-----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, F6j4OHATzyerJvjeEw9eh+2iSYPH13+lWY8RULKExUl8z7HwhQvU/bA4Pp9MVC/E Dcp0ymji70iXcy/nLKjDZQ== 0000737210-98-000007.txt : 19980515 0000737210-98-000007.hdr.sgml : 19980515 ACCESSION NUMBER: 0000737210-98-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980514 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: 98619840 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 March 31, 1998 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 on 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 April 15, 1998: 4,122,475 shares Class of Common Stock: $1.00 par value 2 LNB Bancorp, Inc. Quarterly Report on From 10-Q Quarter Ended March 31, 1998 Part I - Financial Information Item 1 - Financial Statements Interim financial information required by Regulation 210.10-01 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 of Cash Flows 7 Notes to the Condensed Consolidated Financial 9 Statements Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations 14 Item 3 - Quantitative and Qualitative Disclosure 19 about Market Risk Part II - Other Information Item 1 - Legal Proceedings 20 Item 2 - Changes in Securities 20 Item 3 - Defaults upon Senior Securities 20 Item 4 - Submission of matters to a Vote of Security Holders 20 Item 5 - Other Information 21 Item 6 - Exhibits and Reports on Form 8-K 21 Signatures 21 Exhibit Index 22 3 FORM 10-Q LNB BANCORP, INC. PART I - FINANCIAL INFORMATION ITEM 1 - FINANCIAL STATEMENTS MARCH 31, DECEMBER 31, CONDENSED CONSOLIDATED BALANCE SHEETS 1998 1997 ------------- -------------- (Unaudited) (See Note 1) ASSETS: Cash and due from banks $ 20,117,000 $ 24,273,000 Federal funds sold and other interest bearing instruments 2,882,000 134,000 Securities: Securities available for sale 30,662,000 19,336,000 Investment securities held to maturity 87,862,000 96,038,000 -------------- -------------- Total securities 118,524,000 115,374,000 (Market value $119,413,000 and -------------- -------------- $116,197,000, respectively) Loans: Portfolio loans 317,665,000 319,666,000 Loans available for sale 12,047,000 11,365,000 -------------- -------------- Total loans 329,712,000 331,031,000 Reserve for possible loan losses (4,360,000) (4,168,000) -------------- -------------- Net loans 325,352,000 326,863,000 -------------- -------------- Bank premises and equipment, net 11,133,000 11,321,000 Intangible assets 5,088,000 5,114,000 Accrued interest receivable 3,315,000 3,155,000 Other assets 3,517,000 3,983,000 -------------- -------------- TOTAL ASSETS $489,928,000 $490,217,000 ============== ============== 4 LIABILITIES AND STOCKHOLDERS' EQUITY: Deposits: Demand and other noninterest- bearing deposits $ 66,346,000 $ 68,565,000 Savings and passbook accounts 173,537,000 172,936,000 Time deposits 172,689,000 169,154,000 -------------- -------------- Total deposits 412,572,000 410,655,000 -------------- -------------- Securities sold under repurchase agreements and other short-term borrowings 25,102,000 28,950,000 Federal Home Loan Bank advances 2,045,000 2,045,000 Accrued interest payable 1,453,000 1,379,000 Accrued taxes, expenses, and other liabilities 2,969,000 2,203,000 -------------- -------------- Total liabilities 444,141,000 445,232,000 Shareholders' equity: Common stock $1.00 par: Shares authorized 5,000,000 Shares issued 4,222,475 and 4,222,375, respectively and Shares outstanding 4,122,475 and 4,124,379 respectively 4,222,000 4,222,000 Additional capital 22,600,000 22,599,000 Retained earnings 21,791,000 20,937,000 Accumulated other comprehensive income 69,000 70,000 Treasury stock at cost, 100,000 and 97,996 shares, respectively (2,900,000) (2,843,000) -------------- -------------- Total shareholders' equity 45,787,000 44,985,000 -------------- -------------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $489,928,000 $490,217,000 ============== ============== Note 1: The consolidated balance sheet at December 31, 1997 has been taken from the audited Financial Statements and condensed. See notes to unaudited condensed consolidated financial statements. 5 FORM 10-Q LNB BANCORP, INC. Unaudited PART I - FINANCIAL INFORMATION ITEM 1 - FINANCIAL STATEMENTS THREE MONTHS ENDED CONDENSED CONSOLIDATED STATEMENTS MARCH 31, OF INCOME ------------------------------ 1998 1997 INTEREST INCOME: ------------------------------ Interest and fees on loans: Taxable $ 7,284,000 $ 6,642,000 Tax-exempt 11,000 13,000 Interest and dividends on securities: U.S. Treasury securities 1,720,000 1,556,000 U.S. Government agencies and corporations States and political subdivisions Other debt and equity securities 51,000 35,000 Interest on Federal funds sold and other interest bearing instruments 60,000 10,000 ------------- ------------- TOTAL INTEREST INCOME 9,126,000 8,256,000 ------------- ------------- INTEREST EXPENSE: Interest on deposits: Time certificates of $100,000 and over 557,000 558,000 Other deposits 2,582,000 2,172,000 Interest on securities sold under repurchase agreements and other short- term borrowings 264,000 252,000 Interest on Federal Home Loan Bank advances 32,000 17,000 ------------- ------------- TOTAL INTEREST EXPENSE 3,435,000 2,999,000 ------------- ------------- NET INTEREST INCOME 5,691,000 5,257,000 Provision for possible loan losses 187,000 125,000 NET INTEREST INCOME AFTER PROVISION ------------- ------------- FOR POSSIBLE LOAN LOSSES 5,504,000 5,132,000 ------------- ------------- OTHER INCOME: Trust and Investment Management 437,000 278,000 division income Service charges on deposit accounts 639,000 545,000 Other service charges, exchanges and fees 537,000 460,000 Other operating income 9,000 10,000 ------------- ------------- TOTAL OTHER INCOME 1,622,000 1,293,000 STATEMENT CONTINUED ON NEXT PAGE 6 STATEMENT CONTINUED FROM PREVIOUS PAGE OTHER EXPENSES: Salaries and employee benefits 2,155,000 2,008,000 Net occupancy expense of premises 352,000 329,000 Furniture and equipment expenses 578,000 561,000 Amortization of intangible assets 112,000 -0- Supplies and postage 255,000 247,000 FDIC deposit insurance premium 13,000 11,000 Ohio Franchise Tax 135,000 129,000 Other operating expenses 982,000 828,000 ------------- ------------- TOTAL OTHER EXPENSES 4,582,000 4,113,000 ------------- ------------- INCOME BEFORE FEDERAL INCOME TAXES 2,544,000 2,312,000 FEDERAL INCOME TAXES Current 866,000 787,000 Deferred -0- -0- ------------- ------------- TOTAL FEDERAL INCOME TAXES 866,000 787,000 ------------- ------------- NET INCOME $1,678,000 $ 1,525,000 ============= ============= BASIC EARNINGS PER SHARE $ .41 $ .36 ======= ======= DILUTED EARNINGS PER SHARE $ .41 $ .36 ======= ======= See notes to unaudited 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 MARCH 31, OF CASH FLOWS ---------------------------- 1998 1997 CASH FLOWS FROM OPERATING ACTIVITIES: ---------------------------- Interest received $ 8,972,000 $ 7,835,000 Other income received 1,565,000 1,294,000 Interest paid (3,373,000) (2,855,000) Cash paid for salaries and employee benefits (2,037,000) (1,856,000) Net occupancy expense of premises paid (259,000) (232,000) Furniture and equipment expenses paid (192,000) (207,000) Cash paid for supplies and postage (255,000) (247,000) Cash paid for other operating expenses (795,000) (908,000) Federal income taxes paid (25,000) -0- ------------- ------------- NET CASH PROVIDED BY OPERATING ACTIVITIES 3,601,000 2,824,000 ------------- ------------- CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from maturities of investment securities 8,191,000 5,806,000 Proceeds from maturities of securities available for sale 4,175,000 -0- Proceeds from sales of securities available for sale -0- (33,000) Purchases of investment securities -0- (6,071,000) Purchase of securities available for sale (15,497,000) -0- Net decrease in credit card loans 353,000 568,000 Net (increase) decrease in long-term loans 904,000 (4,518,000) Purchases of bank premises and equipment (239,000) (620,000) Proceeds from sales of bank premises, and equipment (2,000) 1,000 ------------- ------------- NET CASH USED IN INVESTING ACTIVITIES (2,115,000) (4,867,000) ------------- ------------- STATEMENT CONTINUED ON NEXT PAGE 8 STATEMENT CONTINUED FROM PREVIOUS PAGE CASH FLOWS FROM FINANCING ACTIVITIES: Net (decrease) in demand and other on interest-bearing deposits (2,219,000) (2,859,000) Net increase in savings and passbook deposits 601,000 1,028,000 Net increase in time deposit 3,535,000 6,455,000 Net increase (decrease) in securities sold under repurchase agreements and other short-term borrowings (3,848,000) 960,000 Proceeds from Federal Home Loan Bank advances -0- -0- Proceeds from line of credit -0- -0- Cash paid on line of credit -0- -0- Purchase of Treasury Stock (57,000) -0- Proceeds from exercise of stock options 1,000 -0- Dividends paid (907,000) (662,000) ------------- ------------- NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES (2,894,000) 4,922,000 ------------- ------------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (1,408,000) 2,879,000 CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 24,407,000 18,993,000 ------------- ------------- CASH AND CASH EQUIVALENTS AT END OF QUARTER $22,999,000 $21,872,000 ============= ============= RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES: NET INCOME $1,678,000 $1,525,000 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 479,000 451,000 Amortization of deferred loan fees and costs, net 76,000 85,000 Provision for possible loan losses 187,000 125,000 Amortization of Intangible Assets 112,000 -0- (Increase)in accrued interest receivable (160,000) (411,000) (Increase) decrease in other assets 277,000 (104,000) Increase in accrued interest payable 62,000 144,000 Increase (decrease) in accrued taxes, expenses and other liabilities 861,000 770,000 Others, net 9,000 239,000 -------------- -------------- NET CASH PROVIDED BY OPERATING ACTIVITIES $3,601,000 $2,824,000 ============== ============== See notes to unaudited condensed consolidated financial statements. 9 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. (the Corporation) at March 31, 1998, compared to December 31, 1997 and the results of operations for the three months ended March 31, 1998 compared to the same period in 1997. It is the intent of this discussion to provide the reader with an understanding of the unaudited 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 March 31, 1998, the unaudited condensed consolidated statements of income and the unaudited condensed consolidated statement of cash flows for the three months ended March 31, 1998 and 1997 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 operation 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, 1997 Annual Report to Shareholders. The results of operations for the period ended March 31, 1998 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 10 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 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. 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. Under Generally Accepted Accounting Principles, 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. RECLASSIFICATIONS Certain 1997 amounts have been reclassified to conform to 1998 presentation. 11 2. EARNINGS PER SHARE 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 1997. In accordance with SFAS No. 128, Earnings per share is calculated as follows: For the Quarter ended March 31, 1998 Income Shares Per-Share (Numerator) (Denominator) Amount Net Income $1,678,000 Basic EPS Income available to common stockholders $1,678,000 4,123,820 $ .41 ===== Effect of Dilutive Securities Incentive Stock Options -0- 10,148 ---------- --------- Dilutive EPS Income available to common stockholders + assumed conversions $1,678,000 4,133,968 $ .41 ========== ========= ===== For the Quarter ended March 31, 1997 Income Shares Per-Share (Numerator) (Denominator) Amount Net Income $1,525,000 Basic EPS Income available to common stockholders $1,525,000 4,221,304 $ .36 ===== Effect of Dilutive Securities Incentive Stock Options -0- 10,918 ---------- --------- Dilutive EPS Income available to common stockholders + assumed conversions $1,525,000 4,232,222 $ .36 ========== ========= ===== 12 3. COMPREHENSIVE INCOME The Corporation adopted SFAS No. 130 "Reporting Comprehensive Income" on January 1, 1998. This statement requires companies to report all items that are recognized as components of comprehensive income under accounting standards. As required, the Corporation displays the accumulated balance of other comprehensive income separately from retained earnings and additional paid-in capital. The Corporation's comprehensive income for the quarters ended March 31, 1998 and 1997 are as follows: For the quarters ended March 31, 1998 1997 -------------------------------- Net income $1,678,000 $1,525,000 Other comprehensive income: Unrealized (loss) on securities available for sale, net of tax of $-0- and $17,000 (1,000) (33,000) ----------- ------------ Comprehensive Income $1,677,000 $1,492,000 4. DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION The Corporation adopted SFAS No. 131 "Disclosures about segments of an Enterprise and Related Information" on January 1, 1998. This statement provides accounting and reporting standards for the way public business are to report information about operating segments in annual financial statements and requires 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 has determined that adoption of SFAS No. 131 will have no increase in reporting and disclosure requirements. 5. PENSION AND OTHER POSTRETIREMENT BENEFITS The Corporation adopted SFAS No. 132 "Employers' Disclosures about Pensions and Other Postretirement Benefits" on January 1, 1998. This statement revises employers' disclosures about pension and other postretirement benefit plans. It does not change the measurement or recognition of those plans. It standardizes the disclosure requirements for pensions and other postretirement benefits to the extent practicable, requires additional information on changes in the benefit obligations and fair values of plan assets that will facilitate financial analysis, and eliminates certain disclosures that are no longer as useful as the were when FASB Statements No. 87, No. 88 and No. 106 were issued. Corporate Management has determined that the adoption of SFAS No. 132 will change year end reporting requirements for pension and postretirement benefits. 13 6. DIVIDEND REINVESTMENT AND CASH STOCK PURCHASE PLAN The Board of Directors adopted a dividend reinvestment and cash stock purchase plan on November 18, 1997. Under the plan, the first dividend reinvestment and cash stock purchase date was April 1, 1998. The plan allows shareholders to elect to use their quarterly cash dividends to purchase shares of LNB Bancorp, Inc. common stock. Additionally, cash can be contributed directly to the plan for the purchase of shares of common stock with a quarterly limit of $5,000. The dividend reinvestment plan authorized the sale of 150,000 shares of the Corporation's authorized but previously unissued common shares to shareholders who choose to invest all or a portion of their cash dividends plus additional cash payments. No shares were issued by the Corporation pursuant to the plan in the first quarter of 1998. In the first quarter of 1998, stock was purchased in the open market at the then current market price. 14 PART I - FINANCIAL INFORMATION ITEM 2 - MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION & RESULTS OF OPERATION FINANCIAL CONDITION Total assets of the Corporation decreased $289,000 during the first quarter, to $489,928,000. Federal funds sold and other interest-bearing investments increased by $2,748,000 during the first quarter of 1998. The total securities portfolio increased $3,150,000 ending the first quarter at $118,524,000. At March 31, 1998 unrealized gains (losses)in the held to maturity securities portfolio were approximately $914,000 and (25,000), respectively. The decrease in the market value of the security portfolio is due to market interest rate fluctuations and not due to the deterioration of the credit worthiness of debt issuers. The level of nonperforming assets increased $563,000 during the first quarter 1998. The first quarter increase is the result of a net increase in nonaccrual loans plus an decrease in other real estate owned in the amount of $90,000. The increase in nonaccrual loans is due to decreases in nonaccrual principal balances of $12,000 which have been paid off, charged-off or brought current and increases in nonaccrual principal balances of $515,000. The increase in nonaccrual loans in the first quarter of 1998 was due primarily to six commercial loan customer and one mortgage loan customer. The level of nonperforming assets 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 03/31/98 12/31/97 09/30/97 06/30/97 -------- -------- -------- -------- Nonperforming Assets: Nonaccrual $1,078 $ 425 $ 882 $ 376 Restructured 0 0 0 0 Other Real Estate Owned 0 90 0 0 ------ ------ ------ ------ Total Nonperforming Assets $1,078 $ 515 $ 882 $ 376 ====== ====== ====== ====== Reserve for possible loan losses to nonperforming assets 404.4% 809.3% 488.1% 1,127.1% ====== ====== ====== ====== Accruing loans past due 90 days $ 645 $ 461 $ 919 $ 271 ====== ====== ====== ====== Net loans decreased $1,511,000 during the first quarter to $325,352,000 at March 31, 1998. This decrease was a result of a softening in housing market plus increased competition for mortgage loans as well as a reduction in consumer loans due to low seasonal demand for automobile loans during the winter months. The reserve for possible loan losses ended the quarter at $4,360,000 supported by a provision for loan losses of $187,000, recoveries of $47,000 and loan charge-offs of $42,000. The reserve for possible loan losses as a percentage of ending loans was 1.26% at December 31, 1997 and 1.32% at March 31, 1998. Corporate Management believes that the reserve for possible loan losses as a percentage of 15 ending loans at March 31, 1998 remains at an appropriate level as the ratio of the reserve for possible loan losses to nonperforming assets remains strong at 404.4% as of March 31, 1998. Corporate Management believes that the current level of the reserve for possible loan losses is adequate based upon quantitative analysis of identified risks and analysis of historical trends. Potential problem loans are those loans identified on management's watch list in which management has some doubt as to the borrower's ability to comply with the present repayment terms and loans which management is actively monitoring due to changes in the borrower's financial condition. At March 31, 1998, potential problem loans totaled $7,459,000, a decrease of $1,305,000 from the December 31, 1997 balance. The decrease in potential problem loans during the first quarter of 1998 is primarily due to a reduction in the gross amount of potential problem loans plus transfers of potential problem loans to the 90 day past due classification and nonaccrual status. The Corporation's credit policies are reviewed and modified on an ongoing basis in order to remain suitable for the management of credit risk within the loan portfolio as conditions change. At March 31, 1998 there are no significant concentrations of credit in the loan portfolio. The Corporation had outstanding loan and credit commitments to make loans totaling $76,927,000 and $63,001,000 at March 31, 1998 and 1997, respectively. The increase in outstanding loan commitments results in part from an increase in the unused portion of home equity lines of credits from loans acquired from KeyBank National Association on September 15, 1997, net of a decrease in loan demand in the first quarter of 1998. Mortgage and commercial construction loan demand is expected to increase in the second quarter of 1998 as seasonal weather conditions improve and the construction season begins. Consumer loan demand is expected to increase in the second quarter for home improvement and automobile loans as weather conditions improve. Total deposits increased $1,917,000 during the first quarter to $412,572,000. Noninterest-bearing deposits decreased to $66,346,000, at March 31, 1998 for a decrease of $2,219,000, while interest-bearing deposits increased to $346,226,000 for an increase of $4,136,000. Federal funds purchased and securities sold under agreements to repurchase decreased $3,848,000 during the first quarter of 1998. Due to the volatility of customer repurchase agreements, most funds generated by repurchase activity enter the Corporation's earning assets as short-term investments. 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 investment 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. The Corporation continues to maintain a relatively high liquid position in order to take advantage of interest rate fluctuations. As of March 31, 1998 short-term security investments with maturities of one year or less 16 totaled $37,790,000 which represented 31.9% of total securities. Adding cash and due from banks of $20,117,000 and Federal Funds sold of $2,882,000, total liquid assets represented 12.4% of total assets. CAPITAL RESOURCES LNB Bancorp, Inc. continues to maintain a strong capital position. Total shareholders' equity increased to $45,787,000, at March 31, 1998. The increase resulted primarily from $1,678,000 of net income generated from the first quarter of operations less a cash dividend payable to shareholders of $824,000. The slight decrease in interest rates experienced in the first quarter of 1998 has caused a decrease in the overall market value of available for sale securities which resulted in a reduction of shareholders' equity by $1,000 for the quarter ended March 31, 1998. During the first quarter of 1998, LNB Bancorp, Inc. reduced its stockholders' equity by purchasing 2,004 shares of its common stock at a cost of $57,000. As of March 31, 1998, the LNB Bancorp, Inc. held 100,000 shares of common stock as treasury stock. LNB Bancorp, Inc. purchased 2,004 of these shares in the first quarter of 1998 and 97,996 shares in 1997 for a total cost of $2,900,000. 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 Corporation's capital and leverage ratios as of March 31, 1998 and 1997 follow. MARCH 31, --------------------- 1998 1997 ------ ------- Tier I capital ratio 13.60% 17.02% Required Tier I capital ratio 4.00% 4.00% Total capital ratio 14.83% 18.28% Required total capital ratio 8.00% 8.00% Leverage ratio 8.32% 10.24% 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. RESULTS OF OPERATIONS Interest and fees on loans increased $640,000 when compared to the first quarter of 1997. This was the result of the impact of increases in the loan portfolio of $24,000,000 offset by decreases in rates. Interest and dividends on securities was $1,773,000 for the first quarter of 1998 for a increase of $180,000 over the same period in 1997. The first quarter increase in Interest and Dividends on Securities results from an increase in the securities portfolio of over $13,000,000. Interest and dividends on securities represented 19.4% of total interest income at March 31, 1998 compared to 19.3% at March 31, 1997. Interest on Federal funds sold and 17 other interest bearing instruments was $60,000 at March 31, 1998 compared to $10,000 at March 31, 1997. The increase resulted from higher average balances invested in this form of financial instrument along with lower interest rates. Total interest expense increased by $436,000 when compared to the first quarter of 1997. The purchase of three branch offices from KeyBank National Association on September 15, 1997 increases the volume of Checkinvest accounts and statement savings and certificates of deposit, contributing to the increase in total interest expense. Also, total interest expense for the first quarter of 1998 was impacted by increases in interest rates paid on certificate of deposit accounts when compared to the first quarter of 1997. Total other income increased by $329,000 when compared to the first quarter of 1997. This increase resulted from increases in trust income of $159,000, increases in service charges of $94,000 and increases in other service charges, exchanges and fees of $77,000. The increase in other service charges, exchanges and fees is due, in part, to an increase in ATM fee income. The Corporation continuously monitors noninterest expenses for greater profitability. The entire staff is geared to improving productivity at all levels. Noninterest expense for the quarter ended March 31, 1998 was $4,582,000, 11.4% more than the first quarter of 1997. This increase was due primarily to certain one-time consulting expenses incurred in the first quarter of 1998, increases in credit card and merchant expenses plus the operating expenses of two additional branch offices acquired from KeyBank and the related intangible amortization expenses. The effective tax rate remained at 34.0% during the first quarter of 1997 and 1998. Net income was $1,678,000 and $1,525,000 for the quarters ended March 31, 1998 and 1997, respectively. Net income per share after adjusting for the two percent stock dividend in 1997 was $.41 and $.36 for the quarters ended March 31, 1998 and 1997, respectively. 4. YEAR 2000 ISSUE Several of the Corporation's and Bank's regulators including the Securities and Exchange Commission, Federal Reserve Board, and the Office of the Comptroller of Currency have issued guidance relative to the management and disclosures for year 2000 issues. A discussion of the year 2000 issue as it relates to the Corporation, the Bank and their customers, suppliers and vendors follows. The Corporation has formed a strategic task force to perform a comprehensive review of its computer systems to identify the systems that could be affected by the "Year 2000" issue and has developed an implementation plan to resolve the issue. The Year 2000 problem is the result of computer programs being written using two digits rather than four to define the applicable year. Any of the Corporation's programs that have time sensitive software may recognize a date using "00" as the year 1900 rather than the year 2000. The Corporation has notified its commercial customers of the year 2000 issue and is in contact with its' suppliers and third party vendors. The Corporation expects to incur internal staff costs, consulting, and other expenses to identify, correct or reprogram, and test the systems 18 for the year 2000 compliance issue. The Corporation estimates that compliance costs for the year 2000 issue from 1998 through 1999 will not exceed $100,000. The Corporation continues to evaluate appropriate courses of corrective action, including replacement of certain systems whose associated costs would be recorded as assets and amortized. Accordingly, the Corporation does not expect that year 2000 compliance costs to be expensed over the next two years to have a material effect on the financial position, liquidity or results of operations. To date, the Corporation is in the process of obtaining formal notifications from all of its major vendors and suppliers that their systems are year 2000 compliant. During 1998, the Corporation will develop strategies and plans to test and validate that these systems are year 2000 compliant. The Corporation plans to complete testing of internal mission critical systems by December 31, 1998. The Corporation provides quarterly updates to the Board of Directors regarding the status of the year 2000 issue. The project completion date for the year 2000 issue is slated for June, 1999. The "Year 2000 Computer Problem" creates risk for the Corporation from unforeseen problems in its own computer systems and from third parties with whom the Corporation deals on financial transactions. Such failures of the Corporation, and/or third parties' computer systems could have a material impact on the Corporation's ability to conduct its business, and especially to process and account for the transfer of funds electronically. 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. 19 PART I - OTHER INFORMATION ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK There has been no significant change in the interest rate risk or market risk of LNB Bancorp, Inc. since December 31, 1997. 20 PART II - OTHER INFORMATION ITEM 1 - Legal Proceedings None ITEM 2 - Changes in Securities See item 4, (c), (1) ITEM 3 - Defaults Upon Senior Securities None ITEM 4 - Submission of Matters to a Vote of Security Holders (a) LNB Bancorp Inc.'s 1998 Annual Meeting of Shareholders was held on April 21, 1998. (b) Proxies were solicited by LNB Bancorp Inc.`s management pursuant to Regulation 14 under the Securities Exchange Act of 1934, there was no solicitation in opposition to management's nominees for election to the board of directors as listed in the proxy statement, and all such nominees were elected to the classes in the proxy statement pursuant to the vote of the shareholders. (c) Other matters voted upon - complete descriptions of the matters voted upon is contained in Item 6, (1) Election of directors to serve as Class II Directors until April 17, 2001 Annual Meeting of Shareholders as follows: ABSTAIN/ BROKER FOR AGAINST WITHHELD NON-VOTES Daniel P. Batista 3,518,689 -0- 34,362 569,424 David M. Koethe 3,521,274 -0- 31,777 569,424 Stanley G. Pijor 3,524,594 -0- 28,457 569,424 Eugene M. Sofranko 3,512,390 -0- 40,661 569,424 Leo Weingarten 3,518,056 -0- 34,995 569,424 The total number of shares of LNB Bancorp, Inc. Common Stock, $1.00 par value, outstanding as of March 9, 1998, the record date of the Annual Meeting, was 4,122,475. 21 ITEM 5 - Other Information (a) The Notice of the Annual Meeting to Shareholders and Proxy Statement (dated March 23, 1998) was previously filed as Exhibit 22 to the Bancorp's 1997 Annual Report on Form 10-K. ITEM 6 - Exhibits and Reports on Form 8-K (a) Exhibit (11) - Computation of Shares Used for Earnings Per Share Calculations. (b) Exhibit (13) - First Quarter Report to Shareholders of LNB Bancorp, Inc. - March 31, 1998 - EDGAR Version. (c) Exhibit (27) - Financial Data Schedule (d) Reports on Form 8-K There were no reports on Form 8-K filed for the three months ended March 31, 1998. Also, see the Exhibit Index which is found on the next page of this Form. SIGNATURE 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) /s/ Gregory D. Friedman Date: May 13, 1998 -------------------------- Gregory D. Friedman, Senior Vice President, Chief Operating Officer and Chief Financial Officer /s/ Mitchell J. Fallis Date: May 13, 1998 -------------------------- Mitchell J. Fallis, Vice President and Chief Accounting Officer 22 LNB Bancorp, Inc. Form 10-Q Exhibit Index Pursuant to Item 601 (a) of Regulation S-K S-K Reference Exhibit Number (11) Computation of Shares Used for Earnings Per Share Calculations. Footnote 2 Earnings Per Share on Page 11 of this Form 10-Q is incorporated by Reference. (12) First Quarter Report to Shareholders of LNB Bancorp, Inc. - March 31, 1998 - EDGAR Version (27) Financial Data Schedule 23 LNB Bancorp, Inc. Exhibit to Form 10 - Q (For the three months ended March 31, 1998) S - K Reference Number (13) First Quarter Report to Shareholders of LNB Bancorp, Inc. - March 31, 1998 EDGAR Version DESCRIPTION: Three sided pamphlet: Outside cover first quarter 1998 LNB Bancorp, Inc., "Familiar Faces...Friendly places" among 15 assorted pictures. Inside contains: Message to shareholders, Unaudited EDGAR version Consolidated Balance Sheets for period ending March 31, 1998 and March 31, 1997, respectively, unaudited EDGAR version Consolidated Statements of Income for the Three Months ended March 31, 1998 and March 31, 1997, respectively, a list of Directors and Officers of LNB Bancorp, Inc., and the list of Banking Offices & ATMs. 24 Outside cover description: Green and white background, green and beige lettering. Front Cover: First Quarter 1998 LNB BANCORP, INC. "Friendly faces...friendly places" among 15 assorted pictures. 25 Inside of front cover: Message to shareholders It's a pleasure, once again, to report on the progress of LNB Bancorp, Inc., and its subsidiary, The Lorain National Bank, after the first quarter of 1998. We are pleased to announce that earnings have increased 10 percent for the first 90 days of the year, compared to the same period one year ago. Earnings for the first quarter of 1998 reached $1,678,00, up from $1,525,000 during the first quarter of 1997. Basic earnings per share for the first quarter of 1998 reached $0.41 compared to $0.36 for the first quarter of 1997. Earnings for the first quarter ended March 31, 1998 were higher than a year ago because of higher net interest income and other non-interest income, offset in part by higher operating expenses. Cash dividend declared to shareholders increased 27.5 percent over the comparative period in 1997. Total shareholders' equity also increased to $45.8 million at March 31, 1998 and total shareholders' equity, as a percentage of total assets, reached 9.3 percent. Total assets rose 10 percent to $489.9 million as of March 31, 1998, as compared to a year ago. We are pleased to report that our Dividend Reinvestment Plan continues to grow. More than 35 percent of our shareholders are now participating in the plan. The planning and construction of our new branch office in LaGrange is on schedule for opening in the third quarter of this year. We look forward to expanding banking service to the southern part of Lorain County. In the graphs presented below, we are please to show increases in total assets and total shareholders' equity at March 31 from 1994 through 1998 and basic earnings per share for the first quarter, from 1994 through 1998. We thank you for your continued support and look forward to addressing you after the completion of our next quarter of operations. Sincerely, James F. Kidd Stanley G. Pijor President and Chairman of the Board Chief Executive Officer TOTAL ASSETS millions of dollars (A Total Assets graph follows in printed version with assets on the x-axis and years 1994 through 1998 on the y-axis. The graph is a vertical bar graph. The co-ordinates, by year, which are presented in the table below are plotted on the previously described grid.) TOTAL SHAREHOLDERS' EQUITY millions of dollars (A Total Shareholders' Equity graph follows in printed version with shareholder's equity on the x-axis and years 1994 through 1998 on the y-axis. The graph is a vertical bar graph. The co-ordinates, by year, which are presented in the table below are plotted on the previously described grid.) BASIC EARNINGS PER SHARE dollars (A Basic Earnings Per Share graph follows in printed version with earnings per share on the x-axis and years 1994 through 1998 on the y-axis. The graph is a vertical bar graph. The co-ordinates, by year, which are 26 presented in the table below are plotted on the previously described grid.) Total Shareholders' Basic Earnings Total Assets Equity Per Share Year Millions of Dollars Millions of Dollars Dollars 1998 $489.9 $45.8 $0.41 1997 $445.5 $45.0 $0.36 1996 $420.5 $41.5 $0.31 1995 $408.1 $38.3 $0.26 1994 $385.2 $35.6 $0.24 *Adjusted for stock dividends and splits 27 Consolidated Balance Sheets March 31 -------------------------- 1998 1997 ------------ ------------ ASSETS: Cash and Due from Banks $ 20,117,000 $ 19,369,000 Federal Funds Sold and 2,882,000 2,505,000 Other Interest Bearing Instruments Securities Available for Sale 30,662,000 16,077,000 Investment Securities 87,862,000 89,158,000 Loans 329,712,000 305,786,000 Reserve for Possible Loan Losses (4,360,000) (4,089,000) ----------------------------------------------------------------- NET LOANS 325,352,000 301,697,000 ----------------------------------------------------------------- Premises, Equipment and Intangible Assets (net) 16,221,000 10,726,000 Accrued Interest Receivable and Other Assets 6,832,000 5,916,000 ----------------------------------------------------------------- TOTAL ASSETS $489,928,000 $445,448,000 ----------------------------------------------------------------- LIABILITIES AND STOCKHOLDERS' EQUITY: Non-Interest Bearing Deposits $ 66,346,000 $ 60,943,000 Interest Bearing Deposits 346,226,000 310,061,000 ----------------------------------------------------------------- TOTAL DEPOSITS 412,572,000 371,004,000 ----------------------------------------------------------------- Securities Sold under Repurchase Agreements and Other Short- term Borrowings 25,102,000 24,346,000 Federal Home Loan Bank Advances 2,045,000 1,095,000 Accrued Taxes, Expenses and Other Liabilities 4,422,000 3,974,000 ----------------------------------------------------------------- TOTAL LIABILITIES 444,141,000 400,419,000 ----------------------------------------------------------------- Common Stock 4,222,000 4,138,000 Additional Capital 22,600,000 20,178,000 Retained Earnings 21,796,000 20,737,000 Net Unrealized Security Gains (Losses) 69,000 (24,000) Treasury Stock at Cost (2,900,000) -0- ----------------------------------------------------------------- TOTAL SHAREHOLDERS' EQUITY 45,787,000 45,029,000 ----------------------------------------------------------------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $489,928,000 $445,448,000 ----------------------------------------------------------------- (LOGO) LNB Bancorp, Inc. and its subsidiary Lorain National Bank 28 Consolidated Statements of Income Three Months Ended March 31 ------------------------ 1998 1997 ------------ ----------- INTEREST INCOME: Interest and Fees on Loans $7,295,000 $6,655,000 Interest and Dividends on Securities: 1,773,000 1,593,000 Interest on Federal Funds Sold 58,000 8,000 ---------------------------------------------------------------- TOTAL INTEREST INCOME 9,126,000 8,256,000 ---------------------------------------------------------------- INTEREST EXPENSE: Interest on Deposits 3,139,000 2,730,000 Interest on Securities Sold under Repurchase Agreements and Other Short-term Borrowings 264,000 252,000 Interest on Federal Home Loan Bank Advances 32,000 17,000 ---------------------------------------------------------------- TOTAL INTEREST EXPENSE 3,435,000 2,999,000 ---------------------------------------------------------------- NET INTEREST INCOME 5,691,000 5,257,000 Provision for Loan Losses 187,000 125,000 ---------------------------------------------------------------- NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 5,504,000 5,132,000 ---------------------------------------------------------------- OTHER INCOME: Trust Department Income 437,000 278,000 Fees and Service Charges 1,176,000 1,005,000 Gains from Sales of Loans and Securities -0- -0- Other Operating Income 9,000 10,000 ---------------------------------------------------------------- TOTAL OTHER INCOME 1,622,000 1,293,000 ---------------------------------------------------------------- OTHER EXPENSES: Salaries and Employee Benefits 2,155,000 2,008,000 Net Occupancy Expense of Premises 352,000 329,000 Furniture and Equipment Expenses 578,000 561,000 Supplies and Postage 255,000 247,000 Ohio Franchise Tax 135,000 129,000 Other Operating Expenses 1,107,000 839,000 ---------------------------------------------------------------- TOTAL OTHER EXPENSES 4,582,000 4,113,000 ---------------------------------------------------------------- INCOME BEFORE FEDERAL INCOME TAXES 2,544,000 2,312,000 Federal Income Taxes 866,000 787,000 ---------------------------------------------------------------- NET INCOME $1,678,000 $1,525,000 ---------------------------------------------------------------- BASIC EARNINGS PER SHARE $ .41 $ .36 DILUTED EARNINGS PER SHARE $ .41 $ .36 ---------------------------------------------------------------- DIVIDENDS DECLARED PER SHARE $ .20 $ .16 ---------------------------------------------------------------- 29 Inside cover Three column format Directors and Officers of LNB Bancorp, Inc. Directors Stanley G. Pijor Benjamin G. Norton Chairman of the Board Employee and Community LNB Bancorp, Inc. and Relations Manager Lorain National Bank RELTEC Corporation James L. Bardoner Jeffrey F. Riddell Retired, Former President President Dorn Industries, Inc. Consumers Builders Supply Co. President and Daniel P. Batista Chief Executive Officer, Attorney/Partner Consumeracq, Inc. Cook & Batista Co., L.P.A. Thomas P. Ryan Robert M. Campana Executive Vice President Managing Director and Secretary/Treasurer P.C. Campana Inc. LNB Bancorp, Inc. Executive Vice President Terry D. Goode and Secretary Vice President Lorain National Bank Lorain County Title Company T.L. Smith, M.D. Wellsley O. Gray Retired Physician Retired Eugene M. Sofranko James F. Kidd President and President and Chief Executive Officer Chief Executive Officer Lorain Glass Company, Inc. LNB Bancorp, Inc. and Lorain National Bank Paul T. Stack Retired David M. Koethe Chairman of the Board Leo Weingarten The Lorain Printing Company Retired Directors Emeritus of Lorain National Bank Don A. Sanborn Retired 30 Officers Stanley G. Pijor Chairman of the Board LNB Bancorp, Inc. and Lorain National Bank James F. Kidd President and Chief Executive Officer Thomas P. Ryan Executive Vice President and Secretary/Treasurer Sandra L. Dubell Senior Vice President and Chief Lending Officer Gregory D. Friedman Senior Vice President, Chief Operating Officer and Chief Financial Officer Michael D. Ireland Senior Vice President Emma N. Mason Senior Vice President James H. Weber Senior Vice President Mitchell J. Fallis Vice President and Chief Accounting Officer Photo credit We'd like to thank the Lorain County Visitors Bureau and Terry Jonasson for the use of their photos in this report. 31 Back Cover: White background with black lettering Four column format Banking Offices and ATMS ATM service available wherever you see this symbol ** Lorain banking officers Avon Lake banking office Main Office **Avon Lake Office 457 Broadway 240 Miller Road Lorain, Ohio 44052 Avon Lake, Ohio 44012 244-7185 933-2186 **Sixth Street Drive-In Office Elyria banking offices 200 Sixth Street **Second Street Office Lorain, Ohio 44052 221 Second Street 244-7242 Elyria, Ohio 44035 323-4621 **Kansas Avenue Office 1604 Kansas Avenue **Cleveland Street Office Lorain, Ohio 44052 801 Cleveland Street 288-9151 Elyria, Ohio 44035 365-8397 **Oberlin Avenue Office 3660 Oberlin Avenue **Midway Mall Office Lorain, Ohio 44053 6395 Midway Mall Blvd. 282-9196 Elyria, Ohio 44035 324-6530 **Cooper-Foster Park Road Office Oberlin banking office 1920 Cooper-Foster Park Rd **Oberlin Office Lorain, Ohio 44053 40 E College Street 282-1252 Oberlin, Ohio 44074 775-1361 **Pearl Avenue Office 2850 Pearl Avenue Kendal at Oberlin Office Lorain, Ohio 44055 600 Kendal Drive 277-1103 Oberlin, Ohio 44074 774-5400 **Lake Avenue Office 42935 N. Ridge Road Olmsted Township Elyria Township, Ohio 44035 banking office 233-7196 **Olmsted Township Office 27095 Bagley Road **West Park Drive Office Olmsted Township, Ohio 44138 2130 West Park Drive 235-4600 Lorain, Ohio 44053 988-3131 The Renaissance Office 26376 John Road Amherst banking office Olmsted Township, Ohio 44138 **Amherst Office 427-0041 1175 Cleveland Avenue Amherst, Ohio 44001 Vermilion banking office 988-4423 **Vermilion Office 4455 E. Liberty Avenue Vermilion, Ohio 44089 967-3124 32 Westlake banking offices Community-based automated **Crossings of Westlake, Ohio teller machine locations 30210 Detroit Road **Captain Larry's Marathon Westlake, Ohio 44145 1317 State Route 60 892-9696 Vermilion, Ohio Westlake Village Office **Convenient Food Mart 28550 Westlake Village Drive 5375 West Erie Avenue Westlake, Ohio 44145 Lorain, Ohio 808-0229 **Gateway Plaza Other offices 3451 Colorado Avenue Executive Offices Lorain, Ohio 457 Broadway Lorain, Ohio 44052 **Lakeland Medical Center 244-7123 3700 Kolbe Road Lorain, Ohio Administration 457 Broadway **Lorain County Lorain, Ohio 44052 Community College 1005 N. Abbe Road Operations Elyria, Ohio 2130 West Park Drive Lorain, Ohio 44053 **Lorain Plaza 989-3315 Shopping Center 1147 Meister Road Human Resources Lorain, Ohio 2130 West Park Drive Lorain, Ohio 44053 **Lowe's Home 989-3139 Improvement Warehouse 620 Midway Boulevard Marketing Elyria, Ohio 457 Broadway Lorain, Ohio 44052 **Midway Mall Food Court 244-7332 3343 Midway Mall Blvd. Elyria, Ohio Purchasing 2150 West Park Drive Lorain, Ohio 44053 989-3260 All other departments & information not listed Lorain 244-6000 1-800-860-1007 Elyria/Cleveland 236-5047 Logos for FDIC Insured, Federal Home Loan Bank System, Equal Housing Lender, and LNB Bancorp, Inc. 33 LNB Bancorp, Inc. Exhibit to Form 10 - Q (For the three months ended March 31, 1998) S - K Reference Number (27) Financial Data Schedule EX-27 2 WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
9 0000737210 LNB BANCORP, INC. 1,000 U.S. 3-MOS DEC-31-1998 JAN-01-1998 MAR-31-1998 1 20,117 482 2,400 0 30,662 87,862 88,751 329,712 (4,360) 489,928 412,572 25,102 4,422 2,045 0 0 4,222 41,565 489,928 7,295 1,771 60 9,126 3,139 3,435 5,691 187 0 4,582 2,544 1,678 0 0 1,678 .41 .41 4.97 1,078 645 0 7,459 4,168 42 47 4,360 3,757 0 403
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