10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2014

OR

o 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)

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 2, 2014 was 9,664,972.

TABLE OF CONTENTS

	Page
PART I - Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets as of March 31, 2014 (unaudited) and December 31, 2013	3
Consolidated Statements of Income and Comprehensive Income (unaudited) for the three months ended March 31, 2014 and March 31, 2013	4
Consolidated Statements of Shareholders’ Equity (unaudited) for the three months ended March 31, 2014 and March 31, 2013	6
Consolidated Statements of Cash Flows (unaudited) for the three months ended March 31, 2014 and March 31, 2013	7
Notes to the Consolidated Financial Statements (unaudited)	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	33
Item 3. Quantitative and Qualitative Disclosures about Market Risk	49
Item 4. Controls and Procedures	52
Part II — Other Information	52
Item 1. Legal Proceedings	53
Item 1A. Risk Factors	53
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	53
Item 6. Exhibits	54

PART I - Financial Information

Item 1. Financial Statements

CONSOLIDATED BALANCE SHEETS

	March 31, 2014			December 31, 2013
	(unaudited)
	(Dollars in thousands except share amounts)
ASSETS
Cash and due from banks	$	38,939		$	36,717
Federal funds sold and interest bearing deposits in banks	29,302			15,555
Cash and cash equivalents (Note 3)	68,241			52,272
Securities available for sale, at fair value (Note 5)	217,510			216,122
Restricted stock	5,741			5,741
Loans held for sale	1,811			4,483
Loans:
Portfolio loans (Note 6)	910,189			902,299
Allowance for loan losses (Note 6)	(17,497		)	(17,505		)
Net loans	892,692			884,794
Bank premises and equipment, net	8,013			8,198
Other real estate owned	979			579
Bank owned life insurance	19,532			19,362
Goodwill, net (Note 4)	21,582			21,582
Intangible assets, net (Note 4)	424			457
Accrued interest receivable	3,774			3,621
Other assets	15,094			13,046
Total Assets	$	1,255,393		$	1,230,257
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits: (Note 7)
Demand and other noninterest-bearing	$	149,530		$	148,961
Savings, money market and interest-bearing demand	430,142			393,778
Time deposits	497,179			502,850
Total deposits	1,076,851			1,045,589
Short-term borrowings (Note 8)	3,725			4,576
Federal Home Loan Bank advances (Note 9)	46,760			46,708
Junior subordinated debentures (Note 10)	16,238			16,238
Accrued interest payable	701			789
Accrued expenses and other liabilities	4,004			4,901
Total Liabilities	1,148,279			1,118,801
Shareholders’ Equity
Preferred stock, Series A Voting, no par value, authorized 150,000 shares, none issued at March 31, 2014 and December 31, 2013.	—			—
Fixed rate cumulative preferred stock, Series B, no par value, $1,000 liquidation value, no shares were issued at March 31, 2014 and 7,689 shares authorized and issued at December 31, 2013	—			7,689
Discount on Series B preferred stock	—			(19		)
Common stock, par value $1 per share, authorized 15,000,000 shares, issued 10,001,717 shares at March 31, 2014 and 10,001,717 at December 31, 2013	10,002			10,002
Additional paid-in capital	51,166			51,098
Retained earnings	55,440			53,966
Accumulated other comprehensive income (loss)	(3,317		)	(5,188		)
Treasury shares at cost, 336,745 shares at March 31, 2014 and 328,194 shares at December 31, 2013	(6,177		)	(6,092		)
Total Shareholders’ Equity	107,114			111,456
Total Liabilities and Shareholders’ Equity	$	1,255,393		$	1,230,257

See accompanying notes to consolidated financial statements.

3

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Unaudited)

	Year Ended Three Months Ended
	March 31, 2014			March 31, 2013
	(Dollars in thousands except share and per share amounts)
Interest and Dividend Income
Loans	$	8,928		$	9,054
Securities:
U.S. Government agencies and corporations	1,028			841
State and political subdivisions	303			289
Other debt and equity securities	117			70
Federal funds sold and short-term investments	17			20
Total interest income	10,393			10,274
Interest Expense
Deposits	1,082			1,249
Federal Home Loan Bank advances	155			154
Short-term borrowings	26			1
Junior subordinated debentures	169			166
Total interest expense	1,432			1,570
Net Interest Income	8,961			8,704
Provision for Loan Losses (Note 6)	900			1,350
Net interest income after provision for loan losses	8,061			7,354
Noninterest Income
Investment and trust services	400			375
Deposit service charges	770			816
Other service charges and fees	753			831
Income from bank owned life insurance	169			168
Other income (loss)	151			321
Total fees and other income	2,243			2,511
Securities gains, net (Note 5)	—			178
Gains on sale of loans	703			656
Loss on sale of other assets, net	(34		)	(13		)
Total noninterest income	2,912			3,332
Noninterest Expense
Salaries and employee benefits	4,595			5,027
Furniture and equipment	1,148			949
Net occupancy	613			588
Professional fees	494			490
Marketing and public relations	400			289
Supplies, postage and freight	214			307
Telecommunications	151			162
Intangible asset amortization	33			33
Ohio franchise tax	224			308
FDIC assessments	272			242
Other real estate owned	24			77
Loan and collection expense	298			388
Other expense	393			421
Total noninterest expense	8,859			9,281
Income before income tax expense	2,114			1,405
Income tax expense	508			292
Net Income	1,606			1,113
Other comprehensive income (loss), net of taxes:
Changes in unrealized securities' holding gain (loss) net of taxes	1,871			(714		)
Less: reclassification adjustments for securities' gains realized in net income,	—			117
Total other comprehensive income (loss), net of taxes	1,871			(831		)
Comprehensive income (loss)	3,477			282
Net Income	1,606			1,113
Dividends and accretion on preferred stock	35			257
Net Income Available to Common Shareholders	$	1,571		$	856

4

Net Income Per Common Share (Note 2)
Basic	$	0.16	$	0.10
Diluted	0.16		0.10
Dividends declared	0.01		0.01
Average Common Shares Outstanding
Basic	9,668,297		8,201,120
Diluted	9,705,432		8,212,038

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, 2012	$	18,815		$	—	$	8,273	$	39,141	$	48,767		$	1,240		$	(6,092	)	$	110,144
Net Income										1,113									1,113
Other comprehensive loss													(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
Balance, December 31, 2013	$	7,670		$	—	$	10,002	$	51,098	$	53,966		$	(5,188	)	$	(6,092	)	$	111,456
Net Income										1,606									1,606
Other comprehensive income													1,871						1,871
Share-based compensation								68											68
Purchase of treasury stock																(85		)	(85		)
Redemption of preferred stock (7,689 shares)	(7,689		)																(7,689		)
Preferred dividends and accretion of discount	19									(35		)							(16		)
Common dividends declared, $.01 per share										(97		)							(97		)
Balance, March 31, 2014	$	—		$	—	$	10,002	$	51,166	$	55,440		$	(3,317	)	$	(6,177	)	$	107,114

See accompanying notes to consolidated financial statements

6

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

	Three Months Ended
	March 31, 2014			March 31, 2013
	(Dollars in thousands)
Operating Activities
Net income	$	1,606		$	1,113
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Provision for loan losses	900			1,350
Depreciation and amortization	232			262
Amortization of premiums and discounts	460			512
Amortization of intangibles	33			33
Amortization of loan servicing rights	72			86
Amortization of deferred loan fees	(43		)	(114		)
Income from cash surrender value of bank-owned life insurance policies	(169		)	(168		)
Federal deferred income tax expense (benefit)	191			860
Securities gains, net	—			(178		)
Share-based compensation expense	68			72
Loans originated for sale	(18,361		)	(29,879		)
Proceeds from sales of loan originations	21,734			31,919
Net gain from loan sales	(703		)	(656		)
Net loss on sale of other assets	34			13
Net increase (decrease) in accrued interest receivable and other assets	(3,237		)	(4,054		)
Net increase (decrease) in accrued interest payable, taxes and other liabilities	(1,176		)	2,493
Net cash provided by operating activities	1,641			3,664
Investing Activities
Proceeds from sales of available-for-sale securities	—			2,280
Proceeds from maturities of available-for-sale securities	11,387			31,171
Purchase of available-for-sale securities	(10,399		)	(54,455		)
Net increase in loans made to customers	(9,364		)	(8,453		)
Proceeds from the sale of other real estate owned	172			141
Purchase of bank premises and equipment	(53		)	(129		)
Proceeds from sale of bank premises and equipment	9			—
Net cash used in investing activities	(8,248		)	(29,445		)
Financing Activities
Net increase (decrease) in demand and other noninterest-bearing	569			(3,581		)
Net increase in savings, money market and interest-bearing demand	36,364			19,793
Net increase (decrease) in time deposits	(5,671		)	33,372
Net increase in short-term borrowings	(851		)	774
Proceeds from Federal Home Loan Bank advances	—			53
Payment of Federal Home Loan Bank advances	52			(3		)
Redemption of Fixed-Rate Cumulative Perpetual Preferred stock	(7,670		)	—
Purchase of Treasury Stock	(85		)	—
Dividends paid	(132		)	(332		)
Net cash provided by financing activities	22,576			50,076
Net increase in cash and cash equivalents	15,969			24,295
Cash and cash equivalents, January 1	52,272			30,659
Cash and cash equivalents, March 31	$	68,241		$	54,954
Supplemental cash flow information
Interest paid	$	1,520		$	1,623
Income taxes paid	—			465
Transfer of loans to other real estate owned	609			40

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 accounting and reporting policies followed in the presentation of the accompanying Unaudited Consolidated Financial Statements are consistent with those described in Note 1 of the Notes to the Consolidated Financial Statements in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2013, as updated by the information contained in this Form 10-Q. Management has evaluated all significant events and transactions that occurred after March 31, 2014, for potential recognition or disclosure in these consolidated financial statements. In the opinion of management, these consolidated financial statements reflect all adjustments necessary to present fairly such information for the periods and dates indicated. Such adjustments are normal and recurring in nature. The Consolidated Balance Sheet at December 31, 2013, contained herein has been derived from the audited Consolidated Balance Sheet included in Corporation’s Annual Report on Form 10-K.

The preparation of the consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Results of operations for interim periods are not necessarily indicative of the results to be expected for the full year, due in part to seasonal variations and unusual or infrequently occurring items.

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.

New Accounting Pronouncements:

In January 2014, the Financial Accounting Standards Board issued an accounting standards update allowing entities to make an accounting policy election with respect to using the proportional amortization method for investments in qualified affordable housing projects, if certain conditions are met. This standard will be effective for public companies for interim and annual periods beginning after December 15, 2014. The Corporation will adopt this new guidance as required, and it is not expected to have a material impact on the Corporation's Consolidated Financial Statements.

Also in January 2014, the Financial Accounting Standards Board issued an accounting standards update clarifying guidance for in substance repossessions and foreclosures, and requiring additional disclosures regarding foreclosed residential real estate property and recorded investments in consumer mortgage loans collateralized by residential real estate in the process of foreclosure. This standard will be effective for public companies for interim and annual periods beginning after December 15, 2014. The Corporation will adopt this new guidance as required, and it is not expected to have a material impact on the Corporation's Consolidated Financial Statements.

8

(2)    Earnings Per Common Share

The Corporation calculates earnings per common share (EPS) using the two-class method. The two-class method allocates net income to each class of Common Stock and participating security according to the common dividends declared and participation rights in undistributed earnings. Participating securities consist of unvested stock-based payment awards that contain nonforfeitable rights to dividends. The Corporation also uses the treasury stock method to calculate dilutive EPS. The treasury stock method assumes that the Corporation uses the proceeds from a hypothetical exercise of options to repurchase Common Stock at the average market price during the period. The reconciliation between basic and diluted earnings per share is presented as follows(Dollars in thousands, except per share data) :

	Three Months Ended
	March 31, 2014		March 31, 2013
Basic EPS
Net income	$	1,606	$	1,113
Less:
Preferred stock dividend and accretion	35		257
Income allocated to participating securities	6		11
Net income allocated to common shareholders	$	1,565	$	845
Average common shares outstanding	9,668,297		8,201,120
Less: participating shares included in average common shares outstanding	53,169		117,031
Average common shares outstanding used in basic EPS	9,615,128		8,084,089
Basic net income per common share	$	0.16	$	0.10
Diluted EPS:
Income used in diluted earnings per share calculation	$	1,565	$	845
Average common shares outstanding	9,668,297		8,201,120
Add: Common Stock equivalents:
Stock Options	37,135		10,918
Average common stock shares outstanding	9,705,432		8,212,038
Diluted earnings per common share	$	0.16	$	0.10

For the three months ended March 31, 2014, approximately 172,000 of options to purchase shares of common stock were not included in the computation of diluted earnings per share because the effect would be antidilutive. For the three months ended March 31, 2013, approximately 194,500 of options to purchase shares of common stock were not included in the computation of diluted earnings per share because the effect would be antidilutive.

(3)    Cash and Cash Equivalents

For purposes of the Consolidated Statements of Cash Flows, the Corporation considers cash and cash equivalents to include cash on hand, cash items in the process of collection, non-interest bearing amounts due from correspondent banks, federal funds sold and securities purchased under resale agreements with original maturities of three months or less.

9

(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 2013, 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. The Corporation evaluates goodwill impairment annually as of November 30th of each year. 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, 2013.

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, 2014		December 31, 2013
	(Dollars in thousands)
Core deposit intangibles	$	1,367	$	1,367
Less: accumulated amortization	943		910
Carrying value of core deposit intangibles	$	424	$	457

10

(5)    Securities

The amortized cost, gross unrealized gains and losses and fair values of securities at March 31, 2014 and December 31, 2013 follows:

	March 31, 2014
	Amortized  Cost		Unrealized Gains		Unrealized Losses			Fair Value
	(Dollars in thousands)
Securities available for sale:
U.S. Government agencies and corporations	$	71,683	$	—	$	(4,242	)	$	67,441
Mortgage backed securities: residential	94,222		1,360		(1,063		)	94,519
Collateralized mortgage obligations	22,163		247		(271		)	22,139
State and political subdivisions	32,503		1,273		(365		)	33,411
Total Securities	$	220,571	$	2,880	$	(5,941	)	$	217,510
	At December 31, 2013
	Amortized  Cost		Unrealized Gains		Unrealized Losses			Fair Value
	(Dollars in thousands)
Securities available for sale:
U.S. Government agencies and corporations	$	71,851	$	—	$	(6,463	)	$	65,388
Mortgage backed securities: residential	94,313		1,362		(1,245		)	94,430
Collateralized mortgage obligations	18,650		255		(250		)	18,655
State and political subdivisions	32,521		1,137		(693		)	32,965
Preferred securities	4,684		—		—			4,684
Total Securities	$	222,019	$	2,754	$	(8,651	)	$	216,122

U.S. Government agencies and corporations include callable and bullet agency issues and agency-backed mortgage backed securities. Maturities may differ from contractual terms because borrowers may have the right to call or prepay obligations with or without penalties. Periodic payments are received on mortgage-backed securities based upon payment patterns of the underlying collateral.

The amortized cost and fair value of available for sale debt securities by contractual maturity date at March 31, 2014 is provided in the following table. Mortgage backed securities and collaterlized mortgage obligations are not due at a single maturity date and are therefore shown separately.

	At March 31, 2014
	Amortized Cost		Fair Value
	(Dollars in thousands)
Securities available for sale:
Due in one year or less	$	22,033	$	21,144
Due from one year to five years	46,819		45,340
Due from five years to ten years	29,740		28,680
Due after ten years	5,594		5,687
Mortgage backed securities and collateralized mortgage obligations	116,385		116,659
	$	220,571	$	217,510

The following table shows the proceeds from sales of available-for-sale securities for the three months ended March 31, 2014 and 2013. 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.

11

	March 31,
	2014		2013
	(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, lines of credit, and for other purposes required by law amounted to $193,354 and $154,479 at March 31, 2014 and December 31, 2013, respectively.

The following is a summary of securities that had unrealized losses at March 31, 2014 and December 31, 2013. 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, 2014, the Corporation held 50 securities with unrealized losses totaling $5,941. At December 31, 2013, there were 53 securities with unrealized losses totaling $8,651. Securities may temporarily be valued at less than amortized cost if the current levels of interest rates, as compared to the coupons on the securities held by the Corporation, are higher or if 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, 2014
	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	$	58,282	$	(3,405	)	$	9,159	$	(837	)	$	67,441	(4,242		)
Mortgage backed securities: residential	29,332		(454		)	24,875		(609		)	54,207		(1,063		)
Collateralized mortgage obligations	6,741		(86		)	4,287		(185		)	11,028		(271		)
State and political subdivisions	7,526		(316		)	488		(49		)	8,014		(365		)
Total	$	101,881	$	(4,261	)	$	38,809	$	(1,680	)	$	140,690	$	(5,941	)
	At December 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	$	65,388	$	(6,463	)	$	—	$	—		$	65,388	$	(6,463	)
Mortgage backed securities: residential	28,603		(566		)	31,051		(679		)	59,654		(1,245		)
Collateralized mortgage obligations	5,079		(59		)	4,411		(191		)	9,490		(250		)
State and political subdivisions	9,188		(602		)	447		(91		)	9,635		(693		)
Total	$	108,258	$	(7,690	)	$	35,909	$	(961	)	$	144,167	$	(8,651	)

On a quarterly basis, the Corporation performs a comprehensive security-level impairment assessment on all securities in an unrealized loss position to determine if other-than-temporary impairment ("OTTI") exists. An unrealized loss exists when the current fair value of an individual security is less than its amortized cost basis. For debt securities, an OTTI loss must be recognized for a debt security in an unrealized loss position if the Corporation intends to sell the security or it is more likely than not that the Corporation will be required to sell the security before recovery of its amortized cost basis. In this situation, the amount of loss recognized in income is equal to the difference between the fair value and the amortized cost basis of the individual security. If the Corporation does not expect to sell the security, the Corporation must evaluate the expected cash

12

flows to be received to determine if a credit loss has occurred. If a credit loss is present, only the amount of impairment associated with the credit loss is recognized in income. The portion of the unrealized loss relating to other factors, such as liquidity conditions in the market or changes in market interest rates, is recorded in other comprehensive income.

Equity securities are also evaluated to determine whether the unrealized loss is expected to be recoverable based on whether evidence exists to support a realizable value equal to or greater than the amortized cost basis. If it is probable that the Corporation will not recover the amortized cost basis, taking into consideration the estimated recovery period and its ability to hold the equity security until recovery, OTTI is recognized. The Corporation held no equity securities as of March 31, 2014.

The security-level assessment is performed on each security, regardless of the classification of the security as available for sale or held to maturity. The assessments are based on the nature of the securities, the financial condition of the issuer, the extent and duration of the securities, the extent and duration of the loss and the intent and whether management intends to sell or it is more likely than not that it will be required to sell a security before recovery of its amortized cost basis, which may be maturity. For those securities for which the assessment shows the Corporation will recover the entire cost basis, management does not intend to sell these securities and it is not more likely than not that the Corporation will be required to sell them before the anticipated recovery of the amortized cost basis, the gross unrealized losses are recognized in other comprehensive income, net of tax.

Management does not believe that the investment securities that were in an unrealized loss position as of March 31, 2014 represent an other-than-temporary impairment. Total gross unrealized losses were primarily attributable to changes in interest rates, relative to when the investment securities were purchased, and not due to the credit quality of the investment securities. The Corporation does not intend to sell the investment securities that were in an unrealized loss position and it is not more likely than not that the Corporation will be required to sell the investment securities before recovery of their amortized cost bases, which may be at maturity.

(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 incurred credit losses 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.

The general component covers non‑impaired loans and is based on historical loss experience adjusted for current factors. The historical loss experience is determined by portfolio segment and is based on the actual loss history experienced by the Company over the most recent three years. This actual loss experience is supplemented with other economic factors based on the risks present for each portfolio segment. These economic factors include consideration of the following: levels of and trends in delinquencies and impaired loans; levels of and trends in charge-offs and recoveries; trends in volume and terms of loans; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedures, and practices; experience, ability, and depth of lending management and other relevant staff; national and local economic trends and conditions; industry conditions; and effects of changes in credit concentrations.

13

Activity in the allowance for loan losses by segment for the three months ended March 31, 2014 and 2013 are summarized as follows:

Three Months Ended March 31, 2014
	Commercial Real Estate			Commercial			Residential Real Estate			Home Equity Loans			Indirect			Consumer			Total
	(Dollars in thousands)
Allowance for loan losses:
Balance, beginning of period	$	10,122		$	497		$	1,411		$	3,484		$	1,593		$	398		$	17,505
Losses charged off	(546		)	—			(77		)	(222		)	(70		)	(83		)	(998		)
Recoveries	6			1			2			11			58			12			90
Provision charged to expense	662			(34		)	147			205			(68		)	(12		)	900
Balance, end of period	$	10,244		$	464		$	1,483		$	3,478		$	1,513		$	315		$	17,497
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	838		$	73		$	6		$	—		$	—		$	—		$	917
Collectively evaluated for impairment	9,406			391			1,477			3,478			1,513			315			16,580
Total ending allowance balance	$	10,244		$	464		$	1,483		$	3,478		$	1,513		$	315		$	17,497
Loans:
Individually evaluated for impairment	$	16,175		$	460		$	1,254		$	980		$	190		$	65		$	19,124
Collectively evaluated for impairment	392,292			82,837			67,417			121,844			209,504			17,171			891,065
Total ending loans balance	$	408,467		$	83,297		$	68,671		$	122,824		$	209,694		$	17,236		$	910,189

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 period	$	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 period	$	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

14

Year Ended December 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	(2,325		)	(121		)	(754		)	(1,775		)	(678		)	(366		)	(6,019		)
Recoveries	697			8			350			66			335			56			1,512
Provision charged to expense	364			(225		)	256			2,836			706			438			4,375
Balance, end of year	$	10,122		$	497		$	1,411		$	3,484		$	1,593		$	398		$	17,505
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	865		$	73		$	—		$	—		$	—		$	—		$	938
Collectively evaluated for impairment	9,257			424			1,411			3,484			1,593			398			16,567
Total ending allowance balance	$	10,122		$	497		$	1,411		$	3,484		$	1,593		$	398		$	17,505
Loans:
Individually evaluated for impairment	$	17,842		$	472		$	1,731		$	1,111		$	195		$	160		$	21,511
Collectively evaluated for impairment	383,749			88,174			64,776			121,965			206,128			15,996			880,788
Total ending loans balance	$	401,591		$	88,646		$	66,507		$	123,076		$	206,323		$	16,156		$	902,299

Delinquencies

Management monitors delinquency and potential problem loans. Bank-wide delinquency at March 31, 2014 was 1.64% of total loans. Total 30-59 day delinquency and 60-89 day delinquency was 0.25% and 0.25% of total loans at March 31, 2014, respectively. Bank-wide delinquency at December 31, 2013 was 1.69% of total loans. Total 30-59 day delinquency and 60-89 day delinquency was 0.26% and 0.19% of total loans at December 31, 2013, respectively. Information regarding delinquent loans as of March 31, 2014 and December 31, 2013 is as follows:

Age Analysis of Past Due Loans as of March 31, 2014

(Dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days and Greater		Total Past Due		Current		Total Loans		Recorded Investment > 90 Days and Accruing
Commercial real estate	$	741	$	1,260	$	6,319	$	8,320	$	400,147	$	408,467	$	—
Commercial	68		—		159		227		83,070		83,297		—
Residential real estate	422		340		2,076		2,838		65,833		68,671		—
Home equity loans	872		591		1,643		3,106		119,718		122,824		—
Indirect	169		51		5		225		209,469		209,694
Consumer	33		60		95		188		17,048		17,236		—
Total	$	2,305	$	2,302	$	10,297	$	14,904	$	895,285	$	910,189	$	—

15

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

(Dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days and Greater		Total Past Due		Current		Total Loans		Recorded Investment > 90 Days and Accruing
Commercial real estate	$	525	$	4	$	7,401	$	7,930	$	393,661	$	401,591	$	—
Commercial	—		18		219		237		88,409		88,646		—
Residential real estate	347		960		2,252		3,559		62,948		66,507		158
Home equity loans	932		707		1,078		2,717		120,359		123,076		43
Indirect	332		30		23		385		205,938		206,323
Consumer	183		25		191		399		15,757		16,156		—
Total	$	2,319	$	1,744	$	11,164	$	15,227	$	887,072	$	902,299	$	201

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. Consumer 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.

16

Impaired loans for the Period Ended March 31, 2014 and December 31, 2013 are as follows:

	At March 31, 2014						Three Months Ended March 31, 2014
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Balance
	(Dollars in thousands)
With no related allowance recorded:
Commercial real estate	$	12,512	$	16,899	$	—	$	14,021
Commercial	202		255		—		208
Residential real estate	1,233		1,371		—		1,482
Home equity loans	980		1,563		—		1,045
Indirect	190		263		—		192
Consumer	65		97		—		113
With allowance recorded:
Commercial real estate	3,663		5,553		838		2,988
Commercial	258		258		73		258
Residential real estate	21		82		6		11
Home equity loans	—		—		—		—
Indirect	—		—		—		—
Consumer	—		—		—		—
Total	$	19,124	$	26,341	$	917	$	20,318
	At December 31, 2013						Twelve Months Ended December 31, 2013
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Balance
	(Dollars in thousands)
With no related allowance recorded:
Commercial real estate	$	15,530	$	20,438	$	—	$	16,705
Commercial	214		267		—		186
Residential real estate	1,731		1,940		—		1,832
Home equity loans	1,111		1,623		—		847
Indirect	195		268		—		178
Consumer	160		204		—		111
With allowance recorded:
Commercial real estate	2,312		2,319		865		4,374
Commercial	258		258		73		346
Residential real estate	—		—		—		—
Home equity loans	—		—		—		—
Indirect	—		—		—		—
Consumer	—		—		—		—
Total	$	21,511	$	27,317	$	938	$	24,579

*impaired loans shown in the tables 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.

17

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 of these loans have been specifically allocated for as part of the Corporation's normal loan loss provisioning methodology. The Corporation has allocated reserves of $40 for the TDR loans at March 31, 2014.

During the first quarter of 2014 there were no loans that were modified as a TDR.

The following table provides the number of loans modified in a TDR and the recorded investment and unpaid principal balance by loan segment as of March 31, 2014 and 2013.

	Three Months Ended March 31, 2014
	(Dollars in thousands)
	Number of Contracts	Recorded Investment	Unpaid Principal
Commercial real estate	18	$6,214	$8,530
Commercial	1	—	171
Residential real estate	13	964	1,070
Home equity loans	28	786	1,322
Indirect Loans	39	190	263
Consumer Loans	1	65	65
Total	100	$8,219	$11,421

	Three Months Ended March 31, 2013
	(Dollars in thousands)
	Number of Contracts	Recorded Investment	Unpaid Principal
Commercial real estate	14	$6,796	$8,772
Commercial	1	—	171
Residential real estate	10	946	973
Home equity loans	14	483	688
Indirect Loans	14	99	161
Consumer Loans	1	59	59
Total	54	$8,383	$10,824

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

At December 31, 2013
	Number of Contracts	Pre-Modification Outstanding Recorded Investment	Post-Modification Outstanding Recorded Investment
Commercial real estate	3	$93	$93
Residential real estate	3	$236	$236
Home equity loans	15	$774	$774
Indirect Loans	25	$195	$195
Consumer Loans	3	$34	$34

There were no loans modified in a TDR that subsequently defaulted during the twelve months periods ended March 31, 2014 and 2013 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 OCC 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 $628 of additional commitments to lend additional funds to the related debtors whose terms have been modified in a TDR at March 31, 2014.

19

Nonaccrual Loans

Nonaccrual loan balances at March 31, 2014 and December 31, 2013 are as follows:

Loans On Non-Accrual Status	March 31, 2014		December 31, 2013
	(Dollars in thousands)
Commercial real estate	$	10,145	$	11,241
Commercial	227		289
Residential real estate	5,127		5,231
Home equity loans	4,845		4,464
Indirect	362		443
Consumer	212		318
Total Nonaccrual Loans	$	20,918	$	21,986

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, 2014 and December 31, 2013:

• 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.

20

The following tables present 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, 2014 and December 31, 2013:

Commercial Credit Exposure	Commercial Real Estate		Commercial		Residential Real Estate*		Home Equity Loans		Indirect		Consumer		Total
	March 31, 2014
	(Dollars in thousands)
Loans graded by internal credit risk grade:
Grade 1 — Minimal	$	—	$	51	$	—	$	—	$	—	$	—	$	51
Grade 2 — Modest	—		39		—		—		—		—		39
Grade 3 — Better than average	848		—		—		—		—		—		848
Grade 4 — Average	20,204		164		611		—		—		—		20,979
Grade 5 — Acceptable	361,379		79,884		5,654		—		—		—		446,917
Total Pass Credits	382,431		80,138		6,265		—		—		—		468,834
Grade 6 — Special mention	3,341		118		32		—		—		—		3,491
Grade 7 — Substandard	22,695		3,041		615		—		—		—		26,351
Grade 8 — Doubtful	—		—		—		—		—		—		—
Grade 9 — Loss	—		—		—		—		—		—		—
Total loans internally credit risk graded	408,467		83,297		6,912		—		—		—		498,676
Loans not monitored by internal risk grade:
Current loans not internally risk graded	—		—		59,525		119,718		209,469		17,048		405,760
30-59 days past due loans not internally risk graded	—		—		65		872		169		33		1,139
60-89 days past due loans not internally risk graded	—		—		340		591		51		60		1,042
90+ days past due loans not internally risk graded	—		—		1,829		1,643		5		95		3,572
Total loans not internally credit risk graded	—		—		61,759		122,824		209,694		17,236		411,513
Total loans internally and not internally credit risk graded	$	408,467	$	83,297	$	68,671	$	122,824	$	209,694	$	17,236	$	910,189

* 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.

21

Commercial Credit Exposure	Commercial Real Estate		Commercial		Residential Real Estate*		Home Equity Loans		Indirect		Consumer		Total
	December 31, 2013
	(Dollars in thousands)
Loans graded by internal credit risk grade:
Grade 1 — Minimal	$	—	$	52	$	—	$	—	$	—	$	—	$	52
Grade 2 — Modest	—		37		—		—		—		—		37
Grade 3 — Better than average	857		—		—		—		—		—		857
Grade 4 — Average	22,580		271		613		—		—		—		23,464
Grade 5 — Acceptable	352,781		84,979		5,589		—		—		—		443,349
Total Pass Credits	376,218		85,339		6,202		—		—		—		467,759
Grade 6 — Special mention	2,146		2,891		35		—		—		—		5,072
Grade 7 — Substandard	23,227		416		625		—		—		—		24,268
Grade 8 — Doubtful	—		—		—		—		—		—		—
Grade 9 — Loss	—		—		—		—		—		—		—
Total loans internally credit risk graded	401,591		88,646		6,862		—		—		—		497,099
Loans not monitored by internal risk grade:
Current loans not internally risk graded	—		—		56,390		120,359		205,938		15,757		398,444
30-59 days past due loans not internally risk graded	—		—		64		932		332		183		1,511
60-89 days past due loans not internally risk graded	—		—		960		707		30		25		1,722
90+ days past due loans not internally risk graded	—		—		2,231		1,078		23		191		3,523
Total loans not internally credit risk graded	—		—		59,645		123,076		206,323		16,156		405,200
Total loans internally and not internally credit risk graded	$	401,591	$	88,646	$	66,507	$	123,076	$	206,323	$	16,156	$	902,299

* 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 90 days or greater past due. This information is provided in the above past due loans table.

22

(7)    Deposits

Deposit balances are summarized as follows:

	March 31, 2014		December 31, 2013
	(Dollars in thousands)
Demand and other noninterest-bearing	$	149,530	$	148,961
Interest checking	176,028		164,662
Savings	129,976		125,582
Money market accounts	124,138		103,534
Consumer time deposits	362,732		382,137
Public time deposits	134,447		120,713
Total deposits	$	1,076,851	$	1,045,589

The aggregate amount of certificates of deposit in denominations of $100,000 or more amounted to $295,426 and $293,330 at March 31, 2014 and December 31, 2013, respectively.

The maturity distribution of certificates of deposit as of March 31, 2014 are as follows:

	March 31, 2014
	(Dollars in thousands)
0-12 months	$	323,856
12-24 months	109,561
24-36 months	48,056
36-48 months	11,634
48-60 months	4,072
Total	$	497,179

(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, 2014, the Bank had pledged approximately $88,150 in qualifying home equity lines of credit, resulting in an available line of credit of approximately $44,075. No amounts were outstanding under the line of credit at March 31, 2014 or December 31, 2013. The Corporation also has a $6,000 line of credit with an unaffiliated financial institution. The Corporation also has a $6,000 line of credit with an unaffiliated financial institution under which the Corporation had borrowings of $2,500 was outstanding at a rate of 3.50% as of March 31, 2014. At December 31, 2013, the Corporation had borrowings of $3,000 outstanding under the line of credit.

Short-term borrowings include securities sold under repurchase agreements and Federal funds purchased from correspondent banks. At March 31, 2014 and December 31, 2013, the outstanding balance of securities sold under repurchase agreements totaled $1,225 and $1,576, respectively. No Federal funds were purchased as of March 31, 2014 and December 31, 2013.

The following table presents the components of federal funds purchased and securities sold under agreements to repurchase and short-term borrowings as of March 31, 2014 and December 31, 2013.

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	March 31, 2014			December 31, 2013
Federal funds purchased and securities sold under agreements to repurchase	1,225			1,576
Line of credit with an unaffiliated financial institution	2,500			3,000
Total short-term borrowings	$	3,725		$	4,576
Short-term borrowings	March 31, 2014			December 31, 2013
Average balance during the year	$	4,664		$	1,803
Weighted-average annual interest rate during the year	3.60		%	0.10		%
Maximum month-end balance	$	3,725		$	4,576

(9)    Federal Home Loan Bank Advances

Federal Home Loan Bank advances amounted to $46,760 and $46,708 at March 31, 2014 and December 31, 2013 respectively. All advances were bullet maturities with no call features. At March 31, 2014, collateral pledged for FHLB advances consisted of qualified multi-family and residential real estate mortgage loans and investment securities of $88,238 and $16,985, respectively. The maximum borrowing capacity of the Bank at March 31, 2014 was $73,971. 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, 2014 and December 31, 2013.

Maturities of FHLB advances outstanding at March 31, 2014 and December 31, 2013 are as follows:

	March 31, 2014			December 31, 2013
	(Dollars in thousands)
Maturity January 2014 with fixed rate 3.55%	$	—		$	1
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	(740		)	(793		)
Total FHLB advances	$	46,760		$	46,708

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. The present 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 yield. 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.

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At March 31, 2014, the advances were structured to contractually pay down as follows:

	Balance			Weighted Average Rate
2015	$	—		—%
2016	20,000			0.80
2017	10,000			0.79
2018	15,000			0.96
Thereafter	2,500			1.24
Total	$	47,500		0.87%
Restructuring prepayment penalty	(740		)
Total	$	46,760

(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 1.71% and 6.64% for Trust I and Trust II, respectively. At March 31, 2014 and December 31, 2013, accrued interest payable for Trust I was $5 and $6and for Trust II was $21 and $22, respectively.

The subordinated notes are redeemable in whole or in part, without penalty, at the Corporation’s option 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, 2014 and December 31, 2013 follows:

	March 31, 2014		December 31, 2013
	(Dollars in thousands)
Commitments to extend credit	$	78,779	$	84,283
Home equity lines of credit	90,189		89,331
Standby letters of credit	8,543		8,448
Total	$	177,511	$	182,062

The nature of the Corporation’s business may result in litigation. Management, after reviewing with counsel all actions and proceedings pending against or involving the Corporation and its 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.

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.

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, 2014 and December 31, 2013 are summarized as follows:

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	March 31, 2014										December 31, 2013
	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	$	68,241	$	68,241	$	68,241	$	—	$	—	$	52,272	$	52,272
Securities	217,510		217,510		—		217,510		—		216,122		216,122
Restricted stock	5,741		N/A		N/A		N/A		N/A		5,741		5,741
Portfolio loans, net	892,692		888,730		—		—		888,730		884,794		884,211
Loans held for sale	1,811		1,815		—		1,815		—		4,483		4,487
Accrued interest receivable	3,774		3,744		—		970		2,774		3,621		3,621
Financial liabilities
Deposits:
Demand, savings and money market	579,672		574,086		—		574,086		—		542,739		542,739
Certificates of deposit	497,179		498,475		—		498,475		—		502,850		504,381
Short-term borrowings	3,725		3,725		—		3,725		—		4,576		4,576
Federal Home Loan Bank advances	46,760		46,899		—		46,899		—		46,708		46,923
Junior subordinated debentures	16,238		16,650		—		16,650		—		16,238		16,778
Accrued interest payable	701		701		—		701		—		789		789

Cash and Cash Equivalents

The carrying amounts of cash and short-term instruments approximate fair values and are classified as either Level 1 or Level 2. As of March 31, 2014 and December 31, 2013, Cash and due from banks, Federal funds sold and interest bearing deposits in other banks were classified as Level 1.

Restricted stock

It is not practical to determine the fair value of Restricted stock due to restrictions placed on its transferability. Restricted stock is carried at cost and valued based on the ultimate recoverability of par value.

Loans

Fair values of loans, excluding loans held for sale, are estimated as follows: For variable rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values resulting in a Level 3 classification. Fair values for other loans are estimated using discounted cash flow analyses, using interest rates currently being offered for loans with similar terms to borrowers of similar credit quality resulting in a Level 3 classification. Impaired loans are valued at the lower of cost or fair value as described previously. The methods utilized to estimate the fair value of loans do not necessarily represent an exit price. The fair value of loans held for sale is estimated based upon binding contracts and quotes from third party investors resulting in a Level 2 classification.

Deposits

The fair values disclosed for demand deposits (e.g., interest and non-interest checking, passbook savings, and certain types of money market accounts) are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amount) resulting in a Level 2 classification. The carrying amounts of variable rate, fixed-term money market accounts and certificates of deposit approximate their fair values at the reporting date resulting in a Level 2 classification. Fair values for fixed rate certificates of deposit are estimated using a discounted cash flows calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on time deposits resulting in a Level 2 classification.

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Short-term Borrowings

The carrying amounts of federal funds purchased, borrowings under repurchase agreements, and other short-term borrowings, generally maturing within ninety days, approximate their fair values resulting in a Level 2 classification.

Other Borrowings

The fair values of the Company’s long-term borrowings are estimated using discounted cash flow analyses based on the current borrowing rates for similar types of borrowing arrangements resulting in a Level 2 classification.

The fair values of the Company’s Subordinated Debentures are estimated using discounted cash flow analyses based on the current borrowing rates for similar types of borrowing arrangements resulting in a Level 3 classification.

Accrued Interest Receivable/Payable

The carrying amounts of accrued interest approximate fair value resulting in Level 2 and Level 3 classification. The level disclosed should be consistent with the asset and liability that the accrued interest is associated with.

Off-balance Sheet Instruments

Fair values for off-balance sheet, credit-related financial instruments are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties’ credit standing. The fair value of commitments is not material.

The following table presents information about the Corporation’s assets and liabilities measured at fair value on a recurring basis as of March 31, 2014 and December 31, 2013, and the valuation techniques used by the Corporation to determine those fair values.

Description	Fair Value as of March 31, 2014		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	$	67,441	$	—	$	67,441	$	—
Mortgage backed securities: residential	94,519		—		94,519		—
Collateralized mortgage obligations	22,139		—		22,139		—
State and political subdivisions	33,411		—		33,411		—
Interest rate swaps	158		—		158		—
Total	$	217,668	$	—	$	217,668	$	—
Description	Fair Value as of December 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	$	65,388	$	—	$	65,388	$	—
Mortgage backed securities: residential	94,430		—		94,430		—
Collateralized mortgage obligations	18,655		—		18,655		—
State and political subdivisions	32,965		—		32,965		—
Preferred Securities	4,684		—		—		4,684
Interest rate swaps	222		—		222		—
Total	$	216,344	$	—	$	211,660	$	4,684

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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 subdivisions 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 periods ended March 31, 2014 and December 31, 2013. 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, 2014 and December 31, 2013, 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, 2014	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	$	—	$	—	$	18,207	$	18,207
Other real estate	—		—		979		979
Total assets at fair value on a nonrecurring basis	$	—	$	—	$	19,186	$	19,186
December 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	$	—	$	—	$	21,986	$	21,986
Other real estate	—		—		579		579
Total assets at fair value on a nonrecurring basis	$	—	$	—	$	22,565	$	22,565

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. Assets acquired through or instead of loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell. Fair value is commonly based on recent real estate appraisals which are updated no less frequently than annually. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value.

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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	$18,207	Sales comparison approach	Adjustment for differences between the comparable sales
Other real estate	$979	Sales comparison approach	Adjustment for differences between the comparable sales

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, 2014.

(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 on May 2, 2012. Awards granted under this Plan as of March 31, 2014 were stock options granted in 2007, 2008, 2009, 2012 and 2013 and long-term restricted shares issued in 2010, 2011, 2012 and 2013. 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

During the three months ended March 31, 2014, the Corporation granted no stock options. All outstanding stock options are granted at an excercise price equal to the fair value of the common stock on the date of grant. 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.

The Corporation recognizes compensation expense for awards with graded vesting schedule on a straight-line basis over the requisite service period for the entire award. The expense recorded for stock options was $30, and $5 for the three months ended March 31, 2014 and 2013, respectively.

The following table summarizes the Corporation's stock options outstanding at March 31, 2014:

	Outstanding		Exercisable
	Number	Weighted Average Remaining Contractual Life (Years)	Number	Weighted Average Exercise Price
Range of Exercise Prices
$5.34-$5.39	37,500	7.66	25,833	$	5.39
$9.07-$9.56	128,196	9.17	—	—
$14.47	79,500	3.85	79,500	14.47
$16.00-$16.50	32,500	2.72	32,500	16.04
$19.10	30,000	1.84	30,000	19.10
$19.17	30,000	0.84	30,000	19.17
Outstanding at end of period	337,696	5.74	197,833	14.96

A summary of the status of stock options at March 31, 2014 and 2013 is presented in the table below:

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	2014		2013
	Options	Weighted Average Exercise Price per Share	Options	Weighted Average Exercise Price per Share
Outstanding at beginning of period	337,696	12.43	232,000	14.50
Granted	—	—	—	—
Forfeited or expired	—	—	—	—
Exercised	—	—	—	—
Stock dividend or split	—	—	—	—
Outstanding at end of period	337,696	12.43	232,000	14.50
Exercisable at end of period	197,833	14.96	197,000	16.12

There were no options exercised during the three months of 2014, therefore the total intrinsic value of options exercised was $0. The aggregate intrinsic value represents the total pre-tax intrinsic value (the difference between the Corporation’s closing stock price on the last trading day of the quarter and the exercise price, multiplied by the number of in-the-money options). The Corporation’s closing stock price on March 31, 2014 was $11.42.

Restricted Shares

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, 2014 and 2013 was $38,and $72, 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, 2014 is presented in the table below:

	Nonvested Shares		Weighted Average Grant Date Fair Value
Nonvested at January 1, 2014	83,355		$	5.86
Granted	—		—
Vested	(44,803	)	5.35
Forfeited or expired	—		—
Nonvested at March 31, 2014	38,552		6.45

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, 2014, was $0 and for 2013 was $4.

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(14) Accumulated Other Comprehensive Income (Loss)

The following table details the change in the components of the Corporation’s accumulated other comprehensive income (loss) for the three months ended March 31, 2014 and 2013:

	March 31, 2014
	Unrealized securities gains and losses			Pension and post- retirement costs			Total
Balance at the beginning of the period	$	(3,892	)	$	(1,296	)	$	(5,188	)
Amounts recognized in other comprehensive income, net of taxes of $964	1,871			—			1,871
Reclassified amounts out of accumulated other comprehensive income, net of tax	—			—			—
Balance at the end of the period	$	(2,021	)	$	(1,296	)	$	(3,317	)

	March 31, 2013
	Unrealized securities gains and losses			Pension and post- retirement costs			Total
Balance at the beginning of the period	$	3,295		$	(2,055	)	$	1,240
Amounts recognized in other comprehensive income, net of taxes of $368	(714		)	—			(714		)
Reclassified amounts out of accumulated other comprehensive income, net of tax	117			—			—
Balance at the end of the period	$	2,464		$	(2,055	)	$	409

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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, 2014. 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, 2013, 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)

LNB Bancorp, Inc. (the “Corporation”) is a diversified banking services company headquartered in Lorain, Ohio. It is organized as a bank holding company under the Bank Holding Company Act of 1956, as amended (the “BHC Act”). Its predecessor, The Lorain Banking Company, was a state chartered bank founded in 1905. It merged with the National Bank of Lorain in 1961, and in 1984 became a wholly-owned subsidiary of LNB Bancorp, Inc.

The Corporation engages in lending and depository services, investment services, and other traditional banking services. These services are generally offered through the Corporation's wholly-owned subsidiary, The Lorain National Bank (the “Bank”).

The primary business of the Bank is providing personal, mortgage and commercial banking products, along with investment management and trust services. The Lorain National Bank operates through 20 retail-banking locations and 28 automated teller machines (“ATM's”) in Lorain, Erie, Cuyahoga and Summit counties in the Ohio communities of Lorain, Elyria, Amherst, Avon, Avon Lake, LaGrange, North Ridgeville, Oberlin, Olmsted Township, Vermilion, Westlake and Hudson, as well as a business development office in Cuyahoga County. The Bank also operates an office in Columbus, Ohio that specializes in originating Small Business Administration (SBA) related loans.

Net income for the first quarter 2014 was $1,606 compared to $1,113 for the same period one year ago. Net income available to common shareholders for the first quarter 2014 was $1,571, or $0.16 per diluted common share, compared to $856, or $0.10 per diluted common shares, for the first quarter 2013. In the first quarter of 2013, net income available to common shareholders of $856 included Supplemental Executive Retirement Plan (SERP) compensation expense of $455 net of tax. Excluding the SERP expense, the adjusted net income available to common shareholders would have been $1,311 in the first quarter of 2013. The adjusted net income available to common shareholders increased of $260 or 19.8% when compared to the first quarter of 2013.

Net interest income on a fully taxable equivalent (FTE) basis for the first quarter 2014 was $9,117, an increase of 2.9%, compared to $8,860 for the first quarter 2013. The net interest margin FTE, determined by dividing tax equivalent net interest income by average assets, for the first quarter 2014 was 3.21% compared to 3.23% for the first quarter 2013.

The provision for loan losses was $900 for the quarter ended March 31, 2014 compared to $1,350 for the quarter ended March 31, 2013. See Note 6: Loans and Allowance for Loan Losses and table 7: Analysis of Allowance for Loan Losses for further details.

Noninterest income was $2,912 for the first quarter 2014 compared to $3,332, or a 12.6% decrease when compared to the first quarter 2013. The 12.6% decrease was attributable to $178 or 100% decrease in gain on the sale of securities, a decrease of $46 or 5.6% in deposit service charges and a decrease of $78 or 9.4% in other service charges and fees. The decreases in the first quarter of 2014 in deposit service charges and other service charges and fees are attributed to the harsh weather conditions experienced.

Noninterest expense for the first quarter was $8,859, a decrease of $422, or 4.5%, when compared to $9,281, for the same period one year ago. The decrease year over year in noninterest expense was mainly attributable to the $693 SERP charge recognized in the first quarter of 2013.

During the first quarter 2014, loans increased slightly as total portfolio loans ended at $910,189, a 0.9% increase, compared to $902,299 at December 31, 2013. Total assets for the first quarter 2014 ended at $1,255,393 compared to $1,230,257 at December 31, 2013, an increase of $25,136, or 2.0%. Total deposits grew to $1,076,851 at March 31, 2014, an increase of 3.0%, from $1,045,589 at December 31, 2013.

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The Corporation continued its efforts in improving credit metrics. The Corporation’s non-performing loans totaled $20,918 at March 31, 2014, or 2.30% of total loans, a decrease from $21,986, or 2.44% of total loans, at December 31, 2013, and a decrease of $7,596 from $28,514, or 26.6%, from the first quarter 2013.

The allowance for possible loan losses was $17,497 at March 31, 2014, compared to $17,505 at December 31, 2013, and 1.92% compared to 1.94% of total portfolio loans at December 31, 2013. Annualized net charge-offs to average loans at March 31, 2014 was 0.40% compared to 0.51% at December 31, 2013, and 0.54% at March 31, 2013.

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

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, 2014, and 2013.

	Three Months Ended March 31,
	2014								2013
	Average Balance			Interest			Rate		Average Balance			Interest			Rate
	(Dollars in thousands)
Assets:
U.S. Govt agencies and corporations	$	184,487		$	1,078		2.37	%	$	175,589		$	841		1.94	%
State and political subdivisions	33,267			434			5.29		32,202			415			5.22
Federal funds sold and short-term investments	16,740			17			0.41		7,230			20			1.13
Restricted stock	5,221			67			5.22		6,627			70			4.26
Commercial loans	496,647			5,370			4.38		491,326			5,423			4.48
Residential real estate loans	46,763			564			4.89		54,761			652			4.83
Home equity lines of credit	110,266			1,056			3.79		107,664			1,016			3.83
Installment loans	257,109			1,963			3.13		237,893			1,993			3.40
Total Earning Assets	$	1,150,500		$	10,549		3.67	%	$	1,113,292		$	10,430		3.80	%
Allowance for loan loss	(17,540		)						(17,762		)
Cash and due from banks	35,775								34,926
Bank owned life insurance	19,421								18,680
Other assets	46,224								46,494
Total Assets	$	1,234,380							$	1,195,630
Liabilities and Shareholders’ Equity:
Consumer time deposits	$	411,774		$	861		0.85	%	$	437,118		$	1,047		0.97	%
Public time deposits	81,954			135			0.67		57,612			115			0.81
Savings deposits	127,636			11			0.04		120,510			16			0.05
Money market accounts	119,243			55			0.19		105,365			43			0.17
Interest-bearing demand	169,732			20			0.05		158,603			28			0.07
Short-term borrowings	4,663			26			2.32		1,514			1			0.10
FHLB advances	46,737			155			1.34		46,531			154			1.35
Junior subordinated debentures	16,334			169			4.20		16,313			166			4.13
Total Interest-Bearing Liabilities	$	978,073		$	1,432		0.59	%	$	943,566		$	1,570		0.68	%
Noninterest-bearing deposits	145,640								137,760
Other liabilities	3,986								3,888
Shareholders’ Equity	106,681								110,416
Total Liabilities and Shareholders’ Equity	$	1,234,380							$	1,195,630
Net interest Income (FTE)				$	9,117		3.21	%				$	8,860		3.23	%
Taxable Equivalent Adjustment				(156		)	(0.05	)				(156		)	(0.06	)
Net Interest Income Per Financial Statements				$	8,961							$	8,704
Net Yield on Earning Assets							3.16	%							3.17	%

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(Dollar in thousand except per share data)

Three Months Ended March 31, 2014, versus Three Months Ended March 31, 2013, 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 75.5% of the Corporation’s revenues for the three months ended March 31, 2014. 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 $8,961 for the first quarter 2014 compared to $8,704 during the same quarter of 2013, an increase of 2.95%. Contributing to the increase in net interest income was $20,258, or 2.28% growth in portfolio loans from the first quarter of 2013. Adjusting for tax-exempt income, net interest income FTE for the first quarter of 2014 and 2013 was $9,117 and $8,860, respectively. The net interest margin FTE, determined by dividing tax equivalent net interest income by average earning assets, was 3.21% for the three months ended March 31, 2014, compared to 3.23% for the three months ended March 31, 2013.

Average earning assets for the first quarter of 2014, were $1,150,500, an increase of $37,208 or 3.3%, compared to $1,113,292 for the first quarter of last year. The yield on average loans during the first quarter of 2014 was 3.99%, which was 14 basis points lower than the yield on average loans during the first quarter of 2013 of 4.13%. Interest income from securities was $1,512 (FTE) for the three months ended March 31, 2014, compared to $1,256 during the first quarter of 2013. The yield on average securities increased to 2.82% from 2.45% for these periods, respectively. The increase in interest income from securities is the result of higher long-term interest rates year over year which led to a decrease in prepayments within the Corporation's mortgage-backed securities portfolio. This resulted in a decline in premium amortization expense for the first quarter of 2014.

The cost of interest-bearing liabilities was 0.59% during the first quarter of 2014 compared to 0.68% during the same period in 2013. This decrease is primarily due to the sustained low interest rate environment. Noninterest-bearing accounts were $145,640, an increase of 5.7%, compared to $137,760 for the same period a year ago. Total average interest-bearing liabilities of $978,073 for the quarter ended March 31, 2014 increased $34,507, or 3.7%, compared to the quarter ended March 31, 2013. The average cost of trust preferred securities was 4.20% for the first quarter of 2014, compared to 4.13% for the first quarter of 2013. One half of the Corporation’s outstanding trust preferred securities accrued dividends at a fixed rate of 6.64%, and the other half accrued dividends at LIBOR plus 1.48%, which was 1.71% as of March 31, 2014.

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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, 2014, and March 31, 2013. The table is presented on a fully tax-equivalent basis.

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

	Three Months Ended March 31,
	Increase (Decrease) in Interest Income/Expense  in 2014 over 2013
	Volume			Rate			Total
	(Dollars in thousands)
U.S. Govt agencies and corporations	$	51		$	186		$	237
State and political subdivisions	14			5			19
Federal funds sold and short-term investments	10			(13		)	(3		)
Restricted stock	(18		)	15			(3		)
Commercial loans	58			(111		)	(53		)
Residential real estate loans	(96		)	8			(88		)
Home equity lines of credit	25			15			40
Installment loans	148			(178		)	(30		)
Total Interest Income	192			(73		)	119
Consumer time deposits	(53		)	(133		)	(186		)
Public time deposits	40			(20		)	20
Savings deposits	1			(6		)	(5		)
Money market accounts	6			6			12
Interest-bearing demand	1			(9		)	(8		)
Short-term borrowings	18			7			25
FHLB advances	1			—			1
Trust preferred securities	—			3			3
Total Interest Expense	14			(152		)	(138		)
Net Interest Income (FTE)	$	178		$	79		$	257

Net interest income (FTE) for the first quarter 2014 and 2013 was $9,117 and $8,860, respectively. Net interest income (FTE) for the first quarter of 2014 increased by $257, or 3.0%, in comparison to the same period in 2013. This increase is primarily attributable to the improvement in the Corporation's investment portfolio. Interest income on securities of U.S. Government agencies and of corporations increased $237, of which $186 is attributable to rate and $51 is attributable to volume. Overall higher longer-term interest rates have decreased the number of agency securities being called. In addition, a slowdown in prepayments within the Corporation's mortgage-backed securities resulted in a corresponding decline in premium amortization.

Interest income on commercial loans decreased $53. This decrease is primarily attributable to the sustained low interest rate environment, with a decrease in rate of $111, which was offset by an increase in volume of $58. Interest income on installment loans decreased $30, with a decrease in rate of $178, which was offset by an increase in volume of $148. The decrease was the result of the continued lower interest rate environment and the competitive nature of indirect lending.

The $186 decrease in consumer time deposits was due primarily to lower market interest rates as existing accounts continued to renew at favorable lower market interest rates. Total interest expense decreased $138, with the decrease being attributable to a $152 decrease due to rate and an increase due to volume of $14.

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Noninterest Income

Table 3: Details of Noninterest Income

	Three Months Ended March 31,
	2014			2013
	(Dollars in thousands)
Investment and trust services	$	400		$	375
Deposit service charges	770			816
Other service charges and fees	753			831
Income from bank owned life insurance	169			168
Other income	151			321
Total fees and other income	2,243			2,511
Securities gains, net	—			178
Gain on sale of loans	703			656
Loss on sale of other assets, net	(34		)	(13		)
Total noninterest income	$	2,912		$	3,332

Three Months Ended March 31, 2014, versus Three Months Ended March 31, 2013, Noninterest Income Comparison

Total fees and other income for the three months ended March 31, 2014, was $2,243, a decrease of $268, or 10.7%, from $2,511 for the same period in 2013. The Corporation utilizes derivatives as part of its risk management strategy in conducting its mortgage activities. Consequently, changes in fair value, both gains and losses, of the instruments are recorded in the Consolidated Statements of Income in other income. The decrease of $170, or 53% in other income from the first quarter of 2014 compared to the first quarter of 2013 is the result of changes in the fair value of mortgage interest rate lock pipeline loans. Interest rate locked pipeline loans have significantly decreased year over year as an increase in mortgage interest rates resulted in the transition in the mortgage market from a refinance era to a purchase market.

For the three months ended March 31, 2014, deposit service charges were $770 compared to $816 for the same period one year ago. For the three months ended March 31, 2014, other service charges and fees decreased to $753 from $831. The decreases reflect lower activity primarily due to the harsh weather conditions experienced in the first quarter of 2014. Income earned on investment and trust services for the first quarter of 2014 increased $25 compared to the first quarter of 2013.

Gain on the sale of loans was $703 for the first quarter of 2014, compared to $656 for the first quarter of 2013, an increase of $47 or 7.2%.

The following table details the gain on the sale of loans recognized for the three months ended March 31, 2014 and 2013:

	Three Months Ended March 31,
	2014		2013
Gain on sale of mortgage loans	$	110	$	591
Gain on sale of indirect auto consumer loans	98		65
Gain on sale of SBA loans	495		—
	$	703	$	656

As noted above, the Corporation experienced a decrease in the demand for mortgage lending, primarily in the refinancing market due to rising interest rates year over year. As a result the gain on the sale of mortgage loans for the first quarter of 2014 decreased $481, or 81.4%. This was offset by the Small Business Administration (SBA) lending team generating over $12 million in loans, which resulted in a gain on sale of $495 in the first quarter of 2014. The Corporation retains the unguaranteed portion of these loans and sells the guaranteed portion of these loans. The Corporation continues to service these loans after sale and is required under the SBA programs to retain specified amounts. During the fourth quarter of 2013, the Corporation invested in a new loan office in Columbus, Ohio, with a focus on business loan growth and increasing revenue through the SBA programs. In the first quarter 2014, gain on the sale of indirect auto consumer loans was $98 compared to $65 for the first quarter of 2013. The increase of $33, or 50.8%, is due to the Corporation electing to sell more indirect auto consumer loans.

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Noninterest Expense

Table 4: Details on Noninterest Expense

	Three Months Ended March 31,
	2014		2013
	(Dollars in thousands)
Salaries and employee benefits	$	4,595	$	5,027
Furniture and equipment	1,148		949
Net occupancy	613		588
Professional fees	494		490
Marketing and public relations	400		289
Supplies, postage and freight	214		307
Telecommunications	151		162
Ohio franchise tax	224		308
Intangible asset amortization	33		33
FDIC assessments	272		242
Other real estate owned	24		77
Loan and collection expense	298		388
Other expense	393		421
Total noninterest expense	$	8,859	$	9,281

Three Months Ended March 31, 2014 versus Three Months Ended March 31, 2013 Noninterest Expense Comparison

Noninterest expense for the first quarter of 2014 decreased $422, or 4.5%, compared to the same period of 2013. The decrease year over year in noninterest expense was mainly attributable to the $693 SERP expense recognized in the first quarter of 2013. Furniture and equipment expense increased $199, or 21.0%, compared to the same period one year ago due to an increase in data processing expense with the introduction of mobile banking. Marketing and public relations expense increased $111, or 38.4%, compared to the same period one year ago. The increase is primarily due to the Corporation's communication and advertising for mobile banking, the SBA lending program and the implementation of a relationship checking account product which offers rewards as the customer's relationship with the bank grows. Ohio franchise tax decreased $84, or 27.3%, compared to same period one year ago due to state legislation changes resulting in a change in the calculation of Ohio franchise tax for community banks from an equity based method to an asset based method. Loan and collection expense decreased $90, or 23.2%, compared to same period one year ago due to improved asset quality.

Income taxes

Three Months Ended March 31, 2014 versus Three Months Ended March 31, 2013 Income Taxes Comparison

The Corporation recognized income tax expense of $508 and $292 for the first quarter 2014 and 2013, respectively. The increase in the Corporation’s effective tax rate to 24.0% for March 31, 2014, from 20.8% for March 31, 2013, compared to the Federal statutory tax rate of 34%, is due to higher pre-tax income year over year. Included in net income for the three months ended March 31, 2014, and March 31, 2013, was $486 and $485 of nontaxable income, respectively, which is comprised of $137 and $135, respectively, related to life insurance policies and $349 and $349, respectively, of tax-exempt investment and loan interest income.

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Financial Condition

Overview

The Corporation’s total assets at March 31, 2014, were $1,255,393 compared to $1,230,257 at December 31, 2013, an increase of $25,136, or 2.0%. This increase is primarily due to the increase in total deposits of $31,262. Total deposits at March 31, 2014, were $1,076,851 compared to $1,045,589 at December 31, 2013. The increase in total deposits was due to increases in money market and interest-bearing demand accounts of $36,364 and decreases in time deposits of $5,671. Other increases to note when compared to December 31, 2013 are in portfolio loans of $7,890, cash and cash equivalents of $15,969 and securities available for sale of $1,388.

Securities

The distribution of the Corporation’s securities portfolio at March 31, 2014 and December 31, 2013, is presented in Note 5 to the Consolidated Financial Statements contained within this Form 10-Q. The Corporation continued to employ the securities portfolio to manage the Corporation’s interest rate risk and liquidity needs. Total securities increased $1,388, or 0.6%, compared to December 31, 2013. As of March 31, 2014, the portfolio was comprised of 97.4% available-for-sale securities and 2.6% restricted stock. Available for sale securities were comprised of 31.0% U.S. Government Agencies, 43.5% U.S. Agency mortgage-backed securities, 10.2% U.S. collateralized mortgage obligations, and 15.4% municipal securities at March 31, 2014. The available-for-sale securities had a net temporary unrealized loss of $3,061, representing 1.4% 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 fluctuating interest rate environment and the flattening of the yield curve, the Corporation focused investment opportunities to short-term duration investments.

At March 31, 2014, the available-for-sale securities portfolio had gross unrealized gains of $2,880 and gross unrealized losses of $5,941. The gross unrealized losses represented 2.7% of the total amortized cost of the Corporation’s available-for-sale securities at March 31, 2014. At March 31, 2014, the Corporation held twelve available-for-sale securities with an unrealized loss position for greater than twelve months totaling $1,680. Available-for-sale securities with an unrealized loss position for less than twelve months totaled $4,261 at March 31, 2014. The unrealized gains and losses at December 31, 2013, were $2,754 and $8,651, respectively. See Note 5 to the Consolidated Financial Statements for further detail.

Loans

The detail of loan balances is presented in Note 6 to the Consolidated Financial Statements contained within this Form 10-Q. Table 7 provides detail by loan segment.

Total portfolio loans at March 31, 2014 were $910,189. This was an increase of $7,890 over total portfolio loans of at December 31, 2013. The Corporation believes that its loan portfolio was well-diversified at March 31, 2014. Commercial and commercial real estate loans represented 54.1%, indirect loans represented 23.0%, home equity loans represented 13.5%, residential real estate mortgage loans represented 7.5% and consumer loans represented 1.9% of total portfolio loans at March 31, 2014.

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Table 5: Loan Portfolio Distribution

	March 31, 2014			December 31, 2013			March 31, 2013
	(Dollars in thousands)
Commercial real estate	$	408,467		$	401,591		$	415,753
Commercial	83,297			88,646			75,909
Residential real estate	68,671			66,507			64,486
Home equity loans	122,824			123,076			121,764
Indirect	209,694			206,323			199,964
Consumer	17,236			16,156			12,055
Total Loans	910,189			902,299			889,931
Allowance for loan losses	(17,497		)	(17,505		)	(17,806		)
Net Loans	$	892,692		$	884,794		$	872,125
Loan Mix Percent
Commercial real estate	44.9		%	44.5		%	46.7		%
Commercial	9.2		%	9.8		%	8.5		%
Residential real estate	7.5		%	7.4		%	7.2		%
Home equity loans	13.5		%	13.6		%	13.7		%
Indirect	23.0		%	22.9		%	22.5		%
Consumer	1.9		%	1.8		%	1.4		%
Total Loans	100.0		%	100.0		%	100.0		%

Commercial loans and commercial real estate loans totaled $491,764 at March 31, 2014. This was an increase of $1,527, or 0.3%, over December 31, 2013, and a slight increase of $102 from March 31, 2013. 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 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 $188 of the $68,671 residential real estate mortgage loan portfolio at March 31, 2014. At March 31, 2014 residential real estate mortgage loans increased by $2,164, or 3.3%, in comparison to December 31, 2013 and increased $4,185, or 6.5%, from March 31, 2013. As interest rates have risen year over year, the refinancing market has slowed, contributing to the decrease in loans year over year.

Indirect auto loans increased by $3,371, or 1.6%, compared to December 31, 2013, and increased $9,730, or 4.9%, compared to March 31, 2013. The increase is primarily attributable to strong demand in the auto sales in the first quarter of 2014. The Corporation currently originates high quality indirect auto loans, defined as loans with borrowers that have personal credit scores that are greater than 750, in Ohio, Kentucky, Indiana, Georgia, North Carolina, Pennsylvania, and Tennessee.

Home equity loans decreased $252, or 0.2%, when compared to December 31, 2013, and increased $1,060, or 0.9%, compared to March 31, 2013. Due to strong marketing efforts, consumer loans have increased $1,080, or 6.7%, in comparison to December 31, 2013 and increased $5,181, or 43.0%, compared to March 31, 2013.

Loans held for sale are not included in portfolio loans and as of March 31, 2014. Total loans classified as held for sale were $1,811 compared to $6,250 as of March 31, 2013. Residential real estate mortgage loans represented $249, or 13.7%, and indirect loans represented $1,562, or 86.3%, of loans held for sale at March 31, 2014. At March 31, 2013, residential real estate mortgage loans represented $4,563, or 73.0%, and indirect loans represented $1,687, or 27.0%.

Table 6 shows the amount of portfolio loans outstanding as of March 31, 2014 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 as 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, 2014
Due in one year or less	$	218,966
Due after one year but within five years	427,327
Due after five years	263,896
Totals	$	910,189
Due after one year with a predetermined fixed interest rate	$	533,818
Due after one year with a floating interest rate	157,405
Totals	$	691,223

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 incurred credit losses 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 several years, the Corporation responded by adding additional internal resources at the end of 2009, continuing to utilize outside resources and implementing 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.

The Corporation uses a historical loss methodology in determining the level of allowances for various loan segments. It is supplemented by a migration analysis which estimates probable incurred losses, similar to the Basel formula, for commercial loans based on a history of loans migrating through the various loan grades.

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.

While the local economy has shown signs of improvement, it has remained fragile, as has the local real estate market and valuations. With the Corporation's 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 loan performance in light of the past and recent volatility in real estate valuations.

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Table 7 presents the Corporation's detailed activity in the allowance for loan losses and related charge-off activity for the three months ended March 31, 2014, and 2013.

Table 7: Analysis of Allowance for Loan Losses

	Three Months Ended
	March 31, 2014			March 31, 2013
	(Dollars in thousands)
Balance at beginning of year	$	17,505		17,637
Charge-offs:
Commercial real estate	(546		)	(123		)
Commercial	—			(63		)
Residential real estate	(77		)	(513		)
Home equity loans	(222		)	(436		)
Indirect	(70		)	(216		)
Consumer	(83		)	(77		)
Total charge-offs	(998		)	(1,428		)
Recoveries:
Commercial real estate	6			7
Commercial	1			4
Residential real estate	2			64
Home equity loans	11			47
Indirect	58			94
Consumer	12			31
Total Recoveries	90			247
Net Charge-offs	(908		)	(1,181		)
Provision for loan losses	900			1,350
Balance at end of year	$	17,497		$	17,806
Average Portfolio loans outstanding	$	906,843		$	884,893
Annualized ratio to average loans:
Net Charge-offs	0.41		%	0.54		%
Provision for loan losses	0.39		%	0.62		%
Loans outstanding	$	910,189		$	889,931
As a percent of outstanding loans	1.92		%	2.00		%

* Loans held for sale are excluded in the average portfolio loans outstanding balance.

The allowance for loan losses at March 31, 2014, was $17,497, or 1.92% of outstanding loans, compared to $17,806, or 2.00% of outstanding loans at March 31, 2013. The allowance for loan losses was 83.65% and 62.45% of nonperforming loans at March 31, 2014 and 2013, respectively.

Net charge-offs for the three months ended March 31, 2014, were $908, compared to $1,181 for the three months ended March 31, 2013. Net charge-offs as a percent of average loans was 0.41% for the quarter of 2014 and 0.54% for the same period in 2013.Net charge-offs on commercial and commercial real estate loans were 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 determined based upon current appraised value less costs to sell.

The provision for loan losses was $900 for the three months ended March 31, 2014, compared to $1,350 for the three months ended March 31, 2013. Real estate market conditions have improved resulting in higher valuations for underlying

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collateral. This coupled with overall better asset quality has resulted in lower level of charged-off loans in the the Corporation's loan portfolio. Consumer loans, especially home equity loans, while somewhat affected by the real estate market, have been largely influenced by the level of unemployment, which has been relatively high over the past several 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.

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, 2014. 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, 2014, and December 31, 2013, 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, 2014				December 31, 2013
	(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	$	10,244	44.9	%	$	10,122	44.5	%
Commercial	464		9.2	%	497		9.8	%
Residential real estate	1,483		7.5	%	1,411		7.4	%
Home equity loans	3,478		13.5	%	3,484		13.6	%
Indirect	1,513		23.0	%	1,593		22.9	%
Consumer	315		1.9	%	398		1.8	%
Total	$	17,497	100.0	%	$	17,505	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 markets. 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, 2014, and December 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
	For the three months ended
	March 31, 2014		December 31, 2013		March 31, 2014		December 31, 2013
	(Dollars in thousands)
Noninterest-bearing checking	$	145,640	$	141,639	—	%	—	%
Interest-bearing checking	169,732		165,846		0.05	%	0.05	%
Savings deposits	127,636		123,179		0.04	%	0.04	%
Money market accounts	119,243		104,758		0.19	%	0.17	%
Consumer time deposits	411,774		434,771		0.85	%	0.93	%
Public time deposits	81,954		67,080		0.67	%	0.73	%
Total Deposits	$	1,055,979	$	1,037,273	0.42	%	0.54	%
Short-term borrowings	4,663		1,807		2.32	%	0.40	%
FHLB borrowings	46,737		46,609		1.34	%	1.35	%
Junior subordinated debentures	16,334		16,322		4.20	%	4.19	%
Total borrowings	$	67,734	$	64,738	2.10	%	2.04	%
Total funding	$	1,123,713	$	1,102,011	0.59	%	0.64	%

Deposit accounts and the generation of deposit accounts continued to be the primary source of funds for the Corporation. The Corporation offers various deposit products to both retail and business customers. The Corporation also has available its business sweep accounts to generate funds as well as the brokered CD market to provide funding comparable to other national market borrowings, which include the Federal Home Loan Bank of Cincinnati and the Federal Reserve Bank of Cleveland. At March 31, 2014 and December 31, 2013, the Corporation had no brokered time deposit balances.

Average deposit balances increased from $1,037,273 at December 31, 2013, to $1,055,979 at March 31, 2014. Low-cost deposits, namely checking, savings and money market accounts accounted for 53.2% of total deposits at March 31, 2014. The improved mix and extended lower interest rate environment has contributed to the Corporation's lower funding cost. These low-cost funds had an average yield of 0.42% compared to 0.54% at December 31, 2013. Included in these funds are consumer time deposits which carried an average yield of 0.85% compared to 0.93% at December 31, 2013. Time deposits to total average deposits were 493,728 or 46.8% of total deposits at March 31, 2014.

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. Short term borrowings decreased 18.6%, to $3,725 at March 31, 2014 compared to $4,576 at December 31, 2013. Of the $3,725, repurchase agreements represented $1,225 and $2,500 represented a line of credit with an unaffiliated financial institution as of March 31, 2014. The Corporation did not have any Federal funds purchased at March 31, 2014, or December 31, 2013.

As part of the Corporation’s redemption of the Series B Preferred Stock, approximately $3.0 million was drawn on a line of credit with an unaffiliated financial institution in December of 2013. The Corporation has maintained a $6.0 million line of credit with this institution since 2009 at prime rate, which was 3.50% at December 31, 2013 and 3.50% at March 31, 2014. In the first quarter 2014 the Corporation made a payment of $500 on the line of credit. Following the $500 payment made in the first quarter of 2014, $2.5 million remained outstanding at prime rate of 3.50% at March 31, 2014.

Long-term borrowings by the Corporation consist of Federal Home Loan Bank (FHLB) advances and junior subordinated debentures. FHLB advances were $46,760 at March 31, 2014 compared to $46,708 at December 31, 2013, while the junior subordinated debentures remained constant at $16,238. In the fourth quarter of 2012, the Corporation prepaid $27,500 of fixed rate FHLB advances with a contractual average interest rate of 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

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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 common shares of the Corporation at a volume-weighted average price of $4.41 per share. At March 31, 2014, the balance of the subordinated notes payable to Trust I and Trust II was $8,119 each.

Capital Management

The Bank is subject to various regulatory capital requirements administered by the Office of the Comptroller of the Currency (“OCC”), including a risk-based capital measure. The risk-based capital guidelines include both a definition of capital and a framework for calculating risk-weighted assets by assigning balance sheet assets and off-balance sheet items to broad risk categories. At March 31, 2014 and December 31, 2013, the Bank exceeded all of its regulatory capital requirements and was considered “well-capitalized” under regulatory guidelines.

	Actual				For Capital Adequacy Purposes				To Be Well Capitalized Under Prompt Corrective Action Provisions
March 31, 2014 (Unaudited)	Amount		Ratio		Amount		Ratio		Amount		Ratio
Total Capital (to Risk Weighted Assets)	$	116,693	12.15	%	$	76,815	8.0	%	$	96,018	10.0	%
Tier 1 Capital (to Risk Weighted Assets)	104,623		10.90		38,407		4.0		57,611		6.0
Tier 1 Leverage Capital (to Adjusted Total Assets)	104,623		8.61		48,604		4.0		60,755		5.0
	Actual				For Capital Adequacy Purposes				To Be Well Capitalized Under Prompt Corrective Action Provisions
December 31, 2013	Amount		Ratio		Amount		Ratio		Amount		Ratio
Total Capital (to Risk Weighted Assets)	$	122,795	12.89	%	$	76,230	8.0	%	$	95,290	10.0	%
Tier 1 Capital (to Risk Weighted Assets)	110,815		11.63		38,116		4.0		57,174		6.0
Tier 1 Leverage Capital (to Adjusted Total Assets)	110,815		9.22		48,086		4.0		60,108		5.0

Capital Resources

The Corporation continues to maintain a capital position that exceeds regulatory capital requirements. Total shareholders' equity was $107,114 at March 31, 2014, compared to $111,456 at December 31, 2013, a decrease of 3.9%, or $4,342. The regulatory capital ratios at December 31, 2013 include the proceeds from the Corporation entering into a common shares purchase agreement (the “Purchase Agreement”) with certain investors party thereto (the “Investors”), which included certain third-party investors and certain directors of the Corporation. Pursuant to the Purchase Agreement, the Corporation sold to the Investors an aggregate of 367,321 Common Shares at a purchase price of $9.9087 per share (except that Investors who are directors of the Corporation or are related thereto paid $10.30 per share), for an aggregate purchase price of $3.68 million.

Following the completion of the issuance and sale of Common Shares pursuant to the Purchase Agreement, on December 17, 2013, the Corporation issued a notice of redemption of all 9,147 remaining shares of Series B Preferred Stock, to be funded with the proceeds from the sale of Common Shares along with cash from $3,000 in borrowings under the Corporation’s line of credit with an unaffiliated financial institution and from the Corporation’s accumulated earnings and excess capital.

On January 17, 2014, the Corporation completed the retirement of the remaining shares of Series B Preferred Stock. The Corporation repurchased 1,458 of such shares in a private transaction in December, 2013, and redeemed the remaining 7,689 shares of Series B Preferred Stock on January 17, 2014, the redemption date. As of March 31, 2014, the Corporation no longer has Series B Preferred Stock issued or outstanding.

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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. No repurchase were made under this program during the first quarter of 2014. At March 31, 2014, the Corporation held 336,745 shares of common stock as treasury stock at a cost of $6,177. In the first three months of 2014, 8,551 shares were surrendered to the Corporation by employees to cover tax withholding in conjunction with vesting of restricted stock, as treasury stock at a cost of $85.

On December 12, 2008, the Corporation issued 25,223 shares of the Company’s Fixed Rate Cumulative Perpetual Preferred Stock, Series B, $1,000 per share liquidation preference (“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 ("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.

In the fourth quarter of 2012, the Corporation completed the repurchase of 6,343 shares of Series B Preferred Stock from private investors, representing $6.3 million in face liquidation amount of the shares, or approximately 25% of the outstanding shares, of the Series B Preferred Stock in exchange for cash at an average price per share of $970.84, plus accrued and unpaid interest. 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 an increase to retained earnings of $141.

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 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.

On December 12, 2013, the Corporation entered into the Purchase Agreement. The Corporation sold to the Investors an aggregate of 367,321 Common Shares at a purchase price of $9.9087 per share (except that Investors who are directors of the Corporation or are related thereto paid $10.30 per share), for an aggregate purchase price of $3.68 million. The transactions were approved by the Board of Directors of the Corporation, by a majority of the disinterested directors of the Corporation and by the Corporation’s Audit and Finance Committee. The Purchase Agreement, among other things, provided the Investors with certain registration rights, pursuant to which the Corporation filed a Registration Statement on Form S-3 with the SEC, which was declared effective on January 16, 2014.

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 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

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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 incurred credit losses 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 incurred credit losses in the loan portfolio. The allowance is comprised of a general allowance, a specific allowance for 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.”

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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, 2013. No significant changes since the previous assessment at December 31, 2013 have occurred, thus no additional information to indicate goodwill is impaired has been reviewed.

• 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.

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.

RISK ELEMENTS

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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, 2014, 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.

Table 9 sets forth nonperforming assets at March 31, 2014, and December 31, 2013.

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Table 9: Nonperforming Assets

	March 31, 2014			December 31, 2013
	(Dollars in thousands)
Commercial real estate	$	10,145		$	11,241
Commercial	227			289
Residential real estate	5,127			5,231
Home equity loans	4,845			4,464
Indirect	362			443
Consumer	212			318
Total nonperforming loans	20,918			21,986
Other foreclosed assets	979			579
Total nonperforming assets	$	21,897		$	22,565
Loans 90 days past due accruing interest	$	—		$	158
Total nonperforming loans as a percent of total loans	2.30		%	2.44		%
Total nonperforming assets as a percent of total assets	1.74		%	1.83		%
Allowance for loan losses to nonperforming loans	83.65		%	79.62		%

The Corporation continues to actively manage credit quality and has made progress managing problem loans. Nonperforming loans at March 31, 2014, were $20,918 compared to $21,986 at December 31, 2013, a decrease of $1,068 or 4.9%. Nonperforming commercial real estate loans were $10,145 for March 31, 2014, compared to $11,241 at December 31, 2013. 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, 2014, was 1.64% of total loans, down from 1.69% at December 31, 2013. Additionally, total 30-59 day and 60-89 day delinquencies were 0.25% and 0.25% of total loans at March 31, 2014, compared to 0.26% and 0.19% of total loans at December 31, 2013, respectively.

Other foreclosed assets were $979 as of March 31, 2014, compared to $579 at December 31, 2013. The $979 is comprised of two commercial properties totaling $252 and nine residential properties, totaling $727. This compares to three commercial properties totaling $304 and seven residential properties, totaling $275 as of December 31, 2013 .

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, 2014, 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 $24,156 at March 31, 2014.

As part of the Corporation’s redemption of the Series B Preferred Stock, approximately $3.0 million was drawn on a line of credit with an unaffiliated financial institution in December 2013. The Corporation has maintained a $6.0 million line of credit with this institution since 2009 at prime rate, which was 3.50% at December 31, 2013 and 3.50% at March 31, 2014. In the first quarter 2014, the Corporation made a payment of $500 on the line of credit. Following the $500 payment, $2.5 million remained outstanding at prime rate of 3.50% at March 31, 2014.

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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 operating liquidity are the dividends 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, 2014.

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, 2014, 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 decrease $515 or 1.4%, and in a -200 basis point shock, net interest income would decrease $2,466, or 6.7%. 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, 2014, this analysis indicated that a +200 basis point change in rates would reduce the value of the Corporation’s equity by 21.4% while a -200 basis point change in rates would increase the value of the Corporation’s equity by 15.1%.

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, 2014, 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, 2014, were: (1) designed to ensure that information required to be disclosed by the Corporation in the reports it files or submits under the Exchange Agreement relating to the Corporation and its subsidiaries is made known to the Chief Executive Officer and Chief Financial Officer by others within the entities as appropriate to allow for timely decisions regarding required disclosure, 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, 2014, that has materially affected, or is reasonably likely to materially affect, the Corporation’s internal control over financial reporting.

Part II Other Information

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Item 1. Legal Proceedings

There were no new material legal proceedings or material changes to existing legal proceedings involving the Corporation during the first quarter of 2014.

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, 2013.

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

Issuer Purchases of Equity Securities

The following table summarizes common share repurchase activity for the quarter ended March 31, 2014:

Period	Total Number of Shares  (or Units) Purchased (1)	Average Price Paid Per  Share (or Unit)		Total Number of Shares  (or Units) Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares (or Units) that may yet be Purchased Under the Plans or Programs (2)
January 1, 2014 — January 31, 2014	—	—		—	129,500
February 1, 2014 — February 28, 2014	8,551	$	9.95	—	129,500
March 1, 2014 — March 31, 2014	—	—		—	129,500
Total	8,551	$	9.95	—	129,500

(1) All shares were surrendered to the Corporation by employees for tax withholding purposes in conjunction with the vesting of restricted stock awarded to the employees by the Corporation under the 2006 Stock Incentive Plan, as amended.

(2) 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. As of March 31, 2014, the Corporation had repurchased an aggregate of 202,500 shares under this program. No shares were repurchased under this program during the first quarter of 2014.

During the fourth quarter of 2013, the Corporation issued a notice to redeem all of its 9,147 outstanding shares of Series B Preferred Stock. On January 17, 2014, the Corporation completed the repurchase and redemption of all of the Series B Preferred Stock for an aggregate price of $9,147,000, the face liquidation amount of the shares, plus approximately $74,000 of accrued but unpaid dividends.

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Item 6. Exhibits

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

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SIGNATURES

Pursuant to the requirements 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 7, 2014	By:	/s/ Gary J. Elek
		Gary J. Elek
		Executive Vice President and Chief Financial Officer
		(Duly Authorized Officer, and Principal Accounting and Financial Officer)

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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, 2014, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets at March 31, 2014 (unaudited) and December 31, 2013; (ii) Consolidated Statements of Income and Comprehensive Income (unaudited) for the three months ended March 31, 2014 and 2013; (iii) Consolidated Statements of Shareholders' Equity (unaudited) for the three months ended March 31, 2014 and 2013; (iv) Consolidated Statements of Cash Flows (unaudited) for the three months ended March 31, 2014 and 2013; and (v) Notes to the Unaudited Consolidated Financial Statements.

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EX-10.1

CHANGE IN CONTROL

SUPPLEMENTAL EXECUTIVE COMPENSATION AGREEMENT

This Agreement, effective as of the ____ day of ________, 2013, by and between LNB Bancorp, Inc., an Ohio corporation (the "Company"), and _____ ("Executive"), is to EVIDENCE THAT:

WHEREAS the Company considers the establishment and maintenance of a sound and vital management team for the Company and its Subsidiaries (as defined in Section 1) to be essential to protecting and enhancing the best interests of the Company and its shareholders; and

WHEREAS the Company recognizes that, as is the case with many publicly held corporations, the possibility of a change in control may arise and that such possibility may result in the departure or distraction of management personnel to the detriment of the Company and its shareholders; and

WHEREAS the Board of Directors of the Company (the "Board") has determined that it is in the best interests of the Company and its shareholders to secure Executive's continued services for the Company and/or its Subsidiaries and to ensure Executive's continued and undivided dedication to Executive's duties in the event of any occurrence of a Change in Control (as defined in Section 1) involving the Company; and

WHEREAS Executive and the Company acknowledge that the terms and conditions of this Agreement shall apply only if a Change in Control occurs, except for the covenants contained in Section 11 which shall apply in all circumstances; and

WHEREAS Executive further acknowledges and agrees that this Agreement does not alter Executive's status as an "employee at will" with the Company;

NOW, THEREFORE, for and in consideration of the mutual covenants and agreements herein contained, and intending to be legally bound hereby, the Company and Executive (collectively, the "Parties" and, individually, a "Party") hereby agree as follows:

1.    Definitions. As used in this Agreement, the following terms shall have the respective meanings set forth below:

(a) "Bonus Amount" means the highest annual incentive bonus earned by Executive from the Company (or its Subsidiaries) during the last three (3) completed fiscal years of the Company immediately preceding Executive’s Date of Termination.

(b) "Cause" means any one or more of the following: (i) the willful and continued failure of Executive to perform substantially Executive's duties with the Company or its Subsidiaries (other than any such failure resulting from Executive's Disability or any such failure subsequent to Executive being delivered a Notice of Termination without Cause by the Company or its Subsidiaries or after Executive delivering a Notice of Termination for Good Reason to the Company or its Subsidiaries) after a written demand for substantial performance is delivered to Executive by the Board which specifically identifies the manner in which the Board believes that Executive has not substantially performed Executive's duties and provides Executive with ten (10) business days to correct such failure; or (ii) the willful engaging by Executive in illegal conduct or gross misconduct which is injurious to the Company or its

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Subsidiaries; or (iii) the conviction of Executive of, or a plea by Executive of nolo contendere to, a felony; or (iv) Executive's breach of or failure to perform any of the non-competition and non-disclosure covenants contained in Section 11 of this Agreement or contained in any other document signed by Executive and by the Company (or any Subsidiary). For purposes of this paragraph (b), no act or failure to act by Executive shall be considered "willful" unless done or omitted to be done by Executive in bad faith and without reasonable belief that Executive's action or omission was in the best interests of the Company and its Subsidiaries. Any act or failure to act based upon authority given pursuant to a resolution duly adopted by the Board, based upon the advice of counsel for the Company, or based upon the instructions of the Company's chief executive officer or another senior officer of the Company shall be conclusively presumed to be done, or omitted to be done, by Executive in good faith and in the best interests of the Company and its Subsidiaries.

(c) "Change in Control" means the occurrence of any one of the following events:

(i) if individuals who, on the date of this Agreement, constitute the Board (the "Incumbent Directors") cease for any reason to constitute at least a majority of the Board; provided, however, that: (A) any person becoming a director subsequent to the date of this Agreement, whose election or nomination for election was approved by a vote of at least two-thirds (2/3) of the Incumbent Directors then on the Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director, without written objection by such Incumbent Directors to such nomination), shall be deemed to be an Incumbent Director; and (B) no individual elected or nominated as a director of the Company initially as a result of an actual or threatened election contest with respect to directors or any other actual or threatened solicitation of proxies by or on behalf of any person other than the Board shall be deemed to be an Incumbent Director;

(ii) if any "person" (as such term is defined in Section 3(a)(9) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes a "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing thirty percent (30%) or more of the combined voting power of the Company's then-outstanding securities eligible to vote for the election of the Board (the "Company Voting Securities"); provided, however, that the events described in this clause (ii) shall not be deemed to be a Change in Control by virtue of any of the following acquisitions: (A) by the Company or any Subsidiary; (B) by any employee benefit plan sponsored or maintained by the Company or any Subsidiary or by any employee stock benefit trust created by the Company or any Subsidiary; (C) by any underwriter temporarily holding securities pursuant to an offering of such securities; (D) pursuant to a Non-Qualifying Transaction (as defined in clause (iii) of this paragraph (c), below); (E) pursuant to any acquisition by Executive or by any group of persons including Executive (or any entity controlled by Executive or any group of persons including Executive); or (F) a transaction

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(other than one described in clause (iii) of this paragraph (c), below) in which Company Voting Securities are acquired from the Company, if a majority of the Incumbent Directors approves a resolution providing expressly that the acquisition pursuant to this subparagraph (F) does not constitute a Change in Control under this clause (ii);

(iii) upon the consummation of a merger, consolidation, share exchange or similar form of corporate transaction involving the Company or any of its Subsidiaries that requires the approval of the Company's shareholders, whether for such transaction or the issuance of securities in the transaction (a "Business Combination"), unless immediately following such Business Combination: (A) more than fifty percent (50%) of the total voting power of either (1) the corporation resulting from the consummation of such Business Combination (the "Surviving Corporation") or, if applicable, (2) the ultimate parent corporation that directly or indirectly has beneficial ownership of one hundred percent (100%) of the voting securities eligible to elect directors of the Surviving Corporation (the "Parent Corporation") is represented by Company Voting Securities that were outstanding immediately prior to such Business Combination (or, if applicable, represented by shares into which such Company Voting Securities were converted pursuant to such Business Combination), and such voting power among the holders thereof is in substantially the same proportion as the voting power of such Company Voting Securities among the holders thereof immediately prior to the Business Combination; (B) no person (other than any employee benefit plan sponsored or maintained by the Surviving Corporation or the Parent Corporation or any employee stock benefit trust created by the Surviving Corporation or the Parent Corporation) is or becomes the beneficial owner, directly or indirectly, of thirty percent (30%) or more of the total voting power of the outstanding voting securities eligible to elect directors of the Parent Corporation (or, if there is no Parent Corporation, the Surviving Corporation); and (C) at least a majority of the members of the board of directors of the Parent Corporation (or, if there is no Parent Corporation, the Surviving Corporation) were Incumbent Directors at the time of the Board's approval of the execution of the initial agreement providing for such Business Combination (any Business Combination which satisfies all of the criteria specified in (A), (B) and (C) above shall be deemed to be a "Non-Qualifying Transaction"); or

(iv) upon liquidation or dissolution of the Company or consummation of the sale of all or substantially all of the Company's assets but only if, pursuant to such liquidation or sale, the assets of the Company are transferred to an entity not owned (directly or indirectly) by the Company's shareholders.

Notwithstanding the foregoing, a Change in Control shall not be deemed to occur solely because any person acquires beneficial ownership of more than thirty percent (30%) of Company Voting Securities as a result of the acquisition of Company Voting Securities by the Company which reduces the number of Company Voting Securities outstanding; provided, however, that if (after such acquisition by the Company) such person becomes the beneficial owner of additional Company Voting Securities that increases the percentage of outstanding Company Voting Securities

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beneficially owned by such person, a Change in Control shall then occur. Notwithstanding anything in this Agreement to the contrary, if (A) Executive's employment is terminated prior to a Change in Control for reasons that would have constituted a Qualifying Termination if they had occurred following a Change in Control, (B) Executive reasonably demonstrates that such termination (or event constituting Good Reason) was at the request of a third party who had indicated an intention or taken steps reasonably calculated to effect a Change in Control, and (C) a Change in Control involving such third party (or a party competing with such third party to effectuate a Change in Control) does occur, then (for purposes of this Agreement) the date immediately prior to the date of such termination of employment (or event constituting Good Reason) shall be treated as a Change in Control.

(d) "Date of Termination" means (1) the effective date on which Executive's employment by the Company and its Subsidiaries terminates as specified in a prior written notice by the Company, a Subsidiary or Executive (as the case may be) to the other, delivered pursuant to Section 9, or (2) if Executive's employment by the Company terminates by reason of death, the date of death of Executive, or (3) if the Executive incurs a Disability, the date of such Disability as determined by a physician chosen by the Company. For purposes of determining the timing of payments and benefits to Executive under Section 4, the date of the actual Change in Control shall be treated as Executive's Date of Termination.

(e) "Disability" means Executive's inability to perform Executive's then-existing duties with the Company or its Subsidiaries on a full-time basis for at least one hundred eighty (180) consecutive days as a result of Executive's incapacity due to physical or mental illness.

(f) "Good Reason" means, without Executive's express written consent, the occurrence of any of the following events after a Change in Control:

(i) (A) any change in the duties or responsibilities (including reporting responsibilities) of Executive that is inconsistent in any material and adverse respect with Executive's positions, duties, responsibilities or status with the Company or its Subsidiaries immediately prior to such Change in Control (including any material and adverse diminution of such duties or responsibilities), or (B) a material and adverse change in Executive's titles or offices (including, if applicable, membership on the Board) with the Company or its Subsidiaries as existing immediately prior to such Change in Control;

(ii) (A) a reduction by the Company or its Subsidiaries in Executive's rate of annual base salary as in effect immediately prior to such Change in Control (or as such annual base salary may be increased from time to time thereafter), or (B) the failure by the Company or its Subsidiaries to pay Executive an annual bonus (if any) in respect of the year in which such Change in Control occurs;

(iii) any requirement of the Company or its Subsidiaries that Executive: (A) be based anywhere more than fifty (50) miles from the Executive's residence at the time of the Change in Control, or (B) travel on Company or Subsidiary

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business to an extent substantially greater than the travel obligations of Executive immediately prior to such Change in Control;

(iv) the failure of the Company or its Subsidiaries to continue in effect any material employee benefit plan, compensation plan, welfare benefit plan or other material fringe benefit plan in which Executive is participating immediately prior to such Change in Control or the taking of any action by the Company or its Subsidiaries which would materially and adversely affect Executive's participation in or reduce Executive's benefits under any such plan, unless Executive is permitted to participate in other plans providing Executive with substantially equivalent benefits in the aggregate; or

(v) the failure of the Company to obtain the assumption (and, if applicable, guarantee) agreement from any successor (and Parent Corporation) as contemplated in Section 8(b).

Notwithstanding any contrary provision in this Agreement: (A) an isolated, insubstantial and inadvertent action taken in good faith and which is remedied by the Company within ten (10) days after receipt of notice thereof given by Executive shall not constitute Good Reason; and (B) Executive's right to terminate employment for Good Reason shall not be affected by Executive's Disability; and (C) Executive's continued employment shall not constitute a consent to, or a waiver of rights with respect to, any event or condition constituting Good Reason (provided, however, that Executive must provide notice of termination of employment within thirty (30) days following Executive's knowledge of an event constituting Good Reason or such event shall not constitute Good Reason under this Agreement).

(g) “Highest Base Salary” means Executive’s highest annual base salary (excluding any bonuses) paid to Executive by the Company and by any Subsidiary during the Company’s last three (3) fiscal years completed immediately prior to the Date of Termination.

(h) "Qualifying Termination" means a termination of Executive's employment after a Change in Control and during the Termination Period (as defined herein) (i) by the Company or its Subsidiaries other than for Cause, or (ii) by Executive for Good Reason. Termination of Executive's employment on account of death or Disability shall not constitute a Qualifying Termination.

(i) "Retirement" means the termination of Executive's employment with the Company and its Subsidiaries: (A) on or after the first of the month coincident with or next following Executive's attainment of age sixty-five (65), or (B) on such later date as may be provided in a written agreement between the Company or its Subsidiaries and Executive.

(j) "Subsidiary" means any corporation or other entity in which the Company: (A) has a direct or indirect ownership interest of fifty percent (50%) or more of the total combined voting power of the then-outstanding securities or interests of such corporation or other entity entitled to vote generally in the election of directors, or

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(B) has the right to receive fifty percent (50%) or more of the distribution of profits or fifty percent (50%) of the assets upon liquidation or dissolution.

(k) "Termination Period" means the two (2) year period beginning with a Change in Control and ending two (2) years following such Change in Control.

2.    Obligation of Executive. In the event of a tender or exchange offer, proxy contest, or the execution of any agreement which, if consummated, would constitute a Change in Control, Executive agrees (as a condition to receiving any payments and benefits hereunder) not to voluntarily leave the employ of the Company (other than as a result of Disability, Retirement or an event which would constitute Good Reason if a Change in Control had occurred) until the Change in Control occurs or, if earlier, such tender or exchange offer, proxy contest, or agreement is terminated or abandoned.

3.    Term of Agreement. The term of this Agreement shall be effective on the date hereof and shall continue in effect until the Company shall have given two (2) years' written notice of cancellation; provided, however, that (notwithstanding the delivery of any such notice) the term of this Agreement shall continue in effect for a period of two (2) years after a Change in Control, if such Change in Control shall have occurred during the term of this Agreement. Notwithstanding anything in this Agreement to the contrary, the term of this Agreement shall terminate if Executive or the Company terminates Executive's employment prior to a Change in Control.

4.    Benefits Upon Qualifying Termination of Employment.

(a) Qualifying Termination — Cash Payment. If, during the Termination Period, Executive's employment with the Company and its Subsidiaries terminates pursuant to a Qualifying Termination, then the Company shall pay to Executive, within twenty (20) days following the Date of Termination, a lump sum cash amount equal to the sum of (i) one hundred twenty-five percent (125%) of Executive's Highest Base Salary, as defined in Section 1(g), through the Date of Termination and any base salary and bonuses which have been earned and are payable, to the extent not theretofore paid or deferred, plus (ii) one hundred twenty-five percent (125%) of Executive's Bonus Amount.

(b) Qualifying Termination ― Continued Coverage. If, during the Termination Period, Executive's employment with the Company and its Subsidiaries terminates pursuant to a Qualifying Termination, the Company shall continue to provide, for a period of fifteen (15) months following the Date of Termination, Executive (and Executive's dependents, if applicable) with the same level of medical insurance benefits upon substantially the same terms and conditions (including contributions required by Executive for such benefits) as existed immediately prior to Executive's Date of Termination (or, if more favorable to Executive, as such benefits and terms and conditions existed immediately prior to the Change in Control); provided, however, that if Executive is not eligible to continue to participate in the Company plan providing such benefits, the Company shall otherwise provide such benefits on the same after-tax basis as if continued participation had been permitted. Notwithstanding the foregoing, in the event Executive becomes re-employed with another employer and becomes eligible to receive medical insurance benefits from such employer, the medical insurance benefits described herein shall be secondary to such benefits during the period of such eligibility but only if (and to the extent

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that) the Company reimburses Executive for any increased cost and provides any additional benefits necessary to give Executive the benefits provided hereunder. Executive's accrued benefits as of the Date of Termination under the Company's medical insurance plan shall be payable in accordance with the terms of such plan.

Notwithstanding any contrary provision set forth in this Agreement, Company's payments to Executive shall be reduced to the extent that such payments (together with all other payments by Company to Executive under all other written or verbal agreements between Company and Executive) constitute an "excess parachute payment" under Section 280G of the Internal Revenue Code (as may be periodically amended).

5.    Withholding Taxes. The Company shall withhold from all payments due to Executive hereunder all taxes which, by applicable Federal, State, local or other law, the Company is required to withhold therefrom.

6.    Reimbursement of Expenses. If any contest or dispute shall arise under this Agreement involving the alleged failure or refusal of the Company or any of its Subsidiaries to perform fully in accordance with the terms hereof, the Company shall reimburse Executive for all reasonable legal fees and expenses, if any, incurred by Executive with respect to such contest or dispute, together with interest in an amount equal to the prime rate of Lorain National Bank from time to time in effect (but in no event higher than the legal rate permissible under applicable law), such interest to accrue from the date the Company becomes obligated to pay such fees and expenses through the date of payment thereof; provided, however, that this Section 6 shall apply only if (and to the extent that) the Company is held to have breached or violated its duties and obligations hereunder to Executive.

7.    Scope of Agreement. Executive acknowledges that Executive is employed by the Company as an "employee at will" and that nothing in this Agreement shall be deemed to change Executive's status as an employee at will or to entitle Executive to continued employment with the Company or its Subsidiaries. If Executive's employment with the Company and its Subsidiaries terminates prior to a Change in Control or the term of this Agreement expires, Executive shall have no further rights under this Agreement (except as otherwise expressly provided hereunder).

8.    Successors; Binding Agreement.

(a) This Agreement shall not be terminated by any Business Combination. In the event of any Business Combination, the provisions of this Agreement shall be binding upon the Surviving Corporation, and such Surviving Corporation shall be treated as the Company hereunder.

(b) The Company agrees that, in connection with any Business Combination, Company will cause any successor entity to the Company unconditionally to assume (and, for any Parent Corporation in such Business Combination, to guarantee), by written instrument delivered to Executive (or Executive's beneficiaries or estate), all of the obligations of the Company hereunder. Failure of the Company to obtain such assumption or guarantee prior to the effectiveness of any such Business Combination that constitutes a Change in Control shall be a breach of this Agreement and shall constitute Good Reason hereunder and, further, shall entitle Executive to compensation from the Company in the same amount and on the same terms as Executive would be entitled hereunder as if Executive's employment were

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terminated following a Change in Control by reason of a Qualifying Termination. For purposes of implementing this Section 8(b), the date on which any such Business Combination becomes effective shall be deemed the date Good Reason occurs and shall be the Date of Termination, if so requested by Executive.

(c) This Agreement shall inure to the benefit of and be enforceable by Executive's personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If Executive dies while any amounts would be payable to Executive hereunder if Executive had continued to live, all such amounts (unless otherwise provided herein) shall be paid in accordance with the terms of this Agreement to such person or persons appointed in writing by Executive to receive such amounts or, if no person is so appointed, to Executive's estate.

9.    Notice.

(a) For purposes of this Agreement, all notices and other communications required or permitted hereunder shall be in writing and shall be deemed to have been properly given when delivered or three (3) days after deposit in the United States mail, certified and return receipt requested, postage prepaid, addressed as follows (or to such other address as either Party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt):

― If to the Executive, at the address set forth below in the signatory provision below; and

― If to the Company:

LNB Bancorp, Inc.

457 Broadway

Lorain, OH 44052

Attn: President

(b) A written notice of Executive's Date of Termination by the Company or Executive, as the case may be, to the other Party shall (i) indicate the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive's employment under the provision so indicated, and (iii) specify the Date of Termination, which date shall be not less than fifteen (15) days (thirty (30) days, if termination is by the Company for Disability) nor more than sixty (60) days after the giving of such notice. The failure by Executive or the Company to set forth in such notice any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of either Party or preclude either Party from asserting such fact or circumstance in enforcing such Party's rights hereunder.

10.    Full Settlement; Resolution of Disputes. The Company's obligation to make payment under this Agreement and otherwise to perform its obligations hereunder shall be in lieu and in full settlement of all other severance payments to Executive (payable because of a Change in Control) under any other

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severance or employment agreement between Executive and the Company and its Subsidiaries (if any) and under any severance plan of the Company and its Subsidiaries (if any). In no event shall Executive be obligated to seek other employment or take other action by way of mitigation of the amounts payable to Executive under any of the provisions of this Agreement and, except as provided in Section 4, such amounts shall not be reduced whether or not Executive obtains other employment. Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in Lorain County, Ohio, by three arbitrators in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrators' award in any State court having jurisdiction in Lorain County, Ohio. Except as otherwise provided in Section 6, each Party shall pay such Party's costs and expenses incurred in connection with any arbitration proceeding pursuant to this Section and the Parties shall each pay fifty percent (50%) of the costs of the arbitration proceedings.

11.    Executive's Non-Disclosure and Non-Solicitation Promises.

11.1    Definitions. For purposes of this Section 11, the Parties agree to and understand the following definitions:

(a) "Competitive Activity" means the performance or rendering of any banking services; trust services and investment services; portfolio management; retirement planning; administration of employee benefit plans; administration of decedents' estates and court-supervised accounts, guardianships, and custodial arrangements; personal tax and estate tax planning; financial consulting services; investment advising services; and any other business activity, service or product which competes with any existing or future business activity, service or product of the Company.

(b) "Confidential Information" means all of the following (whether written or verbal) pertaining to the Company: (i) trade secrets (as defined by Ohio law); customer lists, records and other information regarding the Company's customers (whether or not evidenced in writing); customer fee or price schedules and fee or price policies; financial books, plans, records, ledgers and information; business development plans; sales and marketing plans; research and development plans; employment and personnel manuals, records, data and policies; business manuals, methods and operations; business forms, correspondence, memoranda and other records; computer records and related data; and any other confidential or proprietary data and information of the Company or its customers which Executive encounters during the Employment Term; and (ii) all products, technology, ideas, inventions, discoveries, developments, devices, processes, business notes, forms and documents, business products, computer programs, and other creations (and improvements of any of the foregoing), whether patentable or copyrightable, which Executive has acquired, developed, conceived or made (whether directly or indirectly, whether solicited or unsolicited, or whether during normal work hours or during off-time) during the Employment Term and which relate to any business activity of the Company or are derived from the Confidential Information designated in Subitem (i) of this Section 11.1(b).

- 9 -    

(c) "Customer" means a person, sole proprietorship, partnership, association, organization, corporation, limited liability company, or other entity (governmental or otherwise), wherever located: (i) to or for which the Company sells any products or renders or performs services either during the 180-day period immediately preceding commencement of the Restricted Period or during the Restricted Period, or (ii) which the Company solicits or (as demonstrated by plans, strategies or other tangible preparation) intends to solicit to purchase products or services from the Company either during the 180-day period immediately preceding commencement of the Restricted Period or during the Restricted Period.

(d) "Employment Term" means, for purposes of this Section 11, the period of time starting on the date Executive's employment with the Company commenced and terminating at the close of business on the date Executive's employment with the Company terminates.

(e) "Restricted Period" means a period of two (2) years (or, if shorter, the duration of the Employment Term) commencing on the date the Employment Term is terminated by either Party (for any reason, with or without cause); provided, however, that such period shall be extended to include any period of time during which Executive engages in any activity constituting a breach of this Agreement and any period of time during which litigation transpires wherein Executive is held to have breached this Agreement.

(f) "Company" means, for purposes of this Section 11, LNB Bancorp, Inc. and The Lorain National Bank (a national bank association), all direct and indirect parent and subsidiary entities thereof, and all entities related to LNB Bancorp, Inc., The Lorain National Bank or to such parent and subsidiary entities by common ownership.

11.2    Executive's Promises. Expressly in consideration for the Company's promises made in this Agreement, Executive promises and agrees that:

(a) Confidentiality. The Confidential Information is and, at all times, shall remain the exclusive property of the Company, and Executive (i) shall hold the Confidential Information in strictest confidence and in a position of trust for the Company, and (ii) except as may be necessary to perform Executive's employment duties with the Company, shall not (directly or indirectly) use for any purpose, copy, duplicate, disclose, convey to any third-party or convert any Confidential Information, either during the Employment Term or at any time following termination of the Employment Term (by either Party, for any reason, with or without cause), and (iii) upon the request of the Company at any time during or after the Employment Term, shall immediately deliver to the Company all the Confidential Information in Executive's possession and shall neither convey to any third-party nor retain any copies or duplicates thereof.

- 10 -    

(b) Customers. During the Restricted Period, Executive (or any entity owned or controlled by Executive) shall not directly or indirectly (i) solicit from or perform for any Customer a Competitive Activity, wherever such Customer is located, or (ii) influence (or attempt to influence) any Customer to transfer such Customer's patronage or business from the Company, or (iii) otherwise interfere with any business relationship of the Company with any Customer.

(c) Employees. During the Restricted Period, Executive (or any entity owned or controlled by Executive) shall not directly or indirectly (i) employ, engage, contract for the services of, or solicit or otherwise induce the services of any person who, during the one hundred eighty (180) day period immediately preceding commencement of the Restricted Period or during the Restricted Period, is or was an employee of the Company, or (ii) otherwise interfere with (or attempt to interfere with) any employment relationship of the Company with any employee of the Company.

(d) Other Employment. During the Employment Term, Executive shall not perform services (whether or not for compensation) as an employee, independent contractor, consultant, representative or agent of any person, sole proprietorship, partnership, limited liability company, corporation, association (other than the Company), organization, or other entity (governmental or otherwise) without the prior written consent of the President of the Company (or any person expressly designated by the President).

(e) Costs of Enforcement. Executive shall pay all reasonable legal fees, court costs, expert fees, investigation costs, and other expenses incurred by the Company in the enforcement of this Section 11.

11.3    Importance of Executive's Promises. Executive understands and agrees that:

(a) during the Employment Term, Executive will materially assist the Company in the generation, development or enhancement of certain Confidential Information and certain other business assets and activities for Company; and

(b) Executive's promises in this Section 11: (1) were negotiated at arm's-length and with ample time for Executive to seek the advice of legal counsel, (2) are required for the fair and reasonable protection of the Company and the Confidential Information, and (3) do not constitute an unreasonable hardship to Executive in working for the Company or in subsequently earning a livelihood in Executive's field of expertise; and

(c) if Executive breaches (or threatens to breach) any or all of the promises in this Section 11: the secrecy and thereby the value of the Confidential Information will be significantly jeopardized; the Company will be subject to the immediate risk of material, immeasurable, and irreparable damage and harm; the remedies at law for Executive's breach shall be inadequate;

- 11 -    

the Company shall therefore be entitled to injunctive relief against Executive in addition to any and all other legal or equitable remedies; and

(d) if Executive had not agreed to the restrictive promises in this Agreement, the Company would not have signed this Agreement.

11.4    Extent and Continuation of Executive's Promises. Executive's promises, duties and obligations made in this Section 11 shall apply to Executive irrespective of whether a Change in Control occurs and shall survive the voluntary or involuntary cessation or termination of the Employment Term by either Party (for any reason, with or without cause). If any of the restrictions contained in this Section 11 are ever judicially held to exceed the limitations permitted by law, then such restrictions shall be deemed to be reformed to comply with the maximum limitations permitted by law. The existence of any claim or cause of action by Executive against the Company (whether or not derived from or based upon Executive's employment with the Company) shall not constitute a defense to the Company's enforcement of any covenant, duty or obligation of Executive in this Section 11.

12.    Employment with Subsidiaries. For purposes of this Agreement, any and all references to Executive's employment with the Company shall be deemed to include Executive's employment by any Subsidiary and, with respect to such employment by a Subsidiary, the term "Company" as used in this Agreement shall be deemed to include any Subsidiary which employs Executive.

13.    Survival. The respective obligations and benefits afforded to the Company and Executive as provided in Sections 4 (to the extent that payments or benefits are owed as a result of the termination of employment that occurs during the Termination Period), 5, 6, 8, 10 and 11 shall survive the termination of this Agreement and the term of this Agreement.

14.Governing Law; Validity. The interpretation, construction and performance of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of Ohio without regard to the principle of conflicts of laws. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which other provisions shall remain in full force and effect. The Parties hereby agree that exclusive venue for all litigation arising hereunder lies solely with the State Courts of Lorain County, Ohio and each Party hereby submits and agrees to the personal jurisdiction of such Lorain County State Courts.

15.Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same instrument.

16.    Miscellaneous. No provision of this Agreement may be modified or waived unless such modification or waiver is agreed to in writing and signed by Executive and by a duly authorized officer of the Company. No waiver by either Party (at any time) of any breach by the other Party of, or compliance with, any condition or provision of this Agreement to be performed by such other Party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. Except as otherwise expressly set forth in this Agreement, the failure by Executive or the Company to insist upon strict compliance with any provision of this Agreement or to assert any right Executive or the Company may have hereunder shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement.

- 12 -    

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by a duly authorized officer of the Company and Executive has executed this Agreement as of the day and year first above written.

LNB Bancorp, Inc.
By:
	Daniel E. Klimas, President
	~ Company ~
	[Name]
	Address
	City, State
	~ Executive ~

- 13 -    

Schedule of Executives Entering Into Change in Control Agreements

Mary E. Miles

Frank A. Soltis

Robert F. Heinrich

Peter R. Catanese

John D. Simacek

Kevin W. Nelson

- 14 -    

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, 2014 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 8, 2014	/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, 2014 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 8, 2014	/s/ Gary J. Elek
		Gary J. Elek
		Executive Vice President and 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, 2014 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 8, 2014

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, 2014 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

Executive Vice President and Chief Financial Officer

May 8, 2014

XML

Securities - Realized Gains and Losses Related to Securities Available-for-Sale (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Available-for-sale Securities, Gross Realized Gain (Loss), Disclosures [Abstract]
Gross realized gains	$ 0	$ 178
Gross realized losses	0	0
Net Securities Gains	0	178
Proceeds from sales of available-for-sale securities	$ 0	$ 2,280

XML

Federal Home Loan Bank Advances - Additional Information (Details) (USD $)	12 Months Ended
	Dec. 31, 2012	Mar. 31, 2014	Dec. 31, 2013
Securities Pledged As Collateral [Line Items]
Long-term Federal Home Loan Bank Advances		$ 46,760,000	$ 46,708,000
Maximum borrowing capacity of the Bank		73,971,000
Cash management line of credit		40,000,000
Prepayments For Federal Home Loan Bank Advances	27,500,000
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	1,017,000
Cash Management Line Of Credit Outstanding		0	0
Multi-family mortgage loans [Member]
Securities Pledged As Collateral [Line Items]
Investment securities		88,238,000
Residential real estate mortgage loans [Member]
Securities Pledged As Collateral [Line Items]
Investment securities		$ 16,985,000
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

XML

Loans and Allowance for Loan Losses - Additional Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Dec. 31, 2013
Accounts, Notes, Loans and Financing Receivable [Line Items]
Historical loss measurement period	3 years
Bank wide delinquency of loans in percentage	1.64%	1.69%
Bank wide delinquency of loans, 30 to 59 days delinquent, percentage	0.25%	0.26%
Bank wide delinquency of loans, 60 to 89 days delinquent, percentage	0.25%	0.19%
Allocated reserves of nonaccrual TDR loans	$ 40
Additional commitments to lend	$ 628
Maximum [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Time period of repayment based on delinquency period one	59 days
Time period of repayment based on delinquency period two	89 days
Minimum [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Time period of repayment based on delinquency period one	30 days
Time period of repayment based on delinquency period two	60 days
Time period of repayment based on delinquency period three	90 days

XML

Federal Home Loan Bank Advances - Maturities of FHLB Advances Outstanding (Details) (USD $)	Mar. 31, 2014	Dec. 31, 2013
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	46,760,000	46,708,000
Restructuring prepayment penalty	(740,000)	(793,000)
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	0	1,000
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	20,000,000	20,000,000
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	10,000,000	10,000,000
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	15,000,000	15,000,000
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	$ 2,500,000	$ 2,500,000

XML

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, 2014	Dec. 31, 2013
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Nonaccrual Loans	$ 20,918	$ 21,986
Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Nonaccrual Loans	10,145	11,241
Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Nonaccrual Loans	227	289
Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Nonaccrual Loans	5,127	5,231
Home equity loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Nonaccrual Loans	4,845	4,464
Indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Nonaccrual Loans	362	443
Consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Nonaccrual Loans	$ 212	$ 318

XML

Accumulated Other Comprehensive Income (Loss) (Tables)

3 Months Ended

Mar. 31, 2014

Equity [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss)

The following table details the change in the components of the Corporation’s accumulated other comprehensive income (loss) for the three months ended March 31, 2014 and 2013:

	March 31, 2014
	Unrealized securities gains and losses			Pension and post- retirement costs			Total
Balance at the beginning of the period	$	(3,892	)	$	(1,296	)	$	(5,188	)
Amounts recognized in other comprehensive income, net of taxes of $964	1,871			—			1,871
Reclassified amounts out of accumulated other comprehensive income, net of tax	—			—			—
Balance at the end of the period	$	(2,021	)	$	(1,296	)	$	(3,317	)

	March 31, 2013
	Unrealized securities gains and losses			Pension and post- retirement costs			Total
Balance at the beginning of the period	$	3,295		$	(2,055	)	$	1,240
Amounts recognized in other comprehensive income, net of taxes of $368	(714		)	—			(714		)
Reclassified amounts out of accumulated other comprehensive income, net of tax	117			—			—
Balance at the end of the period	$	2,464		$	(2,055	)	$	409

XML

Trust Preferred Securities - Additional Information (Details) (USD $)	1 Months Ended	3 Months Ended
	May 31, 2007	Mar. 31, 2014	Dec. 31, 2013
Trust Preferred Securities [Line Items]
Accrued interest payable		$ 701,000	$ 789,000
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		1.71%
Accrued interest payable		5,000	6,000
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		$ 21,000	$ 22,000

XML

Securities (Tables)

3 Months Ended

Mar. 31, 2014

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, 2014 and December 31, 2013 follows:

	March 31, 2014
	Amortized  Cost		Unrealized Gains		Unrealized Losses			Fair Value
	(Dollars in thousands)
Securities available for sale:
U.S. Government agencies and corporations	$	71,683	$	—	$	(4,242	)	$	67,441
Mortgage backed securities: residential	94,222		1,360		(1,063		)	94,519
Collateralized mortgage obligations	22,163		247		(271		)	22,139
State and political subdivisions	32,503		1,273		(365		)	33,411
Total Securities	$	220,571	$	2,880	$	(5,941	)	$	217,510
	At December 31, 2013
	Amortized  Cost		Unrealized Gains		Unrealized Losses			Fair Value
	(Dollars in thousands)
Securities available for sale:
U.S. Government agencies and corporations	$	71,851	$	—	$	(6,463	)	$	65,388
Mortgage backed securities: residential	94,313		1,362		(1,245		)	94,430
Collateralized mortgage obligations	18,650		255		(250		)	18,655
State and political subdivisions	32,521		1,137		(693		)	32,965
Preferred securities	4,684		—		—			4,684
Total Securities	$	222,019	$	2,754	$	(8,651	)	$	216,122

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

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

	At March 31, 2014
	Amortized Cost		Fair Value
	(Dollars in thousands)
Securities available for sale:
Due in one year or less	$	22,033	$	21,144
Due from one year to five years	46,819		45,340
Due from five years to ten years	29,740		28,680
Due after ten years	5,594		5,687
Mortgage backed securities and collateralized mortgage obligations	116,385		116,659
	$	220,571	$	217,510

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,
	2014		2013
	(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, 2014
	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	$	58,282	$	(3,405	)	$	9,159	$	(837	)	$	67,441	(4,242		)
Mortgage backed securities: residential	29,332		(454		)	24,875		(609		)	54,207		(1,063		)
Collateralized mortgage obligations	6,741		(86		)	4,287		(185		)	11,028		(271		)
State and political subdivisions	7,526		(316		)	488		(49		)	8,014		(365		)
Total	$	101,881	$	(4,261	)	$	38,809	$	(1,680	)	$	140,690	$	(5,941	)
	At December 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	$	65,388	$	(6,463	)	$	—	$	—		$	65,388	$	(6,463	)
Mortgage backed securities: residential	28,603		(566		)	31,051		(679		)	59,654		(1,245		)
Collateralized mortgage obligations	5,079		(59		)	4,411		(191		)	9,490		(250		)
State and political subdivisions	9,188		(602		)	447		(91		)	9,635		(693		)
Total	$	108,258	$	(7,690	)	$	35,909	$	(961	)	$	144,167	$	(8,651	)

XML

Deposits - Additional Information (Details) (USD $)	3 Months Ended	12 Months Ended
	Mar. 31, 2014	Dec. 31, 2013
Banking and Thrift [Abstract]
Certificates of deposit denominations	$ 100,000
Aggregate amount of certificates of deposit in denominations of $100,000 or more	$ 295,426,000	$ 293,330,000

XML

- 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		12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance, beginning of period	$ 17,505	$ 17,637	$ 17,637
Losses charged off	(998)	(1,428)	(6,019)
Recoveries	90	247	1,512
Provision charged to expense	900	1,350	4,375
Balance, end of period	17,497	17,806	17,505
Ending allowance balance attributable to loans:
Individually evaluated for impairment	917	1,970	938
Collectively evaluated for impairment	16,580	15,836	16,567
Total ending allowance balance	17,497	17,806	17,505
Loans:
Individually evaluated for impairment	19,124	27,137	21,511
Collectively evaluated for impairment	891,065	862,794	880,788
Total ending loans balance	910,189	889,931	902,299
Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance, beginning of period	10,122	11,386	11,386
Losses charged off	(546)	(123)	(2,325)
Recoveries	6	7	697
Provision charged to expense	662	(486)	364
Balance, end of period	10,244	10,784	10,122
Ending allowance balance attributable to loans:
Individually evaluated for impairment	838	1,778	865
Collectively evaluated for impairment	9,406	9,006	9,257
Total ending allowance balance	10,244	10,784	10,122
Loans:
Individually evaluated for impairment	16,175	23,941	17,842
Collectively evaluated for impairment	392,292	391,812	383,749
Total ending loans balance	408,467	415,753	401,591
Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance, beginning of period	497	835	835
Losses charged off	0	(63)	(121)
Recoveries	1	4	8
Provision charged to expense	(34)	(242)	(225)
Balance, end of period	464	534	497
Ending allowance balance attributable to loans:
Individually evaluated for impairment	73	192	73
Collectively evaluated for impairment	391	342	424
Total ending allowance balance	464	534	497
Loans:
Individually evaluated for impairment	460	564	472
Collectively evaluated for impairment	82,837	75,345	88,174
Total ending loans balance	83,297	75,909	88,646
Residential Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance, beginning of period	1,411	1,559	1,559
Losses charged off	(77)	(513)	(754)
Recoveries	2	64	350
Provision charged to expense	147	554	256
Balance, end of period	1,483	1,664	1,411
Ending allowance balance attributable to loans:
Individually evaluated for impairment	6	0	0
Collectively evaluated for impairment	1,477	1,664	1,411
Total ending allowance balance	1,483	1,664	1,411
Loans:
Individually evaluated for impairment	1,254	1,991	1,731
Collectively evaluated for impairment	67,417	62,495	64,776
Total ending loans balance	68,671	64,486	66,507
Home Equity Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance, beginning of period	3,484	2,357	2,357
Losses charged off	(222)	(436)	(1,775)
Recoveries	11	47	66
Provision charged to expense	205	980	2,836
Balance, end of period	3,478	2,948	3,484
Ending allowance balance attributable to loans:
Individually evaluated for impairment	0	0	0
Collectively evaluated for impairment	3,478	2,948	3,484
Total ending allowance balance	3,478	2,948	3,484
Loans:
Individually evaluated for impairment	980	483	1,111
Collectively evaluated for impairment	121,844	121,281	121,965
Total ending loans balance	122,824	121,764	123,076
Indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance, beginning of period	1,593	1,230	1,230
Losses charged off	(70)	(216)	(678)
Recoveries	58	94	335
Provision charged to expense	(68)	502	706
Balance, end of period	1,513	1,610	1,593
Ending allowance balance attributable to loans:
Individually evaluated for impairment	0	0	0
Collectively evaluated for impairment	1,513	1,610	1,593
Total ending allowance balance	1,513	1,610	1,593
Loans:
Individually evaluated for impairment	190	99	195
Collectively evaluated for impairment	209,504	199,865	206,128
Total ending loans balance	209,694	199,964	206,323
Consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance, beginning of period	398	270	270
Losses charged off	(83)	(77)	(366)
Recoveries	12	31	56
Provision charged to expense	(12)	42	438
Balance, end of period	315	266	398
Ending allowance balance attributable to loans:
Individually evaluated for impairment	0	0	0
Collectively evaluated for impairment	315	266	398
Total ending allowance balance	315	266	398
Loans:
Individually evaluated for impairment	65	59	160
Collectively evaluated for impairment	17,171	11,996	15,996
Total ending loans balance	$ 17,236	$ 12,055	$ 16,156

XML

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, 2014	Dec. 31, 2013
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	$ 220,571	$ 222,019
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax	2,880	2,754
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax	(5,941)	(8,651)
Fair Value	217,510	216,122
U.S. Government agencies and corporations
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	71,683	71,851
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax	0	0
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax	(4,242)	(6,463)
Fair Value	67,441	65,388
Mortgage backed securities: residential
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	94,222	94,313
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax	1,360	1,362
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax	(1,063)	(1,245)
Fair Value	94,519	94,430
Collateralized mortgage obligations
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	22,163	18,650
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax	247	255
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax	(271)	(250)
Fair Value	22,139	18,655
State and political subdivisions
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	32,503	32,521
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax	1,273	1,137
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax	(365)	(693)
Fair Value	33,411	32,965
Preferred securities
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost		4,684
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax		0
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax		0
Fair Value		$ 4,684

XML

Short-Term Borrowings - Additional Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Dec. 31, 2013
Short-term Debt [Line Items]
Line of credit	50.00%
Home equity lines of credit	$ 88,150
Available line of credit	44,075
Line of credit with an unaffiliated financial institution	6,000
Total short-term borrowings	3,725	4,576
Securities sold under repurchase agreements	1,225	2
Line of Credit
Short-term Debt [Line Items]
Stated interest rate	3.50%
Total short-term borrowings	$ 2,500	$ 3,000

XML

Share-Based Compensation - Summary of the Status of Restricted Shares (Details) (Restricted stock [Member], USD $)	3 Months Ended
	Mar. 31, 2014
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)	83,355
Nonvested Shares, Granted (in shares)	0
Nonvested Shares, Vested (in shares)	(44,803)
Nonvested Shares, Forfeited or expired (in shares)	0
Nonvested Shares, ending balance (in shares)	38,552
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	$ 5.86
Weighted Average Exercise Price per Share, Granted	$ 0.00
Weighted Average Exercise Price per Share, Vested	$ 5.35
Weighted Average Exercise Price per Share, Forfeited or expired	$ 0.00
Weighted Average Exercise Price per Share, Ending balance	$ 6.45

XML

Estimated Fair Value of Financial Instruments - Assets Measured by Fair Value on a Recurring Basis (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Fair Value Of Other Financial Instrument [Line Items]
Securities available for sale, at fair value (Note 5)	$ 217,510	$ 216,122
Fair Value [Member]
Fair Value Of Other Financial Instrument [Line Items]
Securities available for sale, at fair value (Note 5)	217,668	216,344
Fair Value [Member] | U.S. Government agencies and corporations
Fair Value Of Other Financial Instrument [Line Items]
Securities available for sale, at fair value (Note 5)	67,441	65,388
Fair Value [Member] | Mortgage backed securities: residential
Fair Value Of Other Financial Instrument [Line Items]
Securities available for sale, at fair value (Note 5)	94,519	94,430
Fair Value [Member] | Collateralized mortgage obligations
Fair Value Of Other Financial Instrument [Line Items]
Securities available for sale, at fair value (Note 5)	22,139	18,655
Fair Value [Member] | State and political subdivisions
Fair Value Of Other Financial Instrument [Line Items]
Securities available for sale, at fair value (Note 5)	33,411	32,965
Fair Value [Member] | Preferred securities
Fair Value Of Other Financial Instrument [Line Items]
Securities available for sale, at fair value (Note 5)		4,684
Fair Value [Member] | Interest rate swaps
Fair Value Of Other Financial Instrument [Line Items]
Securities available for sale, at fair value (Note 5)	158	222
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Fair Value Of Other Financial Instrument [Line Items]
Securities available for sale, at fair value (Note 5)	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 available for sale, at fair value (Note 5)	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Mortgage backed securities: residential
Fair Value Of Other Financial Instrument [Line Items]
Securities available for sale, at fair value (Note 5)	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 available for sale, at fair value (Note 5)	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 available for sale, at fair value (Note 5)	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Preferred securities
Fair Value Of Other Financial Instrument [Line Items]
Securities available for sale, at fair value (Note 5)		0
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Interest rate swaps
Fair Value Of Other Financial Instrument [Line Items]
Securities available for sale, at fair value (Note 5)	0	0
Significant Other Observable Inputs (Level 2) [Member]
Fair Value Of Other Financial Instrument [Line Items]
Securities available for sale, at fair value (Note 5)	217,668	211,660
Significant Other Observable Inputs (Level 2) [Member] | U.S. Government agencies and corporations
Fair Value Of Other Financial Instrument [Line Items]
Securities available for sale, at fair value (Note 5)	67,441	65,388
Significant Other Observable Inputs (Level 2) [Member] | Mortgage backed securities: residential
Fair Value Of Other Financial Instrument [Line Items]
Securities available for sale, at fair value (Note 5)	94,519	94,430
Significant Other Observable Inputs (Level 2) [Member] | Collateralized mortgage obligations
Fair Value Of Other Financial Instrument [Line Items]
Securities available for sale, at fair value (Note 5)	22,139	18,655
Significant Other Observable Inputs (Level 2) [Member] | State and political subdivisions
Fair Value Of Other Financial Instrument [Line Items]
Securities available for sale, at fair value (Note 5)	33,411	32,965
Significant Other Observable Inputs (Level 2) [Member] | Preferred securities
Fair Value Of Other Financial Instrument [Line Items]
Securities available for sale, at fair value (Note 5)		0
Significant Other Observable Inputs (Level 2) [Member] | Interest rate swaps
Fair Value Of Other Financial Instrument [Line Items]
Securities available for sale, at fair value (Note 5)	158	222
Significant Unobservable Inputs (Level 3) [Member]
Fair Value Of Other Financial Instrument [Line Items]
Securities available for sale, at fair value (Note 5)		4,684
Significant Unobservable Inputs (Level 3) [Member] | U.S. Government agencies and corporations
Fair Value Of Other Financial Instrument [Line Items]
Securities available for sale, at fair value (Note 5)	0	0
Significant Unobservable Inputs (Level 3) [Member] | Mortgage backed securities: residential
Fair Value Of Other Financial Instrument [Line Items]
Securities available for sale, at fair value (Note 5)	0	0
Significant Unobservable Inputs (Level 3) [Member] | Collateralized mortgage obligations
Fair Value Of Other Financial Instrument [Line Items]
Securities available for sale, at fair value (Note 5)	0	0
Significant Unobservable Inputs (Level 3) [Member] | State and political subdivisions
Fair Value Of Other Financial Instrument [Line Items]
Securities available for sale, at fair value (Note 5)	0	0
Significant Unobservable Inputs (Level 3) [Member] | Preferred securities
Fair Value Of Other Financial Instrument [Line Items]
Securities available for sale, at fair value (Note 5)		4,684
Significant Unobservable Inputs (Level 3) [Member] | Interest rate swaps
Fair Value Of Other Financial Instrument [Line Items]
Securities available for sale, at fair value (Note 5)	$ 0	$ 0

XML

Loans and Allowance for Loan Losses - Summary of Recorded Investment Based on Delinquency Status (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013	Mar. 31, 2013
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total ending loans balance	$ 910,189	$ 902,299	$ 889,931
Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total ending loans balance	408,467	401,591	415,753
Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total ending loans balance	83,297	88,646	75,909
Residential Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total ending loans balance	68,671	66,507	64,486
Home Equity Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total ending loans balance	122,824	123,076	121,764
Indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total ending loans balance	209,694	206,323	199,964
Consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total ending loans balance	17,236	16,156	12,055
Commercial Credit Exposure
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	468,834	467,759
Total loans internally credit risk graded	498,676	497,099
Total loans not internally credit risk graded	411,513	405,200
Total ending loans balance	910,189	902,299
Commercial Credit Exposure | Grade 1-Minimal
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	51	52
Commercial Credit Exposure | Grade 2-Modest
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	39	37
Commercial Credit Exposure | Grade 3-Better than average
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	848	857
Commercial Credit Exposure | Grade 4-Average
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	20,979	23,464
Commercial Credit Exposure | Grade 5-Acceptable
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	446,917	443,349
Commercial Credit Exposure | Grade 6-Special mention
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans internally credit risk graded	3,491	5,072
Commercial Credit Exposure | Grade 7-Substandard
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans internally credit risk graded	26,351	24,268
Commercial Credit Exposure | Grade 8-Doubtful
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans internally credit risk graded	0	0
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	405,760	398,444
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	1,139	1,511
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	1,042	1,722
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	3,572	3,523
Commercial Credit Exposure | Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	382,431	376,218
Total loans internally credit risk graded	408,467	401,591
Total loans not internally credit risk graded	0	0
Total ending loans balance	408,467	401,591
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	848	857
Commercial Credit Exposure | Commercial real estate | Grade 4-Average
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	20,204	22,580
Commercial Credit Exposure | Commercial real estate | Grade 5-Acceptable
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	361,379	352,781
Commercial Credit Exposure | Commercial real estate | Grade 6-Special mention
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans internally credit risk graded	3,341	2,146
Commercial Credit Exposure | Commercial real estate | Grade 7-Substandard
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans internally credit risk graded	22,695	23,227
Commercial Credit Exposure | Commercial real estate | Grade 8-Doubtful
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans internally credit risk graded	0	0
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	80,138	85,339
Total loans internally credit risk graded	83,297	88,646
Total loans not internally credit risk graded	0	0
Total ending loans balance	83,297	88,646
Commercial Credit Exposure | Commercial | Grade 1-Minimal
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	51	52
Commercial Credit Exposure | Commercial | Grade 2-Modest
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	39	37
Commercial Credit Exposure | Commercial | Grade 3-Better than average
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	0	0
Commercial Credit Exposure | Commercial | Grade 4-Average
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	164	271
Commercial Credit Exposure | Commercial | Grade 5-Acceptable
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	79,884	84,979
Commercial Credit Exposure | Commercial | Grade 6-Special mention
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans internally credit risk graded	118	2,891
Commercial Credit Exposure | Commercial | Grade 7-Substandard
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans internally credit risk graded	3,041	416
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	6,265	6,202
Total loans internally credit risk graded	6,912	6,862
Total loans not internally credit risk graded	61,759	59,645
Total ending loans balance	68,671	66,507
Commercial Credit Exposure | Residential Real Estate | Grade 1-Minimal
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	0	0
Commercial Credit Exposure | Residential Real Estate | Grade 2-Modest
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	0	0
Commercial Credit Exposure | Residential Real Estate | Grade 3-Better than average
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	0	0
Commercial Credit Exposure | Residential Real Estate | Grade 4-Average
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	611	613
Commercial Credit Exposure | Residential Real Estate | Grade 5-Acceptable
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Pass Credits	5,654	5,589
Commercial Credit Exposure | Residential Real Estate | Grade 6-Special mention
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans internally credit risk graded	32	35
Commercial Credit Exposure | Residential Real Estate | Grade 7-Substandard
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans internally credit risk graded	615	625
Commercial Credit Exposure | Residential Real Estate | Grade 8-Doubtful
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans internally credit risk graded	0	0
Commercial Credit Exposure | Residential Real Estate | Grade 9-Loss
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans internally credit risk graded	0	0
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	59,525	56,390
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	65	64
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	340	960
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	1,829	2,231
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	122,824	123,076
Total ending loans balance	122,824	123,076
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	119,718	120,359
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	872	932
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	591	707
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	1,643	1,078
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	209,694	206,323
Total ending loans balance	209,694	206,323
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	209,469	205,938
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	169	332
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	51	30
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	5	23
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	17,236	16,156
Total ending loans balance	17,236	16,156
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	17,048	15,757
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	33	183
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	60	25
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	$ 95	$ 191

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Earnings Per Common Share

3 Months Ended

Mar. 31, 2014

Earnings Per Share [Abstract]

Earnings Per Common Share

Earnings Per Common Share

The Corporation calculates earnings per common share (EPS) using the two-class method. The two-class method allocates net income to each class of Common Stock and participating security according to the common dividends declared and participation rights in undistributed earnings. Participating securities consist of unvested stock-based payment awards that contain nonforfeitable rights to dividends. The Corporation also uses the treasury stock method to calculate dilutive EPS. The treasury stock method assumes that the Corporation uses the proceeds from a hypothetical exercise of options to repurchase Common Stock at the average market price during the period. The reconciliation between basic and diluted earnings per share is presented as follows(Dollars in thousands, except per share data) :

	Three Months Ended
	March 31, 2014		March 31, 2013
Basic EPS
Net income	$	1,606	$	1,113
Less:
Preferred stock dividend and accretion	35		257
Income allocated to participating securities	6		11
Net income allocated to common shareholders	$	1,565	$	845
Average common shares outstanding	9,668,297		8,201,120
Less: participating shares included in average common shares outstanding	53,169		117,031
Average common shares outstanding used in basic EPS	9,615,128		8,084,089
Basic net income per common share	$	0.16	$	0.10
Diluted EPS:
Income used in diluted earnings per share calculation	$	1,565	$	845
Average common shares outstanding	9,668,297		8,201,120
Add: Common Stock equivalents:
Stock Options	37,135		10,918
Average common stock shares outstanding	9,705,432		8,212,038
Diluted earnings per common share	$	0.16	$	0.10

For the three months ended March 31, 2014, approximately 172,000 of options to purchase shares of common stock were not included in the computation of diluted earnings per share because the effect would be antidilutive. For the three months ended March 31, 2013, approximately 194,500 of options to purchase shares of common stock were not included in the computation of diluted earnings per share because the effect would be antidilutive.

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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, 2014	Dec. 31, 2013
Fair Value Of Other Financial Instrument [Line Items]
Impaired and nonaccrual loans	$ 18,207	$ 21,986
Other real estate	979	579
Total assets at fair value on a nonrecurring basis	19,186	22,565
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	18,207	21,986
Other real estate	979	579
Total assets at fair value on a nonrecurring basis	$ 19,186	$ 22,565

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Loans and Allowance for Loan Losses - Age Analysis of Past Due Loans (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013	Mar. 31, 2013
Accounts, Notes, Loans and Financing Receivable [Line Items]
30-59 Days Past Due	$ 2,305	$ 2,319
60-89 Days Past Due	2,302	1,744
Greater than 90 Days	10,297	11,164
Total Past Due	14,904	15,227
Current	895,285	887,072
Total ending loans balance	910,189	902,299	889,931
Recorded Investment greater than 90 Days and Accruing	0	201
Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
30-59 Days Past Due	741	525
60-89 Days Past Due	1,260	4
Greater than 90 Days	6,319	7,401
Total Past Due	8,320	7,930
Current	400,147	393,661
Total ending loans balance	408,467	401,591	415,753
Recorded Investment greater than 90 Days and Accruing	0	0
Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
30-59 Days Past Due	68	0
60-89 Days Past Due	0	18
Greater than 90 Days	159	219
Total Past Due	227	237
Current	83,070	88,409
Total ending loans balance	83,297	88,646	75,909
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	422	347
60-89 Days Past Due	340	960
Greater than 90 Days	2,076	2,252
Total Past Due	2,838	3,559
Current	65,833	62,948
Total ending loans balance	68,671	66,507	64,486
Recorded Investment greater than 90 Days and Accruing	0	158
Home equity loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
30-59 Days Past Due	872	932
60-89 Days Past Due	591	707
Greater than 90 Days	1,643	1,078
Total Past Due	3,106	2,717
Current	119,718	120,359
Total ending loans balance	122,824	123,076	121,764
Recorded Investment greater than 90 Days and Accruing	0	43
Indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
30-59 Days Past Due	169	332
60-89 Days Past Due	51	30
Greater than 90 Days	5	23
Total Past Due	225	385
Current	209,469	205,938
Total ending loans balance	209,694	206,323	199,964
Recorded Investment greater than 90 Days and Accruing
Consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
30-59 Days Past Due	33	183
60-89 Days Past Due	60	25
Greater than 90 Days	95	191
Total Past Due	188	399
Current	17,048	15,757
Total ending loans balance	17,236	16,156	12,055
Recorded Investment greater than 90 Days and Accruing	$ 0	$ 0

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Federal Home Loan Bank Advances (Tables)

3 Months Ended

Mar. 31, 2014

Disclosure Federal Home Loan Bank Advances Additional Information [Abstract]

Maturities of FHLB Advances Outstanding

Maturities of FHLB advances outstanding at March 31, 2014 and December 31, 2013 are as follows:

	March 31, 2014			December 31, 2013
	(Dollars in thousands)
Maturity January 2014 with fixed rate 3.55%	$	—		$	1
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	(740		)	(793		)
Total FHLB advances	$	46,760		$	46,708

Federal Home Loan Bank Advances Future Maturities

At March 31, 2014, the advances were structured to contractually pay down as follows:

	Balance			Weighted Average Rate
2015	$	—		—%
2016	20,000			0.80
2017	10,000			0.79
2018	15,000			0.96
Thereafter	2,500			1.24
Total	$	47,500		0.87%
Restructuring prepayment penalty	(740		)
Total	$	46,760

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Short-Term Borrowings (Tables)

3 Months Ended

Mar. 31, 2014

Debt Disclosure [Abstract]

Schedule of Short-term Debt

The following table presents the components of federal funds purchased and securities sold under agreements to repurchase and short-term borrowings as of March 31, 2014 and December 31, 2013.

	March 31, 2014			December 31, 2013
Federal funds purchased and securities sold under agreements to repurchase	1,225			1,576
Line of credit with an unaffiliated financial institution	2,500			3,000
Total short-term borrowings	$	3,725		$	4,576
Short-term borrowings	March 31, 2014			December 31, 2013
Average balance during the year	$	4,664		$	1,803
Weighted-average annual interest rate during the year	3.60		%	0.10		%
Maximum month-end balance	$	3,725		$	4,576

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Federal Home Loan Bank Advances - Schedule of Maturities (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Balance
2015	$ 0
2016	20,000
2017	10,000
2018	15,000
Thereafter	2,500
Total	47,500
Restructuring prepayment penalty	(740)	(793)
Federal Home Loan Bank advances (Note 9)	$ 46,760	$ 46,708
Weighted Average Rate
2015	0.00%
2016	0.80%
2017	0.79%
2018	0.96%
Thereafter	1.24%
Total	0.87%

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Loans and Allowance for Loan Losses - Impaired Loans (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded Investment, Total	$ 19,124		$ 21,511
Unpaid Principal Balance, Total	26,341		27,317
Related Allowance, Total	917		938
Average Recorded Balance, Total	20,318	24,579
Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded Investment	12,512		15,530
Unpaid Principal Balance	16,899		20,438
Related Allowance	0		0
Average Recorded Balance	14,021	16,705
Recorded Investment	3,663		2,312
Unpaid Principal Balance	5,553		2,319
Related Allowance	838		865
Average Recorded Balance	2,988	4,374
Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded Investment	202		214
Unpaid Principal Balance	255		267
Related Allowance	0		0
Average Recorded Balance	208	186
Recorded Investment	258		258
Unpaid Principal Balance	258		258
Related Allowance	73		73
Average Recorded Balance	258	346
Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded Investment	1,233		1,731
Unpaid Principal Balance	1,371		1,940
Related Allowance	0		0
Average Recorded Balance	1,482	1,832
Recorded Investment	21		0
Unpaid Principal Balance	82		0
Related Allowance	6		0
Average Recorded Balance	11	0
Home equity loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded Investment	980		1,111
Unpaid Principal Balance	1,563		1,623
Related Allowance	0		0
Average Recorded Balance	1,045	847
Recorded Investment	0		0
Unpaid Principal Balance	0		0
Related Allowance	0		0
Indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded Investment	190		195
Unpaid Principal Balance	263		268
Related Allowance	0		0
Average Recorded Balance	192	178
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	65		160
Unpaid Principal Balance	97		204
Related Allowance	0		0
Average Recorded Balance	113	111
Recorded Investment	0		0
Unpaid Principal Balance	0		0
Related Allowance	0		0
Average Recorded Balance	$ 0	$ 0

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Commitments and Contingencies (Tables)

3 Months Ended

Mar. 31, 2014

Commitments and Contingencies Disclosure [Abstract]

Summary of The Contractual Amount of Commitments

A summary of the contractual amount of commitments at March 31, 2014 and December 31, 2013 follows:

	March 31, 2014		December 31, 2013
	(Dollars in thousands)
Commitments to extend credit	$	78,779	$	84,283
Home equity lines of credit	90,189		89,331
Standby letters of credit	8,543		8,448
Total	$	177,511	$	182,062

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Estimated Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2014

Fair Value Disclosures [Abstract]

Summary of Financial Instruments

The estimated fair values of the Corporation’s financial instruments at March 31, 2014 and December 31, 2013 are summarized as follows:

	March 31, 2014										December 31, 2013
	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	$	68,241	$	68,241	$	68,241	$	—	$	—	$	52,272	$	52,272
Securities	217,510		217,510		—		217,510		—		216,122		216,122
Restricted stock	5,741		N/A		N/A		N/A		N/A		5,741		5,741
Portfolio loans, net	892,692		888,730		—		—		888,730		884,794		884,211
Loans held for sale	1,811		1,815		—		1,815		—		4,483		4,487
Accrued interest receivable	3,774		3,744		—		970		2,774		3,621		3,621
Financial liabilities
Deposits:
Demand, savings and money market	579,672		574,086		—		574,086		—		542,739		542,739
Certificates of deposit	497,179		498,475		—		498,475		—		502,850		504,381
Short-term borrowings	3,725		3,725		—		3,725		—		4,576		4,576
Federal Home Loan Bank advances	46,760		46,899		—		46,899		—		46,708		46,923
Junior subordinated debentures	16,238		16,650		—		16,650		—		16,238		16,778
Accrued interest payable	701		701		—		701		—		789		789

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, 2014 and December 31, 2013, and the valuation techniques used by the Corporation to determine those fair values.

Description	Fair Value as of March 31, 2014		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	$	67,441	$	—	$	67,441	$	—
Mortgage backed securities: residential	94,519		—		94,519		—
Collateralized mortgage obligations	22,139		—		22,139		—
State and political subdivisions	33,411		—		33,411		—
Interest rate swaps	158		—		158		—
Total	$	217,668	$	—	$	217,668	$	—
Description	Fair Value as of December 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	$	65,388	$	—	$	65,388	$	—
Mortgage backed securities: residential	94,430		—		94,430		—
Collateralized mortgage obligations	18,655		—		18,655		—
State and political subdivisions	32,965		—		32,965		—
Preferred Securities	4,684		—		—		4,684
Interest rate swaps	222		—		222		—
Total	$	216,344	$	—	$	211,660	$	4,684

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, 2014	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	$	—	$	—	$	18,207	$	18,207
Other real estate	—		—		979		979
Total assets at fair value on a nonrecurring basis	$	—	$	—	$	19,186	$	19,186
December 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	$	—	$	—	$	21,986	$	21,986
Other real estate	—		—		579		579
Total assets at fair value on a nonrecurring basis	$	—	$	—	$	22,565	$	22,565

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	$18,207	Sales comparison approach	Adjustment for differences between the comparable sales
Other real estate	$979	Sales comparison approach	Adjustment for differences between the comparable sales

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2014

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 accounting and reporting policies followed in the presentation of the accompanying Unaudited Consolidated Financial Statements are consistent with those described in Note 1 of the Notes to the Consolidated Financial Statements in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2013, as updated by the information contained in this Form 10-Q. Management has evaluated all significant events and transactions that occurred after March 31, 2014, for potential recognition or disclosure in these consolidated financial statements. In the opinion of management, these consolidated financial statements reflect all adjustments necessary to present fairly such information for the periods and dates indicated. Such adjustments are normal and recurring in nature. The Consolidated Balance Sheet at December 31, 2013, contained herein has been derived from the audited Consolidated Balance Sheet included in Corporation’s Annual Report on Form 10-K.

The preparation of the consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Results of operations for interim periods are not necessarily indicative of the results to be expected for the full year, due in part to seasonal variations and unusual or infrequently occurring items.

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.

New Accounting Pronouncements:

In January 2014, the Financial Accounting Standards Board issued an accounting standards update allowing entities to make an accounting policy election with respect to using the proportional amortization method for investments in qualified affordable housing projects, if certain conditions are met. This standard will be effective for public companies for interim and annual periods beginning after December 15, 2014. The Corporation will adopt this new guidance as required, and it is not expected to have a material impact on the Corporation's Consolidated Financial Statements.

Also in January 2014, the Financial Accounting Standards Board issued an accounting standards update clarifying guidance for in substance repossessions and foreclosures, and requiring additional disclosures regarding foreclosed residential real estate property and recorded investments in consumer mortgage loans collateralized by residential real estate in the process of foreclosure. This standard will be effective for public companies for interim and annual periods beginning after December 15, 2014. The Corporation will adopt this new guidance as required, and it is not expected to have a material impact on the Corporation's Consolidated Financial Statements.

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Share-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2014

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

Summary of Options Outstanding

The following table summarizes the Corporation's stock options outstanding at March 31, 2014:

	Outstanding		Exercisable
	Number	Weighted Average Remaining Contractual Life (Years)	Number	Weighted Average Exercise Price
Range of Exercise Prices
$5.34-$5.39	37,500	7.66	25,833	$	5.39
$9.07-$9.56	128,196	9.17	—	—
$14.47	79,500	3.85	79,500	14.47
$16.00-$16.50	32,500	2.72	32,500	16.04
$19.10	30,000	1.84	30,000	19.10
$19.17	30,000	0.84	30,000	19.17
Outstanding at end of period	337,696	5.74	197,833	14.96

Summary of Stock Options

A summary of the status of stock options at March 31, 2014 and 2013 is presented in the table below:

	2014		2013
	Options	Weighted Average Exercise Price per Share	Options	Weighted Average Exercise Price per Share
Outstanding at beginning of period	337,696	12.43	232,000	14.50
Granted	—	—	—	—
Forfeited or expired	—	—	—	—
Exercised	—	—	—	—
Stock dividend or split	—	—	—	—
Outstanding at end of period	337,696	12.43	232,000	14.50
Exercisable at end of period	197,833	14.96	197,000	16.12

Summary of the Status of Restricted Shares

A summary of the status of restricted shares at March 31, 2014 is presented in the table below:

	Nonvested Shares		Weighted Average Grant Date Fair Value
Nonvested at January 1, 2014	83,355		$	5.86
Granted	—		—
Vested	(44,803	)	5.35
Forfeited or expired	—		—
Nonvested at March 31, 2014	38,552		6.45

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Securities - Summary of Securities that had Unrealized Losses (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2014	Dec. 31, 2013
Schedule of Available-for-sale Securities [Line Items]
Less than Twelve Months, Fair Value	$ 101,881	$ 108,258
Less than 12 Months, Aggregate Losses	(4,261)	(7,690)
Twelve Months or Longer, Fair Value	38,809	35,909
Twelve Months or Longer, Unrealized Losses	(1,680)	(961)
Total, Fair Value	140,690	144,167
Total, Unrealized Losses	(5,941)	(8,651)
U.S. Government agencies and corporations
Schedule of Available-for-sale Securities [Line Items]
Less than Twelve Months, Fair Value	58,282	65,388
Less than 12 Months, Aggregate Losses	(3,405)	(6,463)
Twelve Months or Longer, Fair Value	9,159	0
Twelve Months or Longer, Unrealized Losses	(837)	0
Total, Fair Value	67,441	65,388
Total, Unrealized Losses	(4,242)	(6,463)
Mortgage backed securities: residential
Schedule of Available-for-sale Securities [Line Items]
Less than Twelve Months, Fair Value	29,332	28,603
Less than 12 Months, Aggregate Losses	(454)	(566)
Twelve Months or Longer, Fair Value	24,875	31,051
Twelve Months or Longer, Unrealized Losses	(609)	(679)
Total, Fair Value	54,207	59,654
Total, Unrealized Losses	(1,063)	(1,245)
Collateralized mortgage obligations
Schedule of Available-for-sale Securities [Line Items]
Less than Twelve Months, Fair Value	6,741	5,079
Less than 12 Months, Aggregate Losses	(86)	(59)
Twelve Months or Longer, Fair Value	4,287	4,411
Twelve Months or Longer, Unrealized Losses	(185)	(191)
Total, Fair Value	11,028	9,490
Total, Unrealized Losses	(271)	(250)
State and political subdivisions
Schedule of Available-for-sale Securities [Line Items]
Less than Twelve Months, Fair Value	7,526	9,188
Less than 12 Months, Aggregate Losses	(316)	(602)
Twelve Months or Longer, Fair Value	488	447
Twelve Months or Longer, Unrealized Losses	(49)	(91)
Total, Fair Value	8,014	9,635
Total, Unrealized Losses	$ (365)	$ (693)

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Short-Term Borrowings - Components of short-term borrowings (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2014	Dec. 31, 2013
Short-term Debt [Line Items]
Total short-term borrowings	$ 3,725	$ 4,576
Average balance during the year	4,664	1,803
Weighted-average annual interest rate during the year	3.60%	0.10%
Maximum month-end balance	3,725	4,576
Securities Sold under Agreements to Repurchase
Short-term Debt [Line Items]
Total short-term borrowings	1,225	1,576
Line of Credit
Short-term Debt [Line Items]
Total short-term borrowings	$ 2,500	$ 3,000

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CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
ASSETS
Cash and due from banks	$ 38,939	$ 36,717
Federal funds sold and interest bearing deposits in banks	29,302	15,555
Cash and cash equivalents (Note 3)	68,241	52,272
Securities available for sale, at fair value (Note 5)	217,510	216,122
Restricted stock	5,741	5,741
Loans held for sale	1,811	4,483
Loans:
Portfolio loans (Note 6)	910,189	902,299
Allowance for loan losses (Note 6)	(17,497)	(17,505)
Net loans	892,692	884,794
Bank premises and equipment, net	8,013	8,198
Other real estate owned	979	579
Bank owned life insurance	19,532	19,362
Goodwill, net (Note 4)	21,582	21,582
Intangible assets, net (Note 4)	424	457
Accrued interest receivable	3,774	3,621
Other assets	15,094	13,046
Total Assets	1,255,393	1,230,257
Deposits: (Note 7)
Demand and other noninterest-bearing	149,530	148,961
Savings, money market and interest-bearing demand	430,142	393,778
Time deposits	497,179	502,850
Total deposits	1,076,851	1,045,589
Short-term borrowings (Note 8)	3,725	4,576
Federal Home Loan Bank advances (Note 9)	46,760	46,708
Junior subordinated debentures (Note 10)	16,238	16,238
Accrued interest payable	701	789
Accrued expenses and other liabilities	4,004	4,901
Total Liabilities	1,148,279	1,118,801
Shareholders’ Equity
Discount on Series B preferred stock	0	(19)
Common stock, par value $1 per share, authorized 15,000,000 shares, issued 10,001,717 shares at March 31, 2014 and 10,001,717 at December 31, 2013	10,002	10,002
Additional paid-in capital	51,166	51,098
Retained earnings	55,440	53,966
Accumulated other comprehensive income (loss)	(3,317)	(5,188)
Treasury shares at cost, 336,745 shares at March 31, 2014 and 328,194 shares at December 31, 2013	(6,177)	(6,092)
Total Shareholders’ Equity	107,114	111,456
Total Liabilities and Shareholders’ Equity	1,255,393	1,230,257
Preferred stock, Series A Voting, no par value, authorized 150,000 shares, none issued at March 31, 2014 and December 31, 2013.
Shareholders’ Equity
Preferred stock	0	0
Fixed rate cumulative preferred stock, Series B, no par value, $1,000 liquidation value, no shares were issued at March 31, 2014 and 7,689 shares authorized and issued at December 31, 2013
Shareholders’ Equity
Preferred stock	$ 0	$ 7,689

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Loans and Allowance for Loan Losses - Troubled Debt Restructuring Loan Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		12 Months Ended
	Mar. 31, 2014 contracts	Mar. 31, 2013 contracts	Dec. 31, 2013 contracts
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Contracts	100	54
Recorded Investment	$ 8,219	$ 8,383
Unpaid Principal	11,421	10,824
Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Contracts	18	14	3
Recorded Investment	6,214	6,796
Unpaid Principal	8,530	8,772
Pre-Modification Outstanding Recorded Investment			93
Post-Modification Outstanding Recorded Investment			93
Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Contracts	1	1
Recorded Investment	0	0
Unpaid Principal	171	171
Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Contracts	13	10	3
Recorded Investment	964	946
Unpaid Principal	1,070	973
Pre-Modification Outstanding Recorded Investment			236
Post-Modification Outstanding Recorded Investment			236
Home equity loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Contracts	28	14	15
Recorded Investment	786	483
Unpaid Principal	1,322	688
Pre-Modification Outstanding Recorded Investment			774
Post-Modification Outstanding Recorded Investment			774
Indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Contracts	39	14	25
Recorded Investment	190	99
Unpaid Principal	263	161
Pre-Modification Outstanding Recorded Investment			195
Post-Modification Outstanding Recorded Investment			195
Consumer Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Contracts	1	1	3
Recorded Investment	65	59
Unpaid Principal	65	59
Pre-Modification Outstanding Recorded Investment			34
Post-Modification Outstanding Recorded Investment			$ 34

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CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Statement of Stockholders' Equity [Abstract]
Issuance of common stock (in shares)		1,359,348
Redemption of preferred stock (in shares)	7,689	9,733
Dividends declared (in dollars per share)	$ 0.01	$ 0.01

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Commitments and Contingencies - Summary of The Contractual Amount of Commitments (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Loss Contingencies [Line Items]
Contractual amount of commitments, total	$ 177,511	$ 182,062
Commitments to extend credit [Member]
Loss Contingencies [Line Items]
Contractual amount of commitments, total	78,779	84,283
Home Equity Loans
Loss Contingencies [Line Items]
Contractual amount of commitments, total	90,189	89,331
Standby letters of credit [Member]
Loss Contingencies [Line Items]
Contractual amount of commitments, total	$ 8,543	$ 8,448

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Earnings Per Common Share - Additional Information (Details) (Stock options [Member]) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Stock options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Securities not included in the computation of diluted earnings per share because the effect would be antidilutive	172	195

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Share-Based Compensation - Summary of Options Outstanding (Details) (USD $)	3 Months Ended
	Mar. 31, 2014
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Outstanding, Number (in shares)	337,696
Weighted Average Remaining Contractual Life	5 years 8 months 27 days
Exercisable, Number (in shares)	197,833
Weighted Average Exercise Price (in usd per share)	$ 14.96
$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	7 years 7 months 28 days
Exercisable, Number (in shares)	25,833
Weighted Average Exercise Price (in usd per share)	$ 5.39
$9.07-$9.56 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of exercise prices, minimum (in usd per share)	$ 9.07
Range of exercise prices, maximum (in usd per share)	$ 9.56
Outstanding, Number (in shares)	128,196
Weighted Average Remaining Contractual Life	9 years 2 months 1 day
Exercisable, Number (in shares)	0
Weighted Average Exercise Price (in usd per share)	$ 0.00
$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)	79,500
Weighted Average Remaining Contractual Life	3 years 10 months 6 days
Exercisable, Number (in shares)	79,500
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)	32,500
Weighted Average Remaining Contractual Life	2 years 8 months 19 days
Exercisable, Number (in shares)	32,500
Weighted Average Exercise Price (in usd per share)	$ 16.04
$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	1 year 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	10 months 2 days
Exercisable, Number (in shares)	30,000
Weighted Average Exercise Price (in usd per share)	$ 19.17

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2014

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.

The accounting and reporting policies followed in the presentation of the accompanying Unaudited Consolidated Financial Statements are consistent with those described in Note 1 of the Notes to the Consolidated Financial Statements in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2013, as updated by the information contained in this Form 10-Q. Management has evaluated all significant events and transactions that occurred after March 31, 2014, for potential recognition or disclosure in these consolidated financial statements. In the opinion of management, these consolidated financial statements reflect all adjustments necessary to present fairly such information for the periods and dates indicated. Such adjustments are normal and recurring in nature. The Consolidated Balance Sheet at December 31, 2013, contained herein has been derived from the audited Consolidated Balance Sheet included in Corporation’s Annual Report on Form 10-K.

The preparation of the consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Results of operations for interim periods are not necessarily indicative of the results to be expected for the full year, due in part to seasonal variations and unusual or infrequently occurring items.

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.

New Accounting Pronouncements

New Accounting Pronouncements:

In January 2014, the Financial Accounting Standards Board issued an accounting standards update allowing entities to make an accounting policy election with respect to using the proportional amortization method for investments in qualified affordable housing projects, if certain conditions are met. This standard will be effective for public companies for interim and annual periods beginning after December 15, 2014. The Corporation will adopt this new guidance as required, and it is not expected to have a material impact on the Corporation's Consolidated Financial Statements.

Also in January 2014, the Financial Accounting Standards Board issued an accounting standards update clarifying guidance for in substance repossessions and foreclosures, and requiring additional disclosures regarding foreclosed residential real estate property and recorded investments in consumer mortgage loans collateralized by residential real estate in the process of foreclosure. This standard will be effective for public companies for interim and annual periods beginning after December 15, 2014. The Corporation will adopt this new guidance as required, and it is not expected to have a material impact on the Corporation's Consolidated Financial Statements.

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Goodwill and Intangible Assets (Details) (USD $)	12 Months Ended		3 Months Ended
	Dec. 31, 2013	Mar. 31, 2014	Mar. 31, 2014 Core Deposit Intangibles	Dec. 31, 2013 Core Deposit Intangibles
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill	$ 21,582,000	$ 21,582,000
Goodwill impairment charge	0
Acquired Finite-Lived Intangible Assets [Line Items]
Estimated useful life			10 years
Core deposit intangibles			1,367,000	1,367,000
Less: accumulated amortization			943,000	910,000
Carrying value of core deposit intangibles	$ 457,000	$ 424,000	$ 424,000	$ 457,000

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Goodwill and Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2014

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, 2014		December 31, 2013
	(Dollars in thousands)
Core deposit intangibles	$	1,367	$	1,367
Less: accumulated amortization	943		910
Carrying value of core deposit intangibles	$	424	$	457

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Accumulated Other Comprehensive Income (Loss) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Balance at the beginning of the period	$ (5,188)	$ 1,240
Amounts recognized in other comprehensive income, net of taxes	1,871	(714)
Reclassified amounts out of accumulated other comprehensive income, net of tax	0	0
Balance at the end of the period	(3,317)	409
Other Comprehensive Income (Loss), before Reclassifications, Tax	964	368
Unrealized securities gains and losses
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Balance at the beginning of the period	(3,892)	3,295
Amounts recognized in other comprehensive income, net of taxes	1,871	(714)
Reclassified amounts out of accumulated other comprehensive income, net of tax	0	117
Balance at the end of the period	(2,021)	2,464
Pension and post- retirement costs
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Balance at the beginning of the period	(1,296)	(2,055)
Amounts recognized in other comprehensive income, net of taxes	0	0
Reclassified amounts out of accumulated other comprehensive income, net of tax	0	0
Balance at the end of the period	$ (1,296)	$ (2,055)

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Operating Activities
Net income	$ 1,606	$ 1,113
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	900	1,350
Depreciation and amortization	232	262
Amortization (accretion) of premiums and discounts	460	512
Amortization of intangibles	33	33
Amortization of loan servicing rights	72	86
Amortization of deferred loan fees	(43)	(114)
Income from cash surrender value of bank-owned life insurance policies	(169)	(168)
Federal deferred income tax expense (benefit)	191	860
Securities gains, net	0	(178)
Share-based compensation expense	68	72
Loans originated for sale	(18,361)	(29,879)
Proceeds from sales of loan originations	21,734	31,919
Net gain from loan sales	(703)	(656)
Net loss on sale of other assets	34	13
Net decrease (increase) in accrued interest receivable and other assets	(3,237)	(4,054)
Net increase (decrease) in accrued interest payable, taxes and other liabilities	(1,176)	2,493
Net cash provided by operating activities	1,641	3,664
Investing Activities
Proceeds from sales of available-for-sale securities	0	2,280
Proceeds from maturities of available-for-sale securities	11,387	31,171
Purchase of available-for-sale securities	(10,399)	(54,455)
Net increase in loans made to customers	(9,364)	(8,453)
Proceeds from the sale of other real estate owned	172	141
Purchase of bank premises and equipment	(53)	(129)
Proceeds from sale of bank premises and equipment	9	0
Net cash provided by (used in) investing activities	(8,248)	(29,445)
Financing Activities
Net increase (decrease) in demand and other noninterest-bearing	569	(3,581)
Net increase in savings, money market and interest-bearing demand	36,364	19,793
Net decrease in certificates of deposit	(5,671)	33,372
Net increase (decrease) in short-term borrowings	(851)	774
Proceeds from Federal Home Loan Bank advances	0	53
Payment of Federal Home Loan Bank advances	52	(3)
Redemption of Fixed-Rate Cumulative Perpetual Preferred stock	(7,670)	0
Purchase of Treasury Stock	(85)	0
Dividends paid	(132)	(332)
Net cash provided by financing activities	22,576	50,076
Net increase (decrease) in cash and cash equivalents	15,969	24,295
Cash and cash equivalents, January 1	52,272	30,659
Cash and cash equivalents, March 31	68,241	54,954
Supplemental cash flow information
Interest paid	1,520	1,623
Income taxes paid	0	465
Transfer of loans to other real estate owned	$ 609	$ 40

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Mar. 31, 2014	Dec. 31, 2013
Common stock, par value (in dollars per share)	$ 1	$ 1
Common stock, authorized	15,000,000	15,000,000
Common stock, issued	10,001,717	10,001,717
Treasury stock, shares	336,745	328,194
Preferred stock, Series A Voting, no par value, authorized 150,000 shares, none issued at March 31, 2014 and December 31, 2013.
Preferred Stock, No Par Value
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, no shares were issued at March 31, 2014 and 7,689 shares authorized and issued at December 31, 2013
Preferred stock, shares authorized	7,689	7,689
Preferred stock, shares issued	0	7,689
Preferred stock, Series B, liquidation value (in dollars per share)	$ 1,000	$ 1,000

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Trust Preferred Securities

3 Months Ended

Mar. 31, 2014

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 1.71% and 6.64% for Trust I and Trust II, respectively. At March 31, 2014 and December 31, 2013, accrued interest payable for Trust I was $5 and $6and for Trust II was $21 and $22, respectively.

The subordinated notes are redeemable in whole or in part, without penalty, at the Corporation’s option 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, 2014	May 02, 2014
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, 2014
Amendment Flag	false
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q1
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		9,664,972

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2014

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, 2014 and December 31, 2013 follows:

	March 31, 2014		December 31, 2013
	(Dollars in thousands)
Commitments to extend credit	$	78,779	$	84,283
Home equity lines of credit	90,189		89,331
Standby letters of credit	8,543		8,448
Total	$	177,511	$	182,062

The nature of the Corporation’s business may result in litigation. Management, after reviewing with counsel all actions and proceedings pending against or involving the Corporation and its 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, 2014	Mar. 31, 2013
Interest and Dividend Income
Loans	$ 8,928	$ 9,054
Securities:
U.S. Government agencies and corporations	1,028	841
State and political subdivisions	303	289
Other debt and equity securities	117	70
Federal funds sold and short-term investments	17	20
Total interest income	10,393	10,274
Interest Expense
Deposits	1,082	1,249
Federal Home Loan Bank advances	155	154
Short-term borrowings	26	1
Junior subordinated debentures	169	166
Total interest expense	1,432	1,570
Net Interest Income	8,961	8,704
Provision for Loan Losses (Note 6)	900	1,350
Net interest income after provision for loan losses	8,061	7,354
Noninterest Income
Investment and trust services	400	375
Deposit service charges	770	816
Other service charges and fees	753	831
Income from bank owned life insurance	169	168
Other income (loss)	151	321
Total fees and other income	2,243	2,511
Securities gains, net (Note 5)	0	178
Gains on sale of loans	703	656
Loss on sale of other assets, net	(34)	(13)
Total noninterest income	2,912	3,332
Noninterest Expense
Salaries and employee benefits	4,595	5,027
Furniture and equipment	1,148	949
Net occupancy	613	588
Professional fees	494	490
Marketing and public relations	400	289
Supplies, postage and freight	214	307
Telecommunications	151	162
Intangible asset amortization	33	33
Ohio franchise tax	224	308
FDIC assessments	272	242
Other real estate owned	24	77
Loan and collection expense	298	388
Other expense	393	421
Total noninterest expense	8,859	9,281
Income before income tax expense	2,114	1,405
Income tax expense	508	292
Net Income	1,606	1,113
Other comprehensive income (loss), net of taxes:
Changes in unrealized securities' holding gain (loss) net of taxes	1,871	(714)
Less: reclassification adjustments for securities' gains realized in net income,	0	117
Total other comprehensive income (loss), net of taxes	1,871	(831)
Comprehensive income (loss)	3,477	282
Net Income	1,606	1,113
Dividends and accretion on preferred stock	35	257
Net Income Available to Common Shareholders	$ 1,571	$ 856
Net Income Per Common Share (Note 2)
Basic (in dollars per share)	$ 0.16	$ 0.10
Diluted (in dollars per share)	$ 0.16	$ 0.10
Dividends declared (in dollars per share)	$ 0.01	$ 0.01
Average Common Shares Outstanding
Basic (in shares)	9,668,297	8,201,120
Diluted (in shares)	9,705,432	8,212,038

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Securities

3 Months Ended

Mar. 31, 2014

Investments, Debt and Equity Securities [Abstract]

Securities

Securities

The amortized cost, gross unrealized gains and losses and fair values of securities at March 31, 2014 and December 31, 2013 follows:

	March 31, 2014
	Amortized  Cost		Unrealized Gains		Unrealized Losses			Fair Value
	(Dollars in thousands)
Securities available for sale:
U.S. Government agencies and corporations	$	71,683	$	—	$	(4,242	)	$	67,441
Mortgage backed securities: residential	94,222		1,360		(1,063		)	94,519
Collateralized mortgage obligations	22,163		247		(271		)	22,139
State and political subdivisions	32,503		1,273		(365		)	33,411
Total Securities	$	220,571	$	2,880	$	(5,941	)	$	217,510
	At December 31, 2013
	Amortized  Cost		Unrealized Gains		Unrealized Losses			Fair Value
	(Dollars in thousands)
Securities available for sale:
U.S. Government agencies and corporations	$	71,851	$	—	$	(6,463	)	$	65,388
Mortgage backed securities: residential	94,313		1,362		(1,245		)	94,430
Collateralized mortgage obligations	18,650		255		(250		)	18,655
State and political subdivisions	32,521		1,137		(693		)	32,965
Preferred securities	4,684		—		—			4,684
Total Securities	$	222,019	$	2,754	$	(8,651	)	$	216,122

U.S. Government agencies and corporations include callable and bullet agency issues and agency-backed mortgage backed securities. Maturities may differ from contractual terms because borrowers may have the right to call or prepay obligations with or without penalties. Periodic payments are received on mortgage-backed securities based upon payment patterns of the underlying collateral.

The amortized cost and fair value of available for sale debt securities by contractual maturity date at March 31, 2014 is provided in the following table. Mortgage backed securities and collaterlized mortgage obligations are not due at a single maturity date and are therefore shown separately.

	At March 31, 2014
	Amortized Cost		Fair Value
	(Dollars in thousands)
Securities available for sale:
Due in one year or less	$	22,033	$	21,144
Due from one year to five years	46,819		45,340
Due from five years to ten years	29,740		28,680
Due after ten years	5,594		5,687
Mortgage backed securities and collateralized mortgage obligations	116,385		116,659
	$	220,571	$	217,510

The following table shows the proceeds from sales of available-for-sale securities for the three months ended March 31, 2014 and 2013. 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,
	2014		2013
	(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, lines of credit, and for other purposes required by law amounted to $193,354 and $154,479 at March 31, 2014 and December 31, 2013, respectively.

The following is a summary of securities that had unrealized losses at March 31, 2014 and December 31, 2013. 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, 2014, the Corporation held 50 securities with unrealized losses totaling $5,941. At December 31, 2013, there were 53 securities with unrealized losses totaling $8,651. Securities may temporarily be valued at less than amortized cost if the current levels of interest rates, as compared to the coupons on the securities held by the Corporation, are higher or if 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, 2014
	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	$	58,282	$	(3,405	)	$	9,159	$	(837	)	$	67,441	(4,242		)
Mortgage backed securities: residential	29,332		(454		)	24,875		(609		)	54,207		(1,063		)
Collateralized mortgage obligations	6,741		(86		)	4,287		(185		)	11,028		(271		)
State and political subdivisions	7,526		(316		)	488		(49		)	8,014		(365		)
Total	$	101,881	$	(4,261	)	$	38,809	$	(1,680	)	$	140,690	$	(5,941	)
	At December 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	$	65,388	$	(6,463	)	$	—	$	—		$	65,388	$	(6,463	)
Mortgage backed securities: residential	28,603		(566		)	31,051		(679		)	59,654		(1,245		)
Collateralized mortgage obligations	5,079		(59		)	4,411		(191		)	9,490		(250		)
State and political subdivisions	9,188		(602		)	447		(91		)	9,635		(693		)
Total	$	108,258	$	(7,690	)	$	35,909	$	(961	)	$	144,167	$	(8,651	)

On a quarterly basis, the Corporation performs a comprehensive security-level impairment assessment on all securities in an unrealized loss position to determine if other-than-temporary impairment ("OTTI") exists. An unrealized loss exists when the current fair value of an individual security is less than its amortized cost basis. For debt securities, an OTTI loss must be recognized for a debt security in an unrealized loss position if the Corporation intends to sell the security or it is more likely than not that the Corporation will be required to sell the security before recovery of its amortized cost basis. In this situation, the amount of loss recognized in income is equal to the difference between the fair value and the amortized cost basis of the individual security. If the Corporation does not expect to sell the security, the Corporation must evaluate the expected cash flows to be received to determine if a credit loss has occurred. If a credit loss is present, only the amount of impairment associated with the credit loss is recognized in income. The portion of the unrealized loss relating to other factors, such as liquidity conditions in the market or changes in market interest rates, is recorded in other comprehensive income.

Equity securities are also evaluated to determine whether the unrealized loss is expected to be recoverable based on whether evidence exists to support a realizable value equal to or greater than the amortized cost basis. If it is probable that the Corporation will not recover the amortized cost basis, taking into consideration the estimated recovery period and its ability to hold the equity security until recovery, OTTI is recognized. The Corporation held no equity securities as of March 31, 2014.

The security-level assessment is performed on each security, regardless of the classification of the security as available for sale or held to maturity. The assessments are based on the nature of the securities, the financial condition of the issuer, the extent and duration of the securities, the extent and duration of the loss and the intent and whether management intends to sell or it is more likely than not that it will be required to sell a security before recovery of its amortized cost basis, which may be maturity. For those securities for which the assessment shows the Corporation will recover the entire cost basis, management does not intend to sell these securities and it is not more likely than not that the Corporation will be required to sell them before the anticipated recovery of the amortized cost basis, the gross unrealized losses are recognized in other comprehensive income, net of tax.

Management does not believe that the investment securities that were in an unrealized loss position as of March 31, 2014 represent an other-than-temporary impairment. Total gross unrealized losses were primarily attributable to changes in interest rates, relative to when the investment securities were purchased, and not due to the credit quality of the investment securities. The Corporation does not intend to sell the investment securities that were in an unrealized loss position and it is not more likely than not that the Corporation will be required to sell the investment securities before recovery of their amortized cost bases, which may be at maturity.

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Goodwill and Intangible Assets

3 Months Ended

Mar. 31, 2014

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 2013, 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. The Corporation evaluates goodwill impairment annually as of November 30th of each year. 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, 2013.

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, 2014		December 31, 2013
	(Dollars in thousands)
Core deposit intangibles	$	1,367	$	1,367
Less: accumulated amortization	943		910
Carrying value of core deposit intangibles	$	424	$	457

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Earnings Per Common Share (Tables)

3 Months Ended

Mar. 31, 2014

Earnings Per Share [Abstract]

Basic and Diluted Earnings Per Share

The reconciliation between basic and diluted earnings per share is presented as follows(Dollars in thousands, except per share data) :

	Three Months Ended
	March 31, 2014		March 31, 2013
Basic EPS
Net income	$	1,606	$	1,113
Less:
Preferred stock dividend and accretion	35		257
Income allocated to participating securities	6		11
Net income allocated to common shareholders	$	1,565	$	845
Average common shares outstanding	9,668,297		8,201,120
Less: participating shares included in average common shares outstanding	53,169		117,031
Average common shares outstanding used in basic EPS	9,615,128		8,084,089
Basic net income per common share	$	0.16	$	0.10
Diluted EPS:
Income used in diluted earnings per share calculation	$	1,565	$	845
Average common shares outstanding	9,668,297		8,201,120
Add: Common Stock equivalents:
Stock Options	37,135		10,918
Average common stock shares outstanding	9,705,432		8,212,038
Diluted earnings per common share	$	0.16	$	0.10

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Estimated Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2014

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.

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.

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, 2014 and December 31, 2013 are summarized as follows:

	March 31, 2014										December 31, 2013
	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	$	68,241	$	68,241	$	68,241	$	—	$	—	$	52,272	$	52,272
Securities	217,510		217,510		—		217,510		—		216,122		216,122
Restricted stock	5,741		N/A		N/A		N/A		N/A		5,741		5,741
Portfolio loans, net	892,692		888,730		—		—		888,730		884,794		884,211
Loans held for sale	1,811		1,815		—		1,815		—		4,483		4,487
Accrued interest receivable	3,774		3,744		—		970		2,774		3,621		3,621
Financial liabilities
Deposits:
Demand, savings and money market	579,672		574,086		—		574,086		—		542,739		542,739
Certificates of deposit	497,179		498,475		—		498,475		—		502,850		504,381
Short-term borrowings	3,725		3,725		—		3,725		—		4,576		4,576
Federal Home Loan Bank advances	46,760		46,899		—		46,899		—		46,708		46,923
Junior subordinated debentures	16,238		16,650		—		16,650		—		16,238		16,778
Accrued interest payable	701		701		—		701		—		789		789

Cash and Cash Equivalents

The carrying amounts of cash and short-term instruments approximate fair values and are classified as either Level 1 or Level 2. As of March 31, 2014 and December 31, 2013, Cash and due from banks, Federal funds sold and interest bearing deposits in other banks were classified as Level 1.

Restricted stock

It is not practical to determine the fair value of Restricted stock due to restrictions placed on its transferability. Restricted stock is carried at cost and valued based on the ultimate recoverability of par value.

Loans

Fair values of loans, excluding loans held for sale, are estimated as follows: For variable rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values resulting in a Level 3 classification. Fair values for other loans are estimated using discounted cash flow analyses, using interest rates currently being offered for loans with similar terms to borrowers of similar credit quality resulting in a Level 3 classification. Impaired loans are valued at the lower of cost or fair value as described previously. The methods utilized to estimate the fair value of loans do not necessarily represent an exit price. The fair value of loans held for sale is estimated based upon binding contracts and quotes from third party investors resulting in a Level 2 classification.

Deposits

The fair values disclosed for demand deposits (e.g., interest and non-interest checking, passbook savings, and certain types of money market accounts) are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amount) resulting in a Level 2 classification. The carrying amounts of variable rate, fixed-term money market accounts and certificates of deposit approximate their fair values at the reporting date resulting in a Level 2 classification. Fair values for fixed rate certificates of deposit are estimated using a discounted cash flows calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on time deposits resulting in a Level 2 classification.

Short-term Borrowings

The carrying amounts of federal funds purchased, borrowings under repurchase agreements, and other short-term borrowings, generally maturing within ninety days, approximate their fair values resulting in a Level 2 classification.

Other Borrowings

The fair values of the Company’s long-term borrowings are estimated using discounted cash flow analyses based on the current borrowing rates for similar types of borrowing arrangements resulting in a Level 2 classification.

The fair values of the Company’s Subordinated Debentures are estimated using discounted cash flow analyses based on the current borrowing rates for similar types of borrowing arrangements resulting in a Level 3 classification.

Accrued Interest Receivable/Payable

The carrying amounts of accrued interest approximate fair value resulting in Level 2 and Level 3 classification. The level disclosed should be consistent with the asset and liability that the accrued interest is associated with.

Off-balance Sheet Instruments

Fair values for off-balance sheet, credit-related financial instruments are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties’ credit standing. The fair value of commitments is not material.

The following table presents information about the Corporation’s assets and liabilities measured at fair value on a recurring basis as of March 31, 2014 and December 31, 2013, and the valuation techniques used by the Corporation to determine those fair values.

Description	Fair Value as of March 31, 2014		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	$	67,441	$	—	$	67,441	$	—
Mortgage backed securities: residential	94,519		—		94,519		—
Collateralized mortgage obligations	22,139		—		22,139		—
State and political subdivisions	33,411		—		33,411		—
Interest rate swaps	158		—		158		—
Total	$	217,668	$	—	$	217,668	$	—
Description	Fair Value as of December 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	$	65,388	$	—	$	65,388	$	—
Mortgage backed securities: residential	94,430		—		94,430		—
Collateralized mortgage obligations	18,655		—		18,655		—
State and political subdivisions	32,965		—		32,965		—
Preferred Securities	4,684		—		—		4,684
Interest rate swaps	222		—		222		—
Total	$	216,344	$	—	$	211,660	$	4,684

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 subdivisions 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 periods ended March 31, 2014 and December 31, 2013. 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, 2014 and December 31, 2013, 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, 2014	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	$	—	$	—	$	18,207	$	18,207
Other real estate	—		—		979		979
Total assets at fair value on a nonrecurring basis	$	—	$	—	$	19,186	$	19,186
December 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	$	—	$	—	$	21,986	$	21,986
Other real estate	—		—		579		579
Total assets at fair value on a nonrecurring basis	$	—	$	—	$	22,565	$	22,565

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. Assets acquired through or instead of loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell. Fair value is commonly based on recent real estate appraisals which are updated no less frequently than annually. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value.

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	$18,207	Sales comparison approach	Adjustment for differences between the comparable sales
Other real estate	$979	Sales comparison approach	Adjustment for differences between the comparable sales

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, 2014.

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Short-Term Borrowings

3 Months Ended

Mar. 31, 2014

Debt Disclosure [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, 2014, the Bank had pledged approximately $88,150 in qualifying home equity lines of credit, resulting in an available line of credit of approximately $44,075. No amounts were outstanding under the line of credit at March 31, 2014 or December 31, 2013. The Corporation also has a $6,000 line of credit with an unaffiliated financial institution. The Corporation also has a $6,000 line of credit with an unaffiliated financial institution under which the Corporation had borrowings of $2,500 was outstanding at a rate of 3.50% as of March 31, 2014. At December 31, 2013, the Corporation had borrowings of $3,000 outstanding under the line of credit.

Short-term borrowings include securities sold under repurchase agreements and Federal funds purchased from correspondent banks. At March 31, 2014 and December 31, 2013, the outstanding balance of securities sold under repurchase agreements totaled $1,225 and $1,576, respectively. No Federal funds were purchased as of March 31, 2014 and December 31, 2013.

The following table presents the components of federal funds purchased and securities sold under agreements to repurchase and short-term borrowings as of March 31, 2014 and December 31, 2013.

	March 31, 2014			December 31, 2013
Federal funds purchased and securities sold under agreements to repurchase	1,225			1,576
Line of credit with an unaffiliated financial institution	2,500			3,000
Total short-term borrowings	$	3,725		$	4,576
Short-term borrowings	March 31, 2014			December 31, 2013
Average balance during the year	$	4,664		$	1,803
Weighted-average annual interest rate during the year	3.60		%	0.10		%
Maximum month-end balance	$	3,725		$	4,576

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Estimated Fair Value of Financial Instruments - Summary of Financial Instruments (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Fair Value Inputs Assets Liabilities Quantitative Information [Line Items]
Securities	$ 217,510	$ 216,122
Accrued interest payable	701	789
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	68,241	52,272
Securities	217,510	216,122
Restricted stock	5,741	5,741
Portfolio loans, net	892,692	884,794
Loans held for sale	1,811	4,483
Accrued interest receivable	3,774	3,621
Demand, savings and money market	579,672	542,739
Certificates of deposit	497,179	502,850
Short-term borrowings	3,725	4,576
Federal Home Loan Bank advances	46,760	46,708
Junior subordinated debentures	16,238	16,238
Accrued interest payable	701	789
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	68,241	52,272
Securities	217,510	216,122
Restricted stock		5,741
Portfolio loans, net	888,730	884,211
Loans held for sale	1,815	4,487
Accrued interest receivable	3,744	3,621
Demand, savings and money market	574,086	542,739
Certificates of deposit	498,475	504,381
Short-term borrowings	3,725	4,576
Federal Home Loan Bank advances	46,899	46,923
Junior subordinated debentures	16,650	16,778
Accrued interest payable	701	789
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	68,241
Securities	0
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	217,510
Portfolio loans, net
Loans held for sale	1,815
Accrued interest receivable	970
Demand, savings and money market	574,086
Certificates of deposit	498,475
Short-term borrowings	3,725
Federal Home Loan Bank advances	46,899
Junior subordinated debentures	16,650
Accrued interest payable	701
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
Portfolio loans, net	888,730
Loans held for sale	0
Accrued interest receivable	2,774
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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Loans and Allowance for Loan Losses

3 Months Ended

Mar. 31, 2014

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 incurred credit losses 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.

The general component covers non‑impaired loans and is based on historical loss experience adjusted for current factors. The historical loss experience is determined by portfolio segment and is based on the actual loss history experienced by the Company over the most recent three years. This actual loss experience is supplemented with other economic factors based on the risks present for each portfolio segment. These economic factors include consideration of the following: levels of and trends in delinquencies and impaired loans; levels of and trends in charge-offs and recoveries; trends in volume and terms of loans; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedures, and practices; experience, ability, and depth of lending management and other relevant staff; national and local economic trends and conditions; industry conditions; and effects of changes in credit concentrations.

Activity in the allowance for loan losses by segment for the three months ended March 31, 2014 and 2013 are summarized as follows:

Three Months Ended March 31, 2014
	Commercial Real Estate			Commercial			Residential Real Estate			Home Equity Loans			Indirect			Consumer			Total
	(Dollars in thousands)
Allowance for loan losses:
Balance, beginning of period	$	10,122		$	497		$	1,411		$	3,484		$	1,593		$	398		$	17,505
Losses charged off	(546		)	—			(77		)	(222		)	(70		)	(83		)	(998		)
Recoveries	6			1			2			11			58			12			90
Provision charged to expense	662			(34		)	147			205			(68		)	(12		)	900
Balance, end of period	$	10,244		$	464		$	1,483		$	3,478		$	1,513		$	315		$	17,497
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	838		$	73		$	6		$	—		$	—		$	—		$	917
Collectively evaluated for impairment	9,406			391			1,477			3,478			1,513			315			16,580
Total ending allowance balance	$	10,244		$	464		$	1,483		$	3,478		$	1,513		$	315		$	17,497
Loans:
Individually evaluated for impairment	$	16,175		$	460		$	1,254		$	980		$	190		$	65		$	19,124
Collectively evaluated for impairment	392,292			82,837			67,417			121,844			209,504			17,171			891,065
Total ending loans balance	$	408,467		$	83,297		$	68,671		$	122,824		$	209,694		$	17,236		$	910,189

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 period	$	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 period	$	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

Year Ended December 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	(2,325		)	(121		)	(754		)	(1,775		)	(678		)	(366		)	(6,019		)
Recoveries	697			8			350			66			335			56			1,512
Provision charged to expense	364			(225		)	256			2,836			706			438			4,375
Balance, end of year	$	10,122		$	497		$	1,411		$	3,484		$	1,593		$	398		$	17,505
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	865		$	73		$	—		$	—		$	—		$	—		$	938
Collectively evaluated for impairment	9,257			424			1,411			3,484			1,593			398			16,567
Total ending allowance balance	$	10,122		$	497		$	1,411		$	3,484		$	1,593		$	398		$	17,505
Loans:
Individually evaluated for impairment	$	17,842		$	472		$	1,731		$	1,111		$	195		$	160		$	21,511
Collectively evaluated for impairment	383,749			88,174			64,776			121,965			206,128			15,996			880,788
Total ending loans balance	$	401,591		$	88,646		$	66,507		$	123,076		$	206,323		$	16,156		$	902,299

Delinquencies

Management monitors delinquency and potential problem loans. Bank-wide delinquency at March 31, 2014 was 1.64% of total loans. Total 30-59 day delinquency and 60-89 day delinquency was 0.25% and 0.25% of total loans at March 31, 2014, respectively. Bank-wide delinquency at December 31, 2013 was 1.69% of total loans. Total 30-59 day delinquency and 60-89 day delinquency was 0.26% and 0.19% of total loans at December 31, 2013, respectively. Information regarding delinquent loans as of March 31, 2014 and December 31, 2013 is as follows:

Age Analysis of Past Due Loans as of March 31, 2014

(Dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days and Greater		Total Past Due		Current		Total Loans		Recorded Investment > 90 Days and Accruing
Commercial real estate	$	741	$	1,260	$	6,319	$	8,320	$	400,147	$	408,467	$	—
Commercial	68		—		159		227		83,070		83,297		—
Residential real estate	422		340		2,076		2,838		65,833		68,671		—
Home equity loans	872		591		1,643		3,106		119,718		122,824		—
Indirect	169		51		5		225		209,469		209,694
Consumer	33		60		95		188		17,048		17,236		—
Total	$	2,305	$	2,302	$	10,297	$	14,904	$	895,285	$	910,189	$	—

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

(Dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days and Greater		Total Past Due		Current		Total Loans		Recorded Investment > 90 Days and Accruing
Commercial real estate	$	525	$	4	$	7,401	$	7,930	$	393,661	$	401,591	$	—
Commercial	—		18		219		237		88,409		88,646		—
Residential real estate	347		960		2,252		3,559		62,948		66,507		158
Home equity loans	932		707		1,078		2,717		120,359		123,076		43
Indirect	332		30		23		385		205,938		206,323
Consumer	183		25		191		399		15,757		16,156		—
Total	$	2,319	$	1,744	$	11,164	$	15,227	$	887,072	$	902,299	$	201

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. Consumer 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, 2014 and December 31, 2013 are as follows:

	At March 31, 2014						Three Months Ended March 31, 2014
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Balance
	(Dollars in thousands)
With no related allowance recorded:
Commercial real estate	$	12,512	$	16,899	$	—	$	14,021
Commercial	202		255		—		208
Residential real estate	1,233		1,371		—		1,482
Home equity loans	980		1,563		—		1,045
Indirect	190		263		—		192
Consumer	65		97		—		113
With allowance recorded:
Commercial real estate	3,663		5,553		838		2,988
Commercial	258		258		73		258
Residential real estate	21		82		6		11
Home equity loans	—		—		—		—
Indirect	—		—		—		—
Consumer	—		—		—		—
Total	$	19,124	$	26,341	$	917	$	20,318
	At December 31, 2013						Twelve Months Ended December 31, 2013
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Balance
	(Dollars in thousands)
With no related allowance recorded:
Commercial real estate	$	15,530	$	20,438	$	—	$	16,705
Commercial	214		267		—		186
Residential real estate	1,731		1,940		—		1,832
Home equity loans	1,111		1,623		—		847
Indirect	195		268		—		178
Consumer	160		204		—		111
With allowance recorded:
Commercial real estate	2,312		2,319		865		4,374
Commercial	258		258		73		346
Residential real estate	—		—		—		—
Home equity loans	—		—		—		—
Indirect	—		—		—		—
Consumer	—		—		—		—
Total	$	21,511	$	27,317	$	938	$	24,579

*impaired loans shown in the tables 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 of these loans have been specifically allocated for as part of the Corporation's normal loan loss provisioning methodology. The Corporation has allocated reserves of $40 for the TDR loans at March 31, 2014.

During the first quarter of 2014 there were no loans that were modified as a TDR.

The following table provides the number of loans modified in a TDR and the recorded investment and unpaid principal balance by loan segment as of March 31, 2014 and 2013.

	Three Months Ended March 31, 2014
	(Dollars in thousands)
	Number of Contracts	Recorded Investment	Unpaid Principal
Commercial real estate	18	$6,214	$8,530
Commercial	1	—	171
Residential real estate	13	964	1,070
Home equity loans	28	786	1,322
Indirect Loans	39	190	263
Consumer Loans	1	65	65
Total	100	$8,219	$11,421

	Three Months Ended March 31, 2013
	(Dollars in thousands)
	Number of Contracts	Recorded Investment	Unpaid Principal
Commercial real estate	14	$6,796	$8,772
Commercial	1	—	171
Residential real estate	10	946	973
Home equity loans	14	483	688
Indirect Loans	14	99	161
Consumer Loans	1	59	59
Total	54	$8,383	$10,824

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

At December 31, 2013
	Number of Contracts	Pre-Modification Outstanding Recorded Investment	Post-Modification Outstanding Recorded Investment
Commercial real estate	3	$93	$93
Residential real estate	3	$236	$236
Home equity loans	15	$774	$774
Indirect Loans	25	$195	$195
Consumer Loans	3	$34	$34

There were no loans modified in a TDR that subsequently defaulted during the twelve months periods ended March 31, 2014 and 2013 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 OCC 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 $628 of additional commitments to lend additional funds to the related debtors whose terms have been modified in a TDR at March 31, 2014.

Nonaccrual Loans

Nonaccrual loan balances at March 31, 2014 and December 31, 2013 are as follows:

Loans On Non-Accrual Status	March 31, 2014		December 31, 2013
	(Dollars in thousands)
Commercial real estate	$	10,145	$	11,241
Commercial	227		289
Residential real estate	5,127		5,231
Home equity loans	4,845		4,464
Indirect	362		443
Consumer	212		318
Total Nonaccrual Loans	$	20,918	$	21,986

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, 2014 and December 31, 2013:

• 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 tables present 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, 2014 and December 31, 2013:

Commercial Credit Exposure	Commercial Real Estate		Commercial		Residential Real Estate*		Home Equity Loans		Indirect		Consumer		Total
	March 31, 2014
	(Dollars in thousands)
Loans graded by internal credit risk grade:
Grade 1 — Minimal	$	—	$	51	$	—	$	—	$	—	$	—	$	51
Grade 2 — Modest	—		39		—		—		—		—		39
Grade 3 — Better than average	848		—		—		—		—		—		848
Grade 4 — Average	20,204		164		611		—		—		—		20,979
Grade 5 — Acceptable	361,379		79,884		5,654		—		—		—		446,917
Total Pass Credits	382,431		80,138		6,265		—		—		—		468,834
Grade 6 — Special mention	3,341		118		32		—		—		—		3,491
Grade 7 — Substandard	22,695		3,041		615		—		—		—		26,351
Grade 8 — Doubtful	—		—		—		—		—		—		—
Grade 9 — Loss	—		—		—		—		—		—		—
Total loans internally credit risk graded	408,467		83,297		6,912		—		—		—		498,676
Loans not monitored by internal risk grade:
Current loans not internally risk graded	—		—		59,525		119,718		209,469		17,048		405,760
30-59 days past due loans not internally risk graded	—		—		65		872		169		33		1,139
60-89 days past due loans not internally risk graded	—		—		340		591		51		60		1,042
90+ days past due loans not internally risk graded	—		—		1,829		1,643		5		95		3,572
Total loans not internally credit risk graded	—		—		61,759		122,824		209,694		17,236		411,513
Total loans internally and not internally credit risk graded	$	408,467	$	83,297	$	68,671	$	122,824	$	209,694	$	17,236	$	910,189

* 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, 2013
	(Dollars in thousands)
Loans graded by internal credit risk grade:
Grade 1 — Minimal	$	—	$	52	$	—	$	—	$	—	$	—	$	52
Grade 2 — Modest	—		37		—		—		—		—		37
Grade 3 — Better than average	857		—		—		—		—		—		857
Grade 4 — Average	22,580		271		613		—		—		—		23,464
Grade 5 — Acceptable	352,781		84,979		5,589		—		—		—		443,349
Total Pass Credits	376,218		85,339		6,202		—		—		—		467,759
Grade 6 — Special mention	2,146		2,891		35		—		—		—		5,072
Grade 7 — Substandard	23,227		416		625		—		—		—		24,268
Grade 8 — Doubtful	—		—		—		—		—		—		—
Grade 9 — Loss	—		—		—		—		—		—		—
Total loans internally credit risk graded	401,591		88,646		6,862		—		—		—		497,099
Loans not monitored by internal risk grade:
Current loans not internally risk graded	—		—		56,390		120,359		205,938		15,757		398,444
30-59 days past due loans not internally risk graded	—		—		64		932		332		183		1,511
60-89 days past due loans not internally risk graded	—		—		960		707		30		25		1,722
90+ days past due loans not internally risk graded	—		—		2,231		1,078		23		191		3,523
Total loans not internally credit risk graded	—		—		59,645		123,076		206,323		16,156		405,200
Total loans internally and not internally credit risk graded	$	401,591	$	88,646	$	66,507	$	123,076	$	206,323	$	16,156	$	902,299

* 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 90 days or greater past due. This information is provided in the above past due loans table.

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Deposits

3 Months Ended

Mar. 31, 2014

Banking and Thrift [Abstract]

Deposits

Deposits

Deposit balances are summarized as follows:

	March 31, 2014		December 31, 2013
	(Dollars in thousands)
Demand and other noninterest-bearing	$	149,530	$	148,961
Interest checking	176,028		164,662
Savings	129,976		125,582
Money market accounts	124,138		103,534
Consumer time deposits	362,732		382,137
Public time deposits	134,447		120,713
Total deposits	$	1,076,851	$	1,045,589

The aggregate amount of certificates of deposit in denominations of $100,000 or more amounted to $295,426 and $293,330 at March 31, 2014 and December 31, 2013, respectively.

The maturity distribution of certificates of deposit as of March 31, 2014 are as follows:

	March 31, 2014
	(Dollars in thousands)
0-12 months	$	323,856
12-24 months	109,561
24-36 months	48,056
36-48 months	11,634
48-60 months	4,072
Total	$	497,179

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Federal Home Loan Bank Advances

3 Months Ended

Mar. 31, 2014

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 $46,760 and $46,708 at March 31, 2014 and December 31, 2013 respectively. All advances were bullet maturities with no call features. At March 31, 2014, collateral pledged for FHLB advances consisted of qualified multi-family and residential real estate mortgage loans and investment securities of $88,238 and $16,985, respectively. The maximum borrowing capacity of the Bank at March 31, 2014 was $73,971. 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, 2014 and December 31, 2013.

Maturities of FHLB advances outstanding at March 31, 2014 and December 31, 2013 are as follows:

	March 31, 2014			December 31, 2013
	(Dollars in thousands)
Maturity January 2014 with fixed rate 3.55%	$	—		$	1
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	(740		)	(793		)
Total FHLB advances	$	46,760		$	46,708

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. The present 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 yield. 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, 2014, the advances were structured to contractually pay down as follows:

	Balance			Weighted Average Rate
2015	$	—		—%
2016	20,000			0.80
2017	10,000			0.79
2018	15,000			0.96
Thereafter	2,500			1.24
Total	$	47,500		0.87%
Restructuring prepayment penalty	(740		)
Total	$	46,760

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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
	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2006
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of stock options granted	0	0
Closing stock price	$ 11.42
Stock options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum option term	10 years
General vesting period	3 years
Annual vesting percentage	33.33%
Expense recorded for share based compensation	$ 30	$ 5
Total intrinsic value of options exercised	0
Restricted stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expense recorded for share based compensation	38	72
Shares issued	0
Purchase price of long term restricted share	$ 0.00
Number of installments	2
Stock appreciation rights (SARs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum option term	10 years
General vesting period	3 years
Expense recorded for share based compensation	$ 0	$ 4
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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Share-Based Compensation - Summary of Stock Options (Details) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Outstanding at beginning of period, shares	337,696	232,000
Granted, shares	0	0
Forfeited or expired, shares	0	0
Exercised, shares	0	0
Stock dividend or split, shares	0	0
Outstanding at end of period, shares	337,696	232,000
Exercisable at end of period, shares	197,833	197,000
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	$ 12.43	$ 14.50
Granted, Weighted Average Exercise Price Per Share	$ 0.00	$ 0.00
Forfeited or expired, Weighted Average Exercise Price per Share	$ 0.00	$ 0.00
Exercised, Weighted Average Exercise Price per Share	$ 0.00	$ 0.00
Stock dividend or split, Weighted Average Exercise Price per Share	$ 0.00	$ 0.00
Outstanding at end of period, Weighted Average Exercise Price per Share	$ 12.43	$ 14.50
Weighted Average Exercise Price per Share, Exercisable	$ 14.96	$ 16.12

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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, 2014	Dec. 31, 2013
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Collateral dependent impaired loans	$ 18,207	$ 21,986
Other real estate	979	579
Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Collateral dependent impaired loans	18,207	21,986
Other real estate	$ 979	$ 579

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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, 2014	Mar. 31, 2013
Basic EPS
Net income	$ 1,606	$ 1,113
Preferred stock dividend and accretion	35	257
Income allocated to participating securities	6	11
Net income allocated to common shareholders	1,565	845
Average common shares outstanding	9,668,297	8,201,120
Less: participating shares included in average common shares outstanding	53,169	117,031
Average common shares outstanding used in basic EPS	9,615,128	8,084,089
Basic net income per share (in dollars per share)	$ 0.16	$ 0.10
Diluted EPS:
Income used in diluted earnings per share calculation	$ 1,565	$ 845
Stock Options	37,135	10,918
Average common stock shares outstanding	9,705,432	8,212,038
Diluted net income per share (in dollars per share)	$ 0.16	$ 0.10

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Deposits - Contractual Maturities of Certificates of Deposits (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Time Deposits, Fiscal Year Maturity [Abstract]
2013	$ 323,856
2014	109,561
2015	48,056
2016	11,634
2017	4,072
Total	$ 497,179	$ 502,850

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Accumulated Other Comprehensive Income (Loss) (Notes)

3 Months Ended

Mar. 31, 2014

Equity [Abstract]

Accumulated Other Comprehensive Income (Loss)

Accumulated Other Comprehensive Income (Loss)

The following table details the change in the components of the Corporation’s accumulated other comprehensive income (loss) for the three months ended March 31, 2014 and 2013:

	March 31, 2014
	Unrealized securities gains and losses			Pension and post- retirement costs			Total
Balance at the beginning of the period	$	(3,892	)	$	(1,296	)	$	(5,188	)
Amounts recognized in other comprehensive income, net of taxes of $964	1,871			—			1,871
Reclassified amounts out of accumulated other comprehensive income, net of tax	—			—			—
Balance at the end of the period	$	(2,021	)	$	(1,296	)	$	(3,317	)

	March 31, 2013
	Unrealized securities gains and losses			Pension and post- retirement costs			Total
Balance at the beginning of the period	$	3,295		$	(2,055	)	$	1,240
Amounts recognized in other comprehensive income, net of taxes of $368	(714		)	—			(714		)
Reclassified amounts out of accumulated other comprehensive income, net of tax	117			—			—
Balance at the end of the period	$	2,464		$	(2,055	)	$	409

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Loans and Allowance for Loan Losses (Tables)

3 Months Ended

Mar. 31, 2014

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, 2014 and 2013 are summarized as follows:

Three Months Ended March 31, 2014
	Commercial Real Estate			Commercial			Residential Real Estate			Home Equity Loans			Indirect			Consumer			Total
	(Dollars in thousands)
Allowance for loan losses:
Balance, beginning of period	$	10,122		$	497		$	1,411		$	3,484		$	1,593		$	398		$	17,505
Losses charged off	(546		)	—			(77		)	(222		)	(70		)	(83		)	(998		)
Recoveries	6			1			2			11			58			12			90
Provision charged to expense	662			(34		)	147			205			(68		)	(12		)	900
Balance, end of period	$	10,244		$	464		$	1,483		$	3,478		$	1,513		$	315		$	17,497
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	838		$	73		$	6		$	—		$	—		$	—		$	917
Collectively evaluated for impairment	9,406			391			1,477			3,478			1,513			315			16,580
Total ending allowance balance	$	10,244		$	464		$	1,483		$	3,478		$	1,513		$	315		$	17,497
Loans:
Individually evaluated for impairment	$	16,175		$	460		$	1,254		$	980		$	190		$	65		$	19,124
Collectively evaluated for impairment	392,292			82,837			67,417			121,844			209,504			17,171			891,065
Total ending loans balance	$	408,467		$	83,297		$	68,671		$	122,824		$	209,694		$	17,236		$	910,189

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 period	$	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 period	$	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

Year Ended December 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	(2,325		)	(121		)	(754		)	(1,775		)	(678		)	(366		)	(6,019		)
Recoveries	697			8			350			66			335			56			1,512
Provision charged to expense	364			(225		)	256			2,836			706			438			4,375
Balance, end of year	$	10,122		$	497		$	1,411		$	3,484		$	1,593		$	398		$	17,505
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	865		$	73		$	—		$	—		$	—		$	—		$	938
Collectively evaluated for impairment	9,257			424			1,411			3,484			1,593			398			16,567
Total ending allowance balance	$	10,122		$	497		$	1,411		$	3,484		$	1,593		$	398		$	17,505
Loans:
Individually evaluated for impairment	$	17,842		$	472		$	1,731		$	1,111		$	195		$	160		$	21,511
Collectively evaluated for impairment	383,749			88,174			64,776			121,965			206,128			15,996			880,788
Total ending loans balance	$	401,591		$	88,646		$	66,507		$	123,076		$	206,323		$	16,156		$	902,299

Age Analysis of Past Due Loans

Information regarding delinquent loans as of March 31, 2014 and December 31, 2013 is as follows:

Age Analysis of Past Due Loans as of March 31, 2014

(Dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days and Greater		Total Past Due		Current		Total Loans		Recorded Investment > 90 Days and Accruing
Commercial real estate	$	741	$	1,260	$	6,319	$	8,320	$	400,147	$	408,467	$	—
Commercial	68		—		159		227		83,070		83,297		—
Residential real estate	422		340		2,076		2,838		65,833		68,671		—
Home equity loans	872		591		1,643		3,106		119,718		122,824		—
Indirect	169		51		5		225		209,469		209,694
Consumer	33		60		95		188		17,048		17,236		—
Total	$	2,305	$	2,302	$	10,297	$	14,904	$	895,285	$	910,189	$	—

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

(Dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days and Greater		Total Past Due		Current		Total Loans		Recorded Investment > 90 Days and Accruing
Commercial real estate	$	525	$	4	$	7,401	$	7,930	$	393,661	$	401,591	$	—
Commercial	—		18		219		237		88,409		88,646		—
Residential real estate	347		960		2,252		3,559		62,948		66,507		158
Home equity loans	932		707		1,078		2,717		120,359		123,076		43
Indirect	332		30		23		385		205,938		206,323
Consumer	183		25		191		399		15,757		16,156		—
Total	$	2,319	$	1,744	$	11,164	$	15,227	$	887,072	$	902,299	$	201

Impaired Loans

Impaired loans for the Period Ended March 31, 2014 and December 31, 2013 are as follows:

	At March 31, 2014						Three Months Ended March 31, 2014
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Balance
	(Dollars in thousands)
With no related allowance recorded:
Commercial real estate	$	12,512	$	16,899	$	—	$	14,021
Commercial	202		255		—		208
Residential real estate	1,233		1,371		—		1,482
Home equity loans	980		1,563		—		1,045
Indirect	190		263		—		192
Consumer	65		97		—		113
With allowance recorded:
Commercial real estate	3,663		5,553		838		2,988
Commercial	258		258		73		258
Residential real estate	21		82		6		11
Home equity loans	—		—		—		—
Indirect	—		—		—		—
Consumer	—		—		—		—
Total	$	19,124	$	26,341	$	917	$	20,318
	At December 31, 2013						Twelve Months Ended December 31, 2013
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Balance
	(Dollars in thousands)
With no related allowance recorded:
Commercial real estate	$	15,530	$	20,438	$	—	$	16,705
Commercial	214		267		—		186
Residential real estate	1,731		1,940		—		1,832
Home equity loans	1,111		1,623		—		847
Indirect	195		268		—		178
Consumer	160		204		—		111
With allowance recorded:
Commercial real estate	2,312		2,319		865		4,374
Commercial	258		258		73		346
Residential real estate	—		—		—		—
Home equity loans	—		—		—		—
Indirect	—		—		—		—
Consumer	—		—		—		—
Total	$	21,511	$	27,317	$	938	$	24,579

*impaired loans shown in the tables 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 provides the number of loans modified in a TDR and the recorded investment and unpaid principal balance by loan segment as of March 31, 2014 and 2013.

	Three Months Ended March 31, 2014
	(Dollars in thousands)
	Number of Contracts	Recorded Investment	Unpaid Principal
Commercial real estate	18	$6,214	$8,530
Commercial	1	—	171
Residential real estate	13	964	1,070
Home equity loans	28	786	1,322
Indirect Loans	39	190	263
Consumer Loans	1	65	65
Total	100	$8,219	$11,421

	Three Months Ended March 31, 2013
	(Dollars in thousands)
	Number of Contracts	Recorded Investment	Unpaid Principal
Commercial real estate	14	$6,796	$8,772
Commercial	1	—	171
Residential real estate	10	946	973
Home equity loans	14	483	688
Indirect Loans	14	99	161
Consumer Loans	1	59	59
Total	54	$8,383	$10,824

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

At December 31, 2013
	Number of Contracts	Pre-Modification Outstanding Recorded Investment	Post-Modification Outstanding Recorded Investment
Commercial real estate	3	$93	$93
Residential real estate	3	$236	$236
Home equity loans	15	$774	$774
Indirect Loans	25	$195	$195
Consumer Loans	3	$34	$34

Loans on Nonaccrual Status

Nonaccrual loan balances at March 31, 2014 and December 31, 2013 are as follows:

Loans On Non-Accrual Status	March 31, 2014		December 31, 2013
	(Dollars in thousands)
Commercial real estate	$	10,145	$	11,241
Commercial	227		289
Residential real estate	5,127		5,231
Home equity loans	4,845		4,464
Indirect	362		443
Consumer	212		318
Total Nonaccrual Loans	$	20,918	$	21,986

Summary of Recorded Investment Based on Delinquency Status

The following tables present 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, 2014 and December 31, 2013:

Commercial Credit Exposure	Commercial Real Estate		Commercial		Residential Real Estate*		Home Equity Loans		Indirect		Consumer		Total
	March 31, 2014
	(Dollars in thousands)
Loans graded by internal credit risk grade:
Grade 1 — Minimal	$	—	$	51	$	—	$	—	$	—	$	—	$	51
Grade 2 — Modest	—		39		—		—		—		—		39
Grade 3 — Better than average	848		—		—		—		—		—		848
Grade 4 — Average	20,204		164		611		—		—		—		20,979
Grade 5 — Acceptable	361,379		79,884		5,654		—		—		—		446,917
Total Pass Credits	382,431		80,138		6,265		—		—		—		468,834
Grade 6 — Special mention	3,341		118		32		—		—		—		3,491
Grade 7 — Substandard	22,695		3,041		615		—		—		—		26,351
Grade 8 — Doubtful	—		—		—		—		—		—		—
Grade 9 — Loss	—		—		—		—		—		—		—
Total loans internally credit risk graded	408,467		83,297		6,912		—		—		—		498,676
Loans not monitored by internal risk grade:
Current loans not internally risk graded	—		—		59,525		119,718		209,469		17,048		405,760
30-59 days past due loans not internally risk graded	—		—		65		872		169		33		1,139
60-89 days past due loans not internally risk graded	—		—		340		591		51		60		1,042
90+ days past due loans not internally risk graded	—		—		1,829		1,643		5		95		3,572
Total loans not internally credit risk graded	—		—		61,759		122,824		209,694		17,236		411,513
Total loans internally and not internally credit risk graded	$	408,467	$	83,297	$	68,671	$	122,824	$	209,694	$	17,236	$	910,189

* 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, 2013
	(Dollars in thousands)
Loans graded by internal credit risk grade:
Grade 1 — Minimal	$	—	$	52	$	—	$	—	$	—	$	—	$	52
Grade 2 — Modest	—		37		—		—		—		—		37
Grade 3 — Better than average	857		—		—		—		—		—		857
Grade 4 — Average	22,580		271		613		—		—		—		23,464
Grade 5 — Acceptable	352,781		84,979		5,589		—		—		—		443,349
Total Pass Credits	376,218		85,339		6,202		—		—		—		467,759
Grade 6 — Special mention	2,146		2,891		35		—		—		—		5,072
Grade 7 — Substandard	23,227		416		625		—		—		—		24,268
Grade 8 — Doubtful	—		—		—		—		—		—		—
Grade 9 — Loss	—		—		—		—		—		—		—
Total loans internally credit risk graded	401,591		88,646		6,862		—		—		—		497,099
Loans not monitored by internal risk grade:
Current loans not internally risk graded	—		—		56,390		120,359		205,938		15,757		398,444
30-59 days past due loans not internally risk graded	—		—		64		932		332		183		1,511
60-89 days past due loans not internally risk graded	—		—		960		707		30		25		1,722
90+ days past due loans not internally risk graded	—		—		2,231		1,078		23		191		3,523
Total loans not internally credit risk graded	—		—		59,645		123,076		206,323		16,156		405,200
Total loans internally and not internally credit risk graded	$	401,591	$	88,646	$	66,507	$	123,076	$	206,323	$	16,156	$	902,299

* 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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Deposits - Deposit Balances (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Deposits
Demand and other noninterest-bearing	$ 149,530	$ 148,961
Interest checking	176,028	164,662
Savings	129,976	125,582
Money market accounts	124,138	103,534
Consumer time deposits	362,732	382,137
Public time deposits	134,447	120,713
Total deposits	$ 1,076,851	$ 1,045,589

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Securities - Additional Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2014 securities	Dec. 31, 2013 securities
Investments, Debt and Equity Securities [Abstract]
Carrying value of securities	$ 193,354	$ 154,479
Number of securities	50	53
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Losses	5,941	8,651
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses	$ 4,261	$ 7,690

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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, 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 (loss), net of tax	(831)						(831)
Share-based compensation	72				72
Issuance of common stock (1,359,348 shares)	9,733			1,359	8,374
Redemption of preferred stock	(9,694)	(9,701)				7
Preferred dividends and accretion of discount	(253)	4				(257)
Common dividends declared, $.01 per share	(79)					(79)
Ending balance at Mar. 31, 2013	110,205	9,118	0	9,632	47,587	49,551	409	(6,092)
Beginning balance at Dec. 31, 2013	111,456	7,670	0	10,002	51,098	53,966	(5,188)	(6,092)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	1,606					1,606
Other comprehensive income (loss), net of tax	1,871						1,871
Share-based compensation	68				68
Purchase of treasury stock	(85)							(85)
Redemption of preferred stock	(7,689)	(7,689)
Preferred dividends and accretion of discount	(16)	19				(35)
Common dividends declared, $.01 per share	(97)					(97)
Ending balance at Mar. 31, 2014	$ 107,114	$ 0	$ 0	$ 10,002	$ 51,166	$ 55,440	$ (3,317)	$ (6,177)

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Cash and Cash Equivalents

3 Months Ended

Mar. 31, 2014

Cash and Cash Equivalents [Abstract]

Cash and Cash Equivalents

Cash and Cash Equivalents

For purposes of the Consolidated Statements of Cash Flows, the Corporation considers cash and cash equivalents to include cash on hand, cash items in the process of collection, non-interest bearing amounts due from correspondent banks, federal funds sold and securities purchased under resale agreements with original maturities of three months or less.

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Commitments and Contingencies - Additional Information (Details)	3 Months Ended
	Mar. 31, 2014
Commitments and Contingencies Disclosure [Abstract]
Commitment expiration date, minimum	30 days
Commitment expiration date, maximum	120 days

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Deposits (Tables)

3 Months Ended

Mar. 31, 2014

Banking and Thrift [Abstract]

Deposit Balances

Deposit balances are summarized as follows:

	March 31, 2014		December 31, 2013
	(Dollars in thousands)
Demand and other noninterest-bearing	$	149,530	$	148,961
Interest checking	176,028		164,662
Savings	129,976		125,582
Money market accounts	124,138		103,534
Consumer time deposits	362,732		382,137
Public time deposits	134,447		120,713
Total deposits	$	1,076,851	$	1,045,589

Contractual Maturities of Certificates of Deposits

The maturity distribution of certificates of deposit as of March 31, 2014 are as follows:

	March 31, 2014
	(Dollars in thousands)
0-12 months	$	323,856
12-24 months	109,561
24-36 months	48,056
36-48 months	11,634
48-60 months	4,072
Total	$	497,179

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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, 2014	Dec. 31, 2013
Available-for-sale Securities, Debt Maturities [Abstract]
Due in one year or less - Amortized Cost	$ 22,033
Due from one year to five years - Amortized Cost	46,819
Due from five years to ten years - Amortized Cost	29,740
Due after ten years - Amortized Cost	5,594
Mortgage backed securities and collateralized mortgage obligations, Amortized cost	116,385
Amortized Cost	220,571	222,019
Due in one year or less - Fair Value	21,144
Due from one year to five years - Fair Value	45,340
Due from five years to ten years - Fair Value	28,680
Due after ten years - Fair Value	5,687
Mortgage backed securities and collateralized mortgage obligations, Fair value	116,659
Fair Value	$ 217,510	$ 216,122

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Share-Based Compensation

3 Months Ended

Mar. 31, 2014

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 on May 2, 2012. Awards granted under this Plan as of March 31, 2014 were stock options granted in 2007, 2008, 2009, 2012 and 2013 and long-term restricted shares issued in 2010, 2011, 2012 and 2013. 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

During the three months ended March 31, 2014, the Corporation granted no stock options. All outstanding stock options are granted at an excercise price equal to the fair value of the common stock on the date of grant. 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.

The Corporation recognizes compensation expense for awards with graded vesting schedule on a straight-line basis over the requisite service period for the entire award. The expense recorded for stock options was $30, and $5 for the three months ended March 31, 2014 and 2013, respectively.

The following table summarizes the Corporation's stock options outstanding at March 31, 2014:

	Outstanding		Exercisable
	Number	Weighted Average Remaining Contractual Life (Years)	Number	Weighted Average Exercise Price
Range of Exercise Prices
$5.34-$5.39	37,500	7.66	25,833	$	5.39
$9.07-$9.56	128,196	9.17	—	—
$14.47	79,500	3.85	79,500	14.47
$16.00-$16.50	32,500	2.72	32,500	16.04
$19.10	30,000	1.84	30,000	19.10
$19.17	30,000	0.84	30,000	19.17
Outstanding at end of period	337,696	5.74	197,833	14.96

A summary of the status of stock options at March 31, 2014 and 2013 is presented in the table below:

	2014		2013
	Options	Weighted Average Exercise Price per Share	Options	Weighted Average Exercise Price per Share
Outstanding at beginning of period	337,696	12.43	232,000	14.50
Granted	—	—	—	—
Forfeited or expired	—	—	—	—
Exercised	—	—	—	—
Stock dividend or split	—	—	—	—
Outstanding at end of period	337,696	12.43	232,000	14.50
Exercisable at end of period	197,833	14.96	197,000	16.12

There were no options exercised during the three months of 2014, therefore the total intrinsic value of options exercised was $0. The aggregate intrinsic value represents the total pre-tax intrinsic value (the difference between the Corporation’s closing stock price on the last trading day of the quarter and the exercise price, multiplied by the number of in-the-money options). The Corporation’s closing stock price on March 31, 2014 was $11.42.

Restricted Shares

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, 2014 and 2013 was $38,and $72, 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, 2014 is presented in the table below:

	Nonvested Shares		Weighted Average Grant Date Fair Value
Nonvested at January 1, 2014	83,355		$	5.86
Granted	—		—
Vested	(44,803	)	5.35
Forfeited or expired	—		—
Nonvested at March 31, 2014	38,552		6.45

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, 2014, was $0 and for 2013 was $4.