-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, ISDul3HqodzBLYTa6/FH3EjOt4WSs2FXeLJP0DqoDz7t6aSbUixhRzu+EpH9vsKz ATjV/EZ8pdGf0Aj9PV4MKA== 0000737210-97-000025.txt : 19971103 0000737210-97-000025.hdr.sgml : 19971103 ACCESSION NUMBER: 0000737210-97-000025 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971031 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: LNB BANCORP INC CENTRAL INDEX KEY: 0000737210 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 341406303 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-13203 FILM NUMBER: 97705490 BUSINESS ADDRESS: STREET 1: 457 BROADWAY CITY: LORAIN STATE: OH ZIP: 44052-1769 BUSINESS PHONE: 2162446000 10-Q 1 1 Form 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 0-13203 LNB Bancorp, Inc. (Exact name of the registrant as specified in its charter) Ohio 34-1406303 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) 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 Not Applicable (Former name, former address and former fiscal year, if changed since last report) 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, and (2) has been subject to such requirements for the past 90 days. YES X NO Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Outstanding at October 25, 1997: 4,124,279 shares Class of Common Stock: $1.00 par value 2 LNB Bancorp, Inc. Quarterly Report on Form 10-Q Quarter Ended September 30, 1997 Part I - Financial Information Item 1 - Financial Statements Interim financial information required by Regulation 210.01-01 of Regulation S-X is included in this Form 10-Q as referenced below: Page Number(s) Condensed Consolidated Balance Sheets 3 Condensed Consolidated Statements of Income 5 Condensed Consolidated Statements 9 of Cash Flows Notes to the Condensed Consolidated Financial Statements 11 Item 2 - Management's Discussion and Analysis 14 of Financial Condition and Results of Operations Part II - Other Information Item 1 - Legal Proceedings 19 Item 2 - Changes in Securities 19 Item 3 - Defaults upon Senior Securities 19 Item 4 - Submission of matters to a Vote of 19 Security Holders Item 5 - Other Information 19 Item 6 - Exhibit and Reports on Form 8-K 19 Signatures 19 Exhibit Index 20 3 FORM 10-Q LNB BANCORP, INC. PART I - FINANCIAL INFORMATION ITEM 1 - FINANCIAL STATEMENTS SEPTEMBER 30, DECEMBER 31, CONDENSED CONSOLIDATED BALANCE SHEETS 1997 1996 ------------- ------------- (Unaudited) (See Note 1) ASSETS: Cash and due from banks $ 20,842,000 $ 18,890,000 Federal funds sold and other interest bearing instruments 9,561,000 103,000 Securities: Securities available for sale 15,383,000 16,102,000 Investment securities 100,677,000 88,858,000 ------------- ------------- Total Securities 116,060,000 104,960,000 (Market Value $116,785,000 and ------------- ------------- $105,639,000 respectively) Total loans 331,844,000 302,073,000 Reserve for possible loan losses (4,305,000) (4,116,000) ------------- ------------- Net loans 327,539,000 297,957,000 ------------- ------------- Premises and equipment, net 11,329,000 10,893,000 Intangible assets 5,268,000 -0- Accrued interest receivable and other assets 6,180,000 5,440,000 ------------- ------------- TOTAL ASSETS $496,779,000 $438,243,000 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY: Noninterest-bearing deposits $ 65,549,000 $ 63,802,000 Interest-bearing deposits 356,554,000 302,578,000 ------------- ------------- Total deposits 422,103,000 366,380,000 ------------- ------------- Federal funds purchased and securities sold under repurchase agreements and other short-term borrowings 25,930,000 23,386,000 Federal Home Loan Bank Advances 1,095,000 1,095,000 Accrued taxes, expenses and other liabilities 3,226,000 3,184,000 ------------- ------------- Total Liabilities 452,354,000 394,045,000 STATEMENT CONTINUED ON NEXT PAGE ------------- ------------- 4 STATEMENT CONTINUED FROM PREVIOUS PAGE Shareholders' equity: Common stock $1.00 par: Authorized 5,000,000 Outstanding 4,222,275 and 4,138,533, respectively 4,222,000 4,138,000 Additional capital 22,598,000 20,178,000 Retained earnings 20,141,000 19,873,000 Net unrealized security gains 47,000 9,000 Treasury Stock at cost, 88,996 and -0- shares respectively (2,583,000) -0- ------------- ------------- Total Shareholders' Equity 44,425,000 44,198,000 ------------- ------------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $496,779,000 $438,243,000 ============= ============= NOTE 1: The consolidated balance sheet at December 31, 1996 has been taken from the audited Financial Statements and condensed. See Notes to Condensed Consolidated Financial Statements. 5 FORM 10-Q LNB BANCORP, INC. UNAUDITED PART 1 - FINANCIAL INFORMATION ITEM 1 - FINANCIAL STATEMENTS NINE MONTHS ENDED CONDENSED CONSOLIDATED STATEMENTS SEPTEMBER 30, OF INCOME ------------------------- 1997 1996 INTEREST INCOME: ------------ ------------ Interest and Fees on Loans: Taxable $20,725,000 $19,136,000 Tax-Exempt 37,000 46,000 Interest and Dividends on Securities: Taxable 4,818,000 4,578,000 Tax-Exempt 107,000 184,000 Interest on Federal funds sold and other interest bearing instruments 63,000 167,000 ------------ ----------- TOTAL INTEREST INCOME 25,750,000 24,111,000 ------------ ----------- INTEREST EXPENSE: Interest on Certificates of Deposit of $100,000 or more 1,733,000 1,404,000 Interest on Other Deposits 6,747,000 6,437,000 Interest on securities sold under repurchase agreements and other short-term borrowings 925,000 690,000 Interest on Federal Home Loan Bank Advances 53,000 7,000 ------------ ----------- TOTAL INTEREST EXPENSE 9,458,000 8,538,000 ------------ ----------- NET INTEREST INCOME 16,292,000 15,573,000 Provision for Possible Loan Losses 375,000 425,000 NET INTEREST INCOME AFTER PROVISION ------------ ----------- FOR POSSIBLE LOAN LOSSES 15,917,000 15,148,000 ------------ ----------- OTHER INCOME: Trust Division income 955,000 801,000 Service charges on deposit accounts 1,690,000 1,546,000 Other Charges Fees and Exchanges 1,555,000 1,291,000 Gains from Sales of Loans -0- -0- Other operating income 36,000 64,000 ------------ ----------- TOTAL OTHER INCOME 4,236,000 3,702,000 STATEMENT CONTINUED ON NEXT PAGE ------------ ----------- 6 STATEMENT CONTINUED FROM PREVIOUS PAGE OTHER EXPENSES: Salaries and employee benefits 6,321,000 6,059,000 Net occupancy expense 957,000 939,000 Furniture and Equipment Expense 1,719,000 1,630,000 Supplies and postage 725,000 716,000 Ohio Franchise Tax 367,000 427,000 Other operating expenses 2,776,000 2,682,000 ----------- ----------- TOTAL OTHER EXPENSES 12,865,000 12,453,000 ----------- ----------- INCOME BEFORE FEDERAL INCOME TAXES 7,288,000 6,397,000 FEDERAL INCOME TAXES 2,508,000 2,117,000 ----------- ----------- NET INCOME $ 4,780,000 $ 4,280,000 =========== =========== PER SHARE DATA: EARNINGS $ 1.14 $ 1.02 ====== ====== CASH DIVIDENDS $ .49 $ .43 ====== ====== See Notes to Condensed Consolidated Financial Statements. 7 FORM 10-Q LNB BANCORP, INC. Unaudited PART I - FINANCIAL INFORMATION ITEM 1 - FINANCIAL STATEMENTS THREE MONTHS ENDED CONDENSED CONSOLIDATED STATEMENTS SEPTEMBER 30, OF INCOME -------------------------- 1997 1996 INTEREST INCOME ------------ ------------ Interest and Fees on Loans: Taxable $ 7,165,000 $ 6,521,000 Tax-Exempt 12,000 15,000 Interest and Dividends on Securities: Taxable 1,661,000 1,553,000 Tax-Exempt 36,000 49,000 Interest on Federal funds sold and other interest bearing instruments 26,000 49,000 ------------ ----------- TOTAL INTEREST INCOME 8,900,000 8,187,000 ------------ ----------- INTEREST EXPENSE: Interest on certificates of deposit of $100,000 or more 582,000 507,000 Interest on other deposits 2,330,000 2,137,000 Interest on securities sold under repurchase agreements and other short-term borrowings 372,000 240,000 Interest on Federal Home Loan Bank Advances 18,000 6,000 ------------ ----------- TOTAL INTEREST EXPENSE 3,302,000 2,890,000 ------------ ----------- NET INTEREST INCOME 5,598,000 5,297,000 Provision for possible loan losses 125,000 125,000 NET INTEREST INCOME AFTER PROVISION ------------ ----------- FOR POSSIBLE LOAN LOSSES 5,473,000 5,172,000 ------------ ----------- OTHER INCOME: Trust division income 378,000 265,000 Service charges on deposit accounts 597,000 536,000 Other charges fees and exchanges 553,000 439,000 Gains from sales of loans -0- -0- Other operating income 16,000 14,000 ------------ ----------- TOTAL OTHER INCOME 1,544,000 1,254,000 STATEMENT CONTINUED ON NEXT PAGE ------------ ----------- 8 STATEMENT CONTINUED FROM PREVIOUS PAGE OTHER EXPENSES: Salaries and employee benefits 2,184,000 2,049,000 Net occupancy expense 314,000 300,000 Furniture and equipment expense 593,000 552,000 Supplies and postage 255,000 248,000 Ohio Franchise Tax 115,000 137,000 Other operating expenses 1,014,000 866,000 ----------- ----------- TOTAL OTHER EXPENSES 4,475,000 4,152,000 ----------- ----------- INCOME BEFORE FEDERAL INCOME TAXES 2,535,000 2,274,000 FEDERAL INCOME TAXES 882,000 771,000 ----------- ----------- NET INCOME $ 1,660,000 $ 1,503,000 =========== =========== PER SHARE DATA: EARNINGS $ .40 $ .36 ====== ====== CASH DIVIDENDS $ .17 $ .14 ====== ====== See Notes to Condensed Consolidated Financial Statements. 9 FORM 10-Q LNB BANCORP, INC. Unaudited PART I - FINANCIAL INFORMATION ITEM 1 - FINANCIAL STATEMENTS NINE MONTHS ENDED CONDENSED CONSOLIDATED STATEMENTS SEPTEMBER 30, OF CASH FLOWS ------------------------- 1997 1996 CASH FLOWS FROM OPERATING ACTIVITIES: ------------ ------------ Interest received $25,601,000 $23,953,000 Other income receivd 4,221,000 3,760,000 Interest paid (9,315,000) (8,589,000) Cash paid for salaries and benefits (6,310,000) (5,733,000) Net occupancy expense of premises paid (675,000) (720,000) Furniture and equipment expenses paid (627,000) (579,000) Cash paid for supplies and postage (725,000) (716,000) Cash paid for other operating expenses (3,132,000) (3,362,000) Federal income taxes paid (2,311,000) (2,060,000) ------------ ------------ NET CASH PROVIDED BY OPERATING ACTIVITIES: 6,187,000 5,954,000 ------------ ------------ CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from maturities of securities available for sale 3,250,000 9,667,000 Proceeds from maturities of investment securities 11,979,000 18,971,000 Purchase of securities available for sale (4,201,000) (10,446,000) Purchase of investment securities (22,120,000) (17,725,000) Net (increase) in long-term loans (30,672,000) (21,297,000) Net decrease in credit card loans 430,000 200,000 Purchases of bank premises, equipment and software (1,789,000) (1,094,000) Purchase of intangible assets (5,286,000) -0- Proceeds from sales of bank premises, and equipment 9,000 5,000 ------------ ------------ NET CASH USED IN INVESTING ACTIVITIES (48,370,000) (29,719,000) ------------ ------------ STATEMENT CONTINUED ON NEXT PAGE 10 STATEMENT CONTINUED FROM PREVIOUS PAGE CASH FLOWS FROM FINANCING ACTIVITIES: Net increase in demand and other non-interest bearing deposits 1,747,000 3,012,000 Net increase (decrease) in savings and passbook deposits 13,349,000 (4,874,000) Net increase in time deposits 41,627,000 8,871,000 Net increase in Federal funds purchased and other interest bearing instruments 144,000 2,035,000 Proceeds from Federal Home Loan Bank -0- 360,000 Proceeds from Line of Credit 2,400,000 -0- Proceeds from exercise of stock options 19,000 127,000 Purchase of Treasury Stock (2,583,000) -0- Dividends paid (2,110,000) (1,790,000) ------------ ------------ NET CASH PROVIDED BY FINANCING ACTIVITIES 53,593,000 7,741,000 ------------ ------------ NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 11,410,000 (8,024,000) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 18,993,000 27,530,000 ------------ ------------ CASH AND CASH EQUIVALENTS AT END OF QUARTER $30,403,000 $19,506,000 ============ ============ See Notes to Condensed Consolidated Financial Statements. 11 Form 10-Q LNB Bancorp, Inc. Unaudited PART I - FINANCIAL INFORMATION ITEM 1 - FINANCIAL STATEMENTS NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES INTRODUCTION The following areas of discussion pertain to the condensed consolidated financial statements of LNB Bancorp, Inc. at September 30, 1997, compared to December 31, 1996, and the results of operations for the nine months ending September 30, 1997 compared to the same period in 1996. It is the intent of this discussion to provide the reader with a more thorough understanding of the condensed consolidated financial statements and supporting schedules, and should be read in conjunction with those condensed consolidated financial statements and schedules. LNB Bancorp, Inc. is not aware of any trends, events, or uncertainties that might have a material effect on the soundness of operations; neither is LNB Bancorp, Inc. aware of any proposed recommendations by regulatory authorities which would have a similar effect if implemented. BASIS OF PRESENTATION The unaudited condensed consolidated balance sheet as of September 30, 1997, the condensed consolidated statements of income and the condensed consolidated statements of cash flows for the nine months ended September 30, 1997 and 1996 are prepared in accordance with generally accepted accounting principles for interim financial information. The above mentioned statements reflect all normal and recurring adjustments which are, in the opinion of management, necessary for a fair presentation of the financial position and the results of operations for the interim periods presented. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Corporation's December 31, 1996 Annual Report to Shareholders. The results of operations for the period ended September 30, 1997 are not necessarily indicative of the operating results for the full year. RESERVE FOR POSSIBLE LOAN LOSSES Because some loans may not be repaid in full, a reserve for possible loan losses is recorded. This reserve is increased by provisions charged to earnings and is reduced by loan charge-offs, net of recoveries. Estimating the risk of loss on any loan is necessarily subjective. Accordingly, the reserve is maintained by Management at a level considered adequate to cover possible loan losses that are currently anticipated based on Management's evaluation of several key factors including information about specific borrower situations, their financial position and collateral values, current economic conditions, changes in the mix and levels of the various types of loans, past charge-off experience and other pertinent information. The reserve for possible loan losses is based on estimates using currently available information, and ultimate losses may vary from current estimates due to changes in circumstances. These estimates are reviewed periodically and, as adjustments become necessary, they are reported in earnings in the periods in which they become known. While Management may 12 periodically allocate portions of the reserve for specific problem situations, the entire reserve is available for any charge-offs that may occur. Charge-offs are made against the reserve for possible loan losses when Management concludes that it is probable that all or a portion of a loan is uncollectible. After a loan is charged-off,collection efforts continue and future recoveries may occur. The Corporation adopted the provision of Statement of Financial Accounting Standards No. 114 (SFAS No. 114), "Accounting by Creditors for Impairment of a Loan" and SFAS No. 118 "Accounting for Creditors for Impairment of a Loan - Income Recognition and Disclosure" on January 1, 1995. SFAS No. 114 provides guidelines for measuring impairment losses on loans. Under SFAS No. 114, a loan is considered impaired, based on current information and events, if it is probable that the Bank will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. The measurement of impaired loans is generally based on the present value of the expected future cash flows discounted at the loans initial effective interest rate, except that all collateral-dependent loans are measured for impairment based on the fair value of the collateral. If the loan valuation is less than the recorded value of the loan, an impairment reserve must be established for the difference. The impairment reserve is established by either an allocation of the reserve for possible loan losses or by a provision for possible loan losses, depending upon the adequacy of the reserve for possible loan losses. SFAS No. 118 permits existing income recognition practices to continue. RECLASSIFICATIONS Certain 1996 amounts have been reclassified to conform to 1997 presentation. 2. PER SHARE DATA Earnings per common and common equivalent shares (stock options) have been computed using the weighted average number of shares outstanding during each period after giving consideration to the dilutive effect of incentive stock options, a two percent stock dividend and a five-for-four stock split which were approved by shareholders during 1996 and 1995, respectively. The Corporation adopted SFAS No. 128 "Earnings Per Share" on January 1, 1997. This Statement specifies the computation, presentation and disclosure requirements for earnings per share, for entities with publicly held common stock or potential common stock. The per share data has been adjusted to reflect the two percent stock dividend in 1996. In accordance with SFAS No. 128, Earnings per share is calculated as follows: For the Quarter ended September 30, 1997 Income Shares Per-Share (Numerator) (Denominator) Amount Income before extraordinary Item and accounting change $4,780,000 Basic EPS Income available to common stockholders $4,780,000 4,182,228 $1.14 ===== Effect of Dilutive Securities Incentive Stock Options -0- 10,650 ---------- --------- Dilutive EPS Income available to common stockholders + assumed conversions $4,780,000 4,192,878 $1.14 ========== ========= ===== 13 3. DISCLOSURE OF INFORMATION ABOUT CAPITAL STRUCTURE The Corporation adopted SFAS No. 129 "Disclosure of Information about Capital Structure" on January 1, 1997. This statement requires in summary form within the financial statements, the pertinent rights and privileges of the various securities outstanding. Corporate Management has determined that the adoption of SFAS No. 129 will increase year-end disclosure requirements for capital. 4. ACQUISITION OF ASSETS AND DEPOSITS Effective September 15, 1997, Lorain National Bank, a wholly owned subsidiary of LNB Bancorp, Inc., acquired three branch offices from KeyBank National Association (KeyBank) headquartered in Cleveland, Ohio pursuant to a Branch Purchase and Assumption Agreement dated April 10, 1997. The three branch offices, located in Lorain County, Ohio, included an aggregate of $45 million in deposits, certain real estate and personal property associated with the branches, and $18 million in consumer and commercial loans associated with the branches. The KeyBank acquisition has been accounted for as a purchase, and accordingly, the acquired assets and liabilities were recorded based on the fair values at the date of acquisition. Most interest bearing deposit accounts other than time certificates of deposits (CD's) were converted into Lorain National Bank products on the acquisition date and will earn interest at the current rates in effect for Lorain National Bank's deposit products. Other interest bearing deposit accounts acquired from KeyBank were grandfathered and their interest rate will be the KeyBank rate at purchase date. CD's and IRA's acquired will carry the rates of interest per those contracts until their maturity dates. KeyBank National Association, is a national banking association with its headquarters located in Cleveland, Ohio. There is no relationship between KeyBank National Association and LNB Bancorp, Inc. and its wholly-owned subsidiary Lorain National Bank. The effect of the KeyBank acquisition is included in the results of operations prospectively from the date of acquisition. The pro forma effect of this acquisition on prior periods is not shown herein as Lorain National Bank did not acquire the entire businesses of the seller. 14 PART I - FINANCIAL INFORMATION ITEM 2 - MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION & RESULTS OF OPERATION INTRODUCTION On September 15, 1997 Lorain National Bank, a wholly-owned subsidiary of LNB Bancorp, Inc., Lorain, Ohio, purchased and assumed $45.3 million in deposits and other liabilities of three branch offices, located in Lorain County, from KeyBank National Association (KeyBank), headquartered in Cleveland, Ohio. In addition to the deposits assumed, Lorain National Bank also acquired approximately $26.6 million in cash and $0.4 million in premises and equipment, and $18.3 million in consumer and commercial loans. Two of the banking offices acquired by the Lorain National Bank, located in Lorain county, are being operated as part of the Bank's branch office network. The third branch office, located at 383 Broadway, Lorain, Ohio will be open through November 14, 1997 and then merged into our Main Office at 457 Broadway, Lorain, Ohio. Management believes that the purchase will enhance the Bank's long-term profitability and has projected a positive impact of approximately $450,000 for the 1998 fiscal year. However, management anticipates the purchase will have a break-even or slight increase on net income for fiscal 1997, even though approximately $120,000 of consulting, system conversion and employee related expenses associated with the purchase were charged to the third quarter expenses. In May 1997, the Board of Directors of LNB Bancorp, Inc. authorized the repurchase of up to 100,000 shares of common stock. At September 30, 1997, the Corporation had repurchased 88,996 shares under the 100,000 share repurchase program. FINANCIAL CONDITION Total assets at September 30, 1997 increased by $58,536,000, or 13.4%, during the first nine months in 1997. Prior to the KeyBank purchase, cash flows from deposits were used to fund approximately, $11,500,000 in loan growth. At quarter-end, $17,000,000 in proceeds from the KeyBank purchase were temporarily invested in short-term interest bearing time deposits with banks in addition to more permanent investments in United States Treasury Securities and United States Government Agency securities with intermediate maturities. After the quarter-end, temporary investments will be replaced with higher yielding securities with staggered maturities in order to meet the cash flow needs of anticipated loan growth through the remainder of 1997 and into 1998. A portion of asset growth is attributable to the cyclical influx of municipal county tax money. Total earning assets increased $50,329,000 or 12.3% from December 31, 1996. The ratio of earning assets to total assets has decreased slightly from 92.9% at December 31, 1996 to 92.0% at September 30, 1997. With the addition of the KeyBank loans and deposits to the balance sheet, the loan to deposit ratio has declined from 82.4% at 1996 year-end to 78.6% at September 30, 1997. Federal funds sold and other interest bearing investments increased by $9,458,000 during the first nine months of 1997. Total securities increased $11,100,000 ending the third quarter at $116,060,000. At September 30, 1997 unrealized gains (losses)in the investment securities portfolio were approximately $869,000 and ($144,000), respectively. Nonperforming assets at September 30, 1997 totaled $882,000, up from $376,000 at June 30, 1997. The third quarter increase in nonperforming assets of $506,000 resulted from loans being brought current in the amount of $101,000, loans charged-off in the amount of $5,000 and increases in nonaccrual loans of 15 $612,000. The increase in nonaccrual loans in the third quarter of 1997 was due primarily to five commercial loan customers and three consumer loan customers. The level of nonperforming assets at September 30, 1997 remains at relatively low levels and Corporate management believes nonperforming assets are well collateralized. The table below presents the level of nonperforming assets at the end of the last four calendar quarters. Amounts in thousands 09/30/97 06/30/97 03/31/97 12/31/96 -------- -------- -------- -------- Nonperforming Assets: Nonaccrual $ 882 $ 376 $ 597 $ 765 Restructured 0 0 0 0 Other Real Estate Owned 0 0 0 39 ------ ------ ------ ------ Total Nonperforming Assets $ 882 $ 376 $ 597 $ 804 ====== ====== ====== ====== Reserve for possible loan losses to total nonperforming assets 488.1% 1,127.1% 684.4% 511.9% ======== ====== ====== ======= Accruing loans past due 90 days 919 271 180 357 ====== ====== ====== ====== Net loans increased $29,582,000 during the first nine months to $327,539,000 at September 30, 1997. Consumer and commercial loans attributable to the KeyBank acquisition at September 30, 1997 totaled $18,300,000, or 6.1%, of the increase in net loans from the year-end 1996. The reserve for possible loan losses ended the quarter at $4,305,000 supported by a provision for loan losses of $375,000 recoveries of $126,000 and loan charge-offs of $312,000. The reserve for possible loan losses as a percentage of ending loans decreased .06% from 1.36% at December 31, 1996 to 1.30% at September 30, 1997. Corporate management believes that the current level of the reserve for possible loan losses is adequate based upon quantitative analysis of identified risks, due diligence performed on the $18,300,000 loan portfolio acquired from KeyBank, and analysis of historical trends. The Corporation's credit policies are reviewed and modified on an on-going basis in order to remain suitable for the management of credit risk within the loan portfolio as conditions change. At September 30, 1997, there are no significant concentrations of credit in the loan portfolio. The Corporation had outstanding loan and credit commitments to make loans totalling $72,517,000 and $62,933,000 at September 30, 1997 and 1996, respectively. A major portion of the credit commitment increase is attributable to the acquisition of unused home equity lines of credit from KeyBank of approximately $7,500,000. After giving consideration due to the KeyBank purchase, the consistent outstanding loan and credit commitments balance from 1996 to 1997 results from loan demand due to good local economic conditions. Total deposits increased $55,723,000 during the first nine months to $422,103,000. Deposits attributable to the KeyBank acquisition at September 30, 1997 totaled $45,300,000, or 12.4% of the increase in total deposits from year-end 1996. Non-interest bearing deposits increased to $65,549,000, at September 30,1997 for an increase of $1,747,000, while interest bearing deposits climbed to $356,554,000 for an increase of $53,976,000. Federal funds purchased and securities sold under agreements to repurchase increased $2,544,000 during the first nine months of 1997. Due to the volatility of customer repurchase agreements, most funds generated by repurchase activity enter the Corporation's earning assets as short-term investments. The acquired branches experience deposit runoff at September 30, 1997 of about 1.7%. 16 LIQUIDITY Liquidity measures a corporation's ability to generate cash or otherwise obtain funds at reasonable prices to fund commitments to borrowers as well as the demand of depositors and debt holders. Principal internal sources of liquidity for the Corporation and the Bank are cash and cash equivalents, Federal funds sold, and the maturity structures of investments securities and portfolio loans. Securities and loans available for sale provide another source of liquidity through the cash flows of these interest bearing assets as they mature or are sold. Total cash and securities available for sale of $36,225,000 represent 7.3% of total assets on September 30, 1997. Securities available for sale of approximately $11,498,000 is pledged as collateral to secure public funds or other obligations. Of the securities available for sale, $13,383,000 are held in U.S. Treasury and Agency securities, 71.7% of which mature within one year. This increase in liquidity from 1996 year-end is a direct result of the KeyBank deposit acquisition and the funds received from KeyBank for the assumption of those liabilities. At September 30, 1997, $9,400,000 of the proceeds were invested in interest bearing deposits with banks, while $9,000,000 was placed in United States Treasury and Agency Securities. Another measure which shows the improvement in Lorain National Bank's liquidity is the loan to deposit ratio which has declined from 82.4% at December 31,1996 to 78.6% at September 30,1997. The Corporation continues to maintain a relatively high liquid position in order to take advantage of interest rate fluctuations. As of September 30, 1997, short-term security investments with maturities of one year or less totalled $39,712,000 which represented 34.2% of total securities. Adding cash and due from banks of $20,842,000 and Federal funds sold and other interest bearing instruments of $9,561,000, total liquid assets represented 14.1% of total assets. The Corporation's subsidiary bank has established short-term lines of credit at correspondent banks and the Federal Home Loan Bank in the amount of $27,800,000. CAPITAL RESOURCES Total shareholders' equity increased to $44,425,000, at September 30, 1997. The increase resulted primarily from $4,780,000 of net income generated from the first nine months of operations less a cash dividend payable to shareholders of $2,027,000. Financial Accounting Standards Board Statement No. 115, "Accounting for Certain Investments in Debt and Equity Securities", requires that securities which the Bank has classified as "Available-for-Sale" are recorded at market value with any adjustments recorded to equity. The increase in interest rates experienced in the first three quarters of 1997 has caused an increase in the market value of these securities which resulted in an increase of shareholders' equity of $38,000 for the nine months ended September 30, 1997. The Corporation continues to monitor growth to stay within the constraints established by the regulatory authorities. Under Federal banking regulations, an institution is deemed to be well-capitalized if it has a Risk-based Tier 1 capital ratio of 6.00 percent or greater, a Risk-based Total capital ratio of 10.00 percent or greater and a Leverage ratio of 5.00 percent or greater. The Corporation's Risk-based capital and Leverage ratios have exceeded the ratios for a well-capitalized financial institution for all periods presented. The primary reason for the decrease in the capital ratios at September 30, 1997, results from the purchase and assumption of loans and deposits from KeyBank, and the purchase of Treasury Stock. As of September 30, 1997, the LNB Bancorp, Inc. held 88,996 shares of common stock as treasury stock. LNB Bancorp, Inc. purchased 88,996 of these shares in the second and third quarters of 1997 with a total cost of $2,583,000. 17 The Corporation's capital and leverage ratios as of September 30, 1997 and 1996 follow. September 30 ----------------- 1997 1996 ------ ------ Tier I capital ratio 12.81% 16.71% Required Tier I capital ratio 4.00% 4.00% Total capital ratio 14.04% 17.96% Required total capital ratio 8.00% 8.00% Leverage ratio 8.70% 10.26% Required leverage ratio 3.00% 3.00% On an ongoing basis the Corporation analyzes acquisition opportunities in markets which are adjacent to or within the Corporation's current geographical market. Corporate management believes that it's current capital resources are sufficient to support any foreseeable acquisition activity, in addition to the purchase of three branch offices from KeyBank National Association. Lorain National Bank has received approval from the Comptroller of Currency to operate a branch office in LaGrange, Ohio, located in southern Lorain County. The new Lorain National Bank branch is scheduled to open in July of 1998. Lorain National Bank will lease property at Sentinel Square in LaGrange for this full-service branch which will include auto drive-in facilities and an ATM. Lorain National Bank has signed agreements for the expansion and remodeling of its Kansas Avenue Branch Office. Construction began in May and is expected to be completed by October 1997. Total construction costs plus new equipment is expected to be $450,000. There were no other material commitments outstanding at September 30, 1997, other than the loan and credit commitments and the construction and remodeling contracts for the Kansas Avenue Branch Office. RESULTS OF OPERATIONS Interest and fees on loans increased by $1,580,000 when compared to the first nine months of 1996. This was the net result of the impact of slight increases in rates in conjunction with loan portfolio growth of $29,771,000. Interest and dividends on securities was $4,925,000 for the first nine months of 1997 for an increase of $163,000 over the same period in 1996. Interest and dividends on securities represented 19.1% of total interest income at September 30, 1997 compared to 19.8% at September 30, 1996. Interest on Federal funds sold and other interest bearing instruments was $63,000 at September 30, 1997 compared to $167,000 at September 30, 1996. The decrease resulted from declining average balances invested in this form of financial instrument along with lower interest rates. Total interest expense increased by $920,000 when compared to the first nine months of 1996. The increase resulted from increases in average balances of savings, certificates of deposit and checkinvest accounts coupled with decreases in interest rates paid on certificates of deposit and checkinvest accounts. Net interest margin was further effected at the end of the third quarter by the acquisition of deposits from KeyBank. The rates KeyBank paid on the acquired deposits are slightly higher than the Bank's comparable deposit products. To protect against deposit runoff, Lorain National Bank will continue to pay higher rates on selected grandfathered deposit products. Rates on Certificates of Deposit, however, will remain unchanged through the remaining life of those instruments. 18 For the remainder of 1997, the acquisition of the KeyBank consumer and commercial loans and deposits and its related significant impact on balance sheet size will have a positive influence on net interest income. Total other income increased by $534,000 when compared to the first nine months of 1996. This increase resulted from increases in income from fiduciary fees of $154,000, increases in service charges of $144,000 and increases in other charges of $264,000. The increase in service charges is due, in part, to reevaluating the assessment of transaction account charges. The increase in other charges is the result of pricing increases in credit card and merchant fees and increases in ATM fees. Other operating income decreased by $28,000. The Corporation continuously monitors non-interest expenses for greater profitability. The entire staff is geared to improving productivity at all levels. Non-interest expense for the nine months ended September 30, 1997 was $12,865,000, 3.3% above the first nine months of 1996. This increase was due primarily to increases in salaries and employee benefits, net occupancy expense, furniture and equipment expense, KeyBank conversion expenses and the impacts of inflation. The effective tax rate increased from 33.1% during the first nine months of 1996 to 34.4% during the first nine months of 1997. The increase in the effective tax rate is due primarily to the decrease in tax exempt interest income. Net income was $4,780,000 and $4,280,000 for the nine months ended September 30, 1997 and 1996, respectively. Net income per share after adjusting for the two percent stock dividend in 1997 and 1996 was $1.14 and $1.02 for the nine months ended September 1997 and 1996, respectively. IMPACTS OF ACCOUNTING AND REGULATORY PRONOUNCEMENTS Corporate management is not aware of any 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. However, the potential impact of certain accounting and regulatory pronouncements warrant further discussion. The Financial Accounting Standards Board (FASB) has issued: SFAS No. 130, "Reporting Comprehensive Income" Implementation date by the Corporation: January 1, 1998 Impact on the Corporation: This Statement provides accounting and reporting standards for reporting and display of comprehensive income and its components (revenues, expenses, gains, and losses) in a full set of general-purpose financial statements. Corporate management does not believe that adoption of SFAS No. 130 will have a significant impact on net income, but will increase reporting requirements. SFAS No. 131, "Disclosures about segments of an Enterprise and Related Information" Implementation date by the Corporation: January 1, 1998 Impact on the Corporation: This Statement provides accounting and reporting standards about operating segments in annual financial statements and requires that those enterprises report selected information about operating segments in interim financial reports issued to shareholders. It also establishes standards for related disclosures about products and services, geographic areas, and major customers. Corporate management does not believe that adoption of SFAS No. 131 will have a significant impact on net income but will increase disclosure requirements. 19 Part II - OTHER INFORMATION ITEM 1 - Legal Proceedings None ITEM 2 - Changes in Securities None ITEM 3 - Defaults Upon Senior Securities None ITEM 4 - Submission of Matters to a Vote of Security Holders None ITEM 5 - Other Information None ITEM 6 - Exhibits and Reports on Form 8-K: (a) Exhibit (11) - Computation of Shares Used for Earnings Per Share Calculation. (b) Exhibit (19) - Third Quarter Report to Shareholders of LNB Bancorp, Inc., September 30, 1997 - EDGAR Version. (c) Exhibit (27) - Financial Data Schedule. (d) Reports on Form 8-K - On October 2, 1997, LNB Bancorp, Inc. filed a Form 8-K with the Securities and Exchange Commission pursuant to (Form 8-K, Item 5 requirements) concerning the purchase and assumption of certain assets and liabilities of three KeyBank branch offices in Lorain County, Ohio by its wholly owned subsidiary Lorain National Bank from KeyBank National Association, Cleveland, Ohio as of September 15, 1997. Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned thereunto duly authorized. LNB BANCORP, INC. (registrant) Date: October 30, 1997 /s/ Gregory D. Friedman _________________________ Gregory D. Friedman, Senior Vice President, Chief Operating Officer and Chief Financial Officer Date: October 30, 1997 /s/ Mitchell J. Fallis _________________________ Mitchell J. Fallis, Vice President and Chief Accounting Officer 20 LNB Bancorp, Inc. Form 10-Q Exhibit Index Pursuant to Item 601 (a) of Regulation S-K S-K Reference Exhibit Page Number Number (11) Computation of Shares Used for Earnings Per Share Calculations 21 (19) Third Quarter Report to Shareholders of LNB Bancorp, Inc. September 30, 1997 - EDGAR Version. 22 (27) Financial Data Schedule. 27 21 LNB Bancorp, Inc. Exhibit to Form 10-Q (For the nine months ended September 30, 1997) S - K Reference Number (11) Computation of Shares Used for Earnings Per Share Calculation. Nine Months Ended September 30 -------------------- 1997 1996 --------- --------- Weighted Average Shares Outstanding 4,182,228 4,125,664 Common Stock Equivalents (Stock Options) 10,650 10,590 --------- --------- 4,192,878 4,136,254 ========= ========= 22 LNB Bancorp, Inc. Exhibit to Form 10 - Q (For the nine months ended September 30, 1997) S - K Reference Number (19) Third Quarter Report to Shareholders of LNB Bancorp, Inc. (dated September 30, 1997) EDGAR Version Description: Two sided pamphlet: Backside cover containing the list of Customer Service Locations of Lorain National Bank and outside beige cover with brown lettering stating LNB Bancorp, Inc., Quarterly Report, a picture of five hands pulling on a rope with a hoist, September 30, 1997 along with logo. Inside contains: Message to our Shareholders, unaudited EDGAR Version Consolidated Balance Sheets for period ending September 30, 1997 and September 30, 1996 and unaudited Consolidated Statements of Income for the Nine Months Ended September 30, 1997 and September 30, 1996, along with LNB Bancorp, Inc. logo. 23 Message to Our Shareholders It's a pleasure to report that we are well on our way to another successful year of operations of LNB Bancorp, Inc. and its subsidiary, Lorain National Bank. As of September 30, we've achieved growth in many significant areas including earnings, shareholders' equity, total loans and total assets. Also in September, we completed the acquisition of three branch offices of KeyBank in Lorain County. We welcome the thousands of former KeyBank customers who brought over $45 million in deposits and $18 million in loans to Lorain National Bank. Thus, we've expanded our existing customers' banking convenience and introduced our new customers to 18 more bank branches and 25 additional automated teller machine locations. Earnings have increased 11.7 percent for the nine months ended September 30, 1997, compared to the same period one year ago. Consolidated net income for the first nine months of 1997 reached $4,780,000, up from $4,280,000 for the comparative period in 1996. Year-to-date cash dividends declared to shareholders has increased 13.5 percent over the comparative period in 1996. Total shareholders' equity also increased $1.1 million during the 12 months ended September 30, 1997 and total shareholder's equity, as a percentage of total assets, was 8.9 percent. Total assets rose $58,536,000 to $496,779,000 as of September 30, 1997. Net loans increased $29,582,000 to $327,539,000 at September 30, 1997. The asset and loan increase was funded by the purchase and assumption of $45.6 million in deposits and $18.3 million in loans from KeyBank National Association. From a local economic standpoint, we would be remiss in failing to mention the loss of jobs at the Lorain Ford Motor assembly plant. However, we do not expect Lorain County to suffer significantly. Because of the recent growth of non-auto related industry, Lorain County is in much better condition to absorb the loss than in years passed. We are encouraged with the resiliency of our community. As a locally owned, independent bank and holding company, we look forward to providing personal service to our growing four publics - our customers, shareholders, employees, and community. We thank you for your continued support and look forward to addressing you after the completion of another year of successful operations. Sincerely, /s/ Stanley G. Pijor /s/ James F. Kidd _______________________ ______________________ Stanley G. Pijor James F. Kidd Chairman President & Chief of the Board Executive Officer 24 Consolidated Balance Sheets September 30 ------------------------------ 1997 1996 -------------- -------------- ASSETS: Cash and Due from Banks $ 20,842,000 $ 19,404,000 Federal Funds Sold and Other Interest Bearing Instruments 9,561,000 102,000 Securities Available for Sale 15,383,000 14,244,000 Investment Securities 100,677,000 89,725,000 Loans 331,844,000 297,080,000 Reserve for Possible Loan Losses (4,305,000) (4,112,000) - -------------------------------------------------------------------------- NET LOANS 327,539,000 292,968,000 - -------------------------------------------------------------------------- Premises, Equipment and Intangible Assets (net)16,597,000 10,863,000 Accrued Interest Receivable and Other Assets 6,180,000 6,281,000 - -------------------------------------------------------------------------- TOTAL ASSETS $496,779,000 $433,587,000 - -------------------------------------------------------------------------- LIABILITIES AND STOCKHOLDERS' EQUITY: Non-Interest Bearing Deposits $ 65,549,000 $ 63,175,000 Interest Bearing Deposits 356,554,000 297,289,000 - -------------------------------------------------------------------------- TOTAL DEPOSITS 422,103,000 360,464,000 - -------------------------------------------------------------------------- Securities Sold under Repurchase Agreements and Other Short-Term Borrowings 25,930,000 26,203,000 Federal Home Loan Bank Advances 1,095,000 362,000 Accrued Taxes, Expenses and Other Liabilities 3,226,000 3,240,000 - -------------------------------------------------------------------------- TOTAL LIABILITIES 452,354,000 390,269,000 - -------------------------------------------------------------------------- Common Stock 4,222,000 4,135,000 Additional Capital 22,598,000 20,129,000 Retained Earnings 20,141,000 19,087,000 Net Unrealized Security Gains(Losses) 47,000 (33,000) Treasury Stock at Cost (2,583,000) -0- - -------------------------------------------------------------------------- TOTAL SHAREHOLDERS' EQUITY 44,425,000 43,318,000 - -------------------------------------------------------------------------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $496,779,000 $433,587,000 - -------------------------------------------------------------------------- (LOGO) LNB Bancorp, Inc. and its subsidiary Lorain National Bank 25 Consolidated Statements of Income Nine Months Ended September 30 --------------------------- 1997 1996 ------------- ------------- INTEREST INCOME: Interest and Fees on Loans $20,762,000 $19,182,000 Interest and Dividends on Securities 4,932,000 4,767,000 Interest on Federal Funds Sold 56,000 162,000 - -------------------------------------------------------------------------- TOTAL INTEREST INCOME 25,750,000 24,111,000 - -------------------------------------------------------------------------- INTEREST EXPENSE: Interest on Deposits 8,480,000 7,841,000 Interest on Securities Sold Under Repurchase Agreements and Other Short-Term Borrowings 925,000 690,000 Interest on Federal Home Loan Bank Advances 53,000 7,000 - -------------------------------------------------------------------------- TOTAL INTEREST EXPENSE 9,458,000 8,538,000 - -------------------------------------------------------------------------- NET INTEREST INCOME 16,292,000 15,573,000 Provision for Loan Losses 375,000 425,000 - -------------------------------------------------------------------------- NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 15,917,000 15,148,000 - -------------------------------------------------------------------------- OTHER INCOME: Trust Department Income 955,000 801,000 Fees and Service Charges 3,245,000 2,836,000 Gains From Sales of Loans and Securities -0- -0- Other Operating Income 36,000 65,000 - -------------------------------------------------------------------------- TOTAL OTHER INCOME 4,236,000 3,702,000 - -------------------------------------------------------------------------- OTHER EXPENSES: Salaries and Employee Benefits 6,321,000 6,059,000 Net Occupancy Expense of Premises 957,000 939,000 Furniture and Equipment Expenses 1,719,000 1,630,000 Supplies and Postage 725,000 716,000 Ohio Franchise Tax 367,000 427,000 Other Operating Expenses 2,776,000 2,682,000 - -------------------------------------------------------------------------- TOTAL OTHER EXPENSES 12,865,000 12,453,000 - -------------------------------------------------------------------------- INCOME BEFORE FEDERAL INCOME TAXES 7,288,000 6,397,000 Federal Income Taxes 2,508,000 2,117,000 - -------------------------------------------------------------------------- NET INCOME $4,780,000 $4,280,000 - -------------------------------------------------------------------------- PER SHARE DATA: NET INCOME $ 1.14 $ 1.02 - -------------------------------------------------------------------------- DIVIDENDS DECLARED $ .49 $ .43 ========================================================================== The per share data has been adjusted to reflect the 2% stock dividend in 1997 and 1996. Net income per share is based on weighted average common and common equivalent shares outstanding. 26 Outside Cover: 3 column format Customer Service Locations Banking Offices Midway Mall Office 6396 Midway Mall Boulevard Lorain Offices Elyria, Ohio 44035 (440) 324-6530 Main Office* 457 Broadway Second Street Office Lorain, Ohio 44052 221 Second Street (440) 244-7185 Elyria, Ohio 44035 (440) 323-4621 Sixth Street Drive-In 200 Sixth Street Community Offices Lorain, Ohio 44052 (440) 244-7242 Amherst Office 1175 Cleveland Avenue Broadway Office* Amherst, Ohio 44001 383 Broadway (440) 988-4423 Lorain, Ohio 44052 (440) 244-1946 Avon Lake Office 240 Miller Road Cooper Foster Park Road Office Avon Lake, Ohio 44012 1920 Cooper Foster Park Road (440) 933-2186 Lorain, Ohio 44053 (440) 282-1252 Kendal at Oberlin Office 600 Kendal Drive Kansas Avenue Office Oberlin, Ohio 44074 1604 Kansas Avenue (440) 774-5400 Lorain, Ohio 44052 (440) 288-9151 Oberlin Office 40 East College Street Oberlin Avenue Office Oberlin, Ohio 44074 3660 Oberlin Avenue (440) 775-1361 Lorain, Ohio 44053 (440) 282-9196 Olmsted Office 27095 Bagley Road Pearl Avenue Office Olmsted Township, Ohio 44138 2850 Pearl Avenue (440) 235-4600 Lorain, Ohio 44055 (440) 277-1103 The Renaissance Office 26376 John Road West Park Office Olmsted Township, Ohio 44138 2130 West Park Drive (440) 427-0041 Lorain, Ohio 44053 (440) 989-3131 Vermilion Office 4455 Liberty Avenue Elyria Offices Vermilion, Ohio 44089 (440) 967-3124 Cleveland Street Office 801 Cleveland Street The Crossings of Westlake Office Elyria, Ohio 44035 30210 Detroit Road (440) 365-8397 Westlake, Ohio 44145 (440) 892-9696 Lake Avenue Office 42935 North Ridge Road Westlake Village Office Elyria Township, Ohio 44035 28550 Westlake Village Drive (440) 233-7196 Westlake, Ohio 44045 (440) 808-0229 27 Community Based Automated Teller Machine Locations Captain Larry's Marathon 1317 State Route 60 Vermilion, Ohio Community Health Partners East Campus 205 West 20th Street Lorain, Ohio Convenient Food Mart Cash Machine 5375 West Erie Avenue Lorain, Ohio Gateway Plaza 3451 Colorado Avenue Lorain, Ohio Lakeland Medical Center 3700 Kolbe Road Lorain, Ohio Lorain County Community College 1005 North Abbe Road Elyria, Ohio Lorain Plaza Shopping Center 1147 Meister Road Lorain, Ohio Lowe's Home Improvement Warehouse 620 Midway Boulevard Elyria, Ohio Midway Mall Food Court 3343 Midway Mall Elyria, Ohio *Drive-up ATM is available at Sixth Street Drive-In. All other banking offices feature ATMs, except the Broadway and Westlake Village offices. **This office will close permanently at the close of business on November 14, 1997. 28 Frontside cover description: Beige background, brown lettering. LNB Bancorp, Inc. QUARTERLY REPORT Picture of five hands pulling on a rope with a hoist. September 30, 1997 Bottom left: LNB Bancorp, Inc. Logo LNB Bancorp, Inc. And its subsidiary Lorain National Bank 457 Broadway Lorain, Ohio 44052-1739 (440) 244-6000 or (800) 860-1007 29 LNB Bancorp, Inc. Exhibit to Form 10 - Q (For the nine months ended September 30, 1997) S - K Reference Number (27) Financial Data Schedule (Follows as a separate document) EX-27 2
9 0000737210 LNB BANCORP, INC. 1,000 9-MOS DEC-31-1997 JAN-01-1997 SEP-30-1997 20,842 161 9,400 0 15,383 100,677 101,402 331,844 4,305 496,779 422,103 25,930 3,226 1,095 4,222 0 0 40,203 496,779 20,762 4,925 63 25,750 8,480 9,458 16,292 375 0 12,865 7,288 4,780 0 0 4,780 1.14 1.14 5.08 882 919 0 1,019 4,116 312 126 4,305 3,120 0 1,185
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