10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2013

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to             

Commission file number: 0-13203

LNB Bancorp, Inc.

(Exact name of the registrant as specified in its charter)

Ohio	34-1406303
(State of Incorporation)	(I.R.S. Employer Identification No.)
457 Broadway, Lorain, Ohio	44052-1769
(Address of principal executive offices)	(Zip Code)

(440) 244-6000

(Registrant’s telephone number, including area code)

Securities Registered Pursuant to Section 12(b) of the Act:

Title of Each Class	Name of Each Exchange on Which Registered
Common Shares, par value $1.00 per share Preferred Share Purchase Rights	The NASDAQ Stock Market The NASDAQ Stock Market

Securities Registered Pursuant to Section 12(g) of the Act:

Title of Each Class	Name of Each Exchange on Which Registered
None	None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  þ        No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  þ        No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  o	Accelerated filer  o	Non-accelerated filer  þ	Smaller reporting company   o
	(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨        No  þ

The number of common shares of the registrant outstanding on May 3, 2013 was 9,303,702.

TABLE OF CONTENTS

	Page
PART I - Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets as of March 31, 2013 (unaudited) and December 31, 2012	3
Consolidated Statements of Income and Comprehensive Income (unaudited) for the three months ended March 31, 2013 and March 31, 2012	4
Consolidated Statements of Shareholders’ Equity (unaudited) for the three months ended March 31, 2013 and March 31, 2012	6
Consolidated Statements of Cash Flows (unaudited) for the three months ended March 31, 2013 and March 31, 2012	7
Notes to the Consolidated Financial Statements (unaudited)	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	32
Item 3. Quantitative and Qualitative Disclosures about Market Risk	46
Item 4. Controls and Procedures	49
Part II — Other Information	49
Item 1. Legal Proceedings	50
Item 1A. Risk Factors	50
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	50
Item 6. Exhibits	50

PART I - Financial Information

Item 1. Financial Statements

CONSOLIDATED BALANCE SHEETS

	March 31, 2013			December 31, 2012
	(unaudited)
	(Dollars in thousands except share amounts)
ASSETS
Cash and due from banks (Note 3)	$	35,798		$	24,139
Federal funds sold and interest bearing deposits in banks	19,156			6,520
Cash and cash equivalents	54,954			30,659
Securities available for sale, at fair value (Note 5)	223,173			203,763
Restricted stock	5,741			5,741
Loans held for sale	6,250			7,634
Loans:
Portfolio loans (Note 6)	889,931			882,548
Allowance for loan losses (Note 6)	(17,806		)	(17,637		)
Net loans	872,125			864,911
Bank premises and equipment, net	8,588			8,721
Other real estate owned	1,215			1,366
Bank owned life insurance	18,778			18,611
Goodwill, net (Note 4)	21,582			21,582
Intangible assets, net (Note 4)	561			594
Accrued interest receivable	4,018			3,726
Other assets	14,198			10,946
Total Assets	$	1,231,183		$	1,178,254
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits: (Note 7)
Demand and other noninterest-bearing	$	136,313		$	139,894
Savings, money market and interest-bearing demand	397,080			377,287
Time deposits	515,783			482,411
Total deposits	1,049,176			999,592
Short-term borrowings (Note 8)	1,889			1,115
Federal Home Loan Bank advances (Note 9)	46,557			46,508
Junior subordinated debentures (Note 10)	16,238			16,238
Accrued interest payable	828			882
Accrued expenses and other liabilities	6,290			3,775
Total Liabilities	1,120,978			1,068,110
Shareholders’ Equity
Preferred stock, Series A Voting, no par value, authorized 150,000 shares, none issued at March 31, 2013 and December 31, 2012.	—			—
Fixed rate cumulative preferred stock, Series B, no par value, $1,000 liquidation value, 9,147 shares authorized and issued at March 31, 2013 and 18,880 shares authorized and issued at December 31, 2012	9,147			18,880
Discount on Series B preferred stock	(29		)	(65		)
Common stock, par value $1 per share, authorized 15,000,000 shares, issued 9,631,896 shares at March 31, 2013 and 8,272,548 at December 31, 2012	9,632			8,273
Additional paid-in capital	47,587			39,141
Retained earnings	49,551			48,767
Accumulated other comprehensive income	409			1,240
Treasury shares at cost, 328,194 shares at March 31, 2013 and at December 31, 2012	(6,092		)	(6,092		)
Total Shareholders’ Equity	110,205			110,144
Total Liabilities and Shareholders’ Equity	$	1,231,183		$	1,178,254

See accompanying notes to consolidated financial statements.

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CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Unaudited)

	Three Months Ended
	March 31, 2013			March 31, 2012
	(Dollars in thousands except share and per share amounts)
Interest and Dividend Income
Loans	$	9,054		$	10,049
Securities:
U.S. Government agencies and corporations	841			1,260
State and political subdivisions	289			287
Other debt and equity securities	70			72
Federal funds sold and short-term investments	20			9
Total interest income	10,274			11,677
Interest Expense
Deposits	1,249			1,631
Federal Home Loan Bank advances	154			215
Short-term borrowings	1			—
Junior subordinated debentures	166			176
Total interest expense	1,570			2,022
Net Interest Income	8,704			9,655
Provision for Loan Losses (Note 6)	1,350			1,900
Net interest income after provision for loan losses	7,354			7,755
Noninterest Income
Investment and trust services	375			390
Deposit service charges	816			935
Other service charges and fees	831			748
Income from bank owned life insurance	168			165
Other income	321			342
Total fees and other income	2,511			2,580
Securities gains, net (Note 5)	178			—
Gains on sale of loans	656			347
Loss on sale of other assets, net	(13		)	(52		)
Total noninterest income	3,332			2,875
Noninterest Expense
Salaries and employee benefits	5,027			4,111
Furniture and equipment	949			1,070
Net occupancy	588			579
Professional fees	490			495
Marketing and public relations	289			247
Supplies, postage and freight	307			243
Telecommunications	162			173
Ohio franchise tax	308			316
FDIC assessments	242			392
Other real estate owned	77			132
Loan and collection expense	388			349
Other expense	454			437
Total noninterest expense	9,281			8,544
Income before income tax expense	1,405			2,086
Income tax expense	292			581
Net Income	1,113			1,505
Other comprehensive income (loss), net of taxes:
Changes in unrealized securities' holding gain (loss) net of taxes	(714		)	(392		)
Less: reclassification adjustments for securities' gains realized in net income, net of taxes	117			—
Total other comprehensive income (loss), net of taxes	(831		)	(392		)
Comprehensive income	282			1,113
Dividends and accretion on preferred stock	257			319
Net Income Available to Common Shareholders	$	856		$	1,186
Net Income Per Common Share (Note 2)
Basic	$	0.10		$	0.15
Diluted	0.10			0.15
Dividends declared	0.01			0.01

4

Average Common Shares Outstanding
Basic	8,201,120	7,924,562
Diluted	8,212,038	7,925,890

See accompanying notes to consolidated financial statements

5

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Unaudited)

	Preferred Stock (net of discount)			Warrant to Purchase Common Stock		Common Stock		Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Total
	(Dollars in thousands except share and per share amounts)
Balance, December 31, 2011	$	25,122		$	146	$	8,210	$	39,607		$	44,080		$	2,201		$	(6,092	)	$	113,274
Net Income											1,505									1,505
Other comprehensive loss, net of tax:														(392		)				(392		)
Share-based compensation								69												69
Restricted shares granted (62,105 shares)						62		(62		)										—
Preferred dividends and accretion of discount	3										(319		)							(316		)
Common dividends declared, $.01 per share											(79		)							(79		)
Balance, March 31, 2012	25,125			146		8,272		39,614			45,187			1,809			(6,092		)	114,061
Balance, December 31, 2012	$	18,815		$	—	$	8,273	$	39,141		$	48,767		$	1,240		$	(6,092	)	$	110,144
Net Income											1,113									1,113
Other comprehensive income, net of tax:														(831		)				(831		)
Share-based compensation								72												72
Issuance of common stock (1,359 shares)						1,359		8,374												9,733
Redemption of preferred stock (9,733 shares)	(9,701		)								7									(9,694		)
Preferred dividends and accretion of discount	4										(257		)							(253		)
Common dividends declared, $.01 per share											(79		)							(79		)
Balance, March 31, 2013	9,118			—		9,632		47,587			49,551			409			(6,092		)	110,205

See accompanying notes to consolidated financial statements

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CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

	Three Months Ended
	March 31, 2013			March 31, 2012
	(Dollars in thousands)
Operating Activities
Net income	$	1,113		$	1,505
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Provision for loan losses	1,350			1,900
Depreciation and amortization	262			284
Amortization (accretion) of premiums and discounts	512			376
Amortization of intangibles	33			33
Amortization of loan servicing rights	86			181
Amortization of deferred loan fees	(114		)	(54		)
Federal deferred income tax expense (benefit)	860			197
Securities gains, net	(178		)	—
Share-based compensation expense	72			69
Loans originated for sale	(29,879		)	(24,150		)
Proceeds from sales of loan originations	31,919			23,483
Net gain from loan sales	(656		)	(347		)
Net loss on sale of other assets	13			52
Net decrease (increase) in accrued interest receivable and other assets	(4,221		)	(1,277		)
Net increase (decrease) in accrued interest payable, taxes and other liabilities	2,492			(851		)
Net cash provided by operating activities	3,664			1,401
Investing Activities
Proceeds from sales of available-for-sale securities	2,280			—
Proceeds from maturities of available-for-sale securities	31,171			40,681
Purchase of available-for-sale securities	(54,455		)	(47,506		)
Net increase in loans made to customers	(8,453		)	(21,560		)
Proceeds from the sale of other real estate owned	141			355
Purchase of bank premises and equipment	(129		)	(264		)
Net cash provided by (used in) investing activities	(29,445		)	(28,294		)
Financing Activities
Net increase (decrease) in demand and other noninterest-bearing	(3,581		)	7,655
Net increase in savings, money market and interest-bearing demand	19,793			20,419
Net decrease in certificates of deposit	33,372			(2,988		)
Net increase (decrease) in short-term borrowings	774			667
Proceeds from Federal Home Loan Bank advances	53			20,000
Payment of Federal Home Loan Bank advances	(3		)	(15,001		)
Dividends paid	(332		)	(394		)
Net cash provided by financing activities	50,076			30,358
Net increase (decrease) in cash and cash equivalents	24,295			3,465
Cash and cash equivalents, January 1	30,659			40,647
Cash and cash equivalents, March 31	$	54,954		$	44,112
Supplemental cash flow information
Interest paid	$	1,623		$	2,056
Income taxes paid	465			100
Transfer of loans to other real estate owned	40			635

See accompanying notes to consolidated financial statements

7

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands except per share amounts)

(1)    Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements include the accounts of LNB Bancorp, Inc. (the “Corporation”) and its wholly-owned subsidiary, The Lorain National Bank (the “Bank”). The consolidated financial statements also include the accounts of North Coast Community Development Corporation which is a wholly-owned subsidiary of the Bank. All intercompany transactions and balances have been eliminated in consolidation.

The accompanying unaudited consolidated financial statements were prepared in accordance with instructions for Form 10-Q and, therefore, do not include information or footnote disclosures necessary for a complete presentation of financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United States of America (“US GAAP”). Accordingly, these financial statements should be read in conjunction with the consolidated financial statements and notes thereto of the Corporation included in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2012. However, all adjustments (consisting only of normal recurring accruals) which, in the opinion of the Corporation’s management (“Management”), are necessary for a fair presentation of the consolidated financial statements have been included. The results of operations for the three month period ended March 31 2013, are not necessarily indicative of the results which may be expected for a full year.

Certain reclassifications of prior years' amounts have been made to conform to current year presentation. Such reclassifications had no effect on prior year net income or shareholders' equity.

Use of Estimates

LNB Bancorp Inc. prepares its financial statements in conformity with generally accepted accounting principles (GAAP), which requires the Corporation’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and revenues and expenses during the reporting period. Actual results could differ from those estimates. Areas involving the use of management’s estimates and assumptions include the allowance for loan losses, the valuation of goodwill, the realization of deferred tax assets and fair values of financial instruments.

Segment Information

The Corporation’s activities are considered to be a single industry segment for financial reporting purposes. LNB Bancorp, Inc. is a financial holding company engaged in the business of commercial and retail banking, investment management and trust services, title insurance, and insurance with operations conducted through its main office and banking centers located throughout Lorain, Erie, Cuyahoga, and Summit counties of Ohio. This market provides the source for substantially all of the Bank’s deposit and loan and trust activities. The majority of the Bank’s income is derived from a diverse base of commercial, mortgage and retail lending activities and investments.

Statement of Cash Flows

For purposes of reporting in the Consolidated Statements of Cash Flows, cash and cash equivalents include currency on hand, amounts due from banks, Federal funds sold, and securities purchased under resale agreements. Generally, Federal funds sold and securities purchased under resale agreements are for one day periods.

Securities

Securities that are bought and held for the sole purpose of being sold in the near term are deemed trading securities with any related unrealized gains and losses reported in earnings. As of March 31, 2013 and December 31, 2012, the Corporation did not hold any trading securities. Securities that the Corporation has a positive intent and ability to hold to maturity are classified as held to maturity. As of March 31, 2013 and December 31, 2012, LNB Bancorp, Inc. did not hold any securities classified as held to maturity. Securities that are not classified as trading or held to maturity are classified as available for sale. Securities classified as available for sale are carried at their fair value with unrealized gains and losses, net of tax, included as a component of accumulated other comprehensive income. Interest and dividends on securities, including amortization of premiums and accretion of discounts using the effective interest method over the period to maturity or call, are included in interest income. Gains and losses on sales of securities are determined on the specific identification method.

8

Management evaluates securities for other-than-temporary impairment (“OTTI”) on a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. When evaluating investment securities consideration is given to the length of time and the extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer, whether the market decline was affected by macroeconomic conditions and whether the Corporation has the intent to sell the debt security or more likely than not will be required to sell the debt security before its anticipated recovery. In analyzing an issuer’s financial condition, the Corporation may consider whether the securities are issued by the federal government or its agencies, or U.S. Government sponsored enterprises, whether downgrades by bond rating agencies have occurred, and the results of reviews of the issuer’s financial condition. The assessment of whether an other-than-temporary decline exists involves a high degree of subjectivity and judgment and is based on the information available to management at a point in time.

When OTTI occurs, the amount of the OTTI recognized in earnings depends on whether an entity intends to sell the security or it is more likely than not it will be required to sell the security before recovery of its amortized cost basis. If an entity intends to sell or it is more likely than not it will be required to sell the security before recovery of its amortized cost basis, the OTTI shall be recognized in earnings equal to the entire difference between the investment’s amortized cost basis and its fair value at the balance sheet date. The previous amortized cost basis less the OTTI recognized in earnings becomes the new amortized cost basis of the investment. If a security is determined to be other-than-temporarily impaired, but the entity does not intend to sell the security, only the credit portion of the estimated loss is recognized in earnings, with the other portion of the loss recognized in other comprehensive income.

Restricted Stock

The Bank is a member of the Federal Home Loan Bank (FHLB) system. Members are required to own a certain amount of stock based on the level of borrowings and other factors, and may invest in additional amounts. The Bank is also a member of and owns stock in the Federal Reserve Bank. The Corporation owns stock in Bankers Bancshares Inc., an institution that provides correspondent banking services to community banks. Stock in these institutions is classified as restricted stock and is recorded at redemption value which approximates fair value. The Corporation periodically evaluates the restricted stock for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income.

Loans Held For Sale

Held for sale loans are carried at the lower of amortized cost or estimated fair value, determined on an aggregate basis for each type of loan. Net unrealized losses are recognized by charges to income. Gains and losses on loan sales (sales proceeds minus carrying value) are recorded in the noninterest income section of the Consolidated Statement of Income and Comprehensive Income.

Mortgage Banking

The Corporation sells originated mortgage loans into the secondary mortgage loan markets. During the period of loan origination and prior to the sale of the loans in the secondary market, the Corporation has exposure to movements in interest rates associated with mortgage loans that are in the “mortgage pipeline”. A pipeline loan is one in which the Corporation has entered into a written mortgage loan commitment with a potential borrower that will be held for resale. Written loan commitments that relate to the origination of mortgage loans that will be held for resale are considered free-standing derivatives and do not qualify for hedge accounting. Written loan commitments generally have a term of up to 60 days before the closing of the loan. The loan commitment does not bind the potential borrower to entering into the loan, nor does it guarantee that the Corporation will approve the potential borrower for the loan. Therefore, when determining fair value, the Corporation makes estimates of expected “fallout” (loan commitments not expected to close), using models, which consider cumulative historical fallout rates and other factors. Fallout can occur for a variety of reasons including falling interest rate environments where a borrower abandons an interest rate lock loan commitment when a borrower is not approved as an acceptable credit by the lender or for a variety of other non-economic reasons.

Written loan commitments in which the borrower has locked in an interest rate results in market risk to the Corporation to the extent market interest rates change from the rate quoted to the borrower. The Corporation economically hedges the risk of changing interest rates associated with its interest rate lock commitments by entering into mandatory forward sales contracts.

The Corporation's mortgage loans held for sale are subject to changes in fair value, due to changes in interest rates from the loan's closing date through the date the mortgage loan is sold in the secondary market. The fair value of the mortgage loan declines in value when interest rates increase and conversely declines in value when interest rates decrease. To mitigate the risk of changes in interest rates the Corporation enters into mandatory forward sales contracts on a portion of the mortgage loans held for sale to provide an economic hedge against those changes in fair value. The mandatory forward sales contracts were recorded at fair value with changes in value recorded in current earnings.

9

Derivative Instruments and Hedging Activities

The Corporation uses interest rate swaps, interest rate lock commitments and forward contracts sold to hedge interest rate risk for asset and liability management purposes. All derivatives are accounted for in accordance with ASC-815,Derivatives and Hedging and are recorded as either other assets or other liabilities at fair value. The Corporation engages in Back-to-Back swaps to mitigate its exposure to rising interest rates. A Back-to-Back swap provides that a customer receives a fixed interest rate commercial loan and the Corporation subsequently converts that fixed rate loan to a variable rate instrument over the term of the loan by entering into an interest rate swap with a dealer counterparty based on a London Inter-Bank Offered Rate index. The Corporation then receives a fixed rate payment from the customer on the loan and pays the equivalent amount to the dealer counterparty on the swap in exchange for a variable rate payment stream. Based upon accounting guidance each swap is accounted for as a stand-alone derivative and designated as fair value hedges with any changes in fair value presented in current earnings.

Loans

Loans are reported at the principal amount outstanding, net of unearned income and premiums and discounts. Loans acquired through business combinations are valued at fair market value on or near the date of acquisition. The difference between the principal amount outstanding and the fair market valuation is amortized over the aggregate average life of each class of loan. Unearned income includes deferred fees, net of deferred direct incremental loan origination costs. Unearned income is amortized to interest income, over the contractual life of the loan, using the interest method. Direct loan origination fees and costs are deferred and amortized as an adjustment to interest income over the contractual life of the loan, using the interest method.

Loans are generally placed on nonaccrual status when they are 90 days past due for interest or principal or when the full and timely collection of interest or principal becomes uncertain. When a loan has been placed on nonaccrual status, the accrued and unpaid interest receivable is reversed against interest income. Generally, a loan is returned to accrual status when all delinquent interest and principal becomes current under the terms of the loan agreement and when the collectability is no longer doubtful.

A loan is impaired when based on current information and events it is probable the Corporation will be unable to collect the scheduled payment of principal and interest when due under the contractual terms of the loan agreement. Impairment is evaluated in total for smaller-balance loans of similar nature such as real estate mortgages and installment loans, and on an individual loan basis for commercial loans that are graded substandard or below. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis. If a loan is impaired, a portion of the allowance may be allocated so that the loan is reported, net, using either the present value of estimated future cash flows discounted at the loans effective interest rate, the loan's observable market value or at the fair value of collateral if repayment is expected solely from the collateral.

Allowance for Loan Losses

The allowance for loan losses is management’s estimate of credit losses inherent in the loan portfolio at the balance sheet date. Management’s determination of the allowance, and the resulting provision, is based on judgments and assumptions, including general economic conditions, loan portfolio composition, loan loss experience, management’s evaluation of credit risk relating to pools of loans and individual borrowers, sensitivity analysis and expected loss models, value of underlying collateral, and observations of internal loan review staff or banking regulators.

The provision for loan losses is determined based on Management’s evaluation of the loan portfolio and the adequacy of the allowance for loan losses under current economic conditions and such other factors which, in management’s judgment, deserve current recognition.

Servicing

Servicing assets are recognized as separate assets when rights are acquired through sale of financial assets. Capitalized servicing rights are reported in other assets and are amortized into noninterest income in proportion to, and over the period of, the estimated future net servicing income of the underlying financial assets. Servicing assets are evaluated for impairment on a quarterly basis based upon the fair value of the rights as compared to amortized cost. Impairment is determined by stratifying rights by predominant characteristics, such as interest rates and terms. Fair value is determined using prices for similar assets

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with similar characteristics, when available, or based upon discounted cash flows using market-based assumptions. Impairment is recognized through a valuation allowance for an individual stratum, to the extent that fair value is less than the capitalized amount for the stratum.

Bank Premises and Equipment

Bank premises and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are computed generally on the straight-line method over the estimated useful lives of the assets. Upon the sale or other disposition of assets, the cost and related accumulated depreciation are retired and the resulting gain or loss is recognized. Maintenance and repairs are charged to expense as incurred, while renewals and improvements are capitalized. Software costs related to externally developed systems are capitalized at cost less accumulated amortization. Amortization is computed on the straight-line method over the estimated useful life.

Fair Value Measurement

The Corporation uses fair value measurements to record certain assets and liabilities at fair value and determine fair value disclosures. Additional information regarding fair value measurement is included in Note 12 (Estimated Fair Value Financial Instruments) in the notes to the consolidated financial statements.

Goodwill and Core Deposit Intangibles

Intangible assets arise from acquisitions and include goodwill and core deposit intangibles. Goodwill is the excess of purchase price over the fair value of identified net assets in acquisitions. Core deposit intangibles represent the value of depositor relationships purchased. Goodwill is evaluated at least annually for impairment or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The Corporation evaluates goodwill impairment annually as of November 30^th of each year. Core deposit intangible assets are amortized using the straight-line method over ten years and are subject to annual impairment testing.

To simplify the process of testing goodwill for impairment for both public and nonpublic entities, on September 15, 2011 the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2011-08, Intangibles — Goodwill and Other (Topic 350): Testing Goodwill for Impairment. ASU 2011-08 gives an entity the option to first assess qualitative factors to determine whether it is more likely than not (a likelihood of more than 50%) that the fair value of a reporting unit is less than its carrying amount (impairment). If the entity finds after the qualitative assessment that it is more likely than not (impairment indicators) that the fair value of a reporting unit is less than its carrying amount, the entity is then required to perform a full impairment test. Prior to the update, entities were required to test goodwill for impairment on at least an annual basis.

Other Real Estate Owned

Other real estate owned (OREO) is comprised of property acquired through a foreclosure proceeding or acceptance of a deed-in-lieu of foreclosure, and loans classified as in-substance foreclosure. Other real estate owned is recorded at the lower of the recorded investment in the loan at the time of acquisition or the fair value of the underlying property collateral, less estimated selling costs. Any write-down in the carrying value of a property at the time of acquisition is charged to the allowance for loan losses. Any subsequent write-downs to reflect current fair market value, as well as gains and losses on disposition and revenues and expenses incurred in maintaining such properties, are treated as period costs. Banking premises are transferred at the lower of carrying value or estimated fair value, less estimated selling costs.

Bank Owned Life Insurance

Bank owned life insurance policies are stated at the current cash surrender value of the policy, or the policy death proceeds less any obligation to provide a death benefit to an insured's beneficiaries if that value is less than the cash surrender value. Increases in the asset value are recorded as earnings in other income.

Split-Dollar Life Insurance

The Corporation recognizes a liability and related compensation costs for endorsement split-dollar life insurance policies that provide a benefit to certain employees extending to postretirement periods. Based on the present value of expected future cash flows, the liability is recognized based on the substantive agreement with the employee.

Share-Based Compensation

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The Corporation’s stock based compensation plans are described in detail in Note 13 (Share-Based Compensation). Compensation expense is recognized for stock options and unvested (restricted) stock awards issued to employees, based on the fair value of these awards at the date of grant. A Black Scholes model is utilized to estimate the fair value of stock options, while the market price of the Corporation’s common shares at the date of grant is used to estimate the fair value of unvested (restricted) stock awards.

Compensation cost is recognized over the required service period, generally defined as the vesting period for stock option awards and as the unvested period for nonvested (restricted) stock awards. Certain of the Corporation’s share-based awards contain terms that provide for a graded vesting schedule whereby portions of the award vest in increments over the requisite service period.

Investment and Trust Services Assets and Income

Property held by the Corporation in fiduciary or agency capacity for its customers is not included in the Corporation’s financial statements as such items are not assets of the Corporation. Income from the Investment and Trust Services Division is reported on an accrual basis.

Off Balance Sheet Instruments

In the ordinary course of business, the Corporation has entered into commitments to extend credit, including commitments under credit card arrangements, commercial letters of credit and standby letters of credit. Such financial instruments are recorded when they are funded. Additional information regarding Off Balance Sheet Instruments is included in Note 11 (Commitments and Contingencies) in the notes to the consolidated financial statements.

Income Taxes

The Corporation and its wholly-owned subsidiary file an annual consolidated Federal income tax return. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be removed or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded when necessary to reduce deferred tax assets to amounts which are deemed more likely than not to be realized.

Comprehensive Income

Comprehensive income consists of net income and other comprehensive income. Other comprehensive income includes unrealized gains and losses on securities available for sale and changes in the funded status of the pension plan, which are also recognized as separate components of shareholders’ equity. Unrealized gains on the Corporation’s available-for-sale securities (after applicable income tax expense) totaling $2,464 and $3,295 at March 31, 2013 and December 31, 2012, respectively, and the minimum pension liability adjustment (after applicable income tax benefit) totaling $2,055 at March 31, 2013 and December 31, 2012, respectively, are included in accumulated other comprehensive income.

New Accounting Pronouncements

ASC Topic 220: Comprehensive Income: Presentation of Comprehensive Income.    On June 16, 2011, the FASB issued Accounting Standards Update (ASU) 2011-05. This ASU is intended to increase the prominence of other comprehensive income in financial statements. The new guidance does not change whether items are reported in net income or in other comprehensive income or whether and when items of other comprehensive income are reclassified to net income. ASU 2011-05 eliminates the option in current U.S. generally accepted accounting principles that permits the presentation of other comprehensive income in the statement of changes in equity. The new guidance in the ASU requires that an entity report comprehensive income in either a single continuous statement that presents the components of net income or a separate but consecutive statement. The new guidance is to be applied retrospectively and early adoption is permitted. For public entities, the amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The adoption of this pronouncement did not have a material impact on the Corporation’s financial statements.

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(2)    Earnings Per Common Share

Basic earnings per share are computed by dividing income available to common shareholders by the weighted average number of shares outstanding during the year. Diluted earnings per share is computed based on the weighted average number of shares outstanding plus the effects of dilutive stock options and warrants outstanding during the year. Basic and diluted earnings per share are calculated as follows:

	Three Months Ended March 31,
	2013		2012
	(Dollars in thousands except per share amounts)
Weighted average shares outstanding used in Basic Earnings per Common Share	8,201,120		7,924,562
Dilutive effect of stock options	10,918		1,328
Weighted average shares outstanding used in Diluted Earnings Per Common Share	8,212,038		7,925,890
Net Income	$	1,113	$	1,505
Preferred stock dividend and accretion	257		319
Income Available to Common Shareholders	$	856	$	1,186
Basic Earnings Per Common Share	$	0.10	$	0.15
Diluted Earnings Per Common Share	$	0.10	$	0.15

Options to purchase 232,000 common shares were considered in computing diluted earnings per common share for the three month period ended March 31, 2013. Stock options of 10,918 common shares were considered dilutive and the remaining stock options were antidilutive for the period ended March 31, 2013. As of March 31, 2012, stock options of 1,328 were considered dilutive and the remaining stock options were antidilutive for the period ended March 31, 2012.

(3)    Cash and Due from Banks

Federal Reserve Board regulations require the Bank to maintain reserve balances on deposits with the Federal Reserve Bank of Cleveland. The required ending reserve balance was $453 on March 31, 2013 and $228 on December 31, 2012.

(4)    Goodwill and Intangible Assets

The Corporation has goodwill of $21,582 primarily from an acquisition completed in 2007. The Corporation assesses goodwill for impairment annually and more frequently in certain circumstances. In September 2011, FASB issued an update on the testing of goodwill for impairment under ASC Topic 350, Intangibles – Goodwill and Other. ASC 350 requires a corporation to test goodwill for impairment, on at least an annual basis, by comparing the fair value of a reporting unit with its carrying amount. The overall objective of the update is to simplify how entities, both public and private, test goodwill for impairment. Simplification has resulted in an entity having the option to first assess qualitative factors to determine whether the existence or circumstances lead to a determination that it is more likely than not (that is, a likelihood of more than fifty percent) that the fair value of a reporting unit is less than its carrying amount. For 2012 the Corporation determined the Bank was one reporting unit and assessed the following qualitative factors to determine if there is likelihood that goodwill is impaired: (a) industry and market considerations such as a deterioration in the environment in which the Corporation operates; (b) overall financial performance such as negative or declining cash flows or a decline in actual or planned revenue or earnings compared with actual and projected results of relevant prior periods; (c) events affecting a reporting unit such as a change in the composition or carrying amount of the Corporation’s assets unit; (d) share price — considered in both absolute terms and relative to peers; (e) non-performing loans and allowance for loans losses; and (f) bank capital analysis. Based upon this assessment the Corporation determined that there is no likelihood of goodwill impairment therefore no impairment charge was recognized as of December 31, 2012.

The Corporation cannot predict the occurrences of certain future events that might adversely affect the reported value of goodwill. Such events include, but are not limited to, strategic decisions in response to economic and competitive conditions, the effect of the economic environment on the Corporation’s customer base or a material negative change in the relationship with significant customers.Core deposit intangibles are amortized over their estimated useful life of 10 years. A summary of core deposit intangible assets follows:

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	March 31, 2013		December 31, 2012
	(Dollars in thousands)
Core deposit intangibles	$	1,367	$	1,367
Less: accumulated amortization	806		773
Carrying value of core deposit intangibles	$	561	$	594

(5)    Securities

The amortized cost, gross unrealized gains and losses and fair values of securities at March 31, 2013 and December 31, 2012 follows:

	At March 31, 2013
	Amortized  Cost		Unrealized Gains		Unrealized Losses			Fair Value
	(Dollars in thousands)
Securities available for sale:
U.S. Government agencies and corporations	$	57,736	$	29	$	(38	)	$	57,727
Mortgage backed securities	108,146		2,129		(850		)	109,425
Collateralized mortgage obligations	18,904		412		(40		)	19,276
State and political subdivisions	29,970		2,111		(20		)	32,061
Preferred Securities	4,684		—		—			4,684
Total Securities	$	219,440	$	4,681	$	(948	)	$	223,173
	At December 31, 2012
	Amortized  Cost		Unrealized Gains		Unrealized Losses			Fair Value
	(Dollars in thousands)
Securities available for sale:
U.S. Government agencies and corporations	$	36,868	$	102	$	—		$	36,970
Mortgage backed securities	109,440		2,589		(328		)	111,701
Collateralized mortgage obligations	22,483		398		—			22,881
State and political subdivisions	29,980		2,241		(10		)	32,211
Total Securities	$	198,771	$	5,330	$	(338	)	$	203,763

U.S. Government agencies and corporations include callable and bullet agency issues and agency-backed mortgage backed securities. The maturity of mortgage backed securities is shown based on contractual maturity of the security although repayments occur each year.

The amortized cost and fair value of available for sale debt securities by contractual maturity date at March 31, 2013 is provided in the following table. Mortgage backed securities are not due at a single maturity date and are therefore shown separately.

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	At March 31, 2013
	Amortized Cost		Fair Value
	(Dollars in thousands)
Securities available for sale:
Due in one year or less	$	10,080	$	10,085
Due from one year to five years	51,731		52,772
Due from five years to ten years	23,965		24,578
Due after ten years	6,614		7,037
Mortgage backed securities and collateralized mortgage obligations	127,050		128,701
	$	219,440	$	223,173

The following table shows the proceeds from sales of available-for-sale securities for each of the two periods ended March 31. The gross realized gains and losses on those sales that have been included in earnings. Gains or losses on the sales of available-for-sale securities are recognized upon sale and are determined using the specific identification method.

	March 31,
	2013		2012
	(Dollars in thousands)
Gross realized gains	$	178	$	—
Gross realized losses	—		—
Net Securities Gains	$	178	$	—
Proceeds from the sale of available for sale securities	$	2,280	$	—

The carrying value of securities pledged to secure trust deposits, public deposits, line of credit, and for other purposes required by law amounted to $123,770 and $150,197 at March 31, 2013 and December 31, 2012, respectively.

The following is a summary of securities that had unrealized losses at March 31, 2013 and December 31, 2012. The information is presented for securities that have been in an unrealized loss position for less than 12 months and for more than 12 months. At March 31, 2013, the Corporation held 18 securities with unrealized losses totaling $948. At December 31, 2012 there were 12 securities with unrealized losses totaling $338. There are temporary reasons why securities may be valued at less than amortized cost. Temporary reasons are that the current levels of interest rates as compared to the coupons on the securities held by the Corporation are higher and impairment is not due to credit deterioration. The Corporation has the intent and the ability to hold these securities until their value recovers, which may be until maturity.

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	At March 31, 2013
	Less than 12 months					12 months or longer				Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(Dollars in thousands)
U.S. Government agencies and corporations	$	14,962	$	(38	)	$	—	$	—	$	14,962	(38		)
Mortgage backed securities	$	54,753	$	(890	)	$	—	$	—	$	54,753	(890		)
State and political subdivisions	1,053		(20		)	—		—		1,053		(20		)
Total	$	70,768	$	(948	)	$	—	$	—	$	70,768	$	(948	)
	At December 31, 2012
	Less than 12 months					12 months or longer				Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(Dollars in thousands)
Mortgage backed securities	$	44,491	$	(328	)	$	—	$	—	$	44,491	$	(328	)
State and political subdivisions	1,062		(10		)	—		—		1,062		(10		)
Total	$	45,553	$	(338	)	$	—	$	—	$	45,553	$	(338	)

(6)    Loans and Allowance for Loan Losses

The allowance for loan losses is maintained by the Corporation at a level considered by Management to be adequate to cover probable credit losses inherent in the loan portfolio. The amount of the provision for loan losses charged to operating expenses is the amount necessary, in the estimation of Management, to maintain the allowance for loan losses at an adequate level. While management’s periodic analysis of the allowance for loan losses may dictate portions of the allowance be allocated to specific problem loans, the entire amount is available for any loan charge-offs that may occur. Loan losses are charged off against the allowance when management believes that the full collectability of the loan is unlikely. Recoveries of amounts previously charged-off are credited to the allowance.

The allowance is comprised of a general allowance and a specific allowance for identified problem loans. The general allowance is determined by applying estimated loss factors to the credit exposures from outstanding loans. For residential real estate, installment and other loans, loss factors are applied on a portfolio basis. Loss factors are based on the Corporation’s historical loss experience and are reviewed for appropriateness on a quarterly basis, along with other factors affecting the collectability of the loan portfolio. These other factors include but are not limited to; changes in lending policies and procedures, including underwriting standards and collection, charge-off and recovery practices; changes in national and local economic and business conditions, including the condition of various market segments; changes in the nature and volume of the portfolio; changes in the experience, ability, and depth of lending management and staff; changes in the volume and severity of past due and classified loans, the volume of nonaccrual loans, troubled debt restructurings and other loan modifications; the existence and effect of any concentrations of credit, and changes in the level of such concentrations; and the effect of external factors, such as legal and regulatory requirements, on the level of estimated credit losses in the Corporation’s current portfolio. Specific allowances are established for all impaired loans when management has determined that, due to identified significant conditions, it is probable that a loss will be incurred.

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Activity in the allowance for loan losses by segment for the three months ended March 31, 2013 and 2012 are summarized as follows:

Three Months Ended March 31, 2013
	Commercial Real Estate			Commercial			Residential Real Estate			Home Equity Loans			Indirect			Consumer			Total
	(Dollars in thousands)
Allowance for loan losses:
Balance, beginning of year	$	11,386		$	835		$	1,559		$	2,357		$	1,230		$	270		$	17,637
Losses charged off	(123		)	(63		)	(513		)	(436		)	(216		)	(77		)	(1,428		)
Recoveries	7			4			64			47			94			31			247
Provision charged to expense	(486		)	(242		)	554			980			502			42			1,350
Balance, end of year	$	10,784		$	534		$	1,664		$	2,948		$	1,610		$	266		$	17,806
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	1,778		$	192		$	—		$	—		$	—		$	—		$	1,970
Collectively evaluated for impairment	9,006			342			1,664			2,948			1,610			266			15,836
Total ending allowance balance	$	10,784		$	534		$	1,664		$	2,948		$	1,610		$	266		$	17,806
Loans:
Individually evaluated for impairment	$	23,941		$	564		$	1,991		$	483		$	99		$	59		$	27,137
Collectively evaluated for impairment	391,812			75,345			62,495			121,281			199,865			11,996			862,794
Total ending loans balance	$	415,753		$	75,909		$	64,486		$	121,764		$	199,964		$	12,055		$	889,931
Three Months Ended March 31, 2012
	Commercial Real Estate			Commercial			Residential Real Estate			Home Equity Loans			Indirect			Consumer			Total
	(Dollars in thousands)
Allowance for loan losses:
Balance, beginning of year	$	10,714		$	1,409		$	1,331		$	2,289		$	891		$	429		$	17,063
Losses charged off	(979		)	—			(467		)	(403		)	(178		)	(49		)	(2,076		)
Recoveries	20			17			67			4			103			17			228
Provision charged to expense	1,896			(841		)	643			408			(9		)	(197		)	1,900
Balance, end of year	$	11,651		$	585		$	1,574		$	2,298		$	807		$	200		$	17,115
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	3,635		$	145		$	37		$	—		$	—		$	—		$	3,817
Collectively evaluated for impairment	8,016			440			1,537			2,298			807			200			13,298
Total ending allowance balance	$	11,651		$	585		$	1,574		$	2,298		$	807		$	200		$	17,115
Loans:
Individually evaluated for impairment	$	29,328		$	592		$	1,279		$	—		$	—		$	—		$	31,199
Collectively evaluated for impairment	381,453			72,865			59,733			125,298			178,433			13,239			831,021
Total ending loans balance	$	410,781		$	73,457		$	61,012		$	125,298		$	178,433		$	13,239		$	862,220

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Delinquencies

Management monitors delinquency and potential problem loans. Bank-wide delinquency at March 31, 2013 was 2.58% of total loans. Total 30-59 day delinquency and 60-89 day delinquency was 0.75% and 0.23% of total loans at March 31, 2013, respectively. Bank-wide delinquency at December 31, 2012 was 2.89% of total loans. Total 30-59 day delinquency and 60-89 day delinquency was 0.61% and 0.32% of total loans at December 31, 2012, respectively. Information regarding delinquent loans as of March 31, 2013 and December 31, 2012 is as follows:

Age Analysis of Past Due Loans as of March 31, 2013

(Dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days		Total Past Due		Current		Total Loans		Recorded Investment > 90 Days and Accruing
Commercial real estate	$	2,869	$	1,901	$	10,215	$	14,985	$	400,768	$	415,753	$	—
Commercial	1,308		5		462		1,775		74,134		75,909		—
Residential real estate	1,094		—		2,267		3,361		61,125		64,486		—
Home equity loans	730		57		1,009		1,796		119,968		121,764		—
Indirect	299		104		56		459		199,505		199,964
Consumer	409		2		188		599		11,456		12,055		—
Total	$	6,709	$	2,069	$	14,197	$	22,975	$	866,956	$	889,931	$	—

Age Analysis of Past Due Loans as of December 31, 2012

(Dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days		Total Past Due		Current		Total Loans		Recorded Investment > 90 Days and Accruing
Commercial real estate	$	3,681	$	1,004	$	12,398	$	17,083	$	396,922	$	414,005	$	—
Commercial	—		—		376		376		68,329		68,705		—
Residential real estate	394		1,094		2,827		4,315		60,668		64,983		184
Home equity loans	630		494		1,510		2,634		120,196		122,830		—
Indirect	645		227		69		941		198,983		199,924
Consumer	26		40		123		189		11,912		12,101		—
Total	$	5,376	$	2,859	$	17,303	$	25,538	$	857,010	$	882,548	$	184

Impaired Loans

A loan is considered impaired when it is probable that not all principal and interest amounts will be collected according to the loan contract. Residential mortgage, installment and other consumer loans are evaluated collectively for impairment. Individual commercial loans are evaluated for impairment. Impaired loans are written down by the establishment of a specific allowance where necessary. Interest income recognized on impaired loans while the loan was considered impaired was immaterial for all periods.

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Impaired loans for the Period Ended March 31, 2013 and December 31, 2012 are as follows:

	At March 31, 2013						Three Months Ended March 31, 2013
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Balance
	(Dollars in thousands)
With no related allowance recorded:
Commercial real estate	$	19,035	$	24,826	$	—	$	17,207
Commercial	123		294		—		130
Residential real estate	1,991		2,209		—		1,800
Home equity loans	483		689		—		441
Indirect	99		161		—		50
Consumer	59		59		—		61
With allowance recorded:							0
Commercial real estate	4,906		5,867		1,778		6,424
Commercial	441		442		192		450
Residential real estate	—		—		—		—
Home equity loans	—		—		—
Indirect	—		—		—		—
Consumer	—		—		—		—
Total	$	27,137	$	34,547	$	1,970	$	26,563
	At December 31, 2012						Three Months Ended March 31, 2012
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Balance
	(Dollars in thousands)
With no related allowance recorded:
Commercial real estate	$	15,378	$	20,086	$	—	$	9,786
Commercial	138		138		—		287
Residential real estate	1,610		1,686		—		1,449
Home equity loans	398		398		—		—
Indirect	—		—		—		—
Consumer	61		61		—		—
With allowance recorded:
Commercial real estate	7,942		9,876		1,449		18,567
Commercial	459		459		209		269
Residential real estate	181		1,452		15		72
Home equity loans	—		—		—		—
Indirect	—		—		—		—
Consumer	—		—		—		—
Total	$	26,167	$	34,156	$	1,673	$	30,430

*impaired loans shown in the table above included loans that were classified as troubled debt restructurings ("TDRs'). The restructuring of a loan is considered a TDR if both (i) the borrower is experiencing financial difficulties and (ii) the creditor has granted a concession.

Troubled Debt Restructuring

A restructuring of debt constitutes a troubled debt restructuring (“TDR”) if the creditor, for economic or legal reasons related to the debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider. That concession either stems from an agreement between the creditor and the debtor or is imposed by law or a court. The

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Corporation adheres to ASC 310-40, Troubled Debt Restructurings by Creditors, to determine whether a troubled debt restructuring applies in a particular instance. Prior to loans being modified and classified as a TDR, specific reserves are generally assessed, as most these loans have been specifically allocated for as part of the Corporation's normal loan loss provisioning methodology. The Corporation has allocated reserves of $371 for the TDR loans at March 31, 2013.

The following table summarizes the loans that were modified as a TDR during the period ended March 31, 2013 and 2012.

At March 31, 2013
	Number of Contracts	Pre-Modification Outstanding Recorded Investment	Post-Modification Outstanding Recorded Investment
Residential real estate	1	$34	$23
Home equity loans	6	$361	$243
Indirect Loans	14	$161	$99

At March 31, 2012	Number of Contracts	Pre-Modification Outstanding Recorded Investment	Post-Modification Outstanding Recorded Investment
Commercial real estate	5	$4,559	$3,041

There were no loans modified in a TDR that subsequently defaulted during the twelve months periods ended March 31, 2013 and 2012 respectively (i.e., 90 days or more past due following a modification).

A modification of a loan constitutes a TDR when a borrower is experiencing financial difficulty and the modification constitutes a concession. The Corporation offers various types of concessions when modifying a loan, however, forgiveness of principal is rarely granted. Commercial loans modified in a TDR often involve temporary interest-only payments, term extensions, and converting revolving credit lines to term loans. Additional collateral, a co-borrower, or a guarantor may be requested. Commercial mortgage and construction loans modified in a TDR often involve reducing the interest rate for the remaining term of the loan, extending the maturity date at an interest rate lower than the current market rate for new debt with similar risk, or substituting or adding a new borrower or guarantor. Construction loans modified in a TDR may also involve extending the interest-only payment period. Land loans are also included in the class of commercial real estate loans. Land loans are typically structured as interest-only monthly payments with a balloon payment due at maturity. Land loans modified in a TDR typically involve extending the balloon payment by one to three years and changing the monthly payments from interest-only to principal and interest, while leaving the interest rate unchanged.

Loans modified in a TDR are typically already on nonaccrual status and partial charge-offs have in some cases already been taken against the outstanding loan balance. As a result, loans modified in a TDR for the Corporation may have the financial effect of increasing the specific allowance associated with the loan. The allowance for impaired loans that have been modified in a TDR is measured based on the estimated fair value of the collateral, less any selling costs, if the loan is collateral dependent or on the present value of expected future cash flows discounted at the loan’s effective interest rate. Management exercises significant judgment in developing these estimates.

The regulatory guidance requires loans to be accounted for as collateral-dependent loans when borrowers have filed Chapter 7 bankruptcy, the debt has been discharged and the borrower has not reaffirmed the debt, regardless of the delinquency status of the loan. The filing of bankruptcy by the borrower is evidence of financial difficulty and the discharge of the obligation by the bankruptcy court is deemed to be a concession granted to the borrower.

The Corporation had approximately $390 of additional commitments to lend additional funds to the related debtors whose terms have been modified in a TDR.

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Nonaccrual Loans

Nonaccrual loan balances at March 31, 2013 and December 31, 2012 are as follows:

Loans On Non-Accrual Status	March 31, 2013		December 31, 2012
	(Dollars in thousands)
Commercial real estate	$	16,978	$	16,349
Commercial	372		472
Residential real estate	5,148		5,622
Home equity loans	5,156		4,293
Indirect	551		711
Consumer	309		349
Total Nonaccrual Loans	$	28,514	$	27,796

Credit Risk Grading

Sound credit systems, practices and procedures such as credit risk grading systems; effective credit review and examination processes; effective loan monitoring, problem identification, and resolution processes; and a conservative loss recognition process and charge-off policy are integral to management’s proper assessment of the adequacy of the allowance. Many factors are considered when grades are assigned to individual loans such as current and historic delinquency, financial statements of the borrower, current net realizable value of collateral and the general economic environment and specific economic trends affecting the portfolio. Commercial, commercial real estate and residential construction loans are assigned internal credit risk grades. The loan’s internal credit risk grade is reviewed on at least an annual basis and more frequently if needed based on specific borrower circumstances. Credit quality indicators used in management’s periodic analysis of the adequacy of the allowance include the Corporation’s internal credit risk grades which are described below and are included in the table below for March 31, 2013 and December 31, 2012:

• Grades 1 -5: defined as “Pass” credits — loans which are protected by the borrower’s current net worth and paying capacity or by the value of the underlying collateral. Pass credits are current or have not displayed a significant past due history.

• Grade 6: defined as “Special Mention” credits — loans where a potential weakness or risk exists, which could cause a more serious problem if not monitored. Loans listed for special mention generally demonstrate a history of repeated delinquencies, which may indicate a deterioration of the repayment abilities of the borrower.

• Grade 7: defined as “Substandard” credits — loans that have a well-defined weakness based on objective evidence and are characterized by the distinct possibility that the Corporation will sustain some loss if the deficiencies are not corrected.

• Grade 8: defined as “Doubtful” credits — loans classified as doubtful have all the weaknesses inherent in a substandard asset. In addition, these weaknesses make collection or liquidation in full highly questionable and improbable.

• Grade 9: defined as “Loss” credits — loans classified as a loss are considered uncollectible, or of such value that continuance as an asset is not warranted.

For the residential real estate segment, the Corporation monitors credit quality using a combination of the delinquency status of the loan and/or the Corporation’s internal credit risk grades as indicated above.

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The following table presents the recorded investment of commercial real estate, commercial and residential real estate loans by internal credit risk grade and the recorded investment of residential real estate, home equity, indirect and consumer loans based on delinquency status as of March 31, 2013 and December 31, 2012:

Commercial Credit Exposure	Commercial Real Estate		Commercial		Residential Real Estate*		Home Equity Loans		Indirect		Consumer		Total
	March 31, 2013
	(Dollars in thousands)
Loans graded by internal credit risk grade:
Grade 1 — Minimal	$	—	$	113	$	—	$	—	$	—	$	—	$	113
Grade 2 — Modest	—		—		—		—		—		—		—
Grade 3 — Better than average	1,091		3		—		—		—		—		1,094
Grade 4 — Average	30,126		3,576		622		—		—		—		34,324
Grade 5 — Acceptable	346,812		68,567		5,909		—		—		—		421,288
Total Pass Credits	378,029		72,259		6,531		—		—		—		456,819
Grade 6 — Special mention	10,470		3,128		41		—		—		—		13,639
Grade 7 — Substandard	27,254		522		1,353		—		—		—		29,129
Grade 8 — Doubtful	—		—		—		—		—		—		—
Grade 9 — Loss	—		—		—		—		—		—		—
Total loans internally credit risk graded	415,753		75,909		7,925		—		—		—		499,587
Loans not monitored by internal risk grade:
Current loans not internally risk graded	—		—		53,834		119,968		199,505		11,456		384,763
30-59 days past due loans not internally risk graded	—		—		1,094		730		299		409		2,532
60-89 days past due loans not internally risk graded	—		—		—		57		104		2		163
90+ days past due loans not internally risk graded	—		—		1,633		1,009		56		188		2,886
Total loans not internally credit risk graded	—		—		56,561		121,764		199,964		12,055		390,344
Total loans internally and not internally credit risk graded	$	415,753	$	75,909	$	64,486	$	121,764	$	199,964	$	12,055	$	889,931

* Residential loans with an internal commercial credit risk grade include loans that are secured by non owner occupied 1-4 family residential properties and conventional 1-4 family residential properties.

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Commercial Credit Exposure	Commercial Real Estate		Commercial		Residential Real Estate*		Home Equity Loans		Indirect		Consumer		Total
	December 31, 2012
	(Dollars in thousands)
Loans graded by internal credit risk grade:
Grade 1 — Minimal	$	—	$	114	$	—	$	—	$	—	$	—	$	114
Grade 2 — Modest	—		—		—		—		—		—		—
Grade 3 — Better than average	1,100		6		—		—		—		—		1,106
Grade 4 — Average	30,604		4,547		626		—		—		—		35,777
Grade 5 — Acceptable	342,067		60,023		5,584		—		—		—		407,674
Total Pass Credits	373,771		64,690		6,210		—		—		—		444,671
Grade 6 — Special mention	12,201		3,394		42		—		—		—		15,637
Grade 7 — Substandard	27,268		621		1,468		—		—		—		29,357
Grade 8 — Doubtful	765		—		—		—		—		—		765
Grade 9 — Loss	—		—		—		—		—		—		—
Total loans internally credit risk graded	414,005		68,705		7,720		—		—		—		490,430
Loans not monitored by internal risk grade:
Current loans not internally risk graded	—		—		54,416		120,196		198,983		11,912		385,507
30-59 days past due loans not internally risk graded	—		—		394		630		645		26		1,695
60-89 days past due loans not internally risk graded	—		—		1,094		494		227		40		1,855
90+ days past due loans not internally risk graded	—		—		1,359		1,510		69		123		3,061
Total loans not internally credit risk graded	—		—		57,263		122,830		199,924		12,101		392,118
Total loans internally and not internally credit risk graded	$	414,005	$	68,705	$	64,983	$	122,830	$	199,924	$	12,101	$	882,548

* Residential loans with an internal commercial credit risk grade include loans that are secured by non owner occupied 1-4 family residential properties and conventional 1-4 family residential properties.

The Corporation adheres to underwriting standards consistent with its Loan Policy for indirect and consumer loans. Final approval of a consumer credit depends on the repayment ability of the borrower. Repayment ability generally requires the determination of the borrower’s capacity to meet current and proposed debt service requirements. A borrower’s repayment ability is monitored based on delinquency, generally for time periods of 30 to 59 days past due, 60 to 89 days past due and greater than 90 days past due. This information is provided in the above past due loans table.

(7)    Deposits

Deposit balances are summarized as follows:

	March 31, 2013		December 31, 2012
	(Dollars in thousands)
Demand and other noninterest-bearing	$	136,313	$	139,894
Interest checking	164,561		155,248
Savings	122,346		119,247
Money market accounts	110,173		102,792
Consumer time deposits	396,408		386,549
Public time deposits	119,375		95,862
Total deposits	$	1,049,176	$	999,592

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The aggregate amount of certificates of deposit in denominations of $100,000 or more amounted to $290,134 and $253,464 at March 31, 2013 and December 31, 2012, respectively.

The maturity distribution of certificates of deposit as of March 31, 2013 are as follows:

	March 31, 2013
	(Dollars in thousands)
2013	$	326,714
2014	131,150
2015	30,289
2016	20,640
2017	6,990
Total	$	515,783

(8)    Short-Term Borrowings

The Bank has a line of credit for advances and discounts with the Federal Reserve Bank of Cleveland. The amount of this line of credit varies on a monthly basis. The line is equal to 50% of the balances of qualified home equity lines of credit that are pledged as collateral. At March 31, 2013, the Bank had pledged approximately $87,212 in qualifying home equity lines of credit, resulting in an available line of credit of approximately $43,606. No amounts were outstanding under the line of credit at March 31, 2013 or December 31, 2012. The Corporation also has a $6,000 line of credit with an unaffiliated financial institution. No amounts were outstanding under this line of credit at March 31, 2013 and December 31, 2012.

Short-term borrowings include securities sold under repurchase agreements and Federal funds purchased from correspondent banks. At March 31, 2013 and December 31, 2012, the outstanding balance of securities sold under repurchase agreements totaled $1,889 and $1,115, respectively. No Federal funds were purchased as of March 31, 2013 and December 31, 2012.

(9)    Federal Home Loan Bank Advances

Federal Home Loan Bank advances amounted to $46,557 and $46,508 at March 31, 2013 and December 31, 2012 respectively. All advances were bullet maturities with no call features. At March 31, 2013, collateral pledged for FHLB advances consisted of qualified multi-family and residential real estate mortgage loans and investment securities of $79,147 and $24,168, respectively. The maximum borrowing capacity of the Bank at March 31, 2013 was $69,706. The Bank maintains a $40,000 cash management line of credit (CMA) with the FHLB. No amounts were outstanding for the CMA line of credit at March  31, 2013 and December 31, 2012.

Maturities of FHLB advances outstanding at March 31, 2013 and December 31, 2012 are as follows:

	March 31, 2013			December 31, 2012
	(Dollars in thousands)
Maturities January 2014 with fixed rate 3.55%	$	11		$	15
Maturity January 2015 with fixed rate 0.80%	20,000			20,000
Maturity December 2016 with fixed rate 0.79%	10,000			10,000
Maturities June 2017 through December 2017, with fixed rates ranging from 0.89% to 0.99%	15,000			15,000
Maturity June 2018 fixed rate 1.24%	2,500			2,500
Restructuring prepayment penalty	(954		)	(1,007		)
Total FHLB advances	$	46,557		$	46,508

In 2012, the Corporation prepaid $27,500 of fixed rate FHLB advances with a contractual average interest rate of 2.47% and a remaining maturity of 12 to 31 months. The prepaid FHLB advances were replaced with $27,500 of fixed rate FHLB advances with a contractual average interest rate of 0.88% and terms of 49 to 67 months. In accordance with the restructure, the Corporation was required to pay a prepayment penalty of $1,017 to the FHLB. Thepresent value of the cash flows under the terms of the new FHLB advances (including the prepayment penalties) were not more than 10% different from the present value of the cash flows under the terms of the prepaid FHLB advances and therefore the new advances were not considered to

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be substantially different from the original advances in accordance with ASC 470-50, Debt – Modifications and Exchanges. As a result, the prepayment penalties have been treated as a discount on the new debt and are being amortized over the life of the new advances as an adjustment to rate. The prepayment penalty effectively increases the interest rate on the new advances over the lives of the new advances at the time of the transaction. The benefit of prepaying these advances was an immediate decrease in interest expense and a decrease in interest rate sensitivity as the maturity of each of the refinanced FHLB advances was extended at a lower rate.

At March 31, 2013, the advances were structured to contractually pay down as follows:

	Balance			Weighted Average Rate
2014	$	11		3.55%
2015	20,000			0.80
2016	10,000			0.79
2017	15,000			0.96
Thereafter	2,500			1.24
Total	$	47,511		0.87%
Restructuring prepayment penalty	(954		)
Total	$	46,557

(10)    Trust Preferred Securities

In May 2007, LNB Trust I (“Trust I”) and LNB Trust II (“Trust II”) each sold $10.0 million of preferred securities to outside investors and invested the proceeds in junior subordinated debentures issued by the Corporation. The Corporation’s obligations under the transaction documents, taken together, have the effect of providing a full guarantee by the Corporation, on a subordinated basis, of the payment obligation of the Trusts.

The subordinated notes mature in 2037. Trust I bears a floating interest rate (current three-month LIBOR plus 148 basis points). Trust II bears a fixed rate of 6.64% through June 15, 2017, and then becomes a floating interest rate (current three-month LIBOR plus 148 basis points). Interest on the notes is payable quarterly. The interest rates in effect as of the last determination date in 2013 were 1.76% and 6.64% for Trust I and Trust II, respectively. At March 31, 2013 and December 31, 2012, accrued interest payable for Trust I was $5 and $7 and for Trust II was $19 and $21, respectively.

The subordinated notes are redeemable in whole or in part, without penalty, at the Corporation’s option on or after June 15, 2012 and mature on June 15, 2037. The notes are junior in right of payment to the prior payment in full of all senior indebtedness of the Corporation, whether outstanding at the date of the indenture governing the notes or thereafter incurred.

(11)    Commitments and Contingencies

In the normal course of business, the Bank enters into commitments with off-balance sheet risk to meet the financing needs of its customers. These instruments are currently limited to commitments to extend credit and standby letters of credit. Commitments to extend credit involve elements of credit risk and interest rate risk in excess of the amount recognized in the consolidated balance sheets. The Bank’s exposure to credit loss in the event of nonperformance by the other party to the commitment is represented by the contractual amount of the commitment. The Bank uses the same credit policies in making commitments as it does for on-balance sheet instruments. Interest rate risk on commitments to extend credit results from the possibility that interest rates may have moved unfavorably from the position of the Bank since the time the commitment was made.

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates of 30 to 120 days or other termination clauses and may require payment of a fee. Since some of the commitments may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.

The Bank evaluates each customer’s credit worthiness on a case-by-case basis. The amount of collateral obtained by the Bank upon extension of credit is based on management’s credit evaluation of the applicant. Collateral held is generally single-family residential real estate and commercial real estate. Substantially all of the obligations to extend credit are variable rate. Standby letters of credit are conditional commitments issued to guarantee the performance of a customer to a third party. Standby letters of credit generally are contingent upon the failure of the customer to perform according to the terms of the underlying contract with the third party.

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A summary of the contractual amount of commitments at March 31, 2013 and December 31, 2012 follows:

	March 31, 2013		December 31, 2012
	(Dollars in thousands)
Commitments to extend credit	$	83,129	$	74,206
Home equity lines of credit	84,039		81,041
Standby letters of credit	8,709		8,685
Total	$	175,877	$	163,932

The nature of the Corporation’s business may result in litigation. Management, after reviewing with counsel all actions and proceedings pending against or involving LNB Bancorp, Inc. and subsidiaries, considers that the aggregate liability or loss, if any, resulting from them will not be material to the Corporation’s financial position, results of operation or liquidity.

(12)    Estimated Fair Value of Financial Instruments

The Corporation discloses estimated fair values for its financial instruments. Fair value estimates, methods and assumptions are set forth below for the Corporation’s financial instruments. The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value:

• The carrying value of cash and due from banks, Federal funds sold, short-term investments, interest bearing deposits in other banks and accrued interest receivable and other financial assets is a reasonable estimate of fair value due to the short-term nature of the asset.

• The fair value of investment securities is based on the fair value hierarchy described below.

• For variable rate loans with interest rates that may be adjusted on a quarterly, or more frequent basis, the carrying amount is a reasonable estimate of fair value. The fair value of other types of loans is estimated by discounting future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities.

• The carrying value approximates the fair value for bank owned life insurance.

• The fair value of deposits with no stated maturity, such as noninterest-bearing demand deposits, savings, money market, checking and interest-bearing checking, is equal to the amount payable on demand as of March 31, for each period presented. The fair value of fixed-maturity certificates of deposit is estimated using the rates currently offered for deposits of similar remaining maturities. For variable rate certificates of deposit, the carrying amount is a reasonable estimate of fair value.

• Securities sold under repurchase agreements, other short-term borrowings, accrued interest payable and other financial liabilities approximate fair value due to the short-term nature of the liability.

• The fair value of Federal Home Loan Bank advances is estimated by discounting future cash flows using current FHLB rates for the remaining term to maturity.

• The fair value of junior subordinated debentures is based on the discounted value of contractual cash flows using rates currently offered for similar maturities.

• The fair value of commitments to extend credit approximates the fees charged to make these commitments since rates and fees of the commitment contracts approximates those currently charged to originate similar commitments. The carrying amount and fair value of off-balance sheet instruments is not significant as of March 31, 2013 and December 31, 2012.

Limitations

Estimates of fair value are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

Estimates of fair value are based on existing on-and-off balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. For example, the Bank has an Investment and Trust Services Division that contributes net fee income annually. The Investment and Trust Services Division is not considered a financial instrument and its value has not been incorporated

26

into the fair value estimates. Other significant assets and liabilities that are not considered financial instruments include premises and equipment and deferred tax assets. The estimated fair values of the Corporation’s financial instruments at March 31, 2013 and December 31, 2012 are summarized as follows:

	March 31, 2013										December 31, 2012
	Carrying Value		Estimated Fair Value		Level 1		Level 2		Level 3		Carrying Value		Estimated Fair Value
	(Dollars in thousands)
Financial assets
Cash and due from banks, Federal funds sold and interest bearing deposits in other banks	$	54,954	$	54,954	$	54,954	$	—	$	—	$	30,659	$	30,659
Securities	223,173		223,173		—		218,489		4,684		203,763		203,763
Restricted stock	5,741		5,741		—		5,741		—		5,741		5,741
Portfolio loans, net	872,125		877,068		—		—		877,068		864,911		868,716
Loans held for sale	6,250		6,369		—		6,369		—		7,634		7,891
Accrued interest receivable	4,018		4,018		—		4,018		—		3,726		3,726
Financial liabilities
Deposits:
Demand, savings and money market	533,393		528,329		—		528,329		—		517,181		511,665
Certificates of deposit	515,783		519,290		—		519,290		—		482,411		485,394
Short-term borrowings	1,889		1,889		—		1,889		—		1,115		1,115
Federal Home Loan Bank advances	46,557		46,733		—		46,733		—		46,508		46,828
Junior subordinated debentures	16,238		17,010		—		17,010		—		16,238		17,197
Accrued interest payable	803		803		—		803		—		882		882

Fair Value Measurements

The fair value of financial assets and liabilities recorded at fair value is categorized in three levels. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. These levels are as follows:

• Level 1 — Valuations based on quoted prices in active markets, such as the New York Stock Exchange. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities.

• Level 2 — Valuations of assets and liabilities traded in less active dealer or broker markets. Valuations include quoted prices for similar assets and liabilities traded in the same market; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. Valuations may be obtained from, or corroborated by, third-party pricing services.

• Level 3 — Assets and liabilities with valuations that include methodologies and assumptions that may not be readily observable, including option pricing models, discounted cash flow models, yield curves and similar techniques. Level 3 valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets or liabilities, but in all cases are corroborated by external data, which may include third-party pricing services.

The following table presents information about the Corporation’s assets and liabilities measured at fair value on a recurring basis as of March 31, 2013 and December 31, 2012, and the valuation techniques used by the Corporation to determine those fair values.

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Description	Fair Value as of March 31, 2013		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Securities available for sale:
U.S. Government agencies and corporations	$	57,727	$	—	$	57,727	$	—
Mortgage backed securities	109,425		—		109,425		—
Collateralized mortgage obligations	19,276		—		19,276		—
State and political subdivisions	32,061		—		32,061		—
Preferred Securities	4,684		—		—		4,684
Total	$	223,173	$	—	$	218,489	$	4,684
Description	Fair Value as of December 31, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Securities available for sale:
U.S. Government agencies and corporations	$	36,970	$	—	$	36,970	$	—
Mortgage backed securities	111,701		—		111,701		—
Collateralized mortgage obligations	22,881		—		22,881		—
State and political subdivisions	32,211		—		32,211		—
Total	$	203,763	$	—	$	203,763	$	—

Fair value measurements of U.S. Government agencies and mortgage backed securities use pricing models that vary and may consider various assumptions, including time value, yield curves, volatility factors, prepayment speeds, default rates, loss severity, current market and contractual prices for the underlying financial instruments, as well as other relevant economic measures. Fair value of debt securities such as obligations of state and political may be determined by matrix pricing. Matrix pricing is a mathematical technique that is used to value debt securities without relying exclusively on quoted prices for specific securities, but rather by relying on the securities relationship to other benchmark quoted prices.

There were no transfers between Levels 1 and 2 of the fair value hierarchy during the years ended March 31, 2013 and December 31, 2012. For the available for sale securities, the Corporation obtains fair value measurements from an independent third-party service or independent brokers.

The Corporation has assets that, under certain conditions, are subject to measurement at fair value on a nonrecurring basis. At March 31, 2013 and December 31, 2012, such assets consist primarily of impaired loans and other property. The Corporation has estimated the fair values of these assets using Level 3 inputs, specifically discounted cash flow projections.

The following table presents the balances of assets and liabilities measured at fair value on a nonrecurring basis:

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March 31, 2013	Quoted Market Prices in Active Markets (Level 1)		Internal Models with Significant Observable Market Parameters (Level 2)		Internal Models with Significant Unobservable Market Parameters (Level 3)		Total
	(Dollars in thousands)
Impaired and nonaccrual loans	$	—	$	—	$	28,514	$	28,514
Other real estate	—		—		1,215		1,215
Total assets at fair value on a nonrecurring basis	$	—	$	—	$	29,729	$	29,729
December 31, 2012	Quoted Market Prices in Active Markets (Level 1)		Internal Models with Significant Observable Market Parameters (Level 2)		Internal Models with Significant Unobservable Market Parameters (Level 3)		Total
	(Dollars in thousands)
Impaired and nonaccrual loans	$	—	$	—	$	27,796	$	27,796
Other real estate	—		—		1,366		1,366
Total assets at fair value on a nonrecurring basis	$	—	$	—	$	29,162	$	29,162

Impaired and nonaccrual loans:    Fair value adjustments for these items typically occur when there is evidence of impairment. Loans are designated as impaired when, in the judgment of management based on current information and events, it is probable that all amounts due according to the contractual terms of the loan agreement will not be collected. The measurement of loss associated with impaired loans can be based on either the observable market price of the loan or the fair market value of the collateral. The Corporation measures fair value based on the value of the collateral securing the loans. Collateral may be in the form of real estate or personal property including equipment and inventory. The vast majority of collateral is real estate. The value of the collateral is determined based on internal estimates as well as third party appraisals or non-binding broker quotes. These measurements were classified as Level 3.

Other Real Estate:    Other real estate includes foreclosed assets and properties securing residential and commercial loans. Foreclosed assets are adjusted to fair value less costs to sell upon transfer of the loans to foreclosed assets. Subsequently, foreclosed assets are carried at lower of carry value or fair value less costs to sell. Fair value is generally based upon internal estimates and third party appraisals or non-binding broker quotes and, accordingly, considered a Level 3 classification.

The following table presents additional quantitative information about assets measured at fair value on a recurring and nonrecurring basis for which the Corporation has utilized Level 3 inputs to determine fair value (dollars in thousands).

Asset	Fair Value	Valuation Technique	Unobservable Input
Collateral dependent impaired loans	$28,514	Discounted cash flow Appraisal of collateral	Appraisal adjustments Risk premium rate Discount rate
Other real estate	1,215	Appraisal of collateral	Appraisal adjustments
Preferred Securities	4,684	Fair value measurements obtained from an independent pricing service - Income Approach	Market spreads, credit rating collateral type, and other relevant contractual features

Changes in Level 3 Fair Value Measurements

There were no assets measured at fair value on a recurring basis using significant unobservable inputs that were transferred to Level 3 as of or during the three months ended March 31, 2013.

(13)    Share-Based Compensation

A broad-based stock incentive plan, the 2006 Stock Incentive Plan, was adopted by the Corporation’s shareholders on April 18, 2006 and was amended and restated May 2, 2012. Awards granted under this Plan as of March 31, 2013 were stock options granted in 2007, 2008 and 2009 and long-term restricted shares issued in 2010, 2011, and 2012. In addition, the

29

Corporation has nonqualified stock option agreements outside of the 2006 Stock Incentive Plan. Grants under the nonqualified stock option agreements were made from 2005 to 2007.

Stock Options

The expense recorded for stock options was $5, and $1 for the first three months ended March 31, 2013 and 2012, respectively. The maximum option term is ten years and the options generally vest over three years as follows: one-third after one year from the grant date, two-thirds after two years and completely after three years.

	Outstanding		Exercisable
	Number	Weighted Average Remaining Contractual Life (Years)	Number	Weighted Average Exercise Price
Range of Exercise Prices
$5.34-$5.39	37,500	8.66	2,500	$	5.34
$14.47	82,000	4.85	82,000	14.47
$15.35-$16.50	52,500	3.96	52,500	15.78
$19.10	30,000	2.84	30,000	19.10
$19.17	30,000	1.84	30,000	19.17
Outstanding at end of period	232,000	4.62	197,000	$	16.12

A summary of the status of stock options at March 31, 2013 and 2012 and changes during the year then ended is presented in the table below:

	2013		2012
	Options	Weighted Average Exercise Price per Share	Options	Weighted Average Exercise Price per Share
Outstanding at beginning of period	232,000	14.50	197,000	16.12
Granted	—	—	35,000	$5.39
Forfeited or expired	—	—	—	—
Exercised	—	—	—	—
Stock dividend or split	—	—	—	—
Outstanding at end of period	232,000	14.50	232,000	14.50
Exercisable at end of period	197,000	16.12	196,167	16.17

There were no options exercised during the first three months of 2013 therefore the total intrinsic value of options exercised was $0. The total intrinsic value of all options outstanding at March 31, 2013 was $110.

Restricted Shares

In 2012, the Corporation issued 62,105 shares of long-term restricted stock. The market price of the Corporation’s common shares on the date of grant of the long-term restricted stock was $5.39 per share. Shares of long-term restricted stock generally vest in two equal installments on the second and third anniversaries of the date of grant, or upon the earlier death or disability of the recipient or a qualified change of control of the Corporation. The expense recorded for long-term restricted stock for the three months ended March 31, 2013 and 2012 was $72, and $66, respectively.

The market price of the Corporation’s common shares at the date of grant is used to estimate the fair value of restricted stock awards. A summary of the status of restricted shares at March 31, 2013 is presented in the table below:

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	Nonvested Shares		Weighted Average Grant Date Fair Value
Nonvested at January 1, 2013	143,031		$	5.07
Granted	—		—
Vested	(52,499	)	4.68
Forfeited or expired	—		—
Nonvested at March 31, 2013	90,532		8.00

Stock Appreciation Rights (“SARS”)

In 2006, the Corporation issued an aggregate of 30,000 SARS at $19.00 per share, 15,500 of which have expired due to employee terminations. The SARS vest over three years as follows: one-third after one year from the grant date, two-thirds after two years and completely after three years. Any unexercised portion of the SARS shall expire at the end of the stated term which is specified at the date of grant and shall not exceed ten years. The SARS issued in 2006 will expire in January 2016. The expense recorded for SARS for the three months ended March 31, 2013, was $4 and for 2012 was $2.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following commentary presents a discussion and analysis of the Corporation’s financial condition and results of operations by its management (“Management”). This Management’s Discussion and Analysis (“MD&A”) section discusses the financial condition and results of operations of the Corporation for the three months ended March 31, 2013. This MD&A should be read in conjunction with the financial information contained in the Corporation’s Form 10-K for the fiscal year ended December 31, 2012 and in the accompanying consolidated financial statements and notes contained in this Form 10-Q. The objective of this financial review is to enhance the reader’s understanding of the accompanying tables and charts, the consolidated financial statements, notes to the financial statements and financial statistics appearing elsewhere in the report. Where applicable, this discussion also reflects Management’s insights as to known events and trends that have or may reasonably be expected to have a material effect on the Corporation’s operations and financial condition.

Summary (Dollars in thousands, except per share data)

The Corporation is a bank holding company headquartered in Lorain, Ohio, deriving substantially all of its revenue from the Bank. The Corporation provides a range of products and services to commercial customers and the community, and currently operates 20 banking centers throughout Lorain, Erie, Cuyahoga and Summit counties in Ohio.

Net income for the first three months ended 2013 was $1,113 and net income available to common shareholders was $856, or $0.10 per diluted common share. Net income for the first quarter 2012 was $1,505 and net income available to common shareholders was $1,186, or $0.15 per diluted common share. Results were impacted by a one-time Supplemental Executive Retirement Plan (SERP) after-tax charge of $455 during the quarter. Excluding this one-time expense, net income available to common shareholders would have been $1.31 million for the first quarter 2013 compared to $1.19 million for the first quarter in 2012.

Net interest income on a fully taxable equivalent (FTE) basis for the first quarter of 2013 was $8,860, a 9.7% decrease, compared to $9,810 for the first quarter of 2012. The net interest margin FTE, determined by dividing tax equivalent net interest income by average assets for the first quarter 2013 was 3.23% compared to 3.61% for the first quarter of 2012.

The provision for loan losses was $1,350 for the quarter ended March 31, 2013 compared to $1,900 for March 31, 2012. See page 40 "Provision and Allowance for Loan Losses" for further details.

Noninterest income, which is traditionally weak in the first quarter, totaled $3,332 compared to $2,875 for the first quarter of 2012. Year over year total fees and other income have remained constant at $2.5 million. Gain on the sale of securities at March 31, 2013 was $178 compared to no sales of securities at March 31, 2012. Gain on the sale of loans, which includes both mortgage and indirect loan sales, was $656 for the quarter, compared to $347 for the first quarter of 2012, an increase of 90%. This increase is primarily due to $591 of gain on the sale of mortgages, which is up 130% compared to $256 for first quarter of 2012. This increase is attributable to strong demand during the quarter for mortgage lending, both refinancing and new purchase loans.

Noninterest expense was $9.28 million for the first quarter of 2013 compared with $8.54 million for the first quarter of 2012, an increase of 8.6%. Excluding the one-time expense for SERP compensation of $690 (pre-tax), noninterest expenses would have been essentially flat compared to the first quarter of 2012.The efficiency ratio, which is the measure of cost to generate revenue, increased from 67.38% in the first quarter of 2012 to 76.12% in the first quarter of 2013.

During the first quarter of 2013, loan demand increased slightly as total portfolio loans ended the quarter at $889,931, a 0.84% increase compared to $882,548 at December 31, 2012. Total assets for the first quarter 2013 ended at $1,231,183 compared to $1,178,254 at the end of 2012. Total deposits grew to $1,049,176 at the end of the first quarter of 2013, up from $999,592 at December 31, 2012.

The Corporation continued its efforts to reduce the level of problem loans and their associated costs. The Corporation’s non-performing loans totaled $28,514, at March 31, 2013, or 3.20% of total loans, a slight increase from $27,796, or 3.15% of total loans, at December 31, 2012, but decreased from $36,870, or 4.28%, from the year ago quarter.

The allowance for possible loan losses was $17,806 at March 31, 2013 compared to $17,637 at December 31, 2012, remaining a constant 2.00% of total loans compared to 2.00% at December 31, 2012. Annualized net charge-offs to average loans for the quarter ending March 31, 2013 was 0.54% compared to 0.79% at December 31, 2012 and 0.87% at March 31, 2012.

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Table 1: Condensed Consolidated Average Balance Sheets

Interest, Rate, and Rate/ Volume differentials are stated on a Fully-Tax Equivalent (FTE) Basis.

Table 1 presents the condensed consolidated average balance sheets for the three months ended March 31, 2013 and 2012.

	Three Months Ended March 31,
	2013								2012
	Average Balance			Interest			Rate		Average Balance			Interest			Rate
	(Dollars in thousands)
Assets:
U.S. Govt agencies and corporations	$	175,589		$	841		1.94	%	$	190,919		$	1,261		2.66	%
State and political subdivisions	32,202			415			5.22		31,913			411			5.17
Federal funds sold and short-term investments	7,230			20			1.13		8,681			9			0.40
Restricted stock	6,627			70			4.26		5,741			72			5.04
Commercial loans	491,326			5,423			4.48		475,502			5,856			4.95
Residential real estate loans	54,761			652			4.83		54,588			721			5.32
Home equity lines of credit	107,664			1,016			3.83		107,313			1,047			3.92
Installment loans	237,893			1,993			3.40		218,961			2,455			4.51
Total Earning Assets	$	1,113,292		$	10,430		3.80	%	$	1,093,618		$	11,832		4.35	%
Allowance for loan loss	(17,762		)						(17,169		)
Cash and due from banks	34,926								33,641
Bank owned life insurance	18,680								17,926
Other assets	46,494								48,438
Total Assets	$	1,195,630							$	1,176,454
Liabilities and Shareholders’ Equity:
Consumer time deposits	$	437,118		$	1,047		0.97	%	$	418,450		$	1,396		1.34	%
Public time deposits	57,612			115			0.81		84,775			99			0.47
Savings deposits	120,510			16			0.05		104,690			33			0.13
Money market accounts	105,365			43			0.17		104,896			54			0.21
Interest-bearing demand	158,603			28			0.07		156,296			49			0.13
Short-term borrowings	1,514			1			0.10		545			—			0.15
FHLB advances	46,531			154			1.35		47,057			215			1.84
Trust preferred securities	16,313			166			4.13		16,325			176			4.34
Total Interest-Bearing Liabilities	$	943,566		$	1,570		0.68	%	$	933,034		$	2,022		0.87	%
Noninterest-bearing deposits	137,760								124,732
Other liabilities	3,888								4,532
Shareholders’ Equity	110,416								114,156
Total Liabilities and Shareholders’ Equity	$	1,195,630							$	1,176,454
Net interest Income (FTE)				$	8,860		3.23	%				$	9,810		3.61	%
Taxable Equivalent Adjustment				(157		)	(0.06	)				(155		)	(0.05	)
Net Interest Income Per Financial Statements				$	8,704							$	9,655
Net Yield on Earning Assets							3.17	%							3.55	%

Note: Interest income on tax-exempt securities and loans has been adjusted to a fully-taxable equivalent basis. Nonaccrual loans have been included in the average balances

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Results of Operations(Dollars in thousands except per share data)

Three Months Ended March 31, 2013 versus Three Months Ended March 31, 2012 Net Interest Income Comparison

Net interest income is the difference between interest income earned on interest-earning assets and the interest expense paid on interest-bearing liabilities. Net interest income is the Corporation’s principal source of revenue, accounting for 72% of the Corporation’s revenues for the three months ended March 31, 2013. The amount of net interest income is affected by changes in the volume and mix of earning assets and interest-bearing liabilities, the level of rates earned or paid on those assets and liabilities and the amount of loan fees earned. The Corporation reviews net interest income on a fully taxable equivalent (FTE) basis, which presents interest income with an adjustment for tax-exempt interest income on an equivalent pre-tax basis assuming a 34% statutory Federal tax rate. These rates may differ from the Corporation’s actual effective tax rate. The net interest margin is net interest income as a percentage of average earning assets.

Net interest income was $8,704 for the first quarter of 2013 compared to $9,655 during the same quarter of 2012. Adjusting for tax-exempt income, net interest income FTE for the first quarter of 2013 and 2012 was $8,860 and $9,810 respectively. The net interest margin FTE, determined by dividing tax equivalent net interest income by average earning assets, was 3.23% for the three months ended March 31, 2013 compared to 3.61% for the three months ended March 31, 2012.

Average earning assets for the first quarter of 2013 were $1,113,292, an increase of $19,674, or 1.8%, compared to $1,093,618 for the first quarter of last year. The yield on average loans during the first quarter of 2013 was 4.13%, which was 58 basis points lower than the yield on average loans during the first quarter of 2012 of 4.71%. Interest income from securities was $1,256 (FTE) for the three months ended March 31, 2013, compared to $1,672 during the first quarter of 2012. The yield on average securities was 2.45% and 3.02% for these periods, respectively. An increase in pre-payments in the mortgage backed securities portfolio was the primary cause for the decrease noted in yield.

The cost of interest-bearing liabilities was 0.68% during the first quarter of 2013 compared to 0.87% during the same period in 2012. This decrease is primarily due to an improved deposit mix with noninterest-bearing accounts of $137,760, an increase of 10.4% when compared to the same period a year ago. Total average interest-bearing liabilities of $943,566 for the quarter ended March 31, 2013 increased $10,532, or 1.13%, compared to March 31, 2012. The average cost of trust preferred securities was 4.13% for the first quarter of 2013, compared to 4.34% for the first quarter of 2012. One half of the Corporation’s outstanding trust preferred securities accrues dividends at a fixed rate of 6.64% and the other half accrues dividends at LIBOR plus 1.48% which was 1.76% as of March 31, 2013.

Net interest income may also be analyzed by comparing the volume and rate components of interest income and interest expense. Table 2 is an analysis of the changes in interest income and expense between the quarters ended March 31, 2013 and March 31, 2012. The table is presented on a fully tax-equivalent basis.

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Table 2: Rate/Volume Analysis of Net Interest Income (FTE)

	Three Months Ended March 31,
	Increase (Decrease) in Interest Income/Expense in 2013 over 2012
	Volume			Rate			Total
	(Dollars in thousands)
U.S. Govt agencies and corporations	$	(73	)	$	(347	)	$	(420	)
State and political subdivisions	5			(1		)	4
Federal funds sold and short-term investments	(5		)	16			11
Restricted stock	10			(12		)	(2		)
Commercial loans	175			(608		)	(433		)
Residential real estate loans	2			(71		)	(69		)
Home equity lines of credit	3			(34		)	(31		)
Installment loans	159			(621		)	(462		)
Total Interest Income	276			(1,678		)	(1,402		)
Consumer time deposits	45			(394		)	(349		)
Public time deposits	(54		)	70			16
Savings deposits	2			(19		)	(17		)
Money market accounts	—			(11		)	(11		)
Interest-bearing demand	—			(21		)	(21		)
Short-term borrowings	1			—			1
FHLB advances	(2		)	(59		)	(61		)
Trust preferred securities	—			(10		)	(10		)
Total Interest Expense	(8		)	(444		)	(452		)
Net Interest Income (FTE)	$	284		$	(1,234	)	$	(950	)

Net interest income (FTE) for the first quarter 2013 and 2012 was $8,860 and $9,810, respectively. Interest income (FTE) for the first quarter of 2013 decreased $1,402 in comparison to the same period in 2012. This decrease is primarily attributable to a decrease of $1,678 due to rate, offset by a $276 increase due to volume. Interest income on securities of U.S. Government agencies and corporations decreased $420, of which $347 is attributable to rate. Lower market interest rates have increased the number of agency securities being called. In addition, federal programs promoting the refinance of residential mortgages have increased paydowns on mortgage-backed securities, resulting in a decrease in yield and the reinvestment of funds at lower market interest rates.

Interest income on commercial loans decreased $433. This decrease is primarily attributed to the low interest rate environment, with a decrease in rate of $608, which was offset by an increase in volume of $175. The $69 decrease in interest income on real estate mortgage loans was primarily attributable to a decline in average loan balances as a result of refinancing experienced in the portfolio and the Corporation’s practice of selling new mortgage production into the secondary market, in particular 15 year fixed rate mortgages. Given the continued lower interest rate environment and the competitive nature of indirect lending, installment loans accounted for $621 of the change in interest due to rate, offset by an increase in volume of $159.

The $349 decrease in consumer time deposits was due primarily to lower market interest rates as existing accounts continue to renew at favorable lower market interest rates. Total interest expense decreased $452, with the decrease being attributable to a $444 decrease due to rate and a decrease due to volume of $8. Overall, the total decrease of $950 net interest income (FTE) was mainly attributable to a decrease in rate of $1,234 offset by an increase in volume of $284 which is the difference between interest income and interest expense.

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Noninterest Income

Table 3: Details of Noninterest Income

	Three Months Ended March 31,
	2013			2012
	(Dollars in thousands)
Investment and trust services	$	375		$	390
Deposit service charges	816			935
Other service charges and fees	831			748
Income from bank owned life insurance	168			165
Other income	321			342
Total fees and other income	2,511			2,580
Securities gains, net	178			—
Gain on sale of loans	656			347
Loss on sale of other assets, net	(13		)	(52		)
Total noninterest income	$	3,332		$	2,875

Three Months Ended March 31, 2013 versus Three Months Ended March 31, 2012 Noninterest Income Comparison

Total fees and other income for the three months ended March 31, 2013 was $2,511 a slight decrease of $69, or 2.7%, over the same period of 2012. Income earned on investment and trust services declined $15 compared to the prior period. Deposit service charges decreased $119 due primarily to new regulations regarding overdrafts. Other income decreased $21 over the same period of 2012.

A gain on sale of securities was recorded in the first quarter of 2013 of $178 compared to no sales of securities in the first quarter of 2012. Gain on the sale of loans was $656 for the first quarter of 2013, compared to $347 for the first quarter of 2012, an increase of 90%. This increase is primarily due to $591 of gain on the sale of mortgages, which is up 130% compared to $256 for first quarter of 2012. The Corporation continued to see strong demand for mortgage lending, both refinancing and new purchase loans. Sales of bank owned property resulted in a loss of $13 during the first three months of 2013 compared to a loss of $52 for the first three months of 2012.

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Noninterest Expense

Table 4: Details on Noninterest Expense

	Three Months Ended March 31,
	2013		2012
	(Dollars in thousands)
Salaries and employee benefits	$	5,027	$	4,111
Furniture and equipment	949		1,070
Net occupancy	588		579
Professional fees	490		495
Marketing and public relations	289		247
Supplies, postage and freight	307		243
Telecommunications	162		173
Ohio franchise tax	308		316
FDIC assessments	242		392
Other real estate owned	77		132
Other charge-offs and losses	—		—
Loan and collection expense	388		349
Other expense	454		437
Total noninterest expense	$	9,281	$	8,544

Three Months Ended March 31, 2013 versus Three Months Ended March 31, 2012 Noninterest Expense Comparison

Noninterest expense for the first quarter of 2013 increased $737, or 8.6%, compared to the same period of 2012. The increase in noninterest expense was mainly attributable to an increase of $916 in Salary and employee benefits, which included a one-time Supplemental Executive Retirement Plan (SERP) expense of $690 during the quarter. The increase in Salary and employee benefits was offset by decreases of $150 and $121 in FDIC assessments and Furniture and equipment, respectively.

Income taxes

Three Months Ended March 31, 2013 versus Three Months Ended March 31, 2012 Income Taxes Comparison

The Corporation recognized income tax expense of $292 and $581 for the first quarter of 2013 and 2012, respectively. The Corporation’s effective tax rate decreased to 20.1% for March 31, 2013 from 27.9% for March 31, 2012. The Corporation utilizes a new market tax credit that is based on a schedule of eligible qualified investments and contributes to a lower effective tax rate in comparison to the Corporation’s Federal statutory tax rate of 34%. This tax credit is set to expire within the next couple years. Included in net income for the three months ended March 31, 2013 and March 31, 2012 was $485 and $472 of nontaxable income, comprised of $135 and $134 related to life insurance policies and $349 and $338 of tax-exempt investment and loan interest income, respectively. After considering the tax-exempt income and relatively small nondeductible expenses, income subject to tax for the quarter was significantly less than income before income tax expense.

Financial Condition

Overview

The Corporation’s total assets at March 31, 2013 were $1,231,183 compared to $1,178,254 at December 31, 2012. This was an increase of $52,929, or 4.5%, which is primarily attributable to an increase in securities available for sale and cash and cash equivalents of $19,410, or 9.5%, and $24,295, or 79.2%, from December 31, 2012. Total deposits at March 31, 2013 were $1,049,176 compared to $999,592 at December 31, 2012. The increase in total deposits of $49,584 came in the form of savings, money market and interest-bearing demand and time deposits.

Securities

The distribution of the Corporation’s securities portfolio at March 31, 2013 and December 31, 2012 is presented in Note 5 to the Consolidated Financial Statements contained within this Form 10-Q. The Corporation continued to employ the

37

securities portfolio to manage the Corporation’s interest rate risk and liquidity needs. Total securities increased $19,410 or 9.5%, compared to December 31, 2012. As of March 31, 2013 the portfolio was comprised of 97.5% available for sale securities and 2.5% restricted stock. Available for sale securities were comprised of 26.0% U.S. Government agencies, 49.0% U.S. agency mortgage backed securities, 8.6% U.S. collateralized mortgage obligations, 14.4% municipal securities and 2% preferred securities at March 31, 2013. The available for sale securities had a net temporary unrealized gain of $3,733, representing 1.7% of the total amortized cost of the Corporation's available for sale securities.

As with any investment, the yield on an available for sale security depends on the purchase price in relation to the interest rate and the length of time the investor's principal remains outstanding. Mortgage-backed security yields are often quoted in relation to yields on treasury securities with maturities closest to the mortgage security's estimated average life. The estimated yield on a mortgage security reflects its estimated average life based on the assumed prepayment rates for the underlying mortgage loans. If actual prepayment rates are faster or slower than anticipated, the investor holding the mortgage security until maturity may realize a different yield. Due to the sustained low interest rate environment and the flattening of the yield curve, the Corporation focused investment opportunities to short-term duration investments. Primarily due to the continued refinance- heavy market environment, which has contributed to a decrease in yield, the Corporation sold approximately $2,280 mortgage backed securities with elevated prepayment risk for a $178 gain and re-invested the proceeds in higher earning investment securities.

At March 31, 2013, the available for sale securities portfolio had unrealized gains of $4,681 and unrealized losses of $948. The unrealized losses represent 0.4% of the total amortized cost of the Corporation’s available for sale securities. At March 31, 2013, the Corporation held no available for sale securities with an unrealized loss position for greater than twelve months. Available for sale securities with an unrealized loss position for less than twelve months totaled $948 at March 31, 2013. The unrealized gains and losses at December 31, 2012 were $5,330 and $338, respectively. See Note 5 to the Consolidated Financial Statements for further detail.

Loans

The detail of loan balances are presented in Note 6 to the Consolidated Financial Statements contained within this Form 10-Q. Table 5 provides detail by loan segment.

Total portfolio loans at March 31, 2013 were $889,931. This was an increase of $7,383, or 0.8 %, over December 31, 2012. The increase is the primarily result of the Corporation adding several seasoned commercial bankers during 2012. The Corporation believes that its loan portfolio was well-diversified at March 31, 2013. Commercial and commercial real estate loans represented 55.2%, indirect loans represented 22.5%, home equity loans comprised of 13.7%, residential real estate mortgage loans represented 7.2% and consumer loans comprised of 1.4% of total portfolio loans.

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Table 5: Loan Portfolio Distribution

	March 31, 2013			December 31, 2012			March 31, 2012
	(Dollars in thousands)
Commercial real estate	$	415,753		$	414,005		$	410,781
Commercial	75,909			68,705			73,457
Residential real estate	64,486			64,983			61,012
Home equity loans	121,764			122,830			125,298
Indirect	199,964			199,924			178,433
Consumer	12,055			12,101			13,239
Total Loans	889,931			882,548			862,220
Allowance for loan losses	(17,806		)	(17,637		)	(17,115		)
Net Loans	$	872,125		$	864,911		$	845,105
Loan Mix Percent
Commercial real estate	46.7		%	46.9		%	47.6		%
Commercial	8.5		%	7.8		%	8.5		%
Residential real estate	7.2		%	7.4		%	7.2		%
Home equity loans	13.7		%	13.9		%	14.5		%
Indirect	22.5		%	22.6		%	20.7		%
Consumer	1.4		%	1.4		%	1.5		%
Total Loans	100.0		%	100.0		%	100.0		%

Commercial loans and commercial real estate loans totaled $491,662 at March 31, 2013. This was an increase of $8,952, or 1.9%, over December 31, 2012 and an increase of $7,424, or 1.5%, from the same period one year ago. The increase reflects the Corporation’s commitment to support small business lending activities in its local and regional markets. Commercial real estate loans are loans secured by commercial real estate properties. Commercial loans are primarily lines-of-credit as well as loans secured by property other than commercial real estate, generally equipment or other business assets.

Real estate mortgages are primarily adjustable 1-4 rate family mortgage loans and construction loans made to individuals. The Corporation generally requires a loan-to-value ratio of 80% or private mortgage insurance for loan-to-value ratios in excess of 80% for real estate mortgages. Construction loans comprised $191 of the $64,486 residential real estate mortgage loan portfolio at March 31, 2013. At March 31, 2013 residential real estate mortgage loans decreased by $497, or 0.8%, in comparison to December 31, 2012 and increased $3,474, or 5.7%, from the same period one year ago. The Corporation continued to sell most of its new loan production due to a favorable interest rate environment coupled with the level of refinancing in the market place.

Indirect auto loans remained relatively flat increasing by $40 compared to December 31, 2012. Indirect loans compared to the same period one year ago increased $21,531, or 12.1%. The increase is primarily attributable to new dealer representatives in new markets across the country. The Corporation currently originates high quality auto loans, defined as credit scores greater than 750, in Ohio, Kentucky, Indiana, Georgia, North Carolina, Pittsburgh, and Tennessee.

Home equity loans decreased $1,066, or 0.9%, when compared to December 31, 2012, primarily due to continued low valuations in the housing market within the Corporation's footprint. Consumer loans were made to borrowers, mainly on secured terms. Consumer loans decreased $46, or 0.4%, in comparison to December 31, 2012.

Loans held for sale are not included in portfolio loans and as of March 31, 2013 total loans classified as held for sale were $6,250. Residential real estate mortgage loans represented $4,563, or 73.0%, and indirect loans represented $1,687, or 27.0%, of loans held for sale.

Table 6 shows the amount of portfolio loans outstanding as of March 31, 2013 based on the remaining scheduled principal payments or principal amounts repricing in the periods indicated. All loans that, by their terms, are due after one year, but which are subject to more frequent repricing have been classified are due in one year or less for purposes of the table.

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Table 6: Cash Flow and Interest Rate Information for Loans:

	March 31, 2013
Due in one year or less	$	198,905
Due after one year but within five years	430,176
Due after five years	260,850
Totals	$	889,931
Due after one year with a predetermined fixed interest rate	$	536,452
Due after one year with a floating interest rate	154,574
Totals	$	691,026

Provision and Allowance for Loan Losses

The allowance for loan losses is maintained by the Corporation at a level considered by management to be adequate to cover probable credit losses inherent in the loan portfolio. The amount of the provision for loan losses charged to operating expenses is the amount necessary, in the estimation of management, to maintain the allowance for loan losses at an adequate level. Management determines the adequacy of the allowance based upon past experience, changes in portfolio size and mix, relative quality of the loan portfolio and the rate of loan growth, assessments of current and future economic conditions and information about specific borrower situations, including their financial position and collateral values, and other factors, which are subject to change over time. While management’s periodic analysis of the allowance for loan losses may dictate portions of the allowance be allocated to specific problem loans, the entire amount is available for any loan charge-offs that may occur.

As the economy faced significant challenges over the past few years, the Corporation added additional internal resources at the end of 2009, continued to utilize outside resources and began a process to improve asset quality going forward. This process which includes executive management, finance, credit, lending and legal is charged with monitoring problem loans on a regular basis to insure proper grading of the loans, identifying loans as “troubled debt restructured”, adequate allowances and timely resolution of problem credits. In addition, the Corporation's bank subsidiary has a Loan and Credit Review committee which provides board oversight in areas such as underwriting, concentrations, delinquencies, production goals and performance trends.

While the Corporation uses a historical loss methodology in determining the level of allowances for various loan segments, in 2011 it began tracking data to implement a methodology which estimates expected losses similar to the Basel formula for commercial loans based on a history of loans migrating through the various loan grades. Management believes this methodology will supplement and complement its current approach.

The effect of these initiatives has resulted in an improvement in asset quality as measured by the level of nonperforming loans as well as criticized loans. The use of a historical loss methodology tends to have a lag effect when estimating the adequacy of the allowance as specific reserves related to impaired loans are replaced with general reserves related to the various pools of loans.

As the local economy has shown signs of improvement it remains fragile as does the real estate market and valuations. With its exposure to commercial real estate loans, including construction and development loans, and consumer real estate in the form of home equity loans, management continues to monitor their performance due to the past and recent volatility in real estate valuations.

Table 7 presents the detailed activity in the allowance for loan losses and related charge-off activity for three month period ended March 31, 2013 and 2012.

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Table 7: Analysis of Allowance for Loan Losses

	March 31, 2013			March 31, 2012
	(Dollars in thousands)
Balance at beginning of year	$	17,637		$	17,063
Charge-offs:
Commercial real estate	(123		)	(979		)
Commercial	(63		)	—
Residential real estate	(513		)	(467		)
Home equity loans	(436		)	(403		)
Indirect	(216		)	(178		)
Consumer	(77		)	(49		)
Total charge-offs	(1,428		)	(2,076		)
Recoveries:
Commercial real estate	7			20
Commercial	4			17
Residential real estate	64			67
Home equity loans	47			4
Indirect	94			103
Consumer	31			17
Total Recoveries	247			228
Net Charge-offs	(1,181		)	(1,848		)
Provision for loan losses	1,350			1,900
Balance at end of year	$	17,806		$	17,115
Average Portfolio loans outstanding	$	884,893		$	856,364
Annualized ratio to average loans:
Net Charge-offs	0.54		%	0.87		%
Provision for loan losses	0.62		%	0.89		%
Loans outstanding	$	889,931		$	862,220
As a percent of outstanding loans	2.00		%	1.98		%

The allowance for loan losses at March 31, 2013 was $17,806, or 2.00%, of outstanding loans, compared to $17,115, or 1.98%, of outstanding loans at March 31, 2012. The allowance for loan losses was 62.45% and 46.42% of nonperforming loans at March 31, 2013 and 2012 respectively.

Net charge-offs for the year ended March 31, 2013 were $1,181, compared to $1,848 for the three months ended March 31, 2012. Net charge-offs as a percent of average loans was 0.54% for 2013 and 0.87% for 2012. Net charge-offs on commercial and commercial real estate loans are primarily a result of loans that are collateral dependent and deemed uncollectible. As a result, the loans are written down to their net realizable value which is current appraised value less costs to sell.

The provision charged to expense was $1,350 for the year ended March 31, 2013 compared to $1,900 for 2012. Real estate market conditions have resulted in a decline in the valuation of underlying collateral over the years which has impacted the level of charged-off loans in the commercial portfolio. Consumer loans, while somewhat affected by the real estate market, are largely influenced by the level of unemployment, which has been relatively high over the past two years. Management continues to allocate a portion of the allowance to general reserves for loans having higher risk factors. As specific reserves have been charged-off, the composition of the allowance has continued to shift to a lesser allocation of specific reserves and an increase in general reserves.

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The allowance for loan losses is, in the opinion of management, sufficient given its analysis of the information available about the portfolio at March 31, 2013. Management continues to work toward prompt resolution of nonperforming loan situations and to adjust underwriting standards as conditions warrant.

The following table sets forth the allocation of the allowance for loan losses by loan category as of March 31, 2013 and March 31, 2012, as well as the percentage of loans in each category to total loans.  This allocation is based on management's assessment, as of a given point in time, of the risk characteristics of each of the component parts of the total loan portfolio and is subject to changes when the risk factors of each component part change.  The allocation is not indicative of either the specific amounts of the loan categories in which future charge-offs may be taken, nor should it be taken as an indicator of future loss trends.  The allocation of the allowance to each category does not restrict the use of the allowance to absorb losses in any category.

Allocation of the Allowance for Loan Losses by Loan Type

	March 31, 2013				March 31, 2012
	(Dollars in thousands)
	Allowance		Percent of loans in each category to total loans		Allowance		Percent of loans in each category to total loans
Commercial real estate	$	10,784	46.7	%	$	11,651	47.6	%
Commercial	534		8.5	%	585		8.5	%
Residential real estate	1,664		7.2	%	1,574		7.2	%
Home equity loans	2,948		13.7	%	2,298		14.5	%
Indirect	1,610		22.5	%	807		20.7	%
Consumer	266		1.4	%	200		1.5	%
Total	$	17,806	100.0	%	$	17,115	100.0	%

The balance in the allowance for loan losses is determined based on management's review and evaluation of the loan portfolio in relation to past loss experience, the size and composition of the portfolio, current economic events and conditions, and other pertinent factors, including management's assumptions as to future delinquencies, recoveries and losses. Increases to the allowance for loan and lease losses are made by charges to the provision for loan losses. Credit exposures deemed to be uncollectible are charged against the allowance for loan losses. Recoveries of previously charged-off amounts are credited to the allowance for loan losses.

Changes in the allowance for loan losses for all categories of the loan portfolio reflect the net effect of changes in historical net loss rates by risk grade for commercial real estate and commercial loans and for the total of other categories, changes in loan balances for each category or by risk grade, the level of nonperforming and other impaired loans, and management’s judgment with respect to economic and other relevant factors. Additional information regarding the allowance for loan losses is included in Note 6 (Loans and Allowance for Loan Losses) in the notes to the consolidated financial statements.

Funding Sources

  The primary source of funds continues to be the generation of deposit accounts within the Corporation's primary market. In order to achieve deposit account growth, the Corporation offers retail and business customers a full line of deposit products that includes interest and noninterest-bearing checking accounts, savings accounts and time deposits. The Corporation also generates funds through local borrowings generated by a business sweep product. Wholesale funding sources include lines of credit with correspondent banks, advances through the Federal Home Loan Bank of Cincinnati and a secured line of credit with the Federal Reserve Bank of Cleveland. The Corporation from time to time will also utilize brokered time deposits to provide term funding at rates comparable to other wholesale funding sources. Table 8 highlights the average balances and the average rates paid on these sources of funds for the three months ended March 31, 2013.

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The following table shows the various sources of funding for the Corporation.

Table 8: Funding Sources

	Average Balances Outstanding				Average Rates Paid
	March 31, 2013		December 31, 2012		March 31, 2013		December 31, 2012
	(Dollars in thousands)
Noninterest-bearing checking	$	137,760	$	137,077	—	%	—	%
Interest-bearing checking	158,603		162,431		0.07	%	0.11	%
Savings deposits	120,510		110,936		0.05	%	0.09	%
Money market accounts	105,365		105,951		0.17	%	0.19	%
Consumer time deposits	437,118		429,928		0.97	%	1.18	%
Public time deposits	57,612		65,188		0.81	%	0.64	%
Total Deposits	$	1,016,968	$	1,011,511	0.50	%	0.59	%
Short-term borrowings	1,514		942		0.10	%	0.07	%
FHLB borrowings	46,531		47,828		1.35	%	1.81	%
Junior subordinated debentures	16,313		16,315		4.13	%	4.28	%
Total borrowings	$	64,358	$	65,085	2.02	%	2.40	%
Total funding	$	1,081,326	$	1,076,596	0.68	%	0.80	%

Average deposit balances increased from $1,011,511 at December 31, 2012 to $1,016,968 at March 31, 2013. Low-cost deposits, namely checking, savings and money market accounts, accounted for 51.4% of total deposits at March 31, 2013. The improved mix has contributed significantly to the bank's lower funding cost. These low-cost funds had an average yield of 0.50% for the first three months of 2013 compared to 0.59% at December 31, 2012. Included in these funds are money market accounts which carried an average yield of 0.17% at March 31, 2013 compared to 0.19% at year-end 2012. Time deposits to total average deposits were 48.6% at March 31, 2013 compared to 48.9% at year-end 2012. Average time deposits were $494,730 for the first three months of 2013 compared to $495,116 for the first three months ended 2012. This was a decrease of $386, or 0.1%. Public fund time deposits represented 5.7% of total average deposits for the first three months of 2013 compared to 6.4% at year end 2012. At March 31, 2013 and December 31, 2012, the Corporation had no brokered time deposit balances.

Borrowings

The Corporation utilizes both short-term and long-term borrowings to assist in the growth of earning assets. For the Corporation, short-term borrowings include Federal funds purchased and repurchase agreements. Repurchase agreements increased 69.4%, to $1,889 at March 31, 2013 compared to $1,115 at December 31, 2012. The Corporation did not have any Federal funds purchased at March 31, 2013 or December 31, 2012.

Long-term borrowings by the Corporation consist of Federal Home Loan Bank (FHLB) advances and junior subordinated debentures. FHLB advances, increased to $46,557 at March 31, 2013 compared to $46,508 at December 31, 2012 while the junior subordinated debentures remained constant at $16.3 million. In the fourth quarter of 2012, the Corporation prepaid $27,500 of fixed rate FHLB advances with a contractual average interest rate 2.47% and a weighted average remaining term to maturity of 1.63 years. The transaction was accomplished by extending the maturity date of the advances and rolling the net present value of the advances into the funding cost of the new structure. As a result of the restructure, the Corporation was required to pay a prepayment penalty of $1,017 to the FHLB. In accordance with ASC 470-50, Debt - Modification and Exchanges, the new advances were considered a minor modification. The prepayment penalty was deferred and will be recognized in interest expense over the life of the new advances. Additional information regarding the FHLB advances is included in Note 9 (Federal Home Loan Bank Advances) in the notes to the consolidated financial statements.

During 2007, the Corporation completed a private offering of trust preferred securities. The securities were issued in two $10 million tranches, one of which pays dividends at a fixed rate of 6.64% per annum and the other of which pays dividends at LIBOR plus 1.48% per annum. In August 2010, the Corporation entered into an agreement with certain holders of its non-pooled trust preferred securities and exchanged $2,125 in principal amount of the securities issued by Trust I and $2,125 in principal amount of the securities issued by Trust II for 462,234 newly issued shares of the Corporation’s common stock at a volume-weighted average price of $4.41 per share. At March 31, 2013, the balance of the subordinated notes payable to Trust I and Trust II was $8,119 each.

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Capital Resources

The Corporation continues to maintain a capital position that exceeds regulatory capital requirements. Total shareholders' equity was $110,205 at March 31, 2013 compared to $114,061 at March 31, 2012, a decrease of 3.4%, or $3,856.

On March 15, 2013, the Corporation completed the exchange (the “Exchange”) of newly issued common shares, $1.00 par value per share, of the Company (“Common Shares”) for shares of the Company’s Fixed Rate Cumulative Perpetual Preferred Stock, Series B, $1,000 per share liquidation preference (“Series B Preferred Stock”) with certain institutional and private investors (the "sellers"). In the Exchange, the Company issued an aggregate of 1,359,348 Common Shares at a price of $7.16 per share to the Sellers in exchange for an aggregate of 9,733 shares of Series B Preferred Stock at a price of 100% of the per share liquidation preference, or $1,000 per share. The Company also delivered cash to the Sellers in lieu of fractional Common Shares and cash in an amount equal to the accrued and unpaid dividends due on the shares of Series B Preferred Stock. Following the completion of the Exchange, an aggregate of 9,200 shares of the Series B Preferred Stock remain outstanding.

On December 12, 2008, the Corporation issued 25,223 shares of the Series B Preferred Stock to the U.S. Treasury in the TARP Capital Purchase Program for a purchase price of approximately $25,223. In connection with that issuance, the Corporation also issued a warrant to the U.S. Treasury to purchase 561,343 common shares of the Corporation at an exercise price of $6.74 per share (the “Warrant”).

On June 19, 2012, the Treasury completed the offer and sale of all 25,223 shares of the Series B Preferred Stock to the public in a modified Dutch auction. The Corporation did not bid nor receive any of the proceeds from the offering. On July 18, 2012, the Corporation repurchased the Warrant from the Treasury at a mutually agreed upon price of $860, of which $146 represented the value of the warrant on the Corporation's books and a decrease in equity of $714 was subsequently recognized by the Corporation. Following settlement of the Warrant repurchase, the Treasury had no remaining investment in the Corporation.

On December 24, 2012, the Corporation completed the repurchase of $6.3 million in par value, or approximately 25% of the outstanding shares, of its Series B Preferred Stock in exchange for cash at a price representing a discount to par value. The transaction was funded by cash from accumulated earnings and excess capital. As a result of the discount on the purchase price, the Corporation recognized a net increase to retained earnings of $141.

Under the terms of the Series B Preferred Stock, among other things, for the first five years that the stock is outstanding, the Corporation is required to make quarterly dividend payments on the stock at a rate of 5% per annum, which amounts to approximately $457 annually following the above referenced repurchase of stock by the Corporation. If the Series B Preferred Stock remains outstanding after five years from the date of its issuance, the dividend rate will increase to 9% per annum, or approximately $823 annually following the above referenced repurchase of stock by the Corporation.

The Board of Directors reviews the Corporation’s capital requirements on a regular basis and continues to assess potential alternatives for repurchasing the Corporation’s remaining Series B Preferred Stock. The Corporation intends to repurchase the Series B Preferred Stock at a time and in a manner that it believes is appropriate after considering, among other things, the Corporation’s anticipated capital requirements, projected dividend capacity from the Bank, the availability and relative attractiveness of alternative sources of capital, the Corporation’s risk profile, its earnings performance and asset quality trends, and input from its regulators.

On July 28, 2005, the Corporation announced a share repurchase program of up to 5 percent, or about 332,000, of its common shares outstanding. Repurchased shares can be used for a number of corporate purposes, including the Corporation’s stock option and employee benefit plans. The share repurchase program provides that share repurchases are to be made primarily on the open market from time-to-time until the 5 percent maximum is repurchased or the earlier termination of the repurchase program by the Board of Directors, at the discretion of management based upon market, business, legal and other factors. At March 31, 2013 the Corporation held 328,194 shares of common stock as treasury stock at a cost of $6,092. No shares were acquired under this program in 2013.

Off-Balance Sheet Arrangements

In the normal course of business, the Corporation enters into commitments with off-balance sheet risk to meet the financing needs of its customers. These arrangements include commitments to extend credit and standby letters of credit. Commitments to extend credit and standby letters of credit involve elements of credit risk and interest rate risk in excess of the

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amount recognized in the consolidated balance sheets. The Corporation uses the same credit policies in making commitments to extend credit and standby letters of credit as it does for on-balance sheet instruments.

The Corporation’s exposure to credit loss in the event of nonperformance by the other party to the commitment is represented by the contractual amount of the commitment. Interest rate risk on commitments to extend credit results from the possibility that interest rates may have moved unfavorably from the position of the Corporation since the time the commitment was made.

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates of 30 to 120 days or other termination clauses and may require payment of a fee. Since some of the commitments may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.

Standby letters of credit are conditional commitments issued to guarantee the performance of a customer to a third party. Most of these arrangements mature within two years and are expected to expire without being drawn upon. Standby letters of credit generally are contingent upon the failure of the customer to perform according to the terms of the underlying contract with the third party.

The Corporation evaluates each customer’s credit worthiness on a case-by-case basis. The amount of collateral obtained by the Corporation upon extension of credit is based on management’s credit evaluation of the applicant. Collateral held is generally single-family residential real estate and commercial real estate. Substantially all of the obligations to extend credit are variable rate.

The Corporation does not believe that off-balance sheet arrangements will have a material impact on its liquidity or capital resources. See Note 11 to the Consolidated Financial Statements for further detail.

Critical Accounting Policies and Estimates

The Corporation’s consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. The Corporation follows general practices within the banking industry and application of these principles requires management to make assumptions, estimates and judgments that affect the financial statements and accompanying notes. These assumptions, estimates and judgments are based on information available as of the date of the financial statements.

The most significant accounting policies followed by the Corporation are presented in Note 1 to the Consolidated Financial Statements. These policies are fundamental to the understanding of results of operation and financial conditions.

The accounting policies considered to be critical by management are as follows:

• Allowance for loan losses

The allowance for loan losses is an amount that management believes will be adequate to absorb probable credit losses inherent in the loan portfolio taking into consideration such factors as past loss experience, changes in the nature and volume of the portfolio, overall portfolio quality, loan concentrations, specific problem loans and current economic conditions that affect the borrower’s ability to pay. Determination of the allowance is subjective in nature. Loan losses are charged off against the allowance when management believes that the full collectability of the loan is unlikely. Recoveries of amounts previously charged-off are credited to the allowance.

A loan is impaired when based on current information and events it is probable the Corporation will be unable to collect the scheduled payment of principal and interest when due under the contractual terms of the loan agreement. Impairment is evaluated in total for smaller-balance loans of similar nature such as real estate mortgages and installment loans, and on an individual loan basis for commercial loans that are graded substandard or below. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis. If a loan is impaired, a portion of the allowance may be allocated so that the loan is reported, net, using either the present value of estimated future cash flows discounted at the loans effective interest rate, the loan's observable market value or at the fair value of collateral if repayment is expected solely from the collateral.

The Corporation maintains the allowance for loan losses at a level adequate to absorb management’s estimate of probable credit losses inherent in the loan portfolio. The allowance is comprised of a general allowance, a specific allowance for

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identified problem loans and an unallocated allowance representing estimations pursuant to either Statement of Financial Accounting Standards ASC 450,”Accounting for Contingencies,” or ASC 310-10-45, “Accounting by Creditors for Impairment of a Loan.”

The general allowance is determined by applying estimated loss factors to the credit exposures from outstanding loans. For commercial and commercial real estate loans the Corporation uses historical loss experience along with factors that are considered when loan grades are assigned to individual loans such as current and past delinquency, financial statements of the borrower, current net realizable value of collateral and the general economic environment and specific economic trends affecting the portfolio. For residential real estate, installment and other loans, loss factors are applied on a portfolio basis. Loss factors are based on the Corporation’s historical loss experience and are reviewed for appropriateness on a quarterly basis, along with other factors affecting the collectability of the loan portfolio.

Specific allowances are established for all loans when management has determined that, due to identified significant conditions, it is probable that a loss has been incurred that exceeds the general allowance loss factor from these loans. These conditions are reviewed quarterly by management and include general economic conditions, credit quality trends and internal loan review and regulatory examination findings.

Management believes that it uses the best information available to determine the adequacy of the allowance for loan losses. However, future adjustments to the allowance may be necessary and the results of operations could be significantly and adversely affected if circumstances differ substantially from the assumptions used in making the determinations.

• Income Taxes

The Corporation’s income tax expense and related current and deferred tax assets and liabilities are presented as prescribed in ASC 740, “Accounting for Income Taxes”. The accounting requires the periodic review and adjustment of tax assets and liabilities based on many assumptions. These assumptions include predictions as to the Corporation’s future profitability, as well as potential changes in tax laws that could impact the deductibility of certain income and expense items. Since financial results could be significantly different than these estimates, future adjustments may be necessary to tax expense and related balance sheet accounts.

• Goodwill

During 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2011-08, Intangibles – Goodwill and Other (Topic 350): Testing Goodwill for Impairment. This ASU gives an entity the option to first assess qualitative factors to determine whether it is more likely than not (a likelihood of more than 50%) that the fair value of a reporting unit is less than its carrying amount (impairment). If the entity finds after the qualitative assessment that it is more likely than not (impairment indicators) that the fair value of a reporting unit is less than its carrying amount, the entity is then required to perform a full impairment test. The full impairment test is a two-step process that requires management to make judgments in determining what assumptions to use in the calculation. The first step in impairment testing is to estimate the fair value based on valuation techniques including a discounted cash flow model with revenue and profit forecasts and comparing those estimated fair values with the carrying values, which includes the allocated goodwill. If the carrying value exceeds its fair value, goodwill impairment may be indicated and a second step is performed to compute the amount of the impairment by determining an “implied fair value” of goodwill. The determination of an “implied fair value” of goodwill requires the Corporation to allocate fair value to the assets and liabilities. Any unallocated fair value represents the “implied fair value” of goodwill, which is compared to its corresponding carrying value. An impairment loss would be recognized as a charge to earnings to the extent the carrying amount of the goodwill exceeds the implied fair value of the goodwill. Based upon the qualitative assessment the Corporation determined that there is no likelihood of goodwill impairment therefore no impairment charge was recognized as of December 31, 2012. No significant changes since the previous assessment at December 31, 2012, thus no information to indicate goodwill is impaired.

• New Accounting Pronouncements

Management is not aware of any proposed regulations or current recommendations by the Financial Accounting Standards Board or by regulatory authorities, which, if they were implemented, would have a material effect on the liquidity, capital resources, or operations of the Corporation.

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ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.

RISK ELEMENTS

Risk management is an essential aspect in operating a financial services company successfully and effectively. The most prominent risk exposures, for a financial services company, are credit, operational, interest rate, market and liquidity risk. Credit risk involves the risk of uncollectible interest and principal balance on a loan when it is due. Fraud, legal and compliance issues, processing errors, technology and the related disaster recovery and breaches in business continuation and internal controls are types of operational risks. Changes in interest rates affecting net interest income are considered interest rate risks. Market risk is the risk that a financial institution’s earnings and capital or its ability to meet its business objectives are adversely affected by movements in market rates or prices. Such movements include fluctuations in interest rates, foreign exchange rates, equity prices that affect the changes in value of available-for-sale securities, credit spreads and commodity prices. The inability to fund obligations due to investors, borrowers or depositors is liquidity risk. For the Corporation, the dominant risks are market, credit and liquidity risk.

Credit Risk Management

Uniform underwriting criteria, ongoing risk monitoring and review processes, and well-defined, centralized credit policies dictate the management of credit risk for the Corporation. As such, credit risk is managed through the Bank’s allowance for loan loss policy which requires the loan officer, lending officers and the loan review committee to manage loan quality. The Corporation’s credit policies are reviewed and modified on an ongoing basis in order to remain suitable for the management of credit risks within the loan portfolio as conditions change. The Corporation uses a loan rating system to properly classify and assess the credit quality of individual commercial loan transactions. The loan rating system is used to determine the adequacy of the allowance for loan losses for financial reporting purposes and to assist in the determination of the frequency of review for credit exposures.

Most of the Corporation’s business activity is with customers located within the Corporation’s defined market area. As of March 31, 2013 the Corporation had concentrations of credit risk in its loan portfolio for the following loan categories: non-farm, non-residential real estate loans, home equity loans and indirect consumer loans. A concentration is defined as greater than 10% of outstanding loans. The Corporation has no exposure to highly leveraged transactions and no foreign credits in its loan portfolio.

Nonperforming Assets

Total nonperforming assets consist of nonperforming loans, loans which have been restructured and other foreclosed assets. As such, a loan is considered nonperforming if it is 90 days past due and/or in management’s estimation the collection of interest on the loan is doubtful. Nonperforming loans no longer accrue interest and are accounted for on a cash basis. The classification of restructured loans involves the deterioration of a borrower’s financial ability leading to original terms being favorably modified or either principal or interest being forgiven.

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Table 9 sets forth nonperforming assets at March 31, 2013 and December 31, 2012.

Table 9: Nonperforming Assets

	March 31, 2013			December 31, 2012
	(Dollars in thousands)
Commercial real estate	$	16,978		$	16,349
Commercial	372			472
Residential real estate	5,148			5,622
Home equity loans	5,156			4,293
Indirect	551			711
Consumer	309			349
Total nonperforming loans	28,514			27,796
Other foreclosed assets	1,215			1,366
Total nonperforming assets	$	29,729		$	29,162
Loans 90 days past due accruing interest	$	—		$	184
Total nonperforming loans as a percent of total loans	3.20		%	3.15		%
Total nonperforming assets as a percent of total assets	2.41		%	2.48		%
Allowance for loan losses to nonperforming loans	62.45		%	63.45		%

The Corporation continues to actively manage credit quality and has made progress managing problem loans. Nonperforming loans at March 31, 2013 were $28,514 compared to $27,796 at December 31, 2012, an increase of $718 or 2.6%. Nonperforming commercial real estate loans were $16,978 for March 31, 2013 compared to $16,349 at December 31, 2012. These loans are primarily secured by real estate and, in some cases, by SBA guarantees, and have either been charged-down to their realizable value or a specific reserve has been established for any collateral short-fall. All nonperforming loans are being actively managed and monitored.

Management continues to monitor delinquency and potential problem loans. Bank-wide delinquency at March 31, 2013 was 2.58% of total loans down from 2.89% at December 31, 2012. Additionally, total 30-59 day and 60-89 day delinquencies were 0.75% and 0.23% of total loans at March 31, 2013, compared to 0.61% and 0.32% of total loans at December 31, 2012, respectively.

Other foreclosed assets were $1,215 as of March 31, 2013, compared to $1,366 at December 31, 2012. The $1,215 is comprised of four commercial properties totaling $362 and twelve residential properties, totaling $853. This compares to six commercial properties totaling $398 and thirteen residential properties, totaling $968 as of December 31, 2012 .

Liquidity

Management of liquidity is a continual process in the banking industry. The liquidity of the Bank reflects its ability to meet loan demand, the possible outflow of deposits and its ability to take advantage of market opportunities made possible by potential rate environments. Assuring adequate liquidity requires the management of the cash flow characteristics of the assets the Bank originates and the availability of alternative funding sources. The Bank monitors liquidity according to limits established in its liquidity policy. The policy establishes minimums for the ratio of cash and cash equivalents to total assets and the loan to deposit ratio. At March 31, 2013, the Bank’s liquidity was within its policy limits.

The Bank maintains borrowing capacity at the Federal Home Loan Bank of Cincinnati, the Federal Reserve Bank of Cleveland and Federal Fund lines with correspondent banks. The Corporation has a $6,000 line of credit through an unaffiliated financial institution. The term of the line is one year, with principal due at maturity and is subject to renewal on an annual basis. The interest rate on the line of credit is the unaffiliated financial institution’s prime rate. Liquidity is also provided by unencumbered, or unpledged investment securities that totaled $94,720 at March 31, 2013.

The Corporation is the bank holding company of the Bank and conducts no operations. The Corporation’s primary ongoing needs for liquidity are the payment of the quarterly shareholder dividend if declared and miscellaneous expenses related to the regulatory and reporting requirements of a publicly traded corporation. The holding company’s main source of

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operating liquidity is the dividend that it receives from the Bank. Dividends from the Bank are subject to restrictions by banking regulators. The holding company from time-to-time has access to additional sources of liquidity through correspondent lines of credit as of March 31, 2013.

Market Risk Management

The Corporation manages market risk through its Asset/Liability Management Committee (“ALCO”) at the Bank level governed by policies set forth and established by the Board of Directors. This committee assesses interest rate risk exposure through two primary measures: rate sensitive assets divided by rate sensitive liabilities and earnings-at-risk simulation of net interest income over the one year planning cycle and the longer term strategic horizon in order to provide a stable and steadily increasing flow of net interest income.

The difference between a financial institution’s interest rate sensitive assets and interest rate sensitive liabilities is referred to as the interest rate gap. An institution that has more interest rate sensitive assets than interest rate sensitive liabilities in a given period is said to be asset sensitive or has a positive gap. This means that if interest rates rise a corporation’s net interest income may rise and if interest rates fall its net interest income may decline. If interest sensitive liabilities exceed interest sensitive assets then the opposite impact on net interest income may occur. The usefulness of the gap measure is limited. It is important to know the gross dollars of assets and liabilities that may re-price in various time horizons, but without knowing the frequency and basis of the potential rate changes the predictive power of the gap measure is limited.

Two more useful tools in managing market risk are earnings-at-risk simulation and economic value of equity simulation. An earnings-at-risk analysis is a modeling approach that combines the repricing information from gap analysis, with forecasts of balance sheet growth and changes in future interest rates. The result of this simulation provides management with a range of possible net interest margin outcomes. Trends that are identified in earnings-at-risk simulation can help identify product and pricing decisions that can be made currently to assure stable net interest income performance in the future. At March 31, 2013, a “shock” treatment of the balance sheet, in which a parallel shift in the yield curve occurs and all rates increase immediately, indicates that in a +200 basis point shock, net interest income would increase $378 or 1.0%, and in a -200 basis point shock, net interest income would decrease $2,230, or 5.9%. The reason for the lack of symmetry in these results is the implied floors in many of the Corporation’s core funding which limits their downward adjustment from current offering rates. This analysis is done to describe a best or worst case scenario. Factors such as non-parallel yield curve shifts, management pricing changes, customer preferences and other factors are likely to produce different results.

The economic value of equity approach measures the change in the value of the Corporation’s equity as the value of assets and liabilities on the balance sheet change with interest rates. At March 31, 2013, this analysis indicated that a +200 basis point change in rates would reduce the value of the Corporation’s equity by 16.3% while a -200 basis point change in rates would increase the value of the Corporation’s equity by 9.3%.

Item 4. Controls and Procedures

The Corporation’s Management carried out an evaluation, under the supervision and with the participation of the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of the Corporation’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934) as of March 31, 2013, pursuant to the evaluation of these controls and procedures required by Rule 13a-15 of the Securities Exchange Act of 1934.

Based upon that evaluation, the Chief Executive Officer along with the Chief Financial Officer concluded that the Corporation’s disclosure controls and procedures as of March 31, 2013 were: (1) designed to ensure that material information relating to the Corporation and its subsidiaries is made known to the Chief Executive Officer and Chief Financial Officer by others within the entities, and (2) effective, in that they provide reasonable assurance that information required to be disclosed by the Corporation in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. No change in the Corporation’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15(d)-15(f) under the Exchange Act) occurred during the fiscal quarter ended March 31, 2013 that has materially affected, or is reasonably likely to materially affect, the Corporation’s internal control over financial reporting.

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Part II Other Information

Item 1. Legal Proceedings

On April 18, 2008, the Corporation and Richard M. Osborne and certain other parties entered into a settlement agreement (the “Settlement Agreement”) to settle certain contested matters relating to the Corporation's 2008 annual meeting of shareholders. Under the Settlement Agreement, among other things, Mr. Osborne agreed not to seek representation on the Corporation's Board of Directors or to solicit proxies with respect to the voting of the Corporation's common shares for a period of at least 18 months after April 18, 2008. In proxy materials filed with the SEC on March 20, 2009, Mr. Osborne indicated his intent to solicit proxies in favor of the election of two nominees for election as directors at the Corporation's 2009 annual meeting of shareholders. On March 24, 2009, the Corporation filed a complaint against Mr. Osborne for a declaratory judgment and preliminary and permanent injunctive relief in the United States District Court for the Northern District of Ohio, Eastern Division, to enforce the “standstill” provisions of the Settlement Agreement and restrain Mr. Osborne from (a) engaging in any solicitation of proxies or consents, (b) seeking to advise, encourage or influence any person or entity with respect to the voting of any voting securities of the Corporation, (c) initiating, proposing or otherwise soliciting shareholders of the Corporation for the approval of shareholder proposals, (d) entering into any discussions, negotiations, agreements, arrangements or understanding with any third party with respect to any of the foregoing and (e) disseminating his proposed proxy materials to shareholders of the Corporation. The Corporation also sought an order from the Court temporarily restraining Mr. Osborne from engaging in any of the foregoing activities. On March 28, 2009, the Court issued an order granting the Corporation's motion for a temporary restraining order. On April 3, 2009, the Court issued an order granting the Corporation's motion for a preliminary injunction restraining Mr. Osborne from engaging in any of the foregoing activities. On February 15, 2010, Mr. Osborne filed a motion to dissolve the preliminary injunction, which the Corporation opposed. On March 23, 2010, the Court denied Mr. Osborne's motion to dissolve the preliminary injunction. Prior to the Court's decision, on March 19, 2010, Mr. Osborne filed a motion for summary judgment and the Corporation filed a motion for partial summary judgment. On April 14, 2010, Mr. Osborne filed an interlocutory appeal of the denial of his motion to dissolve the preliminary injunction with the Sixth Circuit Court of Appeals. Proceedings in the District Court were stayed pending resolution of Mr. Osborne's appeal by the Sixth Circuit Court of Appeals. On July 25, 2011, the Sixth Circuit affirmed the decision of the District Court. The case was remanded to the District Court, and, on November 30, 2011, the Court granted the Corporation's motion for partial summary judgment, ruling that Mr. Osborne must refrain from engaging in any of the conduct specified in the “standstill” provisions of the Settlement Agreement until such time as both of the directors designated by Mr. Osborne pursuant to the Settlement Agreement no longer serve on the Corporation's Board of Directors. With respect to the remaining claims, the Court scheduled the commencement of a trial on the merits for March 13, 2012. In the meantime, Osborne appealed the District Court's decision granting a permanent injunction to the Sixth Circuit. The Corporation filed a motion to dismiss the appeal, which remains pending in the Sixth Circuit. The District Court has stayed all proceedings pending resolution of the matter in the Sixth Circuit. The appeal has been fully briefed and the Sixth Circuit has not set a date for oral argument. All other claims remain pending in the District Court, but have been stayed pending resolution of the appeal.

Item 1A. Risk Factors

In addition to the other information set forth in this report, you should carefully consider the risk factors disclosed in Item 1A of the Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

On July 28, 2005, the Corporation announced a share repurchase program of up to 5 percent, or about 332,000, of its common shares outstanding. Repurchased shares can be used for a number of corporate purposes, including the Corporation’s stock option and employee benefit plans. The share repurchase program provides that share repurchases are to be made primarily on the open market from time-to-time until the 5 percent maximum is repurchased or the earlier termination of the repurchase program by the Board of Directors, at the discretion of Management based upon market, business, legal and other factors. Under the terms of the Series B Preferred Stock issued by the Corporation in December 2008, as long as the Series B Preferred Stock is outstanding, repurchases or redemptions relating to certain equity securities, including the Corporation’s common shares, are prohibited to the extent that there are any accrued and unpaid dividends on such preferred stock, subject to certain limited exceptions. As of March 31, 2013, the Corporation had repurchased an aggregate of 202,500 shares under this program. The Corporation did not repurchase any shares under this program during the first quarter of 2013.

Item 6. Exhibits

(a) The exhibits to this Form 10-Q are referenced in the Exhibit Index attached hereto.

50

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	LNB BANCORP, INC.
	(Registrant)
Date: May 10, 2013	By:	/s/ Gary J. Elek
		Gary J. Elek
		Chief Financial Officer
		(Duly Authorized Officer, and Principal Accounting and Financial Officer)

51

Exhibit Index

Exhibit No.	Exhibit
31.1	Certification of the Chief Executive Officer Pursuant to Rule 13a-14(a)/15-d-14(a).
31.2	Certification of the Chief Financial Officer Pursuant to Rule 13a-14(a)/15-d-14(a).
32.1	Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Enacted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Enacted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	Financial statements from the quarterly report on Form 10-Q of LNB Bancorp, Inc. for the quarter ended March 31, 2013, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets at March 31, 2013 (unaudited) and December 31, 2012; (ii) Consolidated Statements of Income (unaudited) for the three months ended March 31, 2013 and 2012; (iii) Consolidated Statements of Shareholders' Equity (unaudited) for the three months ended March 31, 2013 and 2012; (iv) Consolidated Statements of Cash Flows (unaudited) for the three months ended March 31, 2013 and 2012; and (v) Notes to the Unaudited Consolidated Financial Statements.

52

EX-31.1

Exhibit 31.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER

PURSUANT TO RULE 13A-14(A)/15D-14(A)

I, Daniel E. Klimas, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2013 of LNB Bancorp, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 10, 2013	/s/ Daniel E. Klimas
	Daniel E. Klimas
	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER

PURSUANT TO RULE 13A-14(A)/15D-14(A)

I, Gary J. Elek, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2013 of LNB Bancorp, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 10, 2013	/s/ Gary J. Elek
	Gary J. Elek
	Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350, AS ENACTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of LNB Bancorp, Inc. (the “Corporation”) for the period ending March 31, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Daniel E. Klimas, President and Chief Executive Officer of the Corporation, certify, pursuant to 18 U.S.C. Section 1350, as enacted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(i)     The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(ii)     The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation as of, and for, the periods presented in the report.

/s/ Daniel E. Klimas    

Daniel E. Klimas

President and Chief Executive Officer

May 10, 2013

EX-32.2

Exhibit 32.2

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350, AS ENACTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of LNB Bancorp, Inc. (the “Corporation”) for the period ending March 31, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Gary J. Elek, Chief Financial Officer of the Corporation, certify, pursuant to 18 U.S.C. Section 1350, as enacted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(i)     The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(ii)     The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation as of, and for, the periods presented in the report.

/s/ Gary J. Elek    

Gary J. Elek

Chief Financial Officer

May 10, 2013

XML

Securities - Summary of Securities that had Unrealized Losses (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Schedule of Available-for-sale Securities [Line Items]
Less than Twelve Months, Fair Value	$ 70,768	$ 45,553
Less than 12 Months, Aggregate Losses	(948)	(338)
Twelve Months or Longer, Fair Value	0	0
Twelve Months or Longer, Unrealized Losses	0	0
Total, Fair Value	70,768	45,553
Total, Unrealized Losses	(948)	(338)
U.S. Government agencies and corporations
Schedule of Available-for-sale Securities [Line Items]
Less than Twelve Months, Fair Value	14,962
Less than 12 Months, Aggregate Losses	(38)
Twelve Months or Longer, Fair Value	0
Twelve Months or Longer, Unrealized Losses	0
Total, Fair Value	14,962
Total, Unrealized Losses	(38)
Mortgage backed securities
Schedule of Available-for-sale Securities [Line Items]
Less than Twelve Months, Fair Value	54,753	44,491
Less than 12 Months, Aggregate Losses	(890)	(328)
Twelve Months or Longer, Fair Value	0	0
Twelve Months or Longer, Unrealized Losses	0	0
Total, Fair Value	54,753	44,491
Total, Unrealized Losses	(890)	(328)
State and political subdivisions
Schedule of Available-for-sale Securities [Line Items]
Less than Twelve Months, Fair Value	1,053	1,062
Less than 12 Months, Aggregate Losses	(20)	(10)
Twelve Months or Longer, Fair Value	0	0
Twelve Months or Longer, Unrealized Losses	0	0
Total, Fair Value	1,053	1,062
Total, Unrealized Losses	$ (20)	$ (10)

XML

Federal Home Loan Bank Advances - Schedule of Maturities (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Balance
2014	$ 11
2015	20,000
2016	10,000
2017	15,000
Thereafter	2,500
Total	47,511
Restructuring prepayment penalty	(954)	(1,007)
Federal Home Loan Bank advances amount	$ 46,557	$ 46,508
Weighted Average Rate
2014	3.55%
2015	0.80%
2016	0.79%
2017	0.96%
Thereafter	1.24%
Total	0.87%

XML

Deposits - Deposit Balances (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Deposits
Demand and other noninterest-bearing	$ 136,313	$ 139,894
Interest checking	164,561	155,248
Savings	122,346	119,247
Money market accounts	110,173	102,792
Consumer time deposits	396,408	386,549
Public time deposits	119,375	95,862
Total deposits	$ 1,049,176	$ 999,592

XML

Trust Preferred Securities - Additional Information (Details) (USD $)	1 Months Ended	3 Months Ended
	May 31, 2007	Mar. 31, 2013	Dec. 31, 2012
Trust Preferred Securities [Line Items]
Accrued interest payable		$ 828,000	$ 882,000
Maturity date of subordinate notes		Jun. 15, 2037
Trust I [Member]
Trust Preferred Securities [Line Items]
Preferred securities sold to outside investors	10,000,000.0
Floating interest rate period	three-month LIBOR
LIBOR basis points	1.48%
Effective interest rate		1.76%
Accrued interest payable		5,000	7,000
Trust II [Member]
Trust Preferred Securities [Line Items]
Preferred securities sold to outside investors	10,000,000.0
Floating interest rate period	three-month LIBOR
LIBOR basis points	1.48%
Fixed interest rate of Trust II	6.64%
Effective interest rate		6.64%
Accrued interest payable		$ 19,000	$ 21,000

XML

Loans and Allowance for Loan Losses - Summary of Recorded Investment Based on Delinquency Status (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013		Dec. 31, 2012		Mar. 31, 2012
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total ending loans balance	$ 889,931		$ 882,548		$ 862,220
Commercial Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total ending loans balance	415,753		414,005		410,781
Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total ending loans balance	75,909		68,705		73,457
Residential Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total ending loans balance	64,486		64,983		61,012
Home Equity Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total ending loans balance	121,764		122,830		125,298
Indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total ending loans balance	199,964		199,924		178,433
Consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total ending loans balance	12,055		12,101		13,239
Commercial Credit Exposure
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	456,819		444,671
Total loans internally credit risk graded	499,587		490,430
Total loans not internally credit risk graded	390,344		392,118
Total ending loans balance	889,931		882,548
Commercial Credit Exposure | Grade 1-Minimal
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	113		114
Commercial Credit Exposure | Grade 2-Modest
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	0		0
Commercial Credit Exposure | Grade 3-Better than average
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	1,094		1,106
Commercial Credit Exposure | Grade 4-Average
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	34,324		35,777
Commercial Credit Exposure | Grade 5-Acceptable
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	421,288		407,674
Commercial Credit Exposure | Grade 6-Special mention
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans internally credit risk graded	13,639		15,637
Commercial Credit Exposure | Grade 7-Substandard
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans internally credit risk graded	29,129		29,357
Commercial Credit Exposure | Grade 8-Doubtful
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans internally credit risk graded	0		765
Commercial Credit Exposure | Grade 9-Loss
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans internally credit risk graded	0		0
Commercial Credit Exposure | Current loans not internally risk graded
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans not internally credit risk graded	384,763		385,507
Commercial Credit Exposure | 30-59 days past due loans not internally risk graded
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans not internally credit risk graded	2,532		1,695
Commercial Credit Exposure | 60-89 days past due loans not internally risk graded
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans not internally credit risk graded	163		1,855
Commercial Credit Exposure | 90 days past due loans not internally risk graded
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans not internally credit risk graded	2,886		3,061
Commercial Credit Exposure | Commercial Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	378,029		373,771
Total loans internally credit risk graded	415,753		414,005
Total loans not internally credit risk graded	0		0
Total ending loans balance	415,753		414,005
Commercial Credit Exposure | Commercial Real Estate | Grade 1-Minimal
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	0		0
Commercial Credit Exposure | Commercial Real Estate | Grade 2-Modest
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	0		0
Commercial Credit Exposure | Commercial Real Estate | Grade 3-Better than average
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	1,091		1,100
Commercial Credit Exposure | Commercial Real Estate | Grade 4-Average
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	30,126		30,604
Commercial Credit Exposure | Commercial Real Estate | Grade 5-Acceptable
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	346,812		342,067
Commercial Credit Exposure | Commercial Real Estate | Grade 6-Special mention
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans internally credit risk graded	10,470		12,201
Commercial Credit Exposure | Commercial Real Estate | Grade 7-Substandard
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans internally credit risk graded	27,254		27,268
Commercial Credit Exposure | Commercial Real Estate | Grade 8-Doubtful
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans internally credit risk graded	0		765
Commercial Credit Exposure | Commercial Real Estate | Grade 9-Loss
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans internally credit risk graded	0		0
Commercial Credit Exposure | Commercial Real Estate | Current loans not internally risk graded
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans not internally credit risk graded	0		0
Commercial Credit Exposure | Commercial Real Estate | 30-59 days past due loans not internally risk graded
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans not internally credit risk graded	0		0
Commercial Credit Exposure | Commercial Real Estate | 60-89 days past due loans not internally risk graded
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans not internally credit risk graded	0		0
Commercial Credit Exposure | Commercial Real Estate | 90 days past due loans not internally risk graded
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans not internally credit risk graded	0		0
Commercial Credit Exposure | Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	72,259		64,690
Total loans internally credit risk graded	75,909		68,705
Total loans not internally credit risk graded	0		0
Total ending loans balance	75,909		68,705
Commercial Credit Exposure | Commercial | Grade 1-Minimal
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	113		114
Commercial Credit Exposure | Commercial | Grade 2-Modest
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	0		0
Commercial Credit Exposure | Commercial | Grade 3-Better than average
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	3		6
Commercial Credit Exposure | Commercial | Grade 4-Average
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	3,576		4,547
Commercial Credit Exposure | Commercial | Grade 5-Acceptable
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	68,567		60,023
Commercial Credit Exposure | Commercial | Grade 6-Special mention
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans internally credit risk graded	3,128		3,394
Commercial Credit Exposure | Commercial | Grade 7-Substandard
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans internally credit risk graded	522		621
Commercial Credit Exposure | Commercial | Grade 8-Doubtful
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans internally credit risk graded	0		0
Commercial Credit Exposure | Commercial | Grade 9-Loss
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans internally credit risk graded	0		0
Commercial Credit Exposure | Commercial | Current loans not internally risk graded
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans not internally credit risk graded	0		0
Commercial Credit Exposure | Commercial | 30-59 days past due loans not internally risk graded
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans not internally credit risk graded	0		0
Commercial Credit Exposure | Commercial | 60-89 days past due loans not internally risk graded
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans not internally credit risk graded	0		0
Commercial Credit Exposure | Commercial | 90 days past due loans not internally risk graded
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans not internally credit risk graded	0		0
Commercial Credit Exposure | Residential Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	6,531	[1]	6,210	[1]
Total loans internally credit risk graded	7,925	[1]	7,720	[1]
Total loans not internally credit risk graded	56,561	[1]	57,263	[1]
Total ending loans balance	64,486	[1]	64,983	[1]
Commercial Credit Exposure | Residential Real Estate | Grade 1-Minimal
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	0	[1]	0	[1]
Commercial Credit Exposure | Residential Real Estate | Grade 2-Modest
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	0	[1]	0	[1]
Commercial Credit Exposure | Residential Real Estate | Grade 3-Better than average
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	0	[1]	0	[1]
Commercial Credit Exposure | Residential Real Estate | Grade 4-Average
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	622	[1]	626	[1]
Commercial Credit Exposure | Residential Real Estate | Grade 5-Acceptable
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	5,909	[1]	5,584	[1]
Commercial Credit Exposure | Residential Real Estate | Grade 6-Special mention
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans internally credit risk graded	41	[1]	42	[1]
Commercial Credit Exposure | Residential Real Estate | Grade 7-Substandard
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans internally credit risk graded	1,353	[1]	1,468	[1]
Commercial Credit Exposure | Residential Real Estate | Grade 8-Doubtful
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans internally credit risk graded	0	[1]	0	[1]
Commercial Credit Exposure | Residential Real Estate | Grade 9-Loss
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans internally credit risk graded	0	[1]	0	[1]
Commercial Credit Exposure | Residential Real Estate | Current loans not internally risk graded
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans not internally credit risk graded	53,834	[1]	54,416	[1]
Commercial Credit Exposure | Residential Real Estate | 30-59 days past due loans not internally risk graded
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans not internally credit risk graded	1,094	[1]	394	[1]
Commercial Credit Exposure | Residential Real Estate | 60-89 days past due loans not internally risk graded
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans not internally credit risk graded	0	[1]	1,094	[1]
Commercial Credit Exposure | Residential Real Estate | 90 days past due loans not internally risk graded
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans not internally credit risk graded	1,633	[1]	1,359	[1]
Commercial Credit Exposure | Home Equity Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	0		0
Total loans internally credit risk graded	0		0
Total loans not internally credit risk graded	121,764		122,830
Total ending loans balance	121,764		122,830
Commercial Credit Exposure | Home Equity Loans | Grade 1-Minimal
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	0		0
Commercial Credit Exposure | Home Equity Loans | Grade 2-Modest
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	0		0
Commercial Credit Exposure | Home Equity Loans | Grade 3-Better than average
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	0		0
Commercial Credit Exposure | Home Equity Loans | Grade 4-Average
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	0		0
Commercial Credit Exposure | Home Equity Loans | Grade 5-Acceptable
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	0		0
Commercial Credit Exposure | Home Equity Loans | Grade 6-Special mention
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans internally credit risk graded	0		0
Commercial Credit Exposure | Home Equity Loans | Grade 7-Substandard
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans internally credit risk graded	0		0
Commercial Credit Exposure | Home Equity Loans | Grade 8-Doubtful
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans internally credit risk graded	0		0
Commercial Credit Exposure | Home Equity Loans | Grade 9-Loss
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans internally credit risk graded	0		0
Commercial Credit Exposure | Home Equity Loans | Current loans not internally risk graded
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans not internally credit risk graded	119,968		120,196
Commercial Credit Exposure | Home Equity Loans | 30-59 days past due loans not internally risk graded
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans not internally credit risk graded	730		630
Commercial Credit Exposure | Home Equity Loans | 60-89 days past due loans not internally risk graded
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans not internally credit risk graded	57		494
Commercial Credit Exposure | Home Equity Loans | 90 days past due loans not internally risk graded
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans not internally credit risk graded	1,009		1,510
Commercial Credit Exposure | Indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	0		0
Total loans internally credit risk graded	0		0
Total loans not internally credit risk graded	199,964		199,924
Total ending loans balance	199,964		199,924
Commercial Credit Exposure | Indirect | Grade 1-Minimal
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	0		0
Commercial Credit Exposure | Indirect | Grade 2-Modest
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	0		0
Commercial Credit Exposure | Indirect | Grade 3-Better than average
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	0		0
Commercial Credit Exposure | Indirect | Grade 4-Average
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	0		0
Commercial Credit Exposure | Indirect | Grade 5-Acceptable
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	0		0
Commercial Credit Exposure | Indirect | Grade 6-Special mention
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans internally credit risk graded	0		0
Commercial Credit Exposure | Indirect | Grade 7-Substandard
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans internally credit risk graded	0		0
Commercial Credit Exposure | Indirect | Grade 8-Doubtful
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans internally credit risk graded	0		0
Commercial Credit Exposure | Indirect | Grade 9-Loss
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans internally credit risk graded	0		0
Commercial Credit Exposure | Indirect | Current loans not internally risk graded
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans not internally credit risk graded	199,505		198,983
Commercial Credit Exposure | Indirect | 30-59 days past due loans not internally risk graded
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans not internally credit risk graded	299		645
Commercial Credit Exposure | Indirect | 60-89 days past due loans not internally risk graded
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans not internally credit risk graded	104		227
Commercial Credit Exposure | Indirect | 90 days past due loans not internally risk graded
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans not internally credit risk graded	56		69
Commercial Credit Exposure | Consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	0		0
Total loans internally credit risk graded	0		0
Total loans not internally credit risk graded	12,055		12,101
Total ending loans balance	12,055		12,101
Commercial Credit Exposure | Consumer | Grade 1-Minimal
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	0		0
Commercial Credit Exposure | Consumer | Grade 2-Modest
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	0		0
Commercial Credit Exposure | Consumer | Grade 3-Better than average
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	0		0
Commercial Credit Exposure | Consumer | Grade 4-Average
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	0		0
Commercial Credit Exposure | Consumer | Grade 5-Acceptable
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	0		0
Commercial Credit Exposure | Consumer | Grade 6-Special mention
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans internally credit risk graded	0		0
Commercial Credit Exposure | Consumer | Grade 7-Substandard
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans internally credit risk graded	0		0
Commercial Credit Exposure | Consumer | Grade 8-Doubtful
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans internally credit risk graded	0		0
Commercial Credit Exposure | Consumer | Grade 9-Loss
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans internally credit risk graded	0		0
Commercial Credit Exposure | Consumer | Current loans not internally risk graded
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans not internally credit risk graded	11,456		11,912
Commercial Credit Exposure | Consumer | 30-59 days past due loans not internally risk graded
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans not internally credit risk graded	409		26
Commercial Credit Exposure | Consumer | 60-89 days past due loans not internally risk graded
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans not internally credit risk graded	2		40
Commercial Credit Exposure | Consumer | 90 days past due loans not internally risk graded
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans not internally credit risk graded	$ 188		$ 123

[1] Residential loans with an internal commercial credit risk grade include loans that are secured by non owner occupied 1-4 family residential properties and conventional 1-4 family residential properties.

XML

Earnings Per Common Share - Additional Information (Details)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Dec. 31, 2012	Dec. 31, 2011
Disclosure Earning Per Share Additional Information [Abstract]
Options for aggregate common shares	232,000	232,000	232,000	197,000
Dilutive effect of stock options	10,918	1,328

XML

Commitments and Contingencies - Summary of The Contractual Amount of Commitments (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Loss Contingencies [Line Items]
Contractual amount of commitments, total	$ 175,877	$ 163,932
Commitments to extend credit [Member]
Loss Contingencies [Line Items]
Contractual amount of commitments, total	83,129	74,206
Home Equity Loans
Loss Contingencies [Line Items]
Contractual amount of commitments, total	84,039	81,041
Standby letters of credit [Member]
Loss Contingencies [Line Items]
Contractual amount of commitments, total	$ 8,709	$ 8,685

XML

Loans and Allowance for Loan Losses (Tables)

3 Months Ended

Mar. 31, 2013

Receivables [Abstract]

Summary of Activity in the Loan Balances and the Allowance for Loan Losses by Segment

Activity in the allowance for loan losses by segment for the three months ended March 31, 2013 and 2012 are summarized as follows:

Three Months Ended March 31, 2013
	Commercial Real Estate			Commercial			Residential Real Estate			Home Equity Loans			Indirect			Consumer			Total
	(Dollars in thousands)
Allowance for loan losses:
Balance, beginning of year	$	11,386		$	835		$	1,559		$	2,357		$	1,230		$	270		$	17,637
Losses charged off	(123		)	(63		)	(513		)	(436		)	(216		)	(77		)	(1,428		)
Recoveries	7			4			64			47			94			31			247
Provision charged to expense	(486		)	(242		)	554			980			502			42			1,350
Balance, end of year	$	10,784		$	534		$	1,664		$	2,948		$	1,610		$	266		$	17,806
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	1,778		$	192		$	—		$	—		$	—		$	—		$	1,970
Collectively evaluated for impairment	9,006			342			1,664			2,948			1,610			266			15,836
Total ending allowance balance	$	10,784		$	534		$	1,664		$	2,948		$	1,610		$	266		$	17,806
Loans:
Individually evaluated for impairment	$	23,941		$	564		$	1,991		$	483		$	99		$	59		$	27,137
Collectively evaluated for impairment	391,812			75,345			62,495			121,281			199,865			11,996			862,794
Total ending loans balance	$	415,753		$	75,909		$	64,486		$	121,764		$	199,964		$	12,055		$	889,931
Three Months Ended March 31, 2012
	Commercial Real Estate			Commercial			Residential Real Estate			Home Equity Loans			Indirect			Consumer			Total
	(Dollars in thousands)
Allowance for loan losses:
Balance, beginning of year	$	10,714		$	1,409		$	1,331		$	2,289		$	891		$	429		$	17,063
Losses charged off	(979		)	—			(467		)	(403		)	(178		)	(49		)	(2,076		)
Recoveries	20			17			67			4			103			17			228
Provision charged to expense	1,896			(841		)	643			408			(9		)	(197		)	1,900
Balance, end of year	$	11,651		$	585		$	1,574		$	2,298		$	807		$	200		$	17,115
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	3,635		$	145		$	37		$	—		$	—		$	—		$	3,817
Collectively evaluated for impairment	8,016			440			1,537			2,298			807			200			13,298
Total ending allowance balance	$	11,651		$	585		$	1,574		$	2,298		$	807		$	200		$	17,115
Loans:
Individually evaluated for impairment	$	29,328		$	592		$	1,279		$	—		$	—		$	—		$	31,199
Collectively evaluated for impairment	381,453			72,865			59,733			125,298			178,433			13,239			831,021
Total ending loans balance	$	410,781		$	73,457		$	61,012		$	125,298		$	178,433		$	13,239		$	862,220

Age Analysis of Past Due Loans

March 31, 2013 and December 31, 2012 is as follows:

Age Analysis of Past Due Loans as of March 31, 2013

(Dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days		Total Past Due		Current		Total Loans		Recorded Investment > 90 Days and Accruing
Commercial real estate	$	2,869	$	1,901	$	10,215	$	14,985	$	400,768	$	415,753	$	—
Commercial	1,308		5		462		1,775		74,134		75,909		—
Residential real estate	1,094		—		2,267		3,361		61,125		64,486		—
Home equity loans	730		57		1,009		1,796		119,968		121,764		—
Indirect	299		104		56		459		199,505		199,964
Consumer	409		2		188		599		11,456		12,055		—
Total	$	6,709	$	2,069	$	14,197	$	22,975	$	866,956	$	889,931	$	—

Age Analysis of Past Due Loans as of December 31, 2012

(Dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days		Total Past Due		Current		Total Loans		Recorded Investment > 90 Days and Accruing
Commercial real estate	$	3,681	$	1,004	$	12,398	$	17,083	$	396,922	$	414,005	$	—
Commercial	—		—		376		376		68,329		68,705		—
Residential real estate	394		1,094		2,827		4,315		60,668		64,983		184
Home equity loans	630		494		1,510		2,634		120,196		122,830		—
Indirect	645		227		69		941		198,983		199,924
Consumer	26		40		123		189		11,912		12,101		—
Total	$	5,376	$	2,859	$	17,303	$	25,538	$	857,010	$	882,548	$	184

Impaired Loans

Impaired loans for the Period Ended March 31, 2013 and December 31, 2012 are as follows:

	At March 31, 2013						Three Months Ended March 31, 2013
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Balance
	(Dollars in thousands)
With no related allowance recorded:
Commercial real estate	$	19,035	$	24,826	$	—	$	17,207
Commercial	123		294		—		130
Residential real estate	1,991		2,209		—		1,800
Home equity loans	483		689		—		441
Indirect	99		161		—		50
Consumer	59		59		—		61
With allowance recorded:							0
Commercial real estate	4,906		5,867		1,778		6,424
Commercial	441		442		192		450
Residential real estate	—		—		—		—
Home equity loans	—		—		—
Indirect	—		—		—		—
Consumer	—		—		—		—
Total	$	27,137	$	34,547	$	1,970	$	26,563
	At December 31, 2012						Three Months Ended March 31, 2012
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Balance
	(Dollars in thousands)
With no related allowance recorded:
Commercial real estate	$	15,378	$	20,086	$	—	$	9,786
Commercial	138		138		—		287
Residential real estate	1,610		1,686		—		1,449
Home equity loans	398		398		—		—
Indirect	—		—		—		—
Consumer	61		61		—		—
With allowance recorded:
Commercial real estate	7,942		9,876		1,449		18,567
Commercial	459		459		209		269
Residential real estate	181		1,452		15		72
Home equity loans	—		—		—		—
Indirect	—		—		—		—
Consumer	—		—		—		—
Total	$	26,167	$	34,156	$	1,673	$	30,430

*impaired loans shown in the table above included loans that were classified as troubled debt restructurings ("TDRs'). The restructuring of a loan is considered a TDR if both (i) the borrower is experiencing financial difficulties and (ii) the creditor has granted a concession.

Troubled Debt Restructuring Loan Information

The following table summarizes the loans that were modified as a TDR during the period ended March 31, 2013 and 2012.

At March 31, 2013
	Number of Contracts	Pre-Modification Outstanding Recorded Investment	Post-Modification Outstanding Recorded Investment
Residential real estate	1	$34	$23
Home equity loans	6	$361	$243
Indirect Loans	14	$161	$99

At March 31, 2012	Number of Contracts	Pre-Modification Outstanding Recorded Investment	Post-Modification Outstanding Recorded Investment
Commercial real estate	5	$4,559	$3,041

Loans on Nonaccrual Status

Nonaccrual loan balances at March 31, 2013 and December 31, 2012 are as follows:

Loans On Non-Accrual Status	March 31, 2013		December 31, 2012
	(Dollars in thousands)
Commercial real estate	$	16,978	$	16,349
Commercial	372		472
Residential real estate	5,148		5,622
Home equity loans	5,156		4,293
Indirect	551		711
Consumer	309		349
Total Nonaccrual Loans	$	28,514	$	27,796

Summary of Recorded Investment Based on Delinquency Status

The following table presents the recorded investment of commercial real estate, commercial and residential real estate loans by internal credit risk grade and the recorded investment of residential real estate, home equity, indirect and consumer loans based on delinquency status as of March 31, 2013 and December 31, 2012:

Commercial Credit Exposure	Commercial Real Estate		Commercial		Residential Real Estate*		Home Equity Loans		Indirect		Consumer		Total
	March 31, 2013
	(Dollars in thousands)
Loans graded by internal credit risk grade:
Grade 1 — Minimal	$	—	$	113	$	—	$	—	$	—	$	—	$	113
Grade 2 — Modest	—		—		—		—		—		—		—
Grade 3 — Better than average	1,091		3		—		—		—		—		1,094
Grade 4 — Average	30,126		3,576		622		—		—		—		34,324
Grade 5 — Acceptable	346,812		68,567		5,909		—		—		—		421,288
Total Pass Credits	378,029		72,259		6,531		—		—		—		456,819
Grade 6 — Special mention	10,470		3,128		41		—		—		—		13,639
Grade 7 — Substandard	27,254		522		1,353		—		—		—		29,129
Grade 8 — Doubtful	—		—		—		—		—		—		—
Grade 9 — Loss	—		—		—		—		—		—		—
Total loans internally credit risk graded	415,753		75,909		7,925		—		—		—		499,587
Loans not monitored by internal risk grade:
Current loans not internally risk graded	—		—		53,834		119,968		199,505		11,456		384,763
30-59 days past due loans not internally risk graded	—		—		1,094		730		299		409		2,532
60-89 days past due loans not internally risk graded	—		—		—		57		104		2		163
90+ days past due loans not internally risk graded	—		—		1,633		1,009		56		188		2,886
Total loans not internally credit risk graded	—		—		56,561		121,764		199,964		12,055		390,344
Total loans internally and not internally credit risk graded	$	415,753	$	75,909	$	64,486	$	121,764	$	199,964	$	12,055	$	889,931

* Residential loans with an internal commercial credit risk grade include loans that are secured by non owner occupied 1-4 family residential properties and conventional 1-4 family residential properties.

Commercial Credit Exposure	Commercial Real Estate		Commercial		Residential Real Estate*		Home Equity Loans		Indirect		Consumer		Total
	December 31, 2012
	(Dollars in thousands)
Loans graded by internal credit risk grade:
Grade 1 — Minimal	$	—	$	114	$	—	$	—	$	—	$	—	$	114
Grade 2 — Modest	—		—		—		—		—		—		—
Grade 3 — Better than average	1,100		6		—		—		—		—		1,106
Grade 4 — Average	30,604		4,547		626		—		—		—		35,777
Grade 5 — Acceptable	342,067		60,023		5,584		—		—		—		407,674
Total Pass Credits	373,771		64,690		6,210		—		—		—		444,671
Grade 6 — Special mention	12,201		3,394		42		—		—		—		15,637
Grade 7 — Substandard	27,268		621		1,468		—		—		—		29,357
Grade 8 — Doubtful	765		—		—		—		—		—		765
Grade 9 — Loss	—		—		—		—		—		—		—
Total loans internally credit risk graded	414,005		68,705		7,720		—		—		—		490,430
Loans not monitored by internal risk grade:
Current loans not internally risk graded	—		—		54,416		120,196		198,983		11,912		385,507
30-59 days past due loans not internally risk graded	—		—		394		630		645		26		1,695
60-89 days past due loans not internally risk graded	—		—		1,094		494		227		40		1,855
90+ days past due loans not internally risk graded	—		—		1,359		1,510		69		123		3,061
Total loans not internally credit risk graded	—		—		57,263		122,830		199,924		12,101		392,118
Total loans internally and not internally credit risk graded	$	414,005	$	68,705	$	64,983	$	122,830	$	199,924	$	12,101	$	882,548

* Residential loans with an internal commercial credit risk grade include loans that are secured by non owner occupied 1-4 family residential properties and conventional 1-4 family residential properties.

XML

Deposits - Contractual Maturities of Certificates of Deposits (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Time Deposits, Fiscal Year Maturity [Abstract]
2013	$ 326,714
2014	131,150
2015	30,289
2016	20,640
2017	6,990
Total	$ 515,783	$ 482,411

XML

Loans and Allowance for Loan Losses - Age Analysis of Past Due Loans (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012	Mar. 31, 2012
Accounts, Notes, Loans and Financing Receivable [Line Items]
30-59 Days Past Due	$ 6,709	$ 5,376
60-89 Days Past Due	2,069	2,859
Greater than 90 Days	14,197	17,303
Total Past Due	22,975	25,538
Current	866,956	857,010
Total ending loans balance	889,931	882,548	862,220
Recorded Investment greater than 90 Days and Accruing	0	184
Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
30-59 Days Past Due	2,869	3,681
60-89 Days Past Due	1,901	1,004
Greater than 90 Days	10,215	12,398
Total Past Due	14,985	17,083
Current	400,768	396,922
Total ending loans balance	415,753	414,005	410,781
Recorded Investment greater than 90 Days and Accruing	0	0
Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
30-59 Days Past Due	1,308	0
60-89 Days Past Due	5	0
Greater than 90 Days	462	376
Total Past Due	1,775	376
Current	74,134	68,329
Total ending loans balance	75,909	68,705	73,457
Recorded Investment greater than 90 Days and Accruing	0	0
Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
30-59 Days Past Due	1,094	394
60-89 Days Past Due	0	1,094
Greater than 90 Days	2,267	2,827
Total Past Due	3,361	4,315
Current	61,125	60,668
Total ending loans balance	64,486	64,983	61,012
Recorded Investment greater than 90 Days and Accruing	0	184
Home equity loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
30-59 Days Past Due	730	630
60-89 Days Past Due	57	494
Greater than 90 Days	1,009	1,510
Total Past Due	1,796	2,634
Current	119,968	120,196
Total ending loans balance	121,764	122,830	125,298
Recorded Investment greater than 90 Days and Accruing	0	0
Indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
30-59 Days Past Due	299	645
60-89 Days Past Due	104	227
Greater than 90 Days	56	69
Total Past Due	459	941
Current	199,505	198,983
Total ending loans balance	199,964	199,924	178,433
Recorded Investment greater than 90 Days and Accruing
Consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
30-59 Days Past Due	409	26
60-89 Days Past Due	2	40
Greater than 90 Days	188	123
Total Past Due	599	189
Current	11,456	11,912
Total ending loans balance	12,055	12,101	13,239
Recorded Investment greater than 90 Days and Accruing	$ 0	$ 0

XML

Securities - Amortized Cost and Fair Value of the Debt Securities Portfolio are Shown by Expected Maturity (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Available-for-sale Securities, Debt Maturities [Abstract]
Due in one year or less - Amortized Cost	$ 10,080
Due from one year to five years - Amortized Cost	51,731
Due from five years to ten years - Amortized Cost	23,965
Due after ten years - Amortized Cost	6,614
Mortgage backed securities and collateralized mortgage obligations, Amortized cost	127,050
Amortized Cost	219,440	198,771
Due in one year or less - Fair Value	10,085
Due from one year to five years - Fair Value	52,772
Due from five years to ten years - Fair Value	24,578
Due after ten years - Fair Value	7,037
Mortgage backed securities and collateralized mortgage obligations, Fair value	128,701
Fair Value	$ 223,173	$ 203,763

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Federal Home Loan Bank Advances - Additional Information (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Mar. 31, 2013
Securities Pledged As Collateral [Line Items]
Long-term Federal Home Loan Bank Advances	$ 46,508	$ 46,557
Maximum borrowing capacity of the Bank		69,706
Cash management line of credit		40,000
Prepayments For Federal Home Loan Bank Advances	27,500
Federal Home Loan Bank advances, average interest rate	2.47%
Federal Home Loan Bank advances contractual average interest rate	0.88%
Deferred FHLB prepayment penalty	1,017
Cash Management Line Of Credit Outstanding	0	0
Multi-family mortgage loans [Member]
Securities Pledged As Collateral [Line Items]
Investment securities		79,147
Residential real estate mortgage loans [Member]
Securities Pledged As Collateral [Line Items]
Investment securities		$ 24,168
Minimum [Member]
Securities Pledged As Collateral [Line Items]
Federal Home Loan Bank advances remaining maturity	12 months
Federal Home Loan Bank advances, fixed rate, remaining maturity	49 months
Maximum [Member]
Securities Pledged As Collateral [Line Items]
Federal Home Loan Bank advances remaining maturity	31 months
Federal Home Loan Bank advances, fixed rate, remaining maturity	67 months

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Estimated Fair Value of Financial Instruments - Level 3 Valuation Inputs and Technique (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Collateral dependent impaired loans	$ 28,514	$ 27,796
Other real estate	1,215	1,366
Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Collateral dependent impaired loans	28,514	27,796
Other real estate	1,215	1,366
Securities	4,684	0
Level 3 [Member] | Preferred securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities	$ 4,684

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Loans and Allowance for Loan Losses - Additional Information (Details) (USD $) In Thousands, unless otherwise specified			3 Months Ended
	Mar. 31, 2013	Dec. 31, 2012	Mar. 31, 2013 Maximum [Member]	Mar. 31, 2013 Minimum [Member]
Receivables [Abstract]
Bank wide delinquency of loans in percentage	2.58%	2.89%
Bank wide delinquency of loans, 30 to 59 days delinquent, percentage	0.75%	0.61%
Bank wide delinquency of loans, 60 to 89 days delinquent, percentage	0.23%	0.32%
Allocated reserves of nonaccrual TDR loans	$ 371
Loans and leases receivable, impaired, commitment to lend	$ 390
Accounts, Notes, Loans and Financing Receivable [Line Items]
Time period of repayment based on delinquency period one			59 days	30 days
Time period of repayment based on delinquency period two			89 days	60 days
Time period of repayment based on delinquency period three				90 days

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Earnings Per Common Share

3 Months Ended

Mar. 31, 2013

Disclosure Earning Per Share Additional Information [Abstract]

Earnings Per Common Share

Earnings Per Common Share

Basic earnings per share are computed by dividing income available to common shareholders by the weighted average number of shares outstanding during the year. Diluted earnings per share is computed based on the weighted average number of shares outstanding plus the effects of dilutive stock options and warrants outstanding during the year. Basic and diluted earnings per share are calculated as follows:

	Three Months Ended March 31,
	2013		2012
	(Dollars in thousands except per share amounts)
Weighted average shares outstanding used in Basic Earnings per Common Share	8,201,120		7,924,562
Dilutive effect of stock options	10,918		1,328
Weighted average shares outstanding used in Diluted Earnings Per Common Share	8,212,038		7,925,890
Net Income	$	1,113	$	1,505
Preferred stock dividend and accretion	257		319
Income Available to Common Shareholders	$	856	$	1,186
Basic Earnings Per Common Share	$	0.10	$	0.15
Diluted Earnings Per Common Share	$	0.10	$	0.15

Options to purchase 232,000 common shares were considered in computing diluted earnings per common share for the three month period ended March 31, 2013. Stock options of 10,918 common shares were considered dilutive and the remaining stock options were antidilutive for the period ended March 31, 2013. As of March 31, 2012, stock options of 1,328 were considered dilutive and the remaining stock options were antidilutive for the period ended March 31, 2012.

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Share-Based Compensation - Additional Information (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended				12 Months Ended	3 Months Ended		12 Months Ended
	Mar. 31, 2013 Stock options [Member]	Mar. 31, 2012 Stock options [Member]	Mar. 31, 2013 Restricted stock [Member] Installment	Mar. 31, 2012 Restricted stock [Member]	Dec. 31, 2012 Restricted stock [Member]	Mar. 31, 2013 Stock appreciation rights (SARs) [Member]	Mar. 31, 2012 Stock appreciation rights (SARs) [Member]	Dec. 31, 2006 Stock appreciation rights (SARs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expense recorded for share based compensation	$ 5	$ 1	$ 72	$ 66		$ 4	$ 2
Maximum option term	10 years					10 years
General vesting period	3 years					3 years
Total intrinsic value of options exercised	0
Total intrinsic value of options outstanding	$ 110
Shares issued			0		62,105
Purchase price of long term restricted share			$ 0.00		$ 5.39
Forfeited due to employee terminations			0
Number of installment			2
Stock appreciation rights shares issued								30,000
Stock appreciation rights price of long term restricted share								$ 19.00
Shares expired due to employee terminations								15,500

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Loans and Allowance for Loan Losses - Impaired Loans (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Dec. 31, 2012
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded Investment, Total	$ 27,137		$ 26,167
Unpaid Principal Balance, Total	34,547		34,156
Related Allowance, Total	1,970		1,673
Average Recorded Balance, Total	26,563	30,430
Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded Investment	19,035		15,378
Unpaid Principal Balance	24,826		20,086
Related Allowance	0		0
Average Recorded Balance	17,207	9,786
Recorded Investment	4,906		7,942
Unpaid Principal Balance	5,867		9,876
Related Allowance	1,778		1,449
Average Recorded Balance	6,424	18,567
Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded Investment	123		138
Unpaid Principal Balance	294		138
Related Allowance	0		0
Average Recorded Balance	130	287
Recorded Investment	441		459
Unpaid Principal Balance	442		459
Related Allowance	192		209
Average Recorded Balance	450	269
Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded Investment	1,991		1,610
Unpaid Principal Balance	2,209		1,686
Related Allowance	0		0
Average Recorded Balance	1,800	1,449
Recorded Investment	0		181
Unpaid Principal Balance	0		1,452
Related Allowance	0		15
Average Recorded Balance	0	72
Home equity loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded Investment	483		398
Unpaid Principal Balance	689		398
Related Allowance	0		0
Average Recorded Balance	441	0
Recorded Investment	0		0
Unpaid Principal Balance	0		0
Related Allowance	0		0
Average Recorded Balance		0
Indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded Investment	99		0
Unpaid Principal Balance	161		0
Related Allowance	0		0
Average Recorded Balance	50	0
Recorded Investment	0		0
Unpaid Principal Balance	0		0
Related Allowance	0		0
Average Recorded Balance	0	0
Consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded Investment	59		61
Unpaid Principal Balance	59		61
Related Allowance	0		0
Average Recorded Balance	61	0
Recorded Investment	0		0
Unpaid Principal Balance	0		0
Related Allowance	0		0
Average Recorded Balance	$ 0	$ 0

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Estimated Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2013

Fair Value Disclosures [Abstract]

Summary of Financial Instruments

The estimated fair values of the Corporation’s financial instruments at March 31, 2013 and December 31, 2012 are summarized as follows:

	March 31, 2013										December 31, 2012
	Carrying Value		Estimated Fair Value		Level 1		Level 2		Level 3		Carrying Value		Estimated Fair Value
	(Dollars in thousands)
Financial assets
Cash and due from banks, Federal funds sold and interest bearing deposits in other banks	$	54,954	$	54,954	$	54,954	$	—	$	—	$	30,659	$	30,659
Securities	223,173		223,173		—		218,489		4,684		203,763		203,763
Restricted stock	5,741		5,741		—		5,741		—		5,741		5,741
Portfolio loans, net	872,125		877,068		—		—		877,068		864,911		868,716
Loans held for sale	6,250		6,369		—		6,369		—		7,634		7,891
Accrued interest receivable	4,018		4,018		—		4,018		—		3,726		3,726
Financial liabilities
Deposits:
Demand, savings and money market	533,393		528,329		—		528,329		—		517,181		511,665
Certificates of deposit	515,783		519,290		—		519,290		—		482,411		485,394
Short-term borrowings	1,889		1,889		—		1,889		—		1,115		1,115
Federal Home Loan Bank advances	46,557		46,733		—		46,733		—		46,508		46,828
Junior subordinated debentures	16,238		17,010		—		17,010		—		16,238		17,197
Accrued interest payable	803		803		—		803		—		882		882

Assets Measured by Fair Value on a Recurring Basis

The following table presents information about the Corporation’s assets and liabilities measured at fair value on a recurring basis as of March 31, 2013 and December 31, 2012, and the valuation techniques used by the Corporation to determine those fair values.

Description	Fair Value as of March 31, 2013		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Securities available for sale:
U.S. Government agencies and corporations	$	57,727	$	—	$	57,727	$	—
Mortgage backed securities	109,425		—		109,425		—
Collateralized mortgage obligations	19,276		—		19,276		—
State and political subdivisions	32,061		—		32,061		—
Preferred Securities	4,684		—		—		4,684
Total	$	223,173	$	—	$	218,489	$	4,684
Description	Fair Value as of December 31, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Securities available for sale:
U.S. Government agencies and corporations	$	36,970	$	—	$	36,970	$	—
Mortgage backed securities	111,701		—		111,701		—
Collateralized mortgage obligations	22,881		—		22,881		—
State and political subdivisions	32,211		—		32,211		—
Total	$	203,763	$	—	$	203,763	$	—

Balances of Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

The following table presents the balances of assets and liabilities measured at fair value on a nonrecurring basis:

March 31, 2013	Quoted Market Prices in Active Markets (Level 1)		Internal Models with Significant Observable Market Parameters (Level 2)		Internal Models with Significant Unobservable Market Parameters (Level 3)		Total
	(Dollars in thousands)
Impaired and nonaccrual loans	$	—	$	—	$	28,514	$	28,514
Other real estate	—		—		1,215		1,215
Total assets at fair value on a nonrecurring basis	$	—	$	—	$	29,729	$	29,729
December 31, 2012	Quoted Market Prices in Active Markets (Level 1)		Internal Models with Significant Observable Market Parameters (Level 2)		Internal Models with Significant Unobservable Market Parameters (Level 3)		Total
	(Dollars in thousands)
Impaired and nonaccrual loans	$	—	$	—	$	27,796	$	27,796
Other real estate	—		—		1,366		1,366
Total assets at fair value on a nonrecurring basis	$	—	$	—	$	29,162	$	29,162

Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques

The following table presents additional quantitative information about assets measured at fair value on a recurring and nonrecurring basis for which the Corporation has utilized Level 3 inputs to determine fair value (dollars in thousands).

Asset	Fair Value	Valuation Technique	Unobservable Input
Collateral dependent impaired loans	$28,514	Discounted cash flow Appraisal of collateral	Appraisal adjustments Risk premium rate Discount rate
Other real estate	1,215	Appraisal of collateral	Appraisal adjustments
Preferred Securities	4,684	Fair value measurements obtained from an independent pricing service - Income Approach	Market spreads, credit rating collateral type, and other relevant contractual features

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Commitments and Contingencies (Tables)

3 Months Ended

Mar. 31, 2013

Commitments and Contingencies Disclosure [Abstract]

Summary of The Contractual Amount of Commitments

A summary of the contractual amount of commitments at March 31, 2013 and December 31, 2012 follows:

	March 31, 2013		December 31, 2012
	(Dollars in thousands)
Commitments to extend credit	$	83,129	$	74,206
Home equity lines of credit	84,039		81,041
Standby letters of credit	8,709		8,685
Total	$	175,877	$	163,932

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Commitments and Contingencies - Additional Information (Details)	3 Months Ended
	Mar. 31, 2013
Commitments and Contingencies Disclosure [Abstract]
Commitment expiration date, minimum	30 days
Commitment expiration date, maximum	120 days

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Loans and Allowance for Loan Losses - Troubled Debt Restructuring Loan Information (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012 Commercial real estate contracts	Mar. 31, 2013 Residential real estate contracts	Mar. 31, 2013 Home equity loans contracts	Mar. 31, 2013 Consumer contracts
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of loans	5	1	6	14
Pre-Modification Outstanding Recorded Investment	$ 4,559	$ 34	$ 361	$ 161
Post-Modification Outstanding Recorded Investment	$ 3,041	$ 23	$ 243	$ 99

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Share-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Summary of Options Outstanding

	Outstanding		Exercisable
	Number	Weighted Average Remaining Contractual Life (Years)	Number	Weighted Average Exercise Price
Range of Exercise Prices
$5.34-$5.39	37,500	8.66	2,500	$	5.34
$14.47	82,000	4.85	82,000	14.47
$15.35-$16.50	52,500	3.96	52,500	15.78
$19.10	30,000	2.84	30,000	19.10
$19.17	30,000	1.84	30,000	19.17
Outstanding at end of period	232,000	4.62	197,000	$	16.12

Summary of Stock Options

A summary of the status of stock options at March 31, 2013 and 2012 and changes during the year then ended is presented in the table below:

	2013		2012
	Options	Weighted Average Exercise Price per Share	Options	Weighted Average Exercise Price per Share
Outstanding at beginning of period	232,000	14.50	197,000	16.12
Granted	—	—	35,000	$5.39
Forfeited or expired	—	—	—	—
Exercised	—	—	—	—
Stock dividend or split	—	—	—	—
Outstanding at end of period	232,000	14.50	232,000	14.50
Exercisable at end of period	197,000	16.12	196,167	16.17

Summary of the Status of Restricted Shares

A summary of the status of restricted shares at March 31, 2013 is presented in the table below:

	Nonvested Shares		Weighted Average Grant Date Fair Value
Nonvested at January 1, 2013	143,031		$	5.07
Granted	—		—
Vested	(52,499	)	4.68
Forfeited or expired	—		—
Nonvested at March 31, 2013	90,532		8.00

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Summary of Significant Accounting Policies - Additional Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2013	Dec. 31, 2012
Accounts, Notes, Loans and Financing Receivable [Line Items]
Amortization of intangible assets		10 years
Unrealized gain on available for sale securities	$ 2,464	$ 3,295
Minimum pension liability adjustment	$ 2,055	$ 2,055
Maximum [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Written loan commitment period before closing	60 days

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2013

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements include the accounts of LNB Bancorp, Inc. (the “Corporation”) and its wholly-owned subsidiary, The Lorain National Bank (the “Bank”). The consolidated financial statements also include the accounts of North Coast Community Development Corporation which is a wholly-owned subsidiary of the Bank. All intercompany transactions and balances have been eliminated in consolidation.

The accompanying unaudited consolidated financial statements were prepared in accordance with instructions for Form 10-Q and, therefore, do not include information or footnote disclosures necessary for a complete presentation of financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United States of America (“US GAAP”). Accordingly, these financial statements should be read in conjunction with the consolidated financial statements and notes thereto of the Corporation included in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2012. However, all adjustments (consisting only of normal recurring accruals) which, in the opinion of the Corporation’s management (“Management”), are necessary for a fair presentation of the consolidated financial statements have been included. The results of operations for the three month period ended March 31 2013, are not necessarily indicative of the results which may be expected for a full year.

Certain reclassifications of prior years' amounts have been made to conform to current year presentation. Such reclassifications had no effect on prior year net income or shareholders' equity.

Use of Estimates

LNB Bancorp Inc. prepares its financial statements in conformity with generally accepted accounting principles (GAAP), which requires the Corporation’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and revenues and expenses during the reporting period. Actual results could differ from those estimates. Areas involving the use of management’s estimates and assumptions include the allowance for loan losses, the valuation of goodwill, the realization of deferred tax assets and fair values of financial instruments.

Segment Information

The Corporation’s activities are considered to be a single industry segment for financial reporting purposes. LNB Bancorp, Inc. is a financial holding company engaged in the business of commercial and retail banking, investment management and trust services, title insurance, and insurance with operations conducted through its main office and banking centers located throughout Lorain, Erie, Cuyahoga, and Summit counties of Ohio. This market provides the source for substantially all of the Bank’s deposit and loan and trust activities. The majority of the Bank’s income is derived from a diverse base of commercial, mortgage and retail lending activities and investments.

Statement of Cash Flows

For purposes of reporting in the Consolidated Statements of Cash Flows, cash and cash equivalents include currency on hand, amounts due from banks, Federal funds sold, and securities purchased under resale agreements. Generally, Federal funds sold and securities purchased under resale agreements are for one day periods.

Securities

Securities that are bought and held for the sole purpose of being sold in the near term are deemed trading securities with any related unrealized gains and losses reported in earnings. As of March 31, 2013 and December 31, 2012, the Corporation did not hold any trading securities. Securities that the Corporation has a positive intent and ability to hold to maturity are classified as held to maturity. As of March 31, 2013 and December 31, 2012, LNB Bancorp, Inc. did not hold any securities classified as held to maturity. Securities that are not classified as trading or held to maturity are classified as available for sale. Securities classified as available for sale are carried at their fair value with unrealized gains and losses, net of tax, included as a component of accumulated other comprehensive income. Interest and dividends on securities, including amortization of premiums and accretion of discounts using the effective interest method over the period to maturity or call, are included in interest income. Gains and losses on sales of securities are determined on the specific identification method.

Management evaluates securities for other-than-temporary impairment (“OTTI”) on a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. When evaluating investment securities consideration is given to the length of time and the extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer, whether the market decline was affected by macroeconomic conditions and whether the Corporation has the intent to sell the debt security or more likely than not will be required to sell the debt security before its anticipated recovery. In analyzing an issuer’s financial condition, the Corporation may consider whether the securities are issued by the federal government or its agencies, or U.S. Government sponsored enterprises, whether downgrades by bond rating agencies have occurred, and the results of reviews of the issuer’s financial condition. The assessment of whether an other-than-temporary decline exists involves a high degree of subjectivity and judgment and is based on the information available to management at a point in time.

When OTTI occurs, the amount of the OTTI recognized in earnings depends on whether an entity intends to sell the security or it is more likely than not it will be required to sell the security before recovery of its amortized cost basis. If an entity intends to sell or it is more likely than not it will be required to sell the security before recovery of its amortized cost basis, the OTTI shall be recognized in earnings equal to the entire difference between the investment’s amortized cost basis and its fair value at the balance sheet date. The previous amortized cost basis less the OTTI recognized in earnings becomes the new amortized cost basis of the investment. If a security is determined to be other-than-temporarily impaired, but the entity does not intend to sell the security, only the credit portion of the estimated loss is recognized in earnings, with the other portion of the loss recognized in other comprehensive income.

Restricted Stock

The Bank is a member of the Federal Home Loan Bank (FHLB) system. Members are required to own a certain amount of stock based on the level of borrowings and other factors, and may invest in additional amounts. The Bank is also a member of and owns stock in the Federal Reserve Bank. The Corporation owns stock in Bankers Bancshares Inc., an institution that provides correspondent banking services to community banks. Stock in these institutions is classified as restricted stock and is recorded at redemption value which approximates fair value. The Corporation periodically evaluates the restricted stock for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income.

Loans Held For Sale

Held for sale loans are carried at the lower of amortized cost or estimated fair value, determined on an aggregate basis for each type of loan. Net unrealized losses are recognized by charges to income. Gains and losses on loan sales (sales proceeds minus carrying value) are recorded in the noninterest income section of the Consolidated Statement of Income and Comprehensive Income.

Mortgage Banking

The Corporation sells originated mortgage loans into the secondary mortgage loan markets. During the period of loan origination and prior to the sale of the loans in the secondary market, the Corporation has exposure to movements in interest rates associated with mortgage loans that are in the “mortgage pipeline”. A pipeline loan is one in which the Corporation has entered into a written mortgage loan commitment with a potential borrower that will be held for resale. Written loan commitments that relate to the origination of mortgage loans that will be held for resale are considered free-standing derivatives and do not qualify for hedge accounting. Written loan commitments generally have a term of up to 60 days before the closing of the loan. The loan commitment does not bind the potential borrower to entering into the loan, nor does it guarantee that the Corporation will approve the potential borrower for the loan. Therefore, when determining fair value, the Corporation makes estimates of expected “fallout” (loan commitments not expected to close), using models, which consider cumulative historical fallout rates and other factors. Fallout can occur for a variety of reasons including falling interest rate environments where a borrower abandons an interest rate lock loan commitment when a borrower is not approved as an acceptable credit by the lender or for a variety of other non-economic reasons.

Written loan commitments in which the borrower has locked in an interest rate results in market risk to the Corporation to the extent market interest rates change from the rate quoted to the borrower. The Corporation economically hedges the risk of changing interest rates associated with its interest rate lock commitments by entering into mandatory forward sales contracts.

The Corporation's mortgage loans held for sale are subject to changes in fair value, due to changes in interest rates from the loan's closing date through the date the mortgage loan is sold in the secondary market. The fair value of the mortgage loan declines in value when interest rates increase and conversely declines in value when interest rates decrease. To mitigate the risk of changes in interest rates the Corporation enters into mandatory forward sales contracts on a portion of the mortgage loans held for sale to provide an economic hedge against those changes in fair value. The mandatory forward sales contracts were recorded at fair value with changes in value recorded in current earnings.

Derivative Instruments and Hedging Activities

The Corporation uses interest rate swaps, interest rate lock commitments and forward contracts sold to hedge interest rate risk for asset and liability management purposes. All derivatives are accounted for in accordance with ASC-815,Derivatives and Hedging and are recorded as either other assets or other liabilities at fair value. The Corporation engages in Back-to-Back swaps to mitigate its exposure to rising interest rates. A Back-to-Back swap provides that a customer receives a fixed interest rate commercial loan and the Corporation subsequently converts that fixed rate loan to a variable rate instrument over the term of the loan by entering into an interest rate swap with a dealer counterparty based on a London Inter-Bank Offered Rate index. The Corporation then receives a fixed rate payment from the customer on the loan and pays the equivalent amount to the dealer counterparty on the swap in exchange for a variable rate payment stream. Based upon accounting guidance each swap is accounted for as a stand-alone derivative and designated as fair value hedges with any changes in fair value presented in current earnings.

Loans

Loans are reported at the principal amount outstanding, net of unearned income and premiums and discounts. Loans acquired through business combinations are valued at fair market value on or near the date of acquisition. The difference between the principal amount outstanding and the fair market valuation is amortized over the aggregate average life of each class of loan. Unearned income includes deferred fees, net of deferred direct incremental loan origination costs. Unearned income is amortized to interest income, over the contractual life of the loan, using the interest method. Direct loan origination fees and costs are deferred and amortized as an adjustment to interest income over the contractual life of the loan, using the interest method.

Loans are generally placed on nonaccrual status when they are 90 days past due for interest or principal or when the full and timely collection of interest or principal becomes uncertain. When a loan has been placed on nonaccrual status, the accrued and unpaid interest receivable is reversed against interest income. Generally, a loan is returned to accrual status when all delinquent interest and principal becomes current under the terms of the loan agreement and when the collectability is no longer doubtful.

A loan is impaired when based on current information and events it is probable the Corporation will be unable to collect the scheduled payment of principal and interest when due under the contractual terms of the loan agreement. Impairment is evaluated in total for smaller-balance loans of similar nature such as real estate mortgages and installment loans, and on an individual loan basis for commercial loans that are graded substandard or below. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis. If a loan is impaired, a portion of the allowance may be allocated so that the loan is reported, net, using either the present value of estimated future cash flows discounted at the loans effective interest rate, the loan's observable market value or at the fair value of collateral if repayment is expected solely from the collateral.

Allowance for Loan Losses

The allowance for loan losses is management’s estimate of credit losses inherent in the loan portfolio at the balance sheet date. Management’s determination of the allowance, and the resulting provision, is based on judgments and assumptions, including general economic conditions, loan portfolio composition, loan loss experience, management’s evaluation of credit risk relating to pools of loans and individual borrowers, sensitivity analysis and expected loss models, value of underlying collateral, and observations of internal loan review staff or banking regulators.

The provision for loan losses is determined based on Management’s evaluation of the loan portfolio and the adequacy of the allowance for loan losses under current economic conditions and such other factors which, in management’s judgment, deserve current recognition.

Servicing

Servicing assets are recognized as separate assets when rights are acquired through sale of financial assets. Capitalized servicing rights are reported in other assets and are amortized into noninterest income in proportion to, and over the period of, the estimated future net servicing income of the underlying financial assets. Servicing assets are evaluated for impairment on a quarterly basis based upon the fair value of the rights as compared to amortized cost. Impairment is determined by stratifying rights by predominant characteristics, such as interest rates and terms. Fair value is determined using prices for similar assets with similar characteristics, when available, or based upon discounted cash flows using market-based assumptions. Impairment is recognized through a valuation allowance for an individual stratum, to the extent that fair value is less than the capitalized amount for the stratum.

Bank Premises and Equipment

Bank premises and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are computed generally on the straight-line method over the estimated useful lives of the assets. Upon the sale or other disposition of assets, the cost and related accumulated depreciation are retired and the resulting gain or loss is recognized. Maintenance and repairs are charged to expense as incurred, while renewals and improvements are capitalized. Software costs related to externally developed systems are capitalized at cost less accumulated amortization. Amortization is computed on the straight-line method over the estimated useful life.

Fair Value Measurement

The Corporation uses fair value measurements to record certain assets and liabilities at fair value and determine fair value disclosures. Additional information regarding fair value measurement is included in Note 12 (Estimated Fair Value Financial Instruments) in the notes to the consolidated financial statements.

Goodwill and Core Deposit Intangibles

Intangible assets arise from acquisitions and include goodwill and core deposit intangibles. Goodwill is the excess of purchase price over the fair value of identified net assets in acquisitions. Core deposit intangibles represent the value of depositor relationships purchased. Goodwill is evaluated at least annually for impairment or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The Corporation evaluates goodwill impairment annually as of November 30^th of each year. Core deposit intangible assets are amortized using the straight-line method over ten years and are subject to annual impairment testing.

To simplify the process of testing goodwill for impairment for both public and nonpublic entities, on September 15, 2011 the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2011-08, Intangibles — Goodwill and Other (Topic 350): Testing Goodwill for Impairment. ASU 2011-08 gives an entity the option to first assess qualitative factors to determine whether it is more likely than not (a likelihood of more than 50%) that the fair value of a reporting unit is less than its carrying amount (impairment). If the entity finds after the qualitative assessment that it is more likely than not (impairment indicators) that the fair value of a reporting unit is less than its carrying amount, the entity is then required to perform a full impairment test. Prior to the update, entities were required to test goodwill for impairment on at least an annual basis.

Other Real Estate Owned

Other real estate owned (OREO) is comprised of property acquired through a foreclosure proceeding or acceptance of a deed-in-lieu of foreclosure, and loans classified as in-substance foreclosure. Other real estate owned is recorded at the lower of the recorded investment in the loan at the time of acquisition or the fair value of the underlying property collateral, less estimated selling costs. Any write-down in the carrying value of a property at the time of acquisition is charged to the allowance for loan losses. Any subsequent write-downs to reflect current fair market value, as well as gains and losses on disposition and revenues and expenses incurred in maintaining such properties, are treated as period costs. Banking premises are transferred at the lower of carrying value or estimated fair value, less estimated selling costs.

Bank Owned Life Insurance

Bank owned life insurance policies are stated at the current cash surrender value of the policy, or the policy death proceeds less any obligation to provide a death benefit to an insured's beneficiaries if that value is less than the cash surrender value. Increases in the asset value are recorded as earnings in other income.

Split-Dollar Life Insurance

The Corporation recognizes a liability and related compensation costs for endorsement split-dollar life insurance policies that provide a benefit to certain employees extending to postretirement periods. Based on the present value of expected future cash flows, the liability is recognized based on the substantive agreement with the employee.

Share-Based Compensation

The Corporation’s stock based compensation plans are described in detail in Note 13 (Share-Based Compensation). Compensation expense is recognized for stock options and unvested (restricted) stock awards issued to employees, based on the fair value of these awards at the date of grant. A Black Scholes model is utilized to estimate the fair value of stock options, while the market price of the Corporation’s common shares at the date of grant is used to estimate the fair value of unvested (restricted) stock awards.

Compensation cost is recognized over the required service period, generally defined as the vesting period for stock option awards and as the unvested period for nonvested (restricted) stock awards. Certain of the Corporation’s share-based awards contain terms that provide for a graded vesting schedule whereby portions of the award vest in increments over the requisite service period.

Investment and Trust Services Assets and Income

Property held by the Corporation in fiduciary or agency capacity for its customers is not included in the Corporation’s financial statements as such items are not assets of the Corporation. Income from the Investment and Trust Services Division is reported on an accrual basis.

Off Balance Sheet Instruments

In the ordinary course of business, the Corporation has entered into commitments to extend credit, including commitments under credit card arrangements, commercial letters of credit and standby letters of credit. Such financial instruments are recorded when they are funded. Additional information regarding Off Balance Sheet Instruments is included in Note 11 (Commitments and Contingencies) in the notes to the consolidated financial statements.

Income Taxes

The Corporation and its wholly-owned subsidiary file an annual consolidated Federal income tax return. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be removed or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded when necessary to reduce deferred tax assets to amounts which are deemed more likely than not to be realized.

Comprehensive Income

Comprehensive income consists of net income and other comprehensive income. Other comprehensive income includes unrealized gains and losses on securities available for sale and changes in the funded status of the pension plan, which are also recognized as separate components of shareholders’ equity. Unrealized gains on the Corporation’s available-for-sale securities (after applicable income tax expense) totaling $2,464 and $3,295 at March 31, 2013 and December 31, 2012, respectively, and the minimum pension liability adjustment (after applicable income tax benefit) totaling $2,055 at March 31, 2013 and December 31, 2012, respectively, are included in accumulated other comprehensive income.

New Accounting Pronouncements

ASC Topic 220: Comprehensive Income: Presentation of Comprehensive Income.    On June 16, 2011, the FASB issued Accounting Standards Update (ASU) 2011-05. This ASU is intended to increase the prominence of other comprehensive income in financial statements. The new guidance does not change whether items are reported in net income or in other comprehensive income or whether and when items of other comprehensive income are reclassified to net income. ASU 2011-05 eliminates the option in current U.S. generally accepted accounting principles that permits the presentation of other comprehensive income in the statement of changes in equity. The new guidance in the ASU requires that an entity report comprehensive income in either a single continuous statement that presents the components of net income or a separate but consecutive statement. The new guidance is to be applied retrospectively and early adoption is permitted. For public entities, the amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The adoption of this pronouncement did not have a material impact on the Corporation’s financial statements.

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Earnings Per Common Share - Basic and Diluted Earnings Per Share (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Disclosure Earning Per Share Additional Information [Abstract]
Weighted average shares outstanding used in Basic Earnings per Common Share	8,201,120	7,924,562
Dilutive effect of stock options	10,918	1,328
Weighted average shares outstanding used in Diluted Earnings Per Common Share	8,212,038	7,925,890
Net income	$ 1,113	$ 1,505
Preferred stock dividend and accretion	257	319
Income Available to Common Shareholders	$ 856	$ 1,186
Basic Earnings Per Common Share	$ 0.10	$ 0.15
Diluted Earnings Per Common Share	$ 0.10	$ 0.15

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Securities - Additional Information (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013 securities	Dec. 31, 2012 securities
Investments, Debt and Equity Securities [Abstract]
Carrying value of securities	$ 123,770	$ 150,197
Number of securities	18	12
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses	$ 948	$ 338

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Federal Home Loan Bank Advances - Maturities of FHLB Advances Outstanding (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Cash Management Line Of Credit Outstanding	$ 0	$ 0
Maturities of FHLB advances outstanding
Federal Home Loan Bank advances amount	46,557	46,508
Restructuring prepayment penalty	(954)	(1,007)
Maturities January 2014 with fixed rate 3.55% [Member]
Maturities of FHLB advances outstanding
Interest rates on Federal Home Loan Bank Advances	3.55%
Federal Home Loan Bank advances amount	11	15
Maturities January 2015 with fixed rate 0.80% [Member]
Maturities of FHLB advances outstanding
Interest rates on Federal Home Loan Bank Advances	0.80%
Federal Home Loan Bank advances amount	20,000	20,000
Maturity December 2016 with fixed rate 0.79% [Member]
Maturities of FHLB advances outstanding
Interest rates on Federal Home Loan Bank Advances	0.79%
Federal Home Loan Bank advances amount	10,000	10,000
Maturity June 2017 through December 2017, with fixed rates ranging from 0.89% to 0.99% [Member]
Maturities of FHLB advances outstanding
Federal Home Loan Bank advances amount	15,000	15,000
Maturity June 2017 through December 2017, with fixed rates ranging from 0.89% to 0.99% [Member] | Minimum [Member]
Maturities of FHLB advances outstanding
Interest rates on Federal Home Loan Bank Advances	0.89%
Maturity June 2017 through December 2017, with fixed rates ranging from 0.89% to 0.99% [Member] | Maximum [Member]
Maturities of FHLB advances outstanding
Interest rates on Federal Home Loan Bank Advances	0.99%
Maturity June 2018 fixed rate 1.24% [Member]
Maturities of FHLB advances outstanding
Interest rates on Federal Home Loan Bank Advances	1.24%
Federal Home Loan Bank advances amount	$ 2,500	$ 2,500

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CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
ASSETS
Cash and due from banks (Note 3)	$ 35,798	$ 24,139
Federal funds sold and interest bearing deposits in banks	19,156	6,520
Cash and cash equivalents	54,954	30,659
Securities available for sale, at fair value (Note 5)	223,173	203,763
Restricted stock	5,741	5,741
Loans held for sale	6,250	7,634
Loans:
Portfolio loans (Note 6)	889,931	882,548
Allowance for loan losses (Note 6)	(17,806)	(17,637)
Net loans	872,125	864,911
Bank premises and equipment, net	8,588	8,721
Other real estate owned	1,215	1,366
Bank owned life insurance	18,778	18,611
Goodwill, net (Note 4)	21,582	21,582
Intangible assets, net (Note 4)	561	594
Accrued interest receivable	4,018	3,726
Other assets	14,198	10,946
Total Assets	1,231,183	1,178,254
Deposits: (Note 7)
Demand and other noninterest-bearing	136,313	139,894
Savings, money market and interest-bearing demand	397,080	377,287
Time deposits	515,783	482,411
Total deposits	1,049,176	999,592
Short-term borrowings (Note 8)	1,889	1,115
Federal Home Loan Bank advances (Note 9)	46,557	46,508
Junior subordinated debentures (Note 10)	16,238	16,238
Accrued interest payable	828	882
Accrued expenses and other liabilities	6,290	3,775
Total Liabilities	1,120,978	1,068,110
Shareholders’ Equity
Discount on Series B preferred stock	(29)	(65)
Common stock, par value $1 per share, authorized 15,000,000 shares, issued 9,631,896 shares at March 31, 2013 and 8,272,548 at December 31, 2012	9,632	8,273
Additional paid-in capital	47,587	39,141
Retained earnings	49,551	48,767
Accumulated other comprehensive income	409	1,240
Treasury shares at cost, 328,194 shares at March 31, 2013 and at December 31, 2012	(6,092)	(6,092)
Total Shareholders’ Equity	110,205	110,144
Total Liabilities and Shareholders’ Equity	1,231,183	1,178,254
Preferred stock, Series A Voting, no par value, authorized 150,000 shares, none issued at March 31, 2013 and December 31, 2012.
Shareholders’ Equity
Preferred stock	0	0
Fixed rate cumulative preferred stock, Series B, no par value, $1,000 liquidation value, 9,147 shares authorized and issued at March 31, 2013 and 18,880 shares authorized and issued at December 31, 2012
Shareholders’ Equity
Preferred stock	$ 9,147	$ 18,880

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Loans and Allowance for Loan Losses - Loans on Nonaccrual Status (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2013	Dec. 31, 2012
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Nonaccrual Loans	$ 28,514	$ 27,796
Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Nonaccrual Loans	16,978	16,349
Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Nonaccrual Loans	372	472
Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Nonaccrual Loans	5,148	5,622
Home equity loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Nonaccrual Loans	5,156	4,293
Indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Nonaccrual Loans	551	711
Consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Nonaccrual Loans	$ 309	$ 349

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CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) (USD $)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Statement of Stockholders' Equity [Abstract]
Dividends declared (in dollars per share)	$ 0.01	$ 0.01
Restricted shares granted (in shares)		62,105
Redemption of preferred stock (in shares)	9,733
Issuance of common stock (in shares)	1,359

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Estimated Fair Value of Financial Instruments - Assets Measured by Fair Value on a Recurring Basis (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Fair Value Of Other Financial Instrument [Line Items]
Securities	$ 0	$ 0
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | U.S. Government agencies and corporations
Fair Value Of Other Financial Instrument [Line Items]
Securities	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Mortgage backed securities
Fair Value Of Other Financial Instrument [Line Items]
Securities	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Collateralized mortgage obligations
Fair Value Of Other Financial Instrument [Line Items]
Securities	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | State and political subdivisions
Fair Value Of Other Financial Instrument [Line Items]
Securities	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Preferred securities
Fair Value Of Other Financial Instrument [Line Items]
Securities	0
Significant Other Observable Inputs (Level 2) [Member]
Fair Value Of Other Financial Instrument [Line Items]
Securities	218,489	203,763
Significant Other Observable Inputs (Level 2) [Member] | U.S. Government agencies and corporations
Fair Value Of Other Financial Instrument [Line Items]
Securities	57,727	36,970
Significant Other Observable Inputs (Level 2) [Member] | Mortgage backed securities
Fair Value Of Other Financial Instrument [Line Items]
Securities	109,425	111,701
Significant Other Observable Inputs (Level 2) [Member] | Collateralized mortgage obligations
Fair Value Of Other Financial Instrument [Line Items]
Securities	19,276	22,881
Significant Other Observable Inputs (Level 2) [Member] | State and political subdivisions
Fair Value Of Other Financial Instrument [Line Items]
Securities	32,061	32,211
Significant Other Observable Inputs (Level 2) [Member] | Preferred securities
Fair Value Of Other Financial Instrument [Line Items]
Securities	0
Significant Unobservable Inputs (Level 3) [Member]
Fair Value Of Other Financial Instrument [Line Items]
Securities	4,684	0
Significant Unobservable Inputs (Level 3) [Member] | U.S. Government agencies and corporations
Fair Value Of Other Financial Instrument [Line Items]
Securities	0	0
Significant Unobservable Inputs (Level 3) [Member] | Mortgage backed securities
Fair Value Of Other Financial Instrument [Line Items]
Securities	0	0
Significant Unobservable Inputs (Level 3) [Member] | Collateralized mortgage obligations
Fair Value Of Other Financial Instrument [Line Items]
Securities	0	0
Significant Unobservable Inputs (Level 3) [Member] | State and political subdivisions
Fair Value Of Other Financial Instrument [Line Items]
Securities	0	0
Significant Unobservable Inputs (Level 3) [Member] | Preferred securities
Fair Value Of Other Financial Instrument [Line Items]
Securities	4,684
Fair Value [Member]
Fair Value Of Other Financial Instrument [Line Items]
Securities	223,173	203,763
Fair Value [Member] | U.S. Government agencies and corporations
Fair Value Of Other Financial Instrument [Line Items]
Securities	57,727	36,970
Fair Value [Member] | Mortgage backed securities
Fair Value Of Other Financial Instrument [Line Items]
Securities	109,425	111,701
Fair Value [Member] | Collateralized mortgage obligations
Fair Value Of Other Financial Instrument [Line Items]
Securities	19,276	22,881
Fair Value [Member] | State and political subdivisions
Fair Value Of Other Financial Instrument [Line Items]
Securities	32,061	32,211
Fair Value [Member] | Preferred securities
Fair Value Of Other Financial Instrument [Line Items]
Securities	$ 4,684

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Goodwill and Intangible Assets (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended		3 Months Ended
	Dec. 31, 2012	Mar. 31, 2013	Mar. 31, 2013 Core Deposit Intangibles	Dec. 31, 2012 Core Deposit Intangibles
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill	$ 21,582	$ 21,582
Goodwill impairment charge	0
Acquired Finite-Lived Intangible Assets [Line Items]
Estimated useful life			10 years
Core deposit intangibles			1,367	1,367
Less: accumulated amortization			806	773
Carrying value of core deposit intangibles	$ 594	$ 561	$ 561	$ 594

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Share-Based Compensation - Summary of the Status of Restricted Shares (Details) (Restricted stock [Member], USD $)	3 Months Ended	12 Months Ended
	Mar. 31, 2013	Dec. 31, 2012
Restricted stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Nonvested Shares, beginning balance (in shares)	143,031
Nonvested Shares, Granted (in shares)	0	62,105
Nonvested Shares, Vested (in shares)	(52,499)
Nonvested Shares, Forfeited or expired (in shares)	0
Nonvested Shares, ending balance (in shares)	90,532	143,031
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]
Weighted Average Exercise Price per Share, Beginning balance	$ 5.07
Weighted Average Exercise Price per Share, Granted	$ 0.00	$ 5.39
Weighted Average Exercise Price per Share, Vested	$ 4.68
Weighted Average Exercise Price per Share, Forfeited or expired	$ 0.00
Weighted Average Exercise Price per Share, Ending balance	$ 8.00	$ 5.07

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Earnings Per Common Share (Tables)

3 Months Ended

Mar. 31, 2013

Disclosure Earning Per Share Additional Information [Abstract]

Basic and Diluted Earnings Per Share

Basic and diluted earnings per share are calculated as follows:

	Three Months Ended March 31,
	2013		2012
	(Dollars in thousands except per share amounts)
Weighted average shares outstanding used in Basic Earnings per Common Share	8,201,120		7,924,562
Dilutive effect of stock options	10,918		1,328
Weighted average shares outstanding used in Diluted Earnings Per Common Share	8,212,038		7,925,890
Net Income	$	1,113	$	1,505
Preferred stock dividend and accretion	257		319
Income Available to Common Shareholders	$	856	$	1,186
Basic Earnings Per Common Share	$	0.10	$	0.15
Diluted Earnings Per Common Share	$	0.10	$	0.15

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Securities - Amortized Cost, Gross Unrealized Gains and Losses and Fair Values of Securities Available for Sale (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Schedule of Available-for-sale Securities [Line Items]
Debt securities - Amortized Cost	$ 219,440	$ 198,771
Total securities - Amortized Cost	219,440
Unrealized Gains	4,681	5,330
Unrealized Losses	(948)	(338)
Fair Value	223,173	203,763
U.S. Government agencies and corporations
Schedule of Available-for-sale Securities [Line Items]
Debt securities - Amortized Cost	57,736	36,868
Unrealized Gains	29	102
Unrealized Losses	(38)	0
Fair Value	57,727	36,970
Mortgage backed securities
Schedule of Available-for-sale Securities [Line Items]
Debt securities - Amortized Cost	108,146	109,440
Unrealized Gains	2,129	2,589
Unrealized Losses	(850)	(328)
Fair Value	109,425	111,701
Collateralized mortgage obligations
Schedule of Available-for-sale Securities [Line Items]
Debt securities - Amortized Cost	18,904	22,483
Unrealized Gains	412	398
Unrealized Losses	(40)	0
Fair Value	19,276	22,881
State and political subdivisions
Schedule of Available-for-sale Securities [Line Items]
Debt securities - Amortized Cost	29,970	29,980
Unrealized Gains	2,111	2,241
Unrealized Losses	(20)	(10)
Fair Value	32,061	32,211
Preferred securities
Schedule of Available-for-sale Securities [Line Items]
Equity securities - Amortized Cost	4,684
Unrealized Gains	0
Unrealized Losses	0
Fair Value	$ 4,684

XML

Securities (Tables)

3 Months Ended

Mar. 31, 2013

Investments, Debt and Equity Securities [Abstract]

Amortized Cost, Gross Unrealized Gains and Losses and Fair Values of Securities Available for Sale

The amortized cost, gross unrealized gains and losses and fair values of securities at March 31, 2013 and December 31, 2012 follows:

	At March 31, 2013
	Amortized  Cost		Unrealized Gains		Unrealized Losses			Fair Value
	(Dollars in thousands)
Securities available for sale:
U.S. Government agencies and corporations	$	57,736	$	29	$	(38	)	$	57,727
Mortgage backed securities	108,146		2,129		(850		)	109,425
Collateralized mortgage obligations	18,904		412		(40		)	19,276
State and political subdivisions	29,970		2,111		(20		)	32,061
Preferred Securities	4,684		—		—			4,684
Total Securities	$	219,440	$	4,681	$	(948	)	$	223,173
	At December 31, 2012
	Amortized  Cost		Unrealized Gains		Unrealized Losses			Fair Value
	(Dollars in thousands)
Securities available for sale:
U.S. Government agencies and corporations	$	36,868	$	102	$	—		$	36,970
Mortgage backed securities	109,440		2,589		(328		)	111,701
Collateralized mortgage obligations	22,483		398		—			22,881
State and political subdivisions	29,980		2,241		(10		)	32,211
Total Securities	$	198,771	$	5,330	$	(338	)	$	203,763

Amortized Cost and Fair Value of the Debt Securities Portfolio are Shown by Expected Maturity

Mortgage backed securities are not due at a single maturity date and are therefore shown separately.

	At March 31, 2013
	Amortized Cost		Fair Value
	(Dollars in thousands)
Securities available for sale:
Due in one year or less	$	10,080	$	10,085
Due from one year to five years	51,731		52,772
Due from five years to ten years	23,965		24,578
Due after ten years	6,614		7,037
Mortgage backed securities and collateralized mortgage obligations	127,050		128,701
	$	219,440	$	223,173

Realized Gains and Losses Related to Securities Available-for-Sale

Gains or losses on the sales of available-for-sale securities are recognized upon sale and are determined using the specific identification method.

	March 31,
	2013		2012
	(Dollars in thousands)
Gross realized gains	$	178	$	—
Gross realized losses	—		—
Net Securities Gains	$	178	$	—
Proceeds from the sale of available for sale securities	$	2,280	$	—

Summary of Securities that had Unrealized Losses

The Corporation has the intent and the ability to hold these securities until their value recovers, which may be until maturity.

	At March 31, 2013
	Less than 12 months					12 months or longer				Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(Dollars in thousands)
U.S. Government agencies and corporations	$	14,962	$	(38	)	$	—	$	—	$	14,962	(38		)
Mortgage backed securities	$	54,753	$	(890	)	$	—	$	—	$	54,753	(890		)
State and political subdivisions	1,053		(20		)	—		—		1,053		(20		)
Total	$	70,768	$	(948	)	$	—	$	—	$	70,768	$	(948	)
	At December 31, 2012
	Less than 12 months					12 months or longer				Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(Dollars in thousands)
Mortgage backed securities	$	44,491	$	(328	)	$	—	$	—	$	44,491	$	(328	)
State and political subdivisions	1,062		(10		)	—		—		1,062		(10		)
Total	$	45,553	$	(338	)	$	—	$	—	$	45,553	$	(338	)

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Operating Activities
Net income	$ 1,113	$ 1,505
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	1,350	1,900
Depreciation and amortization	262	284
Amortization (accretion) of premiums and discounts	512	376
Amortization of intangibles	33	33
Amortization of loan servicing rights	86	181
Amortization of deferred loan fees	(114)	(54)
Federal deferred income tax expense (benefit)	860	197
Securities gains, net	(178)	0
Share-based compensation expense	72	69
Loans originated for sale	(29,879)	(24,150)
Proceeds from sales of loan originations	31,919	23,483
Net gain from loan sales	(656)	(347)
Net loss on sale of other assets	13	52
Net decrease (increase) in accrued interest receivable and other assets	(4,221)	(1,277)
Net increase (decrease) in accrued interest payable, taxes and other liabilities	2,492	(851)
Net cash provided by operating activities	3,664	1,401
Investing Activities
Proceeds from sales of available-for-sale securities	2,280	0
Proceeds from maturities of available-for-sale securities	31,171	40,681
Purchase of available-for-sale securities	(54,455)	(47,506)
Net increase in loans made to customers	(8,453)	(21,560)
Proceeds from the sale of other real estate owned	141	355
Purchase of bank premises and equipment	(129)	(264)
Net cash provided by (used in) investing activities	(29,445)	(28,294)
Financing Activities
Net increase (decrease) in demand and other noninterest-bearing	(3,581)	7,655
Net increase in savings, money market and interest-bearing demand	19,793	20,419
Net decrease in certificates of deposit	33,372	(2,988)
Net increase (decrease) in short-term borrowings	774	667
Proceeds from Federal Home Loan Bank advances	53	20,000
Payment of Federal Home Loan Bank advances	(3)	(15,001)
Dividends paid	(332)	(394)
Net cash provided by financing activities	50,076	30,358
Net increase (decrease) in cash and cash equivalents	24,295	3,465
Cash and cash equivalents, January 1	30,659	40,647
Cash and cash equivalents, March 31	54,954	44,112
Supplemental cash flow information
Interest paid	1,623	2,056
Income taxes paid	465	100
Transfer of loans to other real estate owned	$ 40	$ 635

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Mar. 31, 2013	Dec. 31, 2012
Common stock, par value	$ 1	$ 1
Common stock, authorized	15,000,000	15,000,000
Common stock, issued	9,631,896	8,272,548
Treasury stock, shares	328,194	328,194
Preferred stock, Series A Voting, no par value, authorized 150,000 shares, none issued at March 31, 2013 and December 31, 2012.
Preferred stock, shares authorized	150,000	150,000
Preferred stock, shares issued	0	0
Fixed rate cumulative preferred stock, Series B, no par value, $1,000 liquidation value, 9,147 shares authorized and issued at March 31, 2013 and 18,880 shares authorized and issued at December 31, 2012
Preferred stock, Series B, liquidation value	$ 1,000	$ 1,000
Preferred stock, shares authorized	9,147	18,880
Preferred stock, shares issued	9,147	18,880

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Trust Preferred Securities

3 Months Ended

Mar. 31, 2013

Disclosure Trust Preferred Securities Additional Information [Abstract]

Trust Preferred Securities

Trust Preferred Securities

In May 2007, LNB Trust I (“Trust I”) and LNB Trust II (“Trust II”) each sold $10.0 million of preferred securities to outside investors and invested the proceeds in junior subordinated debentures issued by the Corporation. The Corporation’s obligations under the transaction documents, taken together, have the effect of providing a full guarantee by the Corporation, on a subordinated basis, of the payment obligation of the Trusts.

The subordinated notes mature in 2037. Trust I bears a floating interest rate (current three-month LIBOR plus 148 basis points). Trust II bears a fixed rate of 6.64% through June 15, 2017, and then becomes a floating interest rate (current three-month LIBOR plus 148 basis points). Interest on the notes is payable quarterly. The interest rates in effect as of the last determination date in 2013 were 1.76% and 6.64% for Trust I and Trust II, respectively. At March 31, 2013 and December 31, 2012, accrued interest payable for Trust I was $5 and $7 and for Trust II was $19 and $21, respectively.

The subordinated notes are redeemable in whole or in part, without penalty, at the Corporation’s option on or after June 15, 2012 and mature on June 15, 2037. The notes are junior in right of payment to the prior payment in full of all senior indebtedness of the Corporation, whether outstanding at the date of the indenture governing the notes or thereafter incurred.

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Document and Entity Information	3 Months Ended
	Mar. 31, 2013	May 03, 2013
Document and Entity Information [Abstract]
Entity Registrant Name	LNB BANCORP INC
Entity Central Index Key	0000737210
Document Type	10-Q
Document Period End Date	Mar. 31, 2013
Amendment Flag	false
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q1
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		9,303,702

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2013

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

In the normal course of business, the Bank enters into commitments with off-balance sheet risk to meet the financing needs of its customers. These instruments are currently limited to commitments to extend credit and standby letters of credit. Commitments to extend credit involve elements of credit risk and interest rate risk in excess of the amount recognized in the consolidated balance sheets. The Bank’s exposure to credit loss in the event of nonperformance by the other party to the commitment is represented by the contractual amount of the commitment. The Bank uses the same credit policies in making commitments as it does for on-balance sheet instruments. Interest rate risk on commitments to extend credit results from the possibility that interest rates may have moved unfavorably from the position of the Bank since the time the commitment was made.

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates of 30 to 120 days or other termination clauses and may require payment of a fee. Since some of the commitments may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.

The Bank evaluates each customer’s credit worthiness on a case-by-case basis. The amount of collateral obtained by the Bank upon extension of credit is based on management’s credit evaluation of the applicant. Collateral held is generally single-family residential real estate and commercial real estate. Substantially all of the obligations to extend credit are variable rate. Standby letters of credit are conditional commitments issued to guarantee the performance of a customer to a third party. Standby letters of credit generally are contingent upon the failure of the customer to perform according to the terms of the underlying contract with the third party.

A summary of the contractual amount of commitments at March 31, 2013 and December 31, 2012 follows:

	March 31, 2013		December 31, 2012
	(Dollars in thousands)
Commitments to extend credit	$	83,129	$	74,206
Home equity lines of credit	84,039		81,041
Standby letters of credit	8,709		8,685
Total	$	175,877	$	163,932

The nature of the Corporation’s business may result in litigation. Management, after reviewing with counsel all actions and proceedings pending against or involving LNB Bancorp, Inc. and subsidiaries, considers that the aggregate liability or loss, if any, resulting from them will not be material to the Corporation’s financial position, results of operation or liquidity.

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CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Interest and Dividend Income
Loans	$ 9,054	$ 10,049
Securities:
U.S. Government agencies and corporations	841	1,260
State and political subdivisions	289	287
Other debt and equity securities	70	72
Federal funds sold and short-term investments	20	9
Total interest income	10,274	11,677
Interest Expense
Deposits	1,249	1,631
Federal Home Loan Bank advances	154	215
Short-term borrowings	1	0
Junior subordinated debentures	166	176
Total interest expense	1,570	2,022
Net Interest Income	8,704	9,655
Provision for Loan Losses (Note 6)	1,350	1,900
Net interest income after provision for loan losses	7,354	7,755
Noninterest Income
Investment and trust services	375	390
Deposit service charges	816	935
Other service charges and fees	831	748
Income from bank owned life insurance	168	165
Other income	321	342
Total fees and other income	2,511	2,580
Securities gains, net (Note 5)	178	0
Gains on sale of loans	656	347
Loss on sale of other assets, net	(13)	(52)
Total noninterest income	3,332	2,875
Noninterest Expense
Salaries and employee benefits	5,027	4,111
Furniture and equipment	949	1,070
Net occupancy	588	579
Professional fees	490	495
Marketing and public relations	289	247
Supplies, postage and freight	307	243
Telecommunications	162	173
Ohio franchise tax	308	316
FDIC assessments	242	392
Other real estate owned	77	132
Loan and collection expense	388	349
Other expense	454	437
Total noninterest expense	9,281	8,544
Income before income tax expense	1,405	2,086
Income tax expense	292	581
Net Income	1,113	1,505
Other comprehensive income (loss), net of taxes:
Changes in unrealized securities' holding gain (loss) net of taxes	(714)	(392)
Less: reclassification adjustments for securities' gains realized in net income, net of taxes	117	0
Total other comprehensive income (loss), net of taxes	(831)	(392)
Comprehensive income	282	1,113
Dividends and accretion on preferred stock	257	319
Net Income Available to Common Shareholders	$ 856	$ 1,186
Net Income Per Common Share (Note 2)
Basic (in dollars per share)	$ 0.10	$ 0.15
Diluted (in dollars per share)	$ 0.10	$ 0.15
Dividends declared (in dollars per share)	$ 0.01	$ 0.01
Average Common Shares Outstanding
Basic (in shares)	8,201,120	7,924,562
Diluted (in shares)	8,212,038	7,925,890

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Securities

3 Months Ended

Mar. 31, 2013

Investments, Debt and Equity Securities [Abstract]

Securities

Securities

The amortized cost, gross unrealized gains and losses and fair values of securities at March 31, 2013 and December 31, 2012 follows:

	At March 31, 2013
	Amortized  Cost		Unrealized Gains		Unrealized Losses			Fair Value
	(Dollars in thousands)
Securities available for sale:
U.S. Government agencies and corporations	$	57,736	$	29	$	(38	)	$	57,727
Mortgage backed securities	108,146		2,129		(850		)	109,425
Collateralized mortgage obligations	18,904		412		(40		)	19,276
State and political subdivisions	29,970		2,111		(20		)	32,061
Preferred Securities	4,684		—		—			4,684
Total Securities	$	219,440	$	4,681	$	(948	)	$	223,173
	At December 31, 2012
	Amortized  Cost		Unrealized Gains		Unrealized Losses			Fair Value
	(Dollars in thousands)
Securities available for sale:
U.S. Government agencies and corporations	$	36,868	$	102	$	—		$	36,970
Mortgage backed securities	109,440		2,589		(328		)	111,701
Collateralized mortgage obligations	22,483		398		—			22,881
State and political subdivisions	29,980		2,241		(10		)	32,211
Total Securities	$	198,771	$	5,330	$	(338	)	$	203,763

U.S. Government agencies and corporations include callable and bullet agency issues and agency-backed mortgage backed securities. The maturity of mortgage backed securities is shown based on contractual maturity of the security although repayments occur each year.

The amortized cost and fair value of available for sale debt securities by contractual maturity date at March 31, 2013 is provided in the following table. Mortgage backed securities are not due at a single maturity date and are therefore shown separately.

	At March 31, 2013
	Amortized Cost		Fair Value
	(Dollars in thousands)
Securities available for sale:
Due in one year or less	$	10,080	$	10,085
Due from one year to five years	51,731		52,772
Due from five years to ten years	23,965		24,578
Due after ten years	6,614		7,037
Mortgage backed securities and collateralized mortgage obligations	127,050		128,701
	$	219,440	$	223,173

The following table shows the proceeds from sales of available-for-sale securities for each of the two periods ended March 31. The gross realized gains and losses on those sales that have been included in earnings. Gains or losses on the sales of available-for-sale securities are recognized upon sale and are determined using the specific identification method.

	March 31,
	2013		2012
	(Dollars in thousands)
Gross realized gains	$	178	$	—
Gross realized losses	—		—
Net Securities Gains	$	178	$	—
Proceeds from the sale of available for sale securities	$	2,280	$	—

The carrying value of securities pledged to secure trust deposits, public deposits, line of credit, and for other purposes required by law amounted to $123,770 and $150,197 at March 31, 2013 and December 31, 2012, respectively.

The following is a summary of securities that had unrealized losses at March 31, 2013 and December 31, 2012. The information is presented for securities that have been in an unrealized loss position for less than 12 months and for more than 12 months. At March 31, 2013, the Corporation held 18 securities with unrealized losses totaling $948. At December 31, 2012 there were 12 securities with unrealized losses totaling $338. There are temporary reasons why securities may be valued at less than amortized cost. Temporary reasons are that the current levels of interest rates as compared to the coupons on the securities held by the Corporation are higher and impairment is not due to credit deterioration. The Corporation has the intent and the ability to hold these securities until their value recovers, which may be until maturity.

	At March 31, 2013
	Less than 12 months					12 months or longer				Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(Dollars in thousands)
U.S. Government agencies and corporations	$	14,962	$	(38	)	$	—	$	—	$	14,962	(38		)
Mortgage backed securities	$	54,753	$	(890	)	$	—	$	—	$	54,753	(890		)
State and political subdivisions	1,053		(20		)	—		—		1,053		(20		)
Total	$	70,768	$	(948	)	$	—	$	—	$	70,768	$	(948	)
	At December 31, 2012
	Less than 12 months					12 months or longer				Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(Dollars in thousands)
Mortgage backed securities	$	44,491	$	(328	)	$	—	$	—	$	44,491	$	(328	)
State and political subdivisions	1,062		(10		)	—		—		1,062		(10		)
Total	$	45,553	$	(338	)	$	—	$	—	$	45,553	$	(338	)

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Goodwill and Intangible Assets

3 Months Ended

Mar. 31, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

 Goodwill and Intangible Assets

The Corporation has goodwill of $21,582 primarily from an acquisition completed in 2007. The Corporation assesses goodwill for impairment annually and more frequently in certain circumstances. In September 2011, FASB issued an update on the testing of goodwill for impairment under ASC Topic 350, Intangibles – Goodwill and Other. ASC 350 requires a corporation to test goodwill for impairment, on at least an annual basis, by comparing the fair value of a reporting unit with its carrying amount. The overall objective of the update is to simplify how entities, both public and private, test goodwill for impairment. Simplification has resulted in an entity having the option to first assess qualitative factors to determine whether the existence or circumstances lead to a determination that it is more likely than not (that is, a likelihood of more than fifty percent) that the fair value of a reporting unit is less than its carrying amount. For 2012 the Corporation determined the Bank was one reporting unit and assessed the following qualitative factors to determine if there is likelihood that goodwill is impaired: (a) industry and market considerations such as a deterioration in the environment in which the Corporation operates; (b) overall financial performance such as negative or declining cash flows or a decline in actual or planned revenue or earnings compared with actual and projected results of relevant prior periods; (c) events affecting a reporting unit such as a change in the composition or carrying amount of the Corporation’s assets unit; (d) share price — considered in both absolute terms and relative to peers; (e) non-performing loans and allowance for loans losses; and (f) bank capital analysis. Based upon this assessment the Corporation determined that there is no likelihood of goodwill impairment therefore no impairment charge was recognized as of December 31, 2012.

The Corporation cannot predict the occurrences of certain future events that might adversely affect the reported value of goodwill. Such events include, but are not limited to, strategic decisions in response to economic and competitive conditions, the effect of the economic environment on the Corporation’s customer base or a material negative change in the relationship with significant customers.Core deposit intangibles are amortized over their estimated useful life of 10 years. A summary of core deposit intangible assets follows:

	March 31, 2013		December 31, 2012
	(Dollars in thousands)
Core deposit intangibles	$	1,367	$	1,367
Less: accumulated amortization	806		773
Carrying value of core deposit intangibles	$	561	$	594

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Goodwill and Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Summary of Core Deposit Intangible Assets, Gross and Net

A summary of core deposit intangible assets follows:

	March 31, 2013		December 31, 2012
	(Dollars in thousands)
Core deposit intangibles	$	1,367	$	1,367
Less: accumulated amortization	806		773
Carrying value of core deposit intangibles	$	561	$	594

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Estimated Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2013

Fair Value Disclosures [Abstract]

Estimated Fair Value of Financial Instruments

Estimated Fair Value of Financial Instruments

The Corporation discloses estimated fair values for its financial instruments. Fair value estimates, methods and assumptions are set forth below for the Corporation’s financial instruments. The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value:

• The carrying value of cash and due from banks, Federal funds sold, short-term investments, interest bearing deposits in other banks and accrued interest receivable and other financial assets is a reasonable estimate of fair value due to the short-term nature of the asset.

• The fair value of investment securities is based on the fair value hierarchy described below.

• For variable rate loans with interest rates that may be adjusted on a quarterly, or more frequent basis, the carrying amount is a reasonable estimate of fair value. The fair value of other types of loans is estimated by discounting future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities.

• The carrying value approximates the fair value for bank owned life insurance.

• The fair value of deposits with no stated maturity, such as noninterest-bearing demand deposits, savings, money market, checking and interest-bearing checking, is equal to the amount payable on demand as of March 31, for each period presented. The fair value of fixed-maturity certificates of deposit is estimated using the rates currently offered for deposits of similar remaining maturities. For variable rate certificates of deposit, the carrying amount is a reasonable estimate of fair value.

• Securities sold under repurchase agreements, other short-term borrowings, accrued interest payable and other financial liabilities approximate fair value due to the short-term nature of the liability.

• The fair value of Federal Home Loan Bank advances is estimated by discounting future cash flows using current FHLB rates for the remaining term to maturity.

• The fair value of junior subordinated debentures is based on the discounted value of contractual cash flows using rates currently offered for similar maturities.

• The fair value of commitments to extend credit approximates the fees charged to make these commitments since rates and fees of the commitment contracts approximates those currently charged to originate similar commitments. The carrying amount and fair value of off-balance sheet instruments is not significant as of March 31, 2013 and December 31, 2012.

Limitations

Estimates of fair value are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

Estimates of fair value are based on existing on-and-off balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. For example, the Bank has an Investment and Trust Services Division that contributes net fee income annually. The Investment and Trust Services Division is not considered a financial instrument and its value has not been incorporated into the fair value estimates. Other significant assets and liabilities that are not considered financial instruments include premises and equipment and deferred tax assets. The estimated fair values of the Corporation’s financial instruments at March 31, 2013 and December 31, 2012 are summarized as follows:

	March 31, 2013										December 31, 2012
	Carrying Value		Estimated Fair Value		Level 1		Level 2		Level 3		Carrying Value		Estimated Fair Value
	(Dollars in thousands)
Financial assets
Cash and due from banks, Federal funds sold and interest bearing deposits in other banks	$	54,954	$	54,954	$	54,954	$	—	$	—	$	30,659	$	30,659
Securities	223,173		223,173		—		218,489		4,684		203,763		203,763
Restricted stock	5,741		5,741		—		5,741		—		5,741		5,741
Portfolio loans, net	872,125		877,068		—		—		877,068		864,911		868,716
Loans held for sale	6,250		6,369		—		6,369		—		7,634		7,891
Accrued interest receivable	4,018		4,018		—		4,018		—		3,726		3,726
Financial liabilities
Deposits:
Demand, savings and money market	533,393		528,329		—		528,329		—		517,181		511,665
Certificates of deposit	515,783		519,290		—		519,290		—		482,411		485,394
Short-term borrowings	1,889		1,889		—		1,889		—		1,115		1,115
Federal Home Loan Bank advances	46,557		46,733		—		46,733		—		46,508		46,828
Junior subordinated debentures	16,238		17,010		—		17,010		—		16,238		17,197
Accrued interest payable	803		803		—		803		—		882		882

Fair Value Measurements

The fair value of financial assets and liabilities recorded at fair value is categorized in three levels. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. These levels are as follows:

• Level 1 — Valuations based on quoted prices in active markets, such as the New York Stock Exchange. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities.

• Level 2 — Valuations of assets and liabilities traded in less active dealer or broker markets. Valuations include quoted prices for similar assets and liabilities traded in the same market; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. Valuations may be obtained from, or corroborated by, third-party pricing services.

• Level 3 — Assets and liabilities with valuations that include methodologies and assumptions that may not be readily observable, including option pricing models, discounted cash flow models, yield curves and similar techniques. Level 3 valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets or liabilities, but in all cases are corroborated by external data, which may include third-party pricing services.

The following table presents information about the Corporation’s assets and liabilities measured at fair value on a recurring basis as of March 31, 2013 and December 31, 2012, and the valuation techniques used by the Corporation to determine those fair values.

Description	Fair Value as of March 31, 2013		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Securities available for sale:
U.S. Government agencies and corporations	$	57,727	$	—	$	57,727	$	—
Mortgage backed securities	109,425		—		109,425		—
Collateralized mortgage obligations	19,276		—		19,276		—
State and political subdivisions	32,061		—		32,061		—
Preferred Securities	4,684		—		—		4,684
Total	$	223,173	$	—	$	218,489	$	4,684
Description	Fair Value as of December 31, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Securities available for sale:
U.S. Government agencies and corporations	$	36,970	$	—	$	36,970	$	—
Mortgage backed securities	111,701		—		111,701		—
Collateralized mortgage obligations	22,881		—		22,881		—
State and political subdivisions	32,211		—		32,211		—
Total	$	203,763	$	—	$	203,763	$	—

Fair value measurements of U.S. Government agencies and mortgage backed securities use pricing models that vary and may consider various assumptions, including time value, yield curves, volatility factors, prepayment speeds, default rates, loss severity, current market and contractual prices for the underlying financial instruments, as well as other relevant economic measures. Fair value of debt securities such as obligations of state and political may be determined by matrix pricing. Matrix pricing is a mathematical technique that is used to value debt securities without relying exclusively on quoted prices for specific securities, but rather by relying on the securities relationship to other benchmark quoted prices.

There were no transfers between Levels 1 and 2 of the fair value hierarchy during the years ended March 31, 2013 and December 31, 2012. For the available for sale securities, the Corporation obtains fair value measurements from an independent third-party service or independent brokers.

The Corporation has assets that, under certain conditions, are subject to measurement at fair value on a nonrecurring basis. At March 31, 2013 and December 31, 2012, such assets consist primarily of impaired loans and other property. The Corporation has estimated the fair values of these assets using Level 3 inputs, specifically discounted cash flow projections.

The following table presents the balances of assets and liabilities measured at fair value on a nonrecurring basis:

March 31, 2013	Quoted Market Prices in Active Markets (Level 1)		Internal Models with Significant Observable Market Parameters (Level 2)		Internal Models with Significant Unobservable Market Parameters (Level 3)		Total
	(Dollars in thousands)
Impaired and nonaccrual loans	$	—	$	—	$	28,514	$	28,514
Other real estate	—		—		1,215		1,215
Total assets at fair value on a nonrecurring basis	$	—	$	—	$	29,729	$	29,729
December 31, 2012	Quoted Market Prices in Active Markets (Level 1)		Internal Models with Significant Observable Market Parameters (Level 2)		Internal Models with Significant Unobservable Market Parameters (Level 3)		Total
	(Dollars in thousands)
Impaired and nonaccrual loans	$	—	$	—	$	27,796	$	27,796
Other real estate	—		—		1,366		1,366
Total assets at fair value on a nonrecurring basis	$	—	$	—	$	29,162	$	29,162

Impaired and nonaccrual loans:    Fair value adjustments for these items typically occur when there is evidence of impairment. Loans are designated as impaired when, in the judgment of management based on current information and events, it is probable that all amounts due according to the contractual terms of the loan agreement will not be collected. The measurement of loss associated with impaired loans can be based on either the observable market price of the loan or the fair market value of the collateral. The Corporation measures fair value based on the value of the collateral securing the loans. Collateral may be in the form of real estate or personal property including equipment and inventory. The vast majority of collateral is real estate. The value of the collateral is determined based on internal estimates as well as third party appraisals or non-binding broker quotes. These measurements were classified as Level 3.

Other Real Estate:    Other real estate includes foreclosed assets and properties securing residential and commercial loans. Foreclosed assets are adjusted to fair value less costs to sell upon transfer of the loans to foreclosed assets. Subsequently, foreclosed assets are carried at lower of carry value or fair value less costs to sell. Fair value is generally based upon internal estimates and third party appraisals or non-binding broker quotes and, accordingly, considered a Level 3 classification.

The following table presents additional quantitative information about assets measured at fair value on a recurring and nonrecurring basis for which the Corporation has utilized Level 3 inputs to determine fair value (dollars in thousands).

Asset	Fair Value	Valuation Technique	Unobservable Input
Collateral dependent impaired loans	$28,514	Discounted cash flow Appraisal of collateral	Appraisal adjustments Risk premium rate Discount rate
Other real estate	1,215	Appraisal of collateral	Appraisal adjustments
Preferred Securities	4,684	Fair value measurements obtained from an independent pricing service - Income Approach	Market spreads, credit rating collateral type, and other relevant contractual features

Changes in Level 3 Fair Value Measurements

There were no assets measured at fair value on a recurring basis using significant unobservable inputs that were transferred to Level 3 as of or during the three months ended March 31, 2013.

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Short-Term Borrowings

3 Months Ended

Mar. 31, 2013

Disclosure Short Term Borrowings Additional Information [Abstract]

Short-Term Borrowings

Short-Term Borrowings

The Bank has a line of credit for advances and discounts with the Federal Reserve Bank of Cleveland. The amount of this line of credit varies on a monthly basis. The line is equal to 50% of the balances of qualified home equity lines of credit that are pledged as collateral. At March 31, 2013, the Bank had pledged approximately $87,212 in qualifying home equity lines of credit, resulting in an available line of credit of approximately $43,606. No amounts were outstanding under the line of credit at March 31, 2013 or December 31, 2012. The Corporation also has a $6,000 line of credit with an unaffiliated financial institution. No amounts were outstanding under this line of credit at March 31, 2013 and December 31, 2012.

Short-term borrowings include securities sold under repurchase agreements and Federal funds purchased from correspondent banks. At March 31, 2013 and December 31, 2012, the outstanding balance of securities sold under repurchase agreements totaled $1,889 and $1,115, respectively. No Federal funds were purchased as of March 31, 2013 and December 31, 2012.

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Estimated Fair Value of Financial Instruments - Balances of Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Fair Value Of Other Financial Instrument [Line Items]
Impaired and nonaccrual loans	$ 28,514	$ 27,796
Other real estate	1,215	1,366
Total assets at fair value on a nonrecurring basis	29,729	29,162
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Fair Value Of Other Financial Instrument [Line Items]
Impaired and nonaccrual loans	0	0
Other real estate	0	0
Total assets at fair value on a nonrecurring basis	0	0
Significant Other Observable Inputs (Level 2) [Member]
Fair Value Of Other Financial Instrument [Line Items]
Impaired and nonaccrual loans	0	0
Other real estate	0	0
Total assets at fair value on a nonrecurring basis	0	0
Significant Unobservable Inputs (Level 3) [Member]
Fair Value Of Other Financial Instrument [Line Items]
Impaired and nonaccrual loans	28,514	27,796
Other real estate	1,215	1,366
Total assets at fair value on a nonrecurring basis	$ 29,729	$ 29,162

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Loans and Allowance for Loan Losses

3 Months Ended

Mar. 31, 2013

Receivables [Abstract]

Loans and Allowance for Loan Losses

 Loans and Allowance for Loan Losses

The allowance for loan losses is maintained by the Corporation at a level considered by Management to be adequate to cover probable credit losses inherent in the loan portfolio. The amount of the provision for loan losses charged to operating expenses is the amount necessary, in the estimation of Management, to maintain the allowance for loan losses at an adequate level. While management’s periodic analysis of the allowance for loan losses may dictate portions of the allowance be allocated to specific problem loans, the entire amount is available for any loan charge-offs that may occur. Loan losses are charged off against the allowance when management believes that the full collectability of the loan is unlikely. Recoveries of amounts previously charged-off are credited to the allowance.

The allowance is comprised of a general allowance and a specific allowance for identified problem loans. The general allowance is determined by applying estimated loss factors to the credit exposures from outstanding loans. For residential real estate, installment and other loans, loss factors are applied on a portfolio basis. Loss factors are based on the Corporation’s historical loss experience and are reviewed for appropriateness on a quarterly basis, along with other factors affecting the collectability of the loan portfolio. These other factors include but are not limited to; changes in lending policies and procedures, including underwriting standards and collection, charge-off and recovery practices; changes in national and local economic and business conditions, including the condition of various market segments; changes in the nature and volume of the portfolio; changes in the experience, ability, and depth of lending management and staff; changes in the volume and severity of past due and classified loans, the volume of nonaccrual loans, troubled debt restructurings and other loan modifications; the existence and effect of any concentrations of credit, and changes in the level of such concentrations; and the effect of external factors, such as legal and regulatory requirements, on the level of estimated credit losses in the Corporation’s current portfolio. Specific allowances are established for all impaired loans when management has determined that, due to identified significant conditions, it is probable that a loss will be incurred.

Activity in the allowance for loan losses by segment for the three months ended March 31, 2013 and 2012 are summarized as follows:

Three Months Ended March 31, 2013
	Commercial Real Estate			Commercial			Residential Real Estate			Home Equity Loans			Indirect			Consumer			Total
	(Dollars in thousands)
Allowance for loan losses:
Balance, beginning of year	$	11,386		$	835		$	1,559		$	2,357		$	1,230		$	270		$	17,637
Losses charged off	(123		)	(63		)	(513		)	(436		)	(216		)	(77		)	(1,428		)
Recoveries	7			4			64			47			94			31			247
Provision charged to expense	(486		)	(242		)	554			980			502			42			1,350
Balance, end of year	$	10,784		$	534		$	1,664		$	2,948		$	1,610		$	266		$	17,806
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	1,778		$	192		$	—		$	—		$	—		$	—		$	1,970
Collectively evaluated for impairment	9,006			342			1,664			2,948			1,610			266			15,836
Total ending allowance balance	$	10,784		$	534		$	1,664		$	2,948		$	1,610		$	266		$	17,806
Loans:
Individually evaluated for impairment	$	23,941		$	564		$	1,991		$	483		$	99		$	59		$	27,137
Collectively evaluated for impairment	391,812			75,345			62,495			121,281			199,865			11,996			862,794
Total ending loans balance	$	415,753		$	75,909		$	64,486		$	121,764		$	199,964		$	12,055		$	889,931
Three Months Ended March 31, 2012
	Commercial Real Estate			Commercial			Residential Real Estate			Home Equity Loans			Indirect			Consumer			Total
	(Dollars in thousands)
Allowance for loan losses:
Balance, beginning of year	$	10,714		$	1,409		$	1,331		$	2,289		$	891		$	429		$	17,063
Losses charged off	(979		)	—			(467		)	(403		)	(178		)	(49		)	(2,076		)
Recoveries	20			17			67			4			103			17			228
Provision charged to expense	1,896			(841		)	643			408			(9		)	(197		)	1,900
Balance, end of year	$	11,651		$	585		$	1,574		$	2,298		$	807		$	200		$	17,115
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	3,635		$	145		$	37		$	—		$	—		$	—		$	3,817
Collectively evaluated for impairment	8,016			440			1,537			2,298			807			200			13,298
Total ending allowance balance	$	11,651		$	585		$	1,574		$	2,298		$	807		$	200		$	17,115
Loans:
Individually evaluated for impairment	$	29,328		$	592		$	1,279		$	—		$	—		$	—		$	31,199
Collectively evaluated for impairment	381,453			72,865			59,733			125,298			178,433			13,239			831,021
Total ending loans balance	$	410,781		$	73,457		$	61,012		$	125,298		$	178,433		$	13,239		$	862,220

Delinquencies

Management monitors delinquency and potential problem loans. Bank-wide delinquency at March 31, 2013 was 2.58% of total loans. Total 30-59 day delinquency and 60-89 day delinquency was 0.75% and 0.23% of total loans at March 31, 2013, respectively. Bank-wide delinquency at December 31, 2012 was 2.89% of total loans. Total 30-59 day delinquency and 60-89 day delinquency was 0.61% and 0.32% of total loans at December 31, 2012, respectively. Information regarding delinquent loans as of March 31, 2013 and December 31, 2012 is as follows:

Age Analysis of Past Due Loans as of March 31, 2013

(Dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days		Total Past Due		Current		Total Loans		Recorded Investment > 90 Days and Accruing
Commercial real estate	$	2,869	$	1,901	$	10,215	$	14,985	$	400,768	$	415,753	$	—
Commercial	1,308		5		462		1,775		74,134		75,909		—
Residential real estate	1,094		—		2,267		3,361		61,125		64,486		—
Home equity loans	730		57		1,009		1,796		119,968		121,764		—
Indirect	299		104		56		459		199,505		199,964
Consumer	409		2		188		599		11,456		12,055		—
Total	$	6,709	$	2,069	$	14,197	$	22,975	$	866,956	$	889,931	$	—

Age Analysis of Past Due Loans as of December 31, 2012

(Dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days		Total Past Due		Current		Total Loans		Recorded Investment > 90 Days and Accruing
Commercial real estate	$	3,681	$	1,004	$	12,398	$	17,083	$	396,922	$	414,005	$	—
Commercial	—		—		376		376		68,329		68,705		—
Residential real estate	394		1,094		2,827		4,315		60,668		64,983		184
Home equity loans	630		494		1,510		2,634		120,196		122,830		—
Indirect	645		227		69		941		198,983		199,924
Consumer	26		40		123		189		11,912		12,101		—
Total	$	5,376	$	2,859	$	17,303	$	25,538	$	857,010	$	882,548	$	184

Impaired Loans

A loan is considered impaired when it is probable that not all principal and interest amounts will be collected according to the loan contract. Residential mortgage, installment and other consumer loans are evaluated collectively for impairment. Individual commercial loans are evaluated for impairment. Impaired loans are written down by the establishment of a specific allowance where necessary. Interest income recognized on impaired loans while the loan was considered impaired was immaterial for all periods.

Impaired loans for the Period Ended March 31, 2013 and December 31, 2012 are as follows:

	At March 31, 2013						Three Months Ended March 31, 2013
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Balance
	(Dollars in thousands)
With no related allowance recorded:
Commercial real estate	$	19,035	$	24,826	$	—	$	17,207
Commercial	123		294		—		130
Residential real estate	1,991		2,209		—		1,800
Home equity loans	483		689		—		441
Indirect	99		161		—		50
Consumer	59		59		—		61
With allowance recorded:							0
Commercial real estate	4,906		5,867		1,778		6,424
Commercial	441		442		192		450
Residential real estate	—		—		—		—
Home equity loans	—		—		—
Indirect	—		—		—		—
Consumer	—		—		—		—
Total	$	27,137	$	34,547	$	1,970	$	26,563
	At December 31, 2012						Three Months Ended March 31, 2012
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Balance
	(Dollars in thousands)
With no related allowance recorded:
Commercial real estate	$	15,378	$	20,086	$	—	$	9,786
Commercial	138		138		—		287
Residential real estate	1,610		1,686		—		1,449
Home equity loans	398		398		—		—
Indirect	—		—		—		—
Consumer	61		61		—		—
With allowance recorded:
Commercial real estate	7,942		9,876		1,449		18,567
Commercial	459		459		209		269
Residential real estate	181		1,452		15		72
Home equity loans	—		—		—		—
Indirect	—		—		—		—
Consumer	—		—		—		—
Total	$	26,167	$	34,156	$	1,673	$	30,430

*impaired loans shown in the table above included loans that were classified as troubled debt restructurings ("TDRs'). The restructuring of a loan is considered a TDR if both (i) the borrower is experiencing financial difficulties and (ii) the creditor has granted a concession.

Troubled Debt Restructuring

A restructuring of debt constitutes a troubled debt restructuring (“TDR”) if the creditor, for economic or legal reasons related to the debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider. That concession either stems from an agreement between the creditor and the debtor or is imposed by law or a court. The Corporation adheres to ASC 310-40, Troubled Debt Restructurings by Creditors, to determine whether a troubled debt restructuring applies in a particular instance. Prior to loans being modified and classified as a TDR, specific reserves are generally assessed, as most these loans have been specifically allocated for as part of the Corporation's normal loan loss provisioning methodology. The Corporation has allocated reserves of $371 for the TDR loans at March 31, 2013.

The following table summarizes the loans that were modified as a TDR during the period ended March 31, 2013 and 2012.

At March 31, 2013
	Number of Contracts	Pre-Modification Outstanding Recorded Investment	Post-Modification Outstanding Recorded Investment
Residential real estate	1	$34	$23
Home equity loans	6	$361	$243
Indirect Loans	14	$161	$99

At March 31, 2012	Number of Contracts	Pre-Modification Outstanding Recorded Investment	Post-Modification Outstanding Recorded Investment
Commercial real estate	5	$4,559	$3,041

There were no loans modified in a TDR that subsequently defaulted during the twelve months periods ended March 31, 2013 and 2012 respectively (i.e., 90 days or more past due following a modification).

A modification of a loan constitutes a TDR when a borrower is experiencing financial difficulty and the modification constitutes a concession. The Corporation offers various types of concessions when modifying a loan, however, forgiveness of principal is rarely granted. Commercial loans modified in a TDR often involve temporary interest-only payments, term extensions, and converting revolving credit lines to term loans. Additional collateral, a co-borrower, or a guarantor may be requested. Commercial mortgage and construction loans modified in a TDR often involve reducing the interest rate for the remaining term of the loan, extending the maturity date at an interest rate lower than the current market rate for new debt with similar risk, or substituting or adding a new borrower or guarantor. Construction loans modified in a TDR may also involve extending the interest-only payment period. Land loans are also included in the class of commercial real estate loans. Land loans are typically structured as interest-only monthly payments with a balloon payment due at maturity. Land loans modified in a TDR typically involve extending the balloon payment by one to three years and changing the monthly payments from interest-only to principal and interest, while leaving the interest rate unchanged.

Loans modified in a TDR are typically already on nonaccrual status and partial charge-offs have in some cases already been taken against the outstanding loan balance. As a result, loans modified in a TDR for the Corporation may have the financial effect of increasing the specific allowance associated with the loan. The allowance for impaired loans that have been modified in a TDR is measured based on the estimated fair value of the collateral, less any selling costs, if the loan is collateral dependent or on the present value of expected future cash flows discounted at the loan’s effective interest rate. Management exercises significant judgment in developing these estimates.

The regulatory guidance requires loans to be accounted for as collateral-dependent loans when borrowers have filed Chapter 7 bankruptcy, the debt has been discharged and the borrower has not reaffirmed the debt, regardless of the delinquency status of the loan. The filing of bankruptcy by the borrower is evidence of financial difficulty and the discharge of the obligation by the bankruptcy court is deemed to be a concession granted to the borrower.

The Corporation had approximately $390 of additional commitments to lend additional funds to the related debtors whose terms have been modified in a TDR.

Nonaccrual Loans

Nonaccrual loan balances at March 31, 2013 and December 31, 2012 are as follows:

Loans On Non-Accrual Status	March 31, 2013		December 31, 2012
	(Dollars in thousands)
Commercial real estate	$	16,978	$	16,349
Commercial	372		472
Residential real estate	5,148		5,622
Home equity loans	5,156		4,293
Indirect	551		711
Consumer	309		349
Total Nonaccrual Loans	$	28,514	$	27,796

Credit Risk Grading

Sound credit systems, practices and procedures such as credit risk grading systems; effective credit review and examination processes; effective loan monitoring, problem identification, and resolution processes; and a conservative loss recognition process and charge-off policy are integral to management’s proper assessment of the adequacy of the allowance. Many factors are considered when grades are assigned to individual loans such as current and historic delinquency, financial statements of the borrower, current net realizable value of collateral and the general economic environment and specific economic trends affecting the portfolio. Commercial, commercial real estate and residential construction loans are assigned internal credit risk grades. The loan’s internal credit risk grade is reviewed on at least an annual basis and more frequently if needed based on specific borrower circumstances. Credit quality indicators used in management’s periodic analysis of the adequacy of the allowance include the Corporation’s internal credit risk grades which are described below and are included in the table below for March 31, 2013 and December 31, 2012:

• Grades 1 -5: defined as “Pass” credits — loans which are protected by the borrower’s current net worth and paying capacity or by the value of the underlying collateral. Pass credits are current or have not displayed a significant past due history.

• Grade 6: defined as “Special Mention” credits — loans where a potential weakness or risk exists, which could cause a more serious problem if not monitored. Loans listed for special mention generally demonstrate a history of repeated delinquencies, which may indicate a deterioration of the repayment abilities of the borrower.

• Grade 7: defined as “Substandard” credits — loans that have a well-defined weakness based on objective evidence and are characterized by the distinct possibility that the Corporation will sustain some loss if the deficiencies are not corrected.

• Grade 8: defined as “Doubtful” credits — loans classified as doubtful have all the weaknesses inherent in a substandard asset. In addition, these weaknesses make collection or liquidation in full highly questionable and improbable.

• Grade 9: defined as “Loss” credits — loans classified as a loss are considered uncollectible, or of such value that continuance as an asset is not warranted.

For the residential real estate segment, the Corporation monitors credit quality using a combination of the delinquency status of the loan and/or the Corporation’s internal credit risk grades as indicated above.

The following table presents the recorded investment of commercial real estate, commercial and residential real estate loans by internal credit risk grade and the recorded investment of residential real estate, home equity, indirect and consumer loans based on delinquency status as of March 31, 2013 and December 31, 2012:

Commercial Credit Exposure	Commercial Real Estate		Commercial		Residential Real Estate*		Home Equity Loans		Indirect		Consumer		Total
	March 31, 2013
	(Dollars in thousands)
Loans graded by internal credit risk grade:
Grade 1 — Minimal	$	—	$	113	$	—	$	—	$	—	$	—	$	113
Grade 2 — Modest	—		—		—		—		—		—		—
Grade 3 — Better than average	1,091		3		—		—		—		—		1,094
Grade 4 — Average	30,126		3,576		622		—		—		—		34,324
Grade 5 — Acceptable	346,812		68,567		5,909		—		—		—		421,288
Total Pass Credits	378,029		72,259		6,531		—		—		—		456,819
Grade 6 — Special mention	10,470		3,128		41		—		—		—		13,639
Grade 7 — Substandard	27,254		522		1,353		—		—		—		29,129
Grade 8 — Doubtful	—		—		—		—		—		—		—
Grade 9 — Loss	—		—		—		—		—		—		—
Total loans internally credit risk graded	415,753		75,909		7,925		—		—		—		499,587
Loans not monitored by internal risk grade:
Current loans not internally risk graded	—		—		53,834		119,968		199,505		11,456		384,763
30-59 days past due loans not internally risk graded	—		—		1,094		730		299		409		2,532
60-89 days past due loans not internally risk graded	—		—		—		57		104		2		163
90+ days past due loans not internally risk graded	—		—		1,633		1,009		56		188		2,886
Total loans not internally credit risk graded	—		—		56,561		121,764		199,964		12,055		390,344
Total loans internally and not internally credit risk graded	$	415,753	$	75,909	$	64,486	$	121,764	$	199,964	$	12,055	$	889,931

* Residential loans with an internal commercial credit risk grade include loans that are secured by non owner occupied 1-4 family residential properties and conventional 1-4 family residential properties.

Commercial Credit Exposure	Commercial Real Estate		Commercial		Residential Real Estate*		Home Equity Loans		Indirect		Consumer		Total
	December 31, 2012
	(Dollars in thousands)
Loans graded by internal credit risk grade:
Grade 1 — Minimal	$	—	$	114	$	—	$	—	$	—	$	—	$	114
Grade 2 — Modest	—		—		—		—		—		—		—
Grade 3 — Better than average	1,100		6		—		—		—		—		1,106
Grade 4 — Average	30,604		4,547		626		—		—		—		35,777
Grade 5 — Acceptable	342,067		60,023		5,584		—		—		—		407,674
Total Pass Credits	373,771		64,690		6,210		—		—		—		444,671
Grade 6 — Special mention	12,201		3,394		42		—		—		—		15,637
Grade 7 — Substandard	27,268		621		1,468		—		—		—		29,357
Grade 8 — Doubtful	765		—		—		—		—		—		765
Grade 9 — Loss	—		—		—		—		—		—		—
Total loans internally credit risk graded	414,005		68,705		7,720		—		—		—		490,430
Loans not monitored by internal risk grade:
Current loans not internally risk graded	—		—		54,416		120,196		198,983		11,912		385,507
30-59 days past due loans not internally risk graded	—		—		394		630		645		26		1,695
60-89 days past due loans not internally risk graded	—		—		1,094		494		227		40		1,855
90+ days past due loans not internally risk graded	—		—		1,359		1,510		69		123		3,061
Total loans not internally credit risk graded	—		—		57,263		122,830		199,924		12,101		392,118
Total loans internally and not internally credit risk graded	$	414,005	$	68,705	$	64,983	$	122,830	$	199,924	$	12,101	$	882,548

* Residential loans with an internal commercial credit risk grade include loans that are secured by non owner occupied 1-4 family residential properties and conventional 1-4 family residential properties.

The Corporation adheres to underwriting standards consistent with its Loan Policy for indirect and consumer loans. Final approval of a consumer credit depends on the repayment ability of the borrower. Repayment ability generally requires the determination of the borrower’s capacity to meet current and proposed debt service requirements. A borrower’s repayment ability is monitored based on delinquency, generally for time periods of 30 to 59 days past due, 60 to 89 days past due and greater than 90 days past due. This information is provided in the above past due loans table.

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Deposits

3 Months Ended

Mar. 31, 2013

Banking and Thrift [Abstract]

Deposits

Deposits

Deposit balances are summarized as follows:

	March 31, 2013		December 31, 2012
	(Dollars in thousands)
Demand and other noninterest-bearing	$	136,313	$	139,894
Interest checking	164,561		155,248
Savings	122,346		119,247
Money market accounts	110,173		102,792
Consumer time deposits	396,408		386,549
Public time deposits	119,375		95,862
Total deposits	$	1,049,176	$	999,592

The aggregate amount of certificates of deposit in denominations of $100,000 or more amounted to $290,134 and $253,464 at March 31, 2013 and December 31, 2012, respectively.

The maturity distribution of certificates of deposit as of March 31, 2013 are as follows:

	March 31, 2013
	(Dollars in thousands)
2013	$	326,714
2014	131,150
2015	30,289
2016	20,640
2017	6,990
Total	$	515,783

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Federal Home Loan Bank Advances

3 Months Ended

Mar. 31, 2013

Disclosure Federal Home Loan Bank Advances Additional Information [Abstract]

Federal Home Loan Bank Advances

 Federal Home Loan Bank Advances

Federal Home Loan Bank advances amounted to $46,557 and $46,508 at March 31, 2013 and December 31, 2012 respectively. All advances were bullet maturities with no call features. At March 31, 2013, collateral pledged for FHLB advances consisted of qualified multi-family and residential real estate mortgage loans and investment securities of $79,147 and $24,168, respectively. The maximum borrowing capacity of the Bank at March 31, 2013 was $69,706. The Bank maintains a $40,000 cash management line of credit (CMA) with the FHLB. No amounts were outstanding for the CMA line of credit at March  31, 2013 and December 31, 2012.

Maturities of FHLB advances outstanding at March 31, 2013 and December 31, 2012 are as follows:

	March 31, 2013			December 31, 2012
	(Dollars in thousands)
Maturities January 2014 with fixed rate 3.55%	$	11		$	15
Maturity January 2015 with fixed rate 0.80%	20,000			20,000
Maturity December 2016 with fixed rate 0.79%	10,000			10,000
Maturities June 2017 through December 2017, with fixed rates ranging from 0.89% to 0.99%	15,000			15,000
Maturity June 2018 fixed rate 1.24%	2,500			2,500
Restructuring prepayment penalty	(954		)	(1,007		)
Total FHLB advances	$	46,557		$	46,508

In 2012, the Corporation prepaid $27,500 of fixed rate FHLB advances with a contractual average interest rate of 2.47% and a remaining maturity of 12 to 31 months. The prepaid FHLB advances were replaced with $27,500 of fixed rate FHLB advances with a contractual average interest rate of 0.88% and terms of 49 to 67 months. In accordance with the restructure, the Corporation was required to pay a prepayment penalty of $1,017 to the FHLB. Thepresent value of the cash flows under the terms of the new FHLB advances (including the prepayment penalties) were not more than 10% different from the present value of the cash flows under the terms of the prepaid FHLB advances and therefore the new advances were not considered to be substantially different from the original advances in accordance with ASC 470-50, Debt – Modifications and Exchanges. As a result, the prepayment penalties have been treated as a discount on the new debt and are being amortized over the life of the new advances as an adjustment to rate. The prepayment penalty effectively increases the interest rate on the new advances over the lives of the new advances at the time of the transaction. The benefit of prepaying these advances was an immediate decrease in interest expense and a decrease in interest rate sensitivity as the maturity of each of the refinanced FHLB advances was extended at a lower rate.

At March 31, 2013, the advances were structured to contractually pay down as follows:

	Balance			Weighted Average Rate
2014	$	11		3.55%
2015	20,000			0.80
2016	10,000			0.79
2017	15,000			0.96
Thereafter	2,500			1.24
Total	$	47,511		0.87%
Restructuring prepayment penalty	(954		)
Total	$	46,557

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Share-Based Compensation - Summary of Stock Options (Details) (USD $)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Outstanding at beginning of period, shares	232,000	197,000
Granted, shares	0	35,000
Forfeited or expired, shares	0	0
Exercised, shares	0	0
Stock dividend or split	0	0
Outstanding at end of period, shares	232,000	232,000
Exercisable at end of period, shares	197,000	196,167
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward]
Outstanding at beginning of period, Weighted Average Exercise Price Per Share	$ 14.50	$ 16.12
Granted, Weighted Average Exercise Price Per Share	$ 0.00	$ 5.39
Weighted Average Exercise Price per Share, forfeited or cancelled	$ 0.00	$ 0.00
Weighted Average Exercise Price per Share, exercised	$ 0.00	$ 0.00
Weighted Average Exercise Price per Share, stock dividend or split	$ 0.00	$ 0.00
Outstanding at end of period, weighted average exercise price per share	$ 14.50	$ 14.50
Weighted Average Exercise Price per Share, Exercisable	$ 16.12	$ 16.17

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Share-Based Compensation - Summary of Options Outstanding (Details) (USD $)	3 Months Ended
	Mar. 31, 2013
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Outstanding, Number (in shares)	232,000
Weighted Average Remaining Contractual Life	4 years 7 months 13 days
Exercisable, Number (in shares)	197,000
Weighted Average Exercise Price (in usd per share)	$ 16.12
5.34-5.39 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of exercise prices, minimum (in usd per share)	$ 5.34
Range of exercise prices, maximum (in usd per share)	$ 5.39
Outstanding, Number (in shares)	37,500
Weighted Average Remaining Contractual Life	8 years 7 months 28 days
Exercisable, Number (in shares)	2,500
Weighted Average Exercise Price (in usd per share)	$ 5.34
14.47 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise price (in usd per share)	$ 14.47
Outstanding, Number (in shares)	82,000
Weighted Average Remaining Contractual Life	4 years 10 months 6 days
Exercisable, Number (in shares)	82,000
Weighted Average Exercise Price (in usd per share)	$ 14.47
15.35-16.50 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of exercise prices, minimum (in usd per share)	$ 15.35
Range of exercise prices, maximum (in usd per share)	$ 16.50
Outstanding, Number (in shares)	52,500
Weighted Average Remaining Contractual Life	3 years 11 months 16 days
Exercisable, Number (in shares)	52,500
Weighted Average Exercise Price (in usd per share)	$ 15.78
19.10 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise price (in usd per share)	$ 19.10
Outstanding, Number (in shares)	30,000
Weighted Average Remaining Contractual Life	2 years 10 months 2 days
Exercisable, Number (in shares)	30,000
Weighted Average Exercise Price (in usd per share)	$ 19.10
19.17 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise price (in usd per share)	$ 19.17
Outstanding, Number (in shares)	30,000
Weighted Average Remaining Contractual Life	1 year 10 months 2 days
Exercisable, Number (in shares)	30,000
Weighted Average Exercise Price (in usd per share)	$ 19.17

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Cash and Due from Banks - Additional Information (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Cash and Due from Banks [Abstract]
Reserve Balance	$ 453	$ 228

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Short-Term Borrowings - Additional Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Dec. 31, 2012
Disclosure Short Term Borrowings Additional Information [Abstract]
Line of credit	50.00%
Home equity lines of credit	$ 87,212
Available line of credit	43,606
Outstanding amount	0	0
Line of credit with an unaffiliated financial institution	6,000
Balance line of credit	0	0
Securities sold under repurchase agreements	1,889	1,115
Federal funds purchased	$ 0	$ 0

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2013

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The consolidated financial statements include the accounts of LNB Bancorp, Inc. (the “Corporation”) and its wholly-owned subsidiary, The Lorain National Bank (the “Bank”). The consolidated financial statements also include the accounts of North Coast Community Development Corporation which is a wholly-owned subsidiary of the Bank. All intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates

Use of Estimates

LNB Bancorp Inc. prepares its financial statements in conformity with generally accepted accounting principles (GAAP), which requires the Corporation’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and revenues and expenses during the reporting period. Actual results could differ from those estimates. Areas involving the use of management’s estimates and assumptions include the allowance for loan losses, the valuation of goodwill, the realization of deferred tax assets and fair values of financial instruments.

Segment Information

Segment Information

The Corporation’s activities are considered to be a single industry segment for financial reporting purposes. LNB Bancorp, Inc. is a financial holding company engaged in the business of commercial and retail banking, investment management and trust services, title insurance, and insurance with operations conducted through its main office and banking centers located throughout Lorain, Erie, Cuyahoga, and Summit counties of Ohio. This market provides the source for substantially all of the Bank’s deposit and loan and trust activities. The majority of the Bank’s income is derived from a diverse base of commercial, mortgage and retail lending activities and investments.

Statement of Cash Flows

Statement of Cash Flows

For purposes of reporting in the Consolidated Statements of Cash Flows, cash and cash equivalents include currency on hand, amounts due from banks, Federal funds sold, and securities purchased under resale agreements. Generally, Federal funds sold and securities purchased under resale agreements are for one day periods.

Securities

Securities

Securities that are bought and held for the sole purpose of being sold in the near term are deemed trading securities with any related unrealized gains and losses reported in earnings. As of March 31, 2013 and December 31, 2012, the Corporation did not hold any trading securities. Securities that the Corporation has a positive intent and ability to hold to maturity are classified as held to maturity. As of March 31, 2013 and December 31, 2012, LNB Bancorp, Inc. did not hold any securities classified as held to maturity. Securities that are not classified as trading or held to maturity are classified as available for sale. Securities classified as available for sale are carried at their fair value with unrealized gains and losses, net of tax, included as a component of accumulated other comprehensive income. Interest and dividends on securities, including amortization of premiums and accretion of discounts using the effective interest method over the period to maturity or call, are included in interest income. Gains and losses on sales of securities are determined on the specific identification method.

Management evaluates securities for other-than-temporary impairment (“OTTI”) on a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. When evaluating investment securities consideration is given to the length of time and the extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer, whether the market decline was affected by macroeconomic conditions and whether the Corporation has the intent to sell the debt security or more likely than not will be required to sell the debt security before its anticipated recovery. In analyzing an issuer’s financial condition, the Corporation may consider whether the securities are issued by the federal government or its agencies, or U.S. Government sponsored enterprises, whether downgrades by bond rating agencies have occurred, and the results of reviews of the issuer’s financial condition. The assessment of whether an other-than-temporary decline exists involves a high degree of subjectivity and judgment and is based on the information available to management at a point in time.

When OTTI occurs, the amount of the OTTI recognized in earnings depends on whether an entity intends to sell the security or it is more likely than not it will be required to sell the security before recovery of its amortized cost basis. If an entity intends to sell or it is more likely than not it will be required to sell the security before recovery of its amortized cost basis, the OTTI shall be recognized in earnings equal to the entire difference between the investment’s amortized cost basis and its fair value at the balance sheet date. The previous amortized cost basis less the OTTI recognized in earnings becomes the new amortized cost basis of the investment. If a security is determined to be other-than-temporarily impaired, but the entity does not intend to sell the security, only the credit portion of the estimated loss is recognized in earnings, with the other portion of the loss recognized in other comprehensive income.

Restricted Stock

Restricted Stock

The Bank is a member of the Federal Home Loan Bank (FHLB) system. Members are required to own a certain amount of stock based on the level of borrowings and other factors, and may invest in additional amounts. The Bank is also a member of and owns stock in the Federal Reserve Bank. The Corporation owns stock in Bankers Bancshares Inc., an institution that provides correspondent banking services to community banks. Stock in these institutions is classified as restricted stock and is recorded at redemption value which approximates fair value. The Corporation periodically evaluates the restricted stock for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income.

Loans Held For Sale

Loans Held For Sale

Held for sale loans are carried at the lower of amortized cost or estimated fair value, determined on an aggregate basis for each type of loan. Net unrealized losses are recognized by charges to income. Gains and losses on loan sales (sales proceeds minus carrying value) are recorded in the noninterest income section of the Consolidated Statement of Income and Comprehensive Income.

Mortgage banking

Mortgage Banking

The Corporation sells originated mortgage loans into the secondary mortgage loan markets. During the period of loan origination and prior to the sale of the loans in the secondary market, the Corporation has exposure to movements in interest rates associated with mortgage loans that are in the “mortgage pipeline”. A pipeline loan is one in which the Corporation has entered into a written mortgage loan commitment with a potential borrower that will be held for resale. Written loan commitments that relate to the origination of mortgage loans that will be held for resale are considered free-standing derivatives and do not qualify for hedge accounting. Written loan commitments generally have a term of up to 60 days before the closing of the loan. The loan commitment does not bind the potential borrower to entering into the loan, nor does it guarantee that the Corporation will approve the potential borrower for the loan. Therefore, when determining fair value, the Corporation makes estimates of expected “fallout” (loan commitments not expected to close), using models, which consider cumulative historical fallout rates and other factors. Fallout can occur for a variety of reasons including falling interest rate environments where a borrower abandons an interest rate lock loan commitment when a borrower is not approved as an acceptable credit by the lender or for a variety of other non-economic reasons.

Written loan commitments in which the borrower has locked in an interest rate results in market risk to the Corporation to the extent market interest rates change from the rate quoted to the borrower. The Corporation economically hedges the risk of changing interest rates associated with its interest rate lock commitments by entering into mandatory forward sales contracts.

The Corporation's mortgage loans held for sale are subject to changes in fair value, due to changes in interest rates from the loan's closing date through the date the mortgage loan is sold in the secondary market. The fair value of the mortgage loan declines in value when interest rates increase and conversely declines in value when interest rates decrease. To mitigate the risk of changes in interest rates the Corporation enters into mandatory forward sales contracts on a portion of the mortgage loans held for sale to provide an economic hedge against those changes in fair value. The mandatory forward sales contracts were recorded at fair value with changes in value recorded in current earnings.

Derivative Instruments and Hedging Activities

Derivative Instruments and Hedging Activities

The Corporation uses interest rate swaps, interest rate lock commitments and forward contracts sold to hedge interest rate risk for asset and liability management purposes. All derivatives are accounted for in accordance with ASC-815,Derivatives and Hedging and are recorded as either other assets or other liabilities at fair value. The Corporation engages in Back-to-Back swaps to mitigate its exposure to rising interest rates. A Back-to-Back swap provides that a customer receives a fixed interest rate commercial loan and the Corporation subsequently converts that fixed rate loan to a variable rate instrument over the term of the loan by entering into an interest rate swap with a dealer counterparty based on a London Inter-Bank Offered Rate index. The Corporation then receives a fixed rate payment from the customer on the loan and pays the equivalent amount to the dealer counterparty on the swap in exchange for a variable rate payment stream. Based upon accounting guidance each swap is accounted for as a stand-alone derivative and designated as fair value hedges with any changes in fair value presented in current earnings.

Loans

Loans

Loans are reported at the principal amount outstanding, net of unearned income and premiums and discounts. Loans acquired through business combinations are valued at fair market value on or near the date of acquisition. The difference between the principal amount outstanding and the fair market valuation is amortized over the aggregate average life of each class of loan. Unearned income includes deferred fees, net of deferred direct incremental loan origination costs. Unearned income is amortized to interest income, over the contractual life of the loan, using the interest method. Direct loan origination fees and costs are deferred and amortized as an adjustment to interest income over the contractual life of the loan, using the interest method.

Loans are generally placed on nonaccrual status when they are 90 days past due for interest or principal or when the full and timely collection of interest or principal becomes uncertain. When a loan has been placed on nonaccrual status, the accrued and unpaid interest receivable is reversed against interest income. Generally, a loan is returned to accrual status when all delinquent interest and principal becomes current under the terms of the loan agreement and when the collectability is no longer doubtful.

A loan is impaired when based on current information and events it is probable the Corporation will be unable to collect the scheduled payment of principal and interest when due under the contractual terms of the loan agreement. Impairment is evaluated in total for smaller-balance loans of similar nature such as real estate mortgages and installment loans, and on an individual loan basis for commercial loans that are graded substandard or below. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis. If a loan is impaired, a portion of the allowance may be allocated so that the loan is reported, net, using either the present value of estimated future cash flows discounted at the loans effective interest rate, the loan's observable market value or at the fair value of collateral if repayment is expected solely from the collateral.

Allowance for Loan Losses

Allowance for Loan Losses

The allowance for loan losses is management’s estimate of credit losses inherent in the loan portfolio at the balance sheet date. Management’s determination of the allowance, and the resulting provision, is based on judgments and assumptions, including general economic conditions, loan portfolio composition, loan loss experience, management’s evaluation of credit risk relating to pools of loans and individual borrowers, sensitivity analysis and expected loss models, value of underlying collateral, and observations of internal loan review staff or banking regulators.

The provision for loan losses is determined based on Management’s evaluation of the loan portfolio and the adequacy of the allowance for loan losses under current economic conditions and such other factors which, in management’s judgment, deserve current recognition.

Servicing

Servicing

Servicing assets are recognized as separate assets when rights are acquired through sale of financial assets. Capitalized servicing rights are reported in other assets and are amortized into noninterest income in proportion to, and over the period of, the estimated future net servicing income of the underlying financial assets. Servicing assets are evaluated for impairment on a quarterly basis based upon the fair value of the rights as compared to amortized cost. Impairment is determined by stratifying rights by predominant characteristics, such as interest rates and terms. Fair value is determined using prices for similar assets with similar characteristics, when available, or based upon discounted cash flows using market-based assumptions. Impairment is recognized through a valuation allowance for an individual stratum, to the extent that fair value is less than the capitalized amount for the stratum.

Bank Premises and Equipment

Bank Premises and Equipment

Bank premises and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are computed generally on the straight-line method over the estimated useful lives of the assets. Upon the sale or other disposition of assets, the cost and related accumulated depreciation are retired and the resulting gain or loss is recognized. Maintenance and repairs are charged to expense as incurred, while renewals and improvements are capitalized. Software costs related to externally developed systems are capitalized at cost less accumulated amortization. Amortization is computed on the straight-line method over the estimated useful life.

Fair Value Measurement

Fair Value Measurement

The Corporation uses fair value measurements to record certain assets and liabilities at fair value and determine fair value disclosures. Additional information regarding fair value measurement is included in Note 12 (Estimated Fair Value Financial Instruments) in the notes to the consolidated financial statements.

Goodwill and Core Deposit Intangibles

Goodwill and Core Deposit Intangibles

Intangible assets arise from acquisitions and include goodwill and core deposit intangibles. Goodwill is the excess of purchase price over the fair value of identified net assets in acquisitions. Core deposit intangibles represent the value of depositor relationships purchased. Goodwill is evaluated at least annually for impairment or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The Corporation evaluates goodwill impairment annually as of November 30^th of each year. Core deposit intangible assets are amortized using the straight-line method over ten years and are subject to annual impairment testing.

To simplify the process of testing goodwill for impairment for both public and nonpublic entities, on September 15, 2011 the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2011-08, Intangibles — Goodwill and Other (Topic 350): Testing Goodwill for Impairment. ASU 2011-08 gives an entity the option to first assess qualitative factors to determine whether it is more likely than not (a likelihood of more than 50%) that the fair value of a reporting unit is less than its carrying amount (impairment). If the entity finds after the qualitative assessment that it is more likely than not (impairment indicators) that the fair value of a reporting unit is less than its carrying amount, the entity is then required to perform a full impairment test. Prior to the update, entities were required to test goodwill for impairment on at least an annual basis.

Other Real Estate Owned

Other Real Estate Owned

Other real estate owned (OREO) is comprised of property acquired through a foreclosure proceeding or acceptance of a deed-in-lieu of foreclosure, and loans classified as in-substance foreclosure. Other real estate owned is recorded at the lower of the recorded investment in the loan at the time of acquisition or the fair value of the underlying property collateral, less estimated selling costs. Any write-down in the carrying value of a property at the time of acquisition is charged to the allowance for loan losses. Any subsequent write-downs to reflect current fair market value, as well as gains and losses on disposition and revenues and expenses incurred in maintaining such properties, are treated as period costs. Banking premises are transferred at the lower of carrying value or estimated fair value, less estimated selling costs.

Bank Owned Life Insurance

Bank Owned Life Insurance

Bank owned life insurance policies are stated at the current cash surrender value of the policy, or the policy death proceeds less any obligation to provide a death benefit to an insured's beneficiaries if that value is less than the cash surrender value. Increases in the asset value are recorded as earnings in other income.

Split-Dollar Life Insurance

Split-Dollar Life Insurance

The Corporation recognizes a liability and related compensation costs for endorsement split-dollar life insurance policies that provide a benefit to certain employees extending to postretirement periods. Based on the present value of expected future cash flows, the liability is recognized based on the substantive agreement with the employee.

Share-Based Compensation

Share-Based Compensation

The Corporation’s stock based compensation plans are described in detail in Note 13 (Share-Based Compensation). Compensation expense is recognized for stock options and unvested (restricted) stock awards issued to employees, based on the fair value of these awards at the date of grant. A Black Scholes model is utilized to estimate the fair value of stock options, while the market price of the Corporation’s common shares at the date of grant is used to estimate the fair value of unvested (restricted) stock awards.

Compensation cost is recognized over the required service period, generally defined as the vesting period for stock option awards and as the unvested period for nonvested (restricted) stock awards. Certain of the Corporation’s share-based awards contain terms that provide for a graded vesting schedule whereby portions of the award vest in increments over the requisite service period.

Investment and Trust Services Assets and Income

Investment and Trust Services Assets and Income

Property held by the Corporation in fiduciary or agency capacity for its customers is not included in the Corporation’s financial statements as such items are not assets of the Corporation. Income from the Investment and Trust Services Division is reported on an accrual basis.

Income Taxes

Income Taxes

The Corporation and its wholly-owned subsidiary file an annual consolidated Federal income tax return. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be removed or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded when necessary to reduce deferred tax assets to amounts which are deemed more likely than not to be realized.

Comprehensive Income

Comprehensive Income

Comprehensive income consists of net income and other comprehensive income. Other comprehensive income includes unrealized gains and losses on securities available for sale and changes in the funded status of the pension plan, which are also recognized as separate components of shareholders’ equity.

New Accounting Pronouncements

New Accounting Pronouncements

ASC Topic 220: Comprehensive Income: Presentation of Comprehensive Income.    On June 16, 2011, the FASB issued Accounting Standards Update (ASU) 2011-05. This ASU is intended to increase the prominence of other comprehensive income in financial statements. The new guidance does not change whether items are reported in net income or in other comprehensive income or whether and when items of other comprehensive income are reclassified to net income. ASU 2011-05 eliminates the option in current U.S. generally accepted accounting principles that permits the presentation of other comprehensive income in the statement of changes in equity. The new guidance in the ASU requires that an entity report comprehensive income in either a single continuous statement that presents the components of net income or a separate but consecutive statement. The new guidance is to be applied retrospectively and early adoption is permitted. For public entities, the amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The adoption of this pronouncement did not have a material impact on the Corporation’s financial statements.

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Deposits (Tables)

3 Months Ended

Mar. 31, 2013

Banking and Thrift [Abstract]

Deposit Balances

Deposit balances are summarized as follows:

	March 31, 2013		December 31, 2012
	(Dollars in thousands)
Demand and other noninterest-bearing	$	136,313	$	139,894
Interest checking	164,561		155,248
Savings	122,346		119,247
Money market accounts	110,173		102,792
Consumer time deposits	396,408		386,549
Public time deposits	119,375		95,862
Total deposits	$	1,049,176	$	999,592

Contractual Maturities of Certificates of Deposits

The maturity distribution of certificates of deposit as of March 31, 2013 are as follows:

	March 31, 2013
	(Dollars in thousands)
2013	$	326,714
2014	131,150
2015	30,289
2016	20,640
2017	6,990
Total	$	515,783

XML

Deposits - Additional Information (Details) (USD $)	3 Months Ended	12 Months Ended
	Mar. 31, 2013	Dec. 31, 2012
Banking and Thrift [Abstract]
Certificates of deposit denominations	$ 100,000
Aggregate amount of certificates of deposit in denominations of $100,000 or more	$ 290,134,000	$ 253,464,000

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- Summary of Activity in the Loan Balances and the Allowance for Loan Losses by Segment (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Dec. 31, 2012
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance, beginning of period	$ 17,637	$ 17,063
Losses charged off	(1,428)	(2,076)
Recoveries	247	228
Provision charged to expense	1,350	1,900
Balance, end of period	17,806	17,115
Ending allowance balance attributable to loans:
Individually evaluated for impairment	1,970	3,817
Collectively evaluated for impairment	15,836	13,298
Total ending allowance balance	17,806	17,115
Loans:
Individually evaluated for impairment	27,137	31,199
Collectively evaluated for impairment	862,794	831,021
Total ending loans balance	889,931	862,220	882,548
Commercial Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance, beginning of period	11,386	10,714
Losses charged off	(123)	(979)
Recoveries	7	20
Provision charged to expense	(486)	1,896
Balance, end of period	10,784	11,651
Ending allowance balance attributable to loans:
Individually evaluated for impairment	1,778	3,635
Collectively evaluated for impairment	9,006	8,016
Total ending allowance balance	10,784	11,651
Loans:
Individually evaluated for impairment	23,941	29,328
Collectively evaluated for impairment	391,812	381,453
Total ending loans balance	415,753	410,781	414,005
Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance, beginning of period	835	1,409
Losses charged off	(63)	0
Recoveries	4	17
Provision charged to expense	(242)	(841)
Balance, end of period	534	585
Ending allowance balance attributable to loans:
Individually evaluated for impairment	192	145
Collectively evaluated for impairment	342	440
Total ending allowance balance	534	585
Loans:
Individually evaluated for impairment	564	592
Collectively evaluated for impairment	75,345	72,865
Total ending loans balance	75,909	73,457	68,705
Residential Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance, beginning of period	1,559	1,331
Losses charged off	(513)	(467)
Recoveries	64	67
Provision charged to expense	554	643
Balance, end of period	1,664	1,574
Ending allowance balance attributable to loans:
Individually evaluated for impairment	0	37
Collectively evaluated for impairment	1,664	1,537
Total ending allowance balance	1,664	1,574
Loans:
Individually evaluated for impairment	1,991	1,279
Collectively evaluated for impairment	62,495	59,733
Total ending loans balance	64,486	61,012	64,983
Home Equity Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance, beginning of period	2,357	2,289
Losses charged off	(436)	(403)
Recoveries	47	4
Provision charged to expense	980	408
Balance, end of period	2,948	2,298
Ending allowance balance attributable to loans:
Individually evaluated for impairment	0	0
Collectively evaluated for impairment	2,948	2,298
Total ending allowance balance	2,948	2,298
Loans:
Individually evaluated for impairment	483	0
Collectively evaluated for impairment	121,281	125,298
Total ending loans balance	121,764	125,298	122,830
Indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance, beginning of period	1,230	891
Losses charged off	(216)	(178)
Recoveries	94	103
Provision charged to expense	502	(9)
Balance, end of period	1,610	807
Ending allowance balance attributable to loans:
Individually evaluated for impairment	0	0
Collectively evaluated for impairment	1,610	807
Total ending allowance balance	1,610	807
Loans:
Individually evaluated for impairment	99	0
Collectively evaluated for impairment	199,865	178,433
Total ending loans balance	199,964	178,433	199,924
Consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance, beginning of period	270	429
Losses charged off	(77)	(49)
Recoveries	31	17
Provision charged to expense	42	(197)
Balance, end of period	266	200
Ending allowance balance attributable to loans:
Individually evaluated for impairment	0	0
Collectively evaluated for impairment	266	200
Total ending allowance balance	266	200
Loans:
Individually evaluated for impairment	59	0
Collectively evaluated for impairment	11,996	13,239
Total ending loans balance	$ 12,055	$ 13,239	$ 12,101

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CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (USD $) In Thousands, unless otherwise specified	Total	Preferred Stock (net of discount)	Warrant to Purchase Common Stock	Common Stock [Member]	Additional Paid-In-Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Treasury Stock
Beginning balance at Dec. 31, 2011	$ 113,274	$ 25,122	$ 146	$ 8,210	$ 39,607	$ 44,080	$ 2,201	$ (6,092)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	1,505					1,505
Other comprehensive income, net of tax	(392)						(392)
Share-based compensation	69				69
Restricted shares granted (62,105 shares)	0			62	(62)
Preferred dividends and accretion of discount	(316)	3				(319)
Common dividends declared ($.01 and $.01 per share during the three months ended March 31, 2013 and 2012, respectively)	(79)					(79)
Ending balance at Mar. 31, 2012	114,061	25,125	146	8,272	39,614	45,187	1,809	(6,092)
Beginning balance at Dec. 31, 2012	110,144	18,815	0	8,273	39,141	48,767	1,240	(6,092)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	1,113					1,113
Other comprehensive income, net of tax	(831)						(831)
Share-based compensation	72				72
Issuance of common stock (1,359 shares)	9,733			1,359	8,374
Redemption of preferred stock (9,733 shares)	(9,694)	(9,701)				7
Preferred dividends and accretion of discount	(253)	4				(257)
Common dividends declared ($.01 and $.01 per share during the three months ended March 31, 2013 and 2012, respectively)	(79)					(79)
Ending balance at Mar. 31, 2013	$ 110,205	$ 9,118	$ 0	$ 9,632	$ 47,587	$ 49,551	$ 409	$ (6,092)

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Cash and Due from Banks

3 Months Ended

Mar. 31, 2013

Cash and Cash Equivalents [Abstract]

Cash and Due from Banks

Cash and Due from Banks

Federal Reserve Board regulations require the Bank to maintain reserve balances on deposits with the Federal Reserve Bank of Cleveland. The required ending reserve balance was $453 on March 31, 2013 and $228 on December 31, 2012.

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Estimated Fair Value of Financial Instruments - Summary of Financial Instruments (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Fair Value Inputs Assets Liabilities Quantitative Information [Line Items]
Accrued interest payable	$ 828	$ 882
Carrying Value [Member]
Fair Value Inputs Assets Liabilities Quantitative Information [Line Items]
Cash and due from banks, Federal funds sold and interest bearing deposits in other banks	54,954	30,659
Securities	223,173	203,763
Restricted stock	5,741	5,741
Portfolio loans, net	872,125	864,911
Loans held for sale	6,250	7,634
Accrued interest receivable	4,018	3,726
Demand, savings and money market	533,393	517,181
Certificates of deposit	515,783	482,411
Short-term borrowings	1,889	1,115
Federal Home Loan Bank advances	46,557	46,508
Junior subordinated debentures	16,238	16,238
Accrued interest payable	803	882
Estimated Fair Value [Member]
Fair Value Inputs Assets Liabilities Quantitative Information [Line Items]
Cash and due from banks, Federal funds sold and interest bearing deposits in other banks	54,954	30,659
Securities	223,173	203,763
Restricted stock	5,741	5,741
Portfolio loans, net	877,068	868,716
Loans held for sale	6,369	7,891
Accrued interest receivable	4,018	3,726
Demand, savings and money market	528,329	511,665
Certificates of deposit	519,290	485,394
Short-term borrowings	1,889	1,115
Federal Home Loan Bank advances	46,733	46,828
Junior subordinated debentures	17,010	17,197
Accrued interest payable	803	882
Level 1 [Member]
Fair Value Inputs Assets Liabilities Quantitative Information [Line Items]
Cash and due from banks, Federal funds sold and interest bearing deposits in other banks	54,954
Securities	0	0
Restricted stock
Portfolio loans, net
Loans held for sale
Accrued interest receivable
Demand, savings and money market
Certificates of deposit
Short-term borrowings
Federal Home Loan Bank advances
Junior subordinated debentures
Accrued interest payable
Level 2 [Member]
Fair Value Inputs Assets Liabilities Quantitative Information [Line Items]
Cash and due from banks, Federal funds sold and interest bearing deposits in other banks
Securities	218,489	203,763
Restricted stock	5,741
Portfolio loans, net
Loans held for sale	6,369
Accrued interest receivable	4,018
Demand, savings and money market	528,329
Certificates of deposit	519,290
Short-term borrowings	1,889
Federal Home Loan Bank advances	46,733
Junior subordinated debentures	17,010
Accrued interest payable	803
Level 3 [Member]
Fair Value Inputs Assets Liabilities Quantitative Information [Line Items]
Cash and due from banks, Federal funds sold and interest bearing deposits in other banks
Securities	4,684	0
Restricted stock
Portfolio loans, net	877,068
Loans held for sale	0
Accrued interest receivable	0
Demand, savings and money market
Certificates of deposit
Short-term borrowings
Federal Home Loan Bank advances
Junior subordinated debentures
Accrued interest payable

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Federal Home Loan Bank Advances (Tables)

3 Months Ended

Mar. 31, 2013

Disclosure Federal Home Loan Bank Advances Additional Information [Abstract]

Maturities of FHLB Advances Outstanding

Maturities of FHLB advances outstanding at March 31, 2013 and December 31, 2012 are as follows:

	March 31, 2013			December 31, 2012
	(Dollars in thousands)
Maturities January 2014 with fixed rate 3.55%	$	11		$	15
Maturity January 2015 with fixed rate 0.80%	20,000			20,000
Maturity December 2016 with fixed rate 0.79%	10,000			10,000
Maturities June 2017 through December 2017, with fixed rates ranging from 0.89% to 0.99%	15,000			15,000
Maturity June 2018 fixed rate 1.24%	2,500			2,500
Restructuring prepayment penalty	(954		)	(1,007		)
Total FHLB advances	$	46,557		$	46,508

Federal Home Loan Bank Advances Future Maturities

At March 31, 2013, the advances were structured to contractually pay down as follows:

	Balance			Weighted Average Rate
2014	$	11		3.55%
2015	20,000			0.80
2016	10,000			0.79
2017	15,000			0.96
Thereafter	2,500			1.24
Total	$	47,511		0.87%
Restructuring prepayment penalty	(954		)
Total	$	46,557

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Securities - Realized Gains and Losses Related to Securities Available-for-Sale (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Available-for-sale Securities, Gross Realized Gain (Loss), Disclosures [Abstract]
Gross realized gains	$ 178	$ 0
Gross realized losses	0	0
Net Securities Gains	178	0
Proceeds from sales of available-for-sale securities	$ 2,280	$ 0

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Share-Based Compensation

3 Months Ended

Mar. 31, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-Based Compensation

 Share-Based Compensation

A broad-based stock incentive plan, the 2006 Stock Incentive Plan, was adopted by the Corporation’s shareholders on April 18, 2006 and was amended and restated May 2, 2012. Awards granted under this Plan as of March 31, 2013 were stock options granted in 2007, 2008 and 2009 and long-term restricted shares issued in 2010, 2011, and 2012. In addition, the Corporation has nonqualified stock option agreements outside of the 2006 Stock Incentive Plan. Grants under the nonqualified stock option agreements were made from 2005 to 2007.

Stock Options

The expense recorded for stock options was $5, and $1 for the first three months ended March 31, 2013 and 2012, respectively. The maximum option term is ten years and the options generally vest over three years as follows: one-third after one year from the grant date, two-thirds after two years and completely after three years.

	Outstanding		Exercisable
	Number	Weighted Average Remaining Contractual Life (Years)	Number	Weighted Average Exercise Price
Range of Exercise Prices
$5.34-$5.39	37,500	8.66	2,500	$	5.34
$14.47	82,000	4.85	82,000	14.47
$15.35-$16.50	52,500	3.96	52,500	15.78
$19.10	30,000	2.84	30,000	19.10
$19.17	30,000	1.84	30,000	19.17
Outstanding at end of period	232,000	4.62	197,000	$	16.12

A summary of the status of stock options at March 31, 2013 and 2012 and changes during the year then ended is presented in the table below:

	2013		2012
	Options	Weighted Average Exercise Price per Share	Options	Weighted Average Exercise Price per Share
Outstanding at beginning of period	232,000	14.50	197,000	16.12
Granted	—	—	35,000	$5.39
Forfeited or expired	—	—	—	—
Exercised	—	—	—	—
Stock dividend or split	—	—	—	—
Outstanding at end of period	232,000	14.50	232,000	14.50
Exercisable at end of period	197,000	16.12	196,167	16.17

There were no options exercised during the first three months of 2013 therefore the total intrinsic value of options exercised was $0. The total intrinsic value of all options outstanding at March 31, 2013 was $110.

Restricted Shares

In 2012, the Corporation issued 62,105 shares of long-term restricted stock. The market price of the Corporation’s common shares on the date of grant of the long-term restricted stock was $5.39 per share. Shares of long-term restricted stock generally vest in two equal installments on the second and third anniversaries of the date of grant, or upon the earlier death or disability of the recipient or a qualified change of control of the Corporation. The expense recorded for long-term restricted stock for the three months ended March 31, 2013 and 2012 was $72, and $66, respectively.

The market price of the Corporation’s common shares at the date of grant is used to estimate the fair value of restricted stock awards. A summary of the status of restricted shares at March 31, 2013 is presented in the table below:

	Nonvested Shares		Weighted Average Grant Date Fair Value
Nonvested at January 1, 2013	143,031		$	5.07
Granted	—		—
Vested	(52,499	)	4.68
Forfeited or expired	—		—
Nonvested at March 31, 2013	90,532		8.00

Stock Appreciation Rights (“SARS”)

In 2006, the Corporation issued an aggregate of 30,000 SARS at $19.00 per share, 15,500 of which have expired due to employee terminations. The SARS vest over three years as follows: one-third after one year from the grant date, two-thirds after two years and completely after three years. Any unexercised portion of the SARS shall expire at the end of the stated term which is specified at the date of grant and shall not exceed ten years. The SARS issued in 2006 will expire in January 2016. The expense recorded for SARS for the three months ended March 31, 2013, was $4 and for 2012 was $2.