DEF: LCNB Corp. Sets 2026 Annual Meeting Agenda, Director Elections

LCNB Corp. announced its 2026 Annual Meeting of Shareholders will be held virtually on April 27, 2026, to elect directors, vote on executive compensation, and ratify its independent auditor.

Summary

• The Annual Meeting of Shareholders will be held virtually on April 27, 2026, at 10:00 AM EDT.
• Shareholders will vote on the election of four Class III directors (William H. Kaufman, Mary E. Bradford, William (Rhett) G. Huddle, Craig M. Johnson) to serve until the 2029 annual meeting.
• An advisory, non-binding 'say-on-pay' resolution to approve the compensation of named executive officers will be presented.
• Shareholders will ratify the appointment of Plante & Moran, PLLC as the independent registered public accounting firm for the fiscal year ending December 31, 2026.
• As of March 2, 2026, LCNB had 14,194,170 Common Shares issued and outstanding.
• BlackRock, Inc. is a beneficial owner of more than 5% of Common Shares, holding 757,188 shares (5.3%) as of November 8, 2024.
• All directors and officers as a group beneficially owned 805,471 Common Shares, representing 5.67% of outstanding shares, as of March 2, 2026.
• The Board of Directors met 7 times in 2025, with all directors attending at least 93% of meetings, except for one who resigned in October 2025.
• The CEO's total compensation in 2025 was $892,855, which was approximately 14.94 times the median employee compensation of $59,743.
• Net Income increased by 71% from $13,492,000 in 2024 to $23,120,000 in 2025.
• Return on Average Assets increased from 0.57% in 2024 to 1.02% in 2025.
• The defined benefit pension plan was hard-frozen on March 1, 2025, unfrozen in Q4 2025 for benefit enhancements, refrozen on November 30, 2025, and LCNB withdrew from the plan by December 2025.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this filing positively due to strong financial performance improvements in 2025, particularly in Net Income and ROAA, and robust corporate governance practices, despite some executive compensation metrics being below target.

Positives

• Net Income increased significantly by 71% to $23.1 million in 2025 from $13.492 million in 2024.
• Return on Average Assets improved from 0.57% in 2024 to 1.02% in 2025.
• The company maintains a strong corporate governance framework, including an independent Chairman of the Board and a new Chief Risk Officer position created in 2025.
• Executive compensation programs are designed to align with shareholder interests, featuring performance-based cash incentives and multi-year vesting equity awards.
• The company utilizes an independent compensation consultant (Blanchard Consulting Group) to ensure competitive and appropriate compensation levels for executives and directors.
• All officers, directors, and greater than 10% shareholders have complied with Section 16(a) filing requirements.

Negatives

• Cash incentive awards for named executive officers (NEOs) were below targeted performance in 2025.
• Equity grants for NEOs based on 2024 performance were below target, with earnings per share at $0.88, efficiency ratio at 77.77%, and return on average assets at 0.57%.
• The company does not have a written process for approval and ratification of related party transactions, relying on an unwritten policy for transactions over $120,000.
• The defined benefit pension plan was hard-frozen, then unfrozen for amendments, and refrozen, with LCNB withdrawing from the plan by December 2025, indicating a shift away from this benefit for employees.

Risks

• General economic risks.
• Interest rate risks.
• Credit risks.
• Regulatory risks.
• Audit risks.
• Reputational risks.
• Cybersecurity risks.
• Operational trust and fiduciary wealth advisory risks.

Future Outlook

The company expects to continue paying dividends on a similar schedule, subject to business and other factors. The Compensation Committee plans to conduct an executive compensation study in 2026, continuing its biennial review cycle. Annuity purchases for active employees participating in the defined benefit plan are expected to occur during the first quarter of 2026, finalizing LCNB's involvement in the plan.

Management Comments

• "We have an effective compensation program that is designed to retain top quality executive leadership focused on attaining short-term and long-term corporate goals along with increasing shareholder value."
• "Our executive compensation program is designed to reasonably and fairly recruit, motivate, retain and reward our executives for achieving our objectives and goals."
• "Through equity grants, each of our executive officers is aligned with the long-term interests of shareholders in increasing the value of LCNB."
• "Our performance-based compensation system links executive pay to LCNB’s shortand long-term performance."
• "The Board values the opinions of our shareholders as expressed through their votes and other communications."
• "The Board of Directors feel that the combination of making annual cash incentive/bonus payments based upon specific goals for each NEO and separate cash incentive/bonus payments tied to earnings goals for the Company provide the necessary incentives to reach the Company’s objectives."

Industry Context

StockSavvy.ai notes that LCNB Corp.'s virtual annual meeting format aligns with a broader industry trend towards digital shareholder engagement, driven by technological advancements and efficiency considerations. The company's use of an independent compensation consultant and regular reviews of executive and director compensation practices reflect a commitment to corporate governance best practices prevalent in the banking sector. The significant increase in Net Income and Return on Average Assets in 2025 suggests a strong recovery or improved operational efficiency compared to prior years, which were impacted by merger-related transaction costs, a common occurrence in the consolidating financial services industry.

Comparison to Industry Standards

• LCNB's 2025 Net Income growth of 71% and ROAA of 1.02% demonstrate strong performance, especially when compared to its own prior years which were impacted by merger costs. For context, regional banks often target ROAA in the 1.00% to 1.20% range, suggesting LCNB is performing competitively within its peer group.
• The efficiency ratio of 67.17% in 2025, while an improvement from 77.77% in 2024, indicates there may still be room for operational efficiency gains. Top-performing regional banks often achieve efficiency ratios below 60%, such as First Financial Bancorp (FFBC) which reported an efficiency ratio around 55-60% in recent periods, or Old National Bancorp (ONB) which aims for similar levels. LCNB's ratio suggests it is still above the ideal range for optimal cost management.
• The CEO's pay ratio of 14.94 times the median employee compensation is within the typical range for regional banks, which often see ratios between 10x and 30x, reflecting a balance between executive incentives and broader employee compensation structures.
• The company's practice of linking executive compensation to Net Income, Return on Average Assets, and Total Shareholder Return (TSR) is a standard industry practice for aligning management incentives with shareholder value creation, similar to compensation structures seen at peers like Civista Bancshares, Inc. (CIVB) or Farmers National Banc Corp. (FMNB).

Management Changes

Corporate Governance

Related Party Transactions

• LCNB National Bank retained the law firm of Kaufman & Florence for legal services in 2025, billing approximately $78,836.41. William H. Kaufman, a director of LCNB, is Of Counsel at Kaufman & Florence.
• The Board of Directors reviewed and approved this related party transaction in 2025.
• The company has an unwritten policy requiring disinterested Board approval for transactions valued at $120,000 or more where an interested party is a director, executive officer, immediate family member, or 5% shareholder.

Stakeholder Impact

• Shareholders: Will vote on key governance matters, including director elections, executive compensation, and auditor ratification. Financial performance improvements (Net Income, ROAA) in 2025 could positively impact shareholder value. The clawback policy and stock ownership guidelines aim to align executive interests with shareholders.
• Employees: The defined benefit pension plan was frozen and LCNB withdrew from it, with annuity purchases planned for Q1 2026, indicating a shift in retirement benefits. Employees hired after January 1, 2009, are not eligible for the pension plan but are eligible for an enhanced 401(k) plan with a 50% employer match up to 3% of compensation. Executive compensation practices are designed to recruit, motivate, retain, and reward key employees.
• Customers: The company's focus on overall growth and high performance of key metrics, as well as individual performance goals for NEOs related to improving operating efficiency and customer experience, suggests a positive impact on customer service and offerings.
• Management: Executive officers' compensation is tied to company and individual performance, with base salary increases, cash incentives, and equity grants. The new Chief Risk Officer position impacts the executive management structure and risk management responsibilities.

Next Steps

• Shareholders to attend the virtual Annual Meeting on April 27, 2026, to vote on director elections, executive compensation, and auditor ratification.
• Annuity purchases for active employees participating in the defined benefit plan will occur during the first quarter of 2026.
• The Compensation Committee plans to conduct an executive compensation study in 2026.
• The company will file a Form 8-K with the SEC within four business days after the annual meeting to disclose voting results.
• Shareholder proposals for the 2027 annual meeting must be received by November 12, 2026.
• Nominees for the 2027 annual meeting must be submitted by March 13, 2027.

Key Dates

Recommendation

The filing indicates strong financial performance in 2025 with significant increases in Net Income and Return on Average Assets, which are positive indicators. However, executive compensation targets were not fully met, and the company's efficiency ratio, while improved, still lags behind top-tier regional banks. The shift away from a defined benefit pension plan could be a long-term cost saving, but also a change in employee benefits. Given the mixed signals of strong financial recovery but ongoing operational efficiency challenges and below-target executive incentives, a 'hold' recommendation is appropriate for seasoned investors to observe continued execution on strategic goals and further improvements in efficiency.

Keywords

Proxy Statement, Annual Meeting, Director Election, Executive Compensation, Say-on-Pay, Auditor Ratification, Corporate Governance, Financial Performance, Banking Industry, SEC Filing, LCNB Corp