LCNB Corp. Issues $25M 6.50% Fixed-to-Floating Subordinated Notes

What Happened
On August 7, 2026, LCNB Corp. announced it sold $25,000,000 of 6.50% Fixed-to-Floating Rate Subordinated Notes due August 15, 2036 in a private placement to qualified institutional buyers and accredited investors. The offering was made under the Securities Act exemptions (Section 4(a)(2) and Rule 506(b)). The company said it will use the proceeds for general corporate purposes, including refinancing senior debt and supporting future growth. The issuance also creates a $25 million direct financial obligation for the company.

Key Details

• Aggregate principal: $25,000,000; maturity date: August 15, 2036.
• Interest: 6.50% fixed annually through August 15, 2031 (paid semi‑annually, first payment Feb 15, 2027); from Aug 15, 2031 until maturity interest resets quarterly to three‑month SOFR + 234 basis points (paid quarterly).
• Redemption: Company may redeem (in whole or in part) after Aug 15, 2031 and in certain other events; any redemption requires prior regulatory approval if required. Notes are not redeemable at holders’ option.
• Credit/capital treatment: Unsecured, subordinated obligations of LCNB Corp. (not guaranteed by subsidiaries) and rank junior to senior debt; intended to qualify as Tier 2 regulatory capital.

Why It Matters
This issuance affects LCNB’s capital structure by adding subordinated debt intended to bolster regulatory capital (Tier 2), which can help support lending and growth while potentially improving regulatory capital ratios. Investors should note the higher coupon cost (6.50% initially) and that interest could change after 2031 based on SOFR plus a spread, which may increase interest expense. Because the notes are subordinated and unsecured, they are lower in priority than senior debt in a liquidation scenario and are not guaranteed by subsidiaries.