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REGULATORY MATTERS | 12 Months Ended
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Dec. 31, 2022
Regulatory Assets and Liabilities, Other Disclosure [Abstract] |
REGULATORY MATTERS | REGULATORY MATTERS AND IMPACT ON PAYMENT OF DIVIDENDS The principal source of income and funds for LCNB Corp. is dividends paid by the Bank. The payment of dividends is subject to restriction by regulatory authorities. For 2023, the restrictions generally limit dividends to the aggregate of net income for the year 2023 plus the net earnings retained for 2022 and 2021. In addition, dividend payments may not reduce capital levels below minimum regulatory guidelines. At December 31, 2022, approximately $12,947,000 of the Bank’s earnings retained was available for dividends in 2023 under this guideline. Dividends in excess of these limitations would require the prior approval of the Comptroller of the Currency. The Bank must meet certain minimum capital requirements set by federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a material effect on the Company's and Bank's financial statements. The Bank’s capital amounts and classification are also subject to qualitative judgments by regulators about components, risk weightings, and other factors. In addition to the minimum capital requirements, a financial institution needs to maintain a Capital Conservation Buffer composed of Common Equity Tier 1 Capital of at least 2.5% above its minimum risk-weighted capital requirements to avoid limitations on its ability to make capital distributions, including dividend payments to shareholders and certain discretionary bonus payments to executive officers. A financial institution with a buffer below 2.5% will be subject to increasingly stringent limitations on capital distributions as the buffer approaches zero. For various regulatory purposes, financial institutions are classified into categories based upon capital adequacy:
| Minimum Requirement |  | Minimum Requirement with Capital Conservation Buffer |  | To Be Considered Well-Capitalized
Ratio of Common Equity Tier 1 Capital to risk-weighted assets | 4.5 | % |  | 7.0 | % |  | 6.5 | %
Ratio of tier 1 capital to risk-weighted assets | 6.0 | % |  | 8.5 | % |  | 8.0 | %
Ratio of total capital (tier 1 capital plus tier 2 capital) to risk-weighted assets | 8.0 | % |  | 10.5 | % |  | 10.0 | %
Leverage ratio (tier 1 capital to adjusted quarterly average total assets) | 4.0 | % |  | N/A |  | 5.0 | %
As of the most recent notification from its regulators, the Bank was categorized as "well-capitalized" under the regulatory framework for prompt corrective action. Management believes that no conditions or events have occurred since the last notification that would change the Bank's category. On September 17, 2019, the FDIC finalized a rule that introduced an optional simplified measure of capital adequacy for qualifying community banking organizations, as required by the Economic Growth, Regulatory Relief and Consumer Protection Act. The simplified rule was designed to reduce burden by removing the requirements for calculating and reporting risk-based capital ratios for qualifying community banking organizations that opt into the framework. It could be used beginning with the March 31, 2020 Call Report. Qualifications to use the simplified approach include having a tier 1 leverage ratio of greater than 9%, less than $10 billion in total consolidated assets, and limited amounts of off-balance-sheet exposures and trading assets and liabilities. A qualifying community banking organization that opts into the framework and meets all requirements under the framework will be considered to have met the well-capitalized ratio requirements under the Prompt Corrective Action regulations and will not be required to report or calculate risk-based capital. LCNB qualifies to use the simplified measure, but did not opt in for the December 31, 2022 or 2021 regulatory capital calculations. A summary of the regulatory capital of the Bank at December 31 follows (dollars in thousands):
| 2022 |  | 2021
Regulatory Capital: |  |  |
Shareholders' equity | $ | 213,052 |  |  | 234,451 |
Goodwill and other intangible assets | (60,177) |  |  | (60,655) |
Accumulated other comprehensive (income) loss | 29,945 |  |  | 1,809 |
Tier 1 risk-based capital | 182,820 |  |  | 175,605 |
Eligible allowance for loan losses | 5,646 |  |  | 5,506 |
Total risk-based capital | $ | 188,466 |  |  | 181,111 |
Capital Ratios: |  |  |
Common Equity Tier 1 Capital to risk-weighted assets | 11.94 | % |  | 12.25 | %
Tier 1 capital to risk-weighted assets | 11.94 | % |  | 12.25 | %
Total capital (tier 1 capital plus tier 2 capital) to risk-weighted assets | 12.31 | % |  | 12.64 | %
Leverage ratio (tier 1 capital to adjusted quarterly average total assets) | 9.72 | % |  | 9.58 | %

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- Definition The entire disclosure for regulatory capital requirement for depository and lending institutions. Institutions include, but not are not limited to, finance company, insured depository institution, bank holding company, savings and loan association holding company, bank and savings institution not federally insured, mortgage company, foreign financial institution and credit union. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1F -URI https://asc.fasb.org/extlink&oid=117337116&loc=SL5958575-112826 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1 -Subparagraph (c)(2) -URI https://asc.fasb.org/extlink&oid=117337116&loc=SL5958568-112826 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=117337116&loc=SL5958568-112826 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1A -URI https://asc.fasb.org/extlink&oid=117337116&loc=SL5958569-112826 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1 -Subparagraph (a)(2) -URI https://asc.fasb.org/extlink&oid=117337116&loc=SL5958568-112826 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1 -Subparagraph (a)(1) -URI https://asc.fasb.org/extlink&oid=117337116&loc=SL5958568-112826 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1 -Subparagraph (e) -URI https://asc.fasb.org/extlink&oid=117337116&loc=SL5958568-112826 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1D -URI https://asc.fasb.org/extlink&oid=117337116&loc=SL5958573-112826 + Details
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