LCNB CORP Earnings Per Share Disclosure
NOTE 19 - EARNINGS PER SHARE
LCNB has granted restricted stock awards with non-forfeitable dividend rights, which are considered participating securities. Accordingly, earnings per share is computed using the two-class method as required by FASB ASC 260-10-45. Basic earnings per common share is calculated by dividing net income allocated to common shareholders by the weighted average number of common shares outstanding during the period, which excludes the participating securities. Diluted earnings per common share is adjusted for the dilutive effects of stock options, warrants, and restricted stock.
Earnings per share for the years ended December 31 were calculated as follows (in thousands, except share and per share data):
| 2024 | 2023 | 2022 | ||||||||||
| Net income | $ | 13,492 | 12,628 | 22,128 | ||||||||
| Less allocation of earnings and dividends to participating securities | 82 | 86 | 114 | |||||||||
| Net income allocated to common shareholders | $ | 13,410 | 12,542 | 22,014 | ||||||||
| Weighted average common shares outstanding, gross | 13,849,578 | 11,497,330 | 11,469,676 | |||||||||
| Less average participating securities | 84,593 | 79,473 | 58,695 | |||||||||
| Weighted average number of shares outstanding used in the calculation of basic earnings per common share | 13,764,985 | 11,417,857 | 11,410,981 | |||||||||
| Add dilutive effect of: | ||||||||||||
| Stock options | — | — | — | |||||||||
| Adjusted weighted average number of shares outstanding used in the calculation of diluted earnings per common share | 13,764,985 | 11,417,857 | 11,410,981 | |||||||||
| Earnings per common share: | ||||||||||||
| Basic | $ | 0.97 | 1.10 | 1.93 | ||||||||
| Diluted | 0.97 | 1.10 | 1.93 | |||||||||
About Earnings Per Share Disclosures
The earnings per share disclosure breaks down the calculation from net income to both basic and diluted EPS, revealing the full impact of a company's capital structure on per-share economics. The reconciliation between basic and diluted share counts exposes how many stock options, RSUs, convertible securities, and warrants are potentially dilutive to existing shareholders.
Key signals: a widening gap between basic and diluted shares indicates growing dilution from equity compensation or convertible instruments. Anti-dilutive securities excluded from the diluted calculation deserve attention — they represent latent dilution that will materialize if the stock price rises. Watch for the effect of share buybacks on per-share metrics: EPS growth driven primarily by repurchases rather than income growth signals weakening fundamentals. Compare year-over-year changes in the diluted share count against equity compensation expense to assess whether management is effectively managing dilution.