-----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, MDzTyAnPxQ9AbNKocK5ZW2lkMXcIM0K2RljCyL1oFcgh6e3vDB9cRynnH6/JkHHR HND+9jyvVSC1I98ly6oCIg== 0000737210-99-000005.txt : 19990517 0000737210-99-000005.hdr.sgml : 19990517 ACCESSION NUMBER: 0000737210-99-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990514 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: 99621655 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, 1999 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 27, 1999: 4,122,675 shares Class of Common Stock: $1.00 par value 2 LNB Bancorp, Inc. Quarterly Report on From 10-Q Quarter Ended March 31, 1999 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 Statements 9 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations 13 Item 3 - Quantitative and Qualitative Disclosures about Market Risk 19 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 1999 1998 ------------- -------------- (Unaudited) (See Note 1) ASSETS: Cash and due from banks $ 21,721,000 $ 26,177,000 Federal funds sold and other interest- bearing instruments 2,793,000 6,624,000 Federal Home Loan Bank and Federal Reserve Bank stock, at cost 2,222,000 2,189,000 Securities: Available for sale, at fair value 76,519,000 78,128,000 Held to maturity, at cost (fair value $42,700,000 and $40,253,000, respectively) 43,523,000 38,202,000 -------------- -------------- Total securities 122,264,000 118,519,000 -------------- -------------- Loans: Portfolio loans 384,014,000 359,475,000 Loans available for sale 11,223,000 10,391,000 -------------- -------------- Total loans 395,237,000 369,866,000 Reserve for possible loan losses (3,483,000) (3,483,000) -------------- -------------- Net loans 391,754,000 366,383,000 -------------- -------------- Bank premises and equipment, net 10,150,000 10,989,000 Intangible assets 4,627,000 4,666,000 Accrued interest receivable 3,357,000 3,685,000 Other assets 3,314,000 3,303,000 Other real estate owned 633,000 1,400,000 -------------- -------------- TOTAL ASSETS $560,613,000 $541,746,000 ============== ============== STATEMENT CONTINUED ON NEXT PAGE 4 STATEMENT CONTINUED FROM PREVIOUS PAGE LIABILITIES AND STOCKHOLDERS' EQUITY: Noninterest-bearing deposits $ 80,234,000 $ 85,558,000 Interest-bearing deposits 372,612,000 358,290,000 -------------- -------------- Total deposits 452,846,000 443,848,000 -------------- -------------- Securities sold under repurchase agreements and other short-term borrowings 29,567,000 22,960,000 Federal Home Loan Bank advances 24,345,000 22,045,000 Accrued interest payable 1,540,000 1,487,000 Accrued taxes, expenses, and other liabilities 3,106,000 2,730,000 -------------- -------------- Total liabilities 511,404,000 493,070,000 -------------- -------------- Shareholders' equity: Common stock $1.00 par: Shares authorized 5,000,000 Shares issued 4,222,675 and 4,222,575, respectively and Shares outstanding 4,122,675 and 4,122,575, respectively 4,223,000 4,223,000 Additional capital 22,603,000 22,602,000 Retained earnings 25,136,000 24,210,000 Accumulated other comprehensive income 147,000 541,000 Treasury stock at cost, 100,000 shares (2,900,000) (2,900,000) -------------- -------------- Total shareholders' equity 49,209,000 48,676,000 -------------- -------------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $560,613,000 $541,746,000 ============== ============== See notes to unaudited condensed consolidated financial statements. 5 FORM 10-Q LNB BANCORP, INC. PART I - FINANCIAL INFORMATION ITEM 1 - FINANCIAL STATEMENTS THREE MONTHS ENDED CONDENSED CONSOLIDATED STATEMENTS MARCH 31, OF INCOME (UNAUDITED) ---------------------------- 1999 1998 INTEREST INCOME: ---------------------------- Interest and fees on loans: Taxable $ 7,972,000 $ 7,229,000 Tax-exempt 8,000 11,000 Interest and dividends on securities: Taxable 1,711,000 1,720,000 Tax-exempt 54,000 51,000 Interest on Federal funds sold and other interest-bearing instruments 33,000 60,000 ------------- ------------ TOTAL INTEREST INCOME 9,778,000 9,071,000 ------------- ------------- INTEREST EXPENSE: Interest on Certificates of Deposit of $100,000 and over 611,000 557,000 Interest on other deposits 2,437,000 2,582,000 Interest on securities sold under repurchase agreements and other short-term borrowings 237,000 264,000 Interest on Federal Home Loan Bank advances 290,000 32,000 ------------- ------------ TOTAL INTEREST EXPENSE 3,575,000 3,435,000 ------------- ------------ NET INTEREST INCOME 6,203,000 5,636,000 Provision for possible loan losses 200,000 187,000 NET INTEREST INCOME AFTER PROVISION ------------- ------------ FOR POSSIBLE LOAN LOSSES 6,003,000 5,449,000 ------------- ------------ OTHER INCOME: Trust division income 470,000 437,000 Service charges on deposit accounts 677,000 639,000 Other charges, fees and exchanges 592,000 537,000 Other operating income 11,000 9,000 ------------- ------------ TOTAL OTHER INCOME 1,750,000 1,622,000 STATEMENT CONTINUED ON NEXT PAGE 6 STATEMENT CONTINUED FROM PREVIOUS PAGE OTHER EXPENSES: Salaries and employee benefits 2,395,000 2,100,000 Net occupancy expense 392,000 352,000 Furniture and equipment expenses 608,000 578,000 Supplies and postage 256,000 255,000 FDIC deposit insurance premium 13,000 13,000 Ohio franchise tax 151,000 135,000 Other operating expenses 1,193,000 1,094,000 ------------- ------------ TOTAL OTHER EXPENSES 5,008,000 4,527,000 ------------- ------------ INCOME BEFORE FEDERAL INCOME TAXES 2,745,000 2,544,000 FEDERAL INCOME TAXES 912,000 866,000 ------------- ------------ NET INCOME $ 1,833,000 $ 1,678,000 ============= ============ PER SHARE DATA: BASIC EARNINGS PER SHARE $ .44 $ .41 ======= ======= DILUTED EARNINGS PER SHARE $ .44 $ .41 ======= ======= DIVIDENDS DECLARED PER SHARE $ .22 $ .20 ======= ======= See notes to unaudited condensed consolidated financial statements. 7 FORM 10-Q LNB BANCORP, INC. PART I - FINANCIAL INFORMATION ITEM 1 - FINANCIAL STATEMENTS THREE MONTHS ENDED CONDENSED CONSOLIDATED STATEMENTS MARCH 31, OF CASH FLOWS (UNAUDITED) ---------------------------- 1999 1998 CASH FLOWS FROM OPERATING ACTIVITIES: ---------------------------- Interest received $10,361,000 $ 8,972,000 Other income received 1,842,000 1,565,000 Interest paid (3,522,000) (3,373,000) Cash paid for salaries and employee benefits (1,842,000) (2,037,000) Net occupancy expense of premises paid (290,000) (259,000) Furniture and equipment expenses paid (206,000) (192,000) Cash paid for supplies and postage (256,000) (255,000) Cash paid for other operating expenses (463,000) (795,000) Federal income taxes paid -0- (25,000) ------------- ------------- NET CASH PROVIDED BY OPERATING ACTIVITIES 5,624,000 3,601,000 ------------- ------------- CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from maturities of securities available for sale 5,000,000 4,175,000 Proceeds from maturities of securities held to maturity 9,000 8,191,000 Proceeds from sales of securities available for sale -0- -0- Purchases of securities held to maturity (5,226,000) -0- Purchase of securities available for sale (4,000,000) (15,497,000) Net decrease in credit card loans 374,000 353,000 Net (increase) decrease in long-term loans (26,486,000) 904,000 Purchases of bank premises and equipment (98,000) (239,000) Proceeds from sales of bank premises, and equipment -0- (2,000) Proceeds from liquidation of OREO 767,000 -0- ------------- ------------- NET CASH USED IN INVESTING ACTIVITIES (29,660,000) (2,115,000) ------------- ------------- 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 (6,450,000) (2,219,000) Net increase (decrease) in savings and passbook deposits (3,352,000) 601,000 Net increase in time deposit 17,674,000 3,535,000 Net increase (decrease) in securities sold under repurchase agreements and other short-term borrowings 6,607,000 (3,848,000) Proceeds from Federal Home Loan Bank advances 2,300,000 -0- Purchase of Treasury Stock -0- (57,000) Proceeds from exercise of stock options 1,000 1,000 Dividends paid (1,031,000) (907,000) ------------- ------------- NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES 15,749,000 (2,894,000) ------------- ------------- NET (DECREASE) IN CASH AND CASH EQUIVALENTS (8,287,000) (1,408,000) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 32,801,000 24,407,000 ------------- ------------- CASH AND CASH EQUIVALENTS AT END OF QUARTER $24,514,000 $22,999,000 ============= ============= RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES: NET INCOME $1,833,000 $1,678,000 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 504,000 479,000 Amortization of deferred loan fees and costs, net 619,000 76,000 Provision for possible loan losses 200,000 187,000 Amortization of intangible assets 106,000 112,000 (Increase) decrease in accrued interest receivable 328,000 (160,000) Decrease in other assets 263,000 277,000 Increase in accrued interest payable 53,000 62,000 Increase in accrued taxes, expenses and other liabilities 1,626,000 861,000 Others, net 92,000 9,000 -------------- ------------- NET CASH PROVIDED BY OPERATING ACTIVITIES $5,624,000 $3,601,000 ============== ============== See notes to unaudited condensed consolidated financial statements. 9 FORM 10-Q LNB Bancorp, Inc. PART I - FINANCIAL INFORMATION ITEM 1 - FINANCIAL STATEMENTS NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES INTRODUCTION The following areas of discussion pertain to the unaudited condensed consolidated financial statements of LNB Bancorp, Inc. (The Parent Company) and its wholly-owned subsidiary, Lorain National Bank (The Bank) at March 31, 1999, compared to December 31, 1998 and the results of its operations and cash flows for the three months ended March 31, 1999 compared to the same period in 1998. The term "the Corporation" refers to LNB Bancorp, Inc. and its wholly-owned subsidiary. It is the intent of this discussion to provide the reader with a more thorough understanding of the unaudited condensed consolidated financial statements and supporting schedules, and should be read in conjunction with those unaudited 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, 1999, the unaudited condensed consolidated statements of income and the unaudited condensed consolidated statement of cash flows for the three months ended March 31, 1999 and 1998 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. The consolidated balance sheet at December 31, 1998 has been taken from the audited Financial Statements and condensed. 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, 1998 Annual Report to Shareholders. The results of operations for the period ended March 31, 1999 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 10 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 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. 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 1998 amounts have been reclassified to conform to 1999 presentation. 11 2. EARNINGS PER SHARE Earnings per share is calculated as follows: For the Quarter ended March 31, 1999 Income Shares Per-Share (Numerator) (Denominator) Amount Net Income $1,833,000 Basic EPS Income available to common stockholders $1,833,000 4,122,638 $ .44 ===== Effect of Dilutive Securities Incentive Stock Options -0- 9,298 ---------- --------- Dilutive EPS Income available to common stockholders + assumed conversions $1,833,000 4,131,936 $ .44 ========== ========= ===== 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 ========== ========= ===== 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 as a separate component of shareholders' equity. The Corporation's comprehensive income for the quarters ended March 31, 1999 and 1998 are as follows: For the quarters ended March 31, 1999 1998 -------------------------------- Net income $1,833,000 $1,678,000 Other comprehensive income: Unrealized (loss) on securities available for sale, net of tax (credit)of $(203,000) and $-0- (394,000) (1,000) ----------- ----------- Comprehensive Income $1,439,000 $1,677,000 =========== =========== 4. 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 1999. In the first quarter of 1999, stock was purchased in the open market at the then current market price. 13 PART I - FINANCIAL INFORMATION ITEM 2 - MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION & RESULTS OF OPERATIONS FINANCIAL CONDITION Total assets of the Corporation increased $18,867,000 during the first quarter, to $560,613,000. Federal funds sold and other interest-bearing investments decreased by $3,831,000 during the first quarter of 1999. The total securities portfolio increased $3,745,000 ending the first quarter at $122,264,000. At March 31, 1999 unrealized gains (losses)in the held to maturity securities portfolio were approximately $140,000 and $(963,000), 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. Net loans increased $25,371,000 during the first quarter to $391,754,000 at March 31, 1999. This increase was a result of strong loan demand in our market. Personal and Commercial loan growth was particularly robust, showing first quarter increases of $11,280,000 and $11,441,000, respectively. Mortgage loans increased by $2,650,000 during the first quarter of 1999. The reserve for possible loan losses ended the quarter at $3,483,000 supported by a provision for loan losses of $200,000, recoveries of $70,000 and loan charge-offs of $270,000. The reserve for possible loan losses as a percentage of ending loans was .88% at March 31, 1999 and .94% at December 31, 1998. Corporate management believes that the reserve for possible loan losses as a percentage of ending loans at March 31, 1999 remains at an appropriate level because the ratio of the reserve for possible loan losses to nonperforming assets improved to 235.2% as of March 31, 1999. Also, 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. The level of nonperforming assets decreased $1,006,000 during the first quarter of 1999. The decrease in nonaccrual loans is due to decreases in nonaccrual principal balances of $168,000 which have been paid off or brought current, loans charged-off in the amount of $76,000 and liquidations of nonaccrual loans of $242,000 and increases in nonaccrual principal balances of $247,000. The decrease in nonaccrual loans in the first quarter of 1999 was due primarily to four commercial loan customers and six personal loan customers. The decrease in Other Real Estate Owned in the amount of $767,000 resulted from liquidation of assets. The level of nonperforming assets remains at relatively low levels and Corporate management believes nonperforming assets are well collateralized. 14 The table below presents the level of nonperforming assets at the end of the last four calendar quarters. Amounts in thousands 03/31/99 12/31/98 09/31/98 06/30/98 -------- -------- -------- -------- Nonperforming Assets: Nonaccrual $ 848 $1,087 $2,707 $1,344 Restructured 0 0 0 0 Other Real Estate Owned 633 1,400 0 0 ------ ------ ------ ------ Total Nonperforming Assets $1,481 $2,487 $2,707 $1,344 ====== ====== ====== ====== Reserve for possible loan losses to nonperforming assets 235.2% 140.1% 172.7% 336.6% ====== ====== ====== ====== Accruing loans past due 90 days $ 479 $ 213 $ 295 $ 421 ====== ====== ====== ====== 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, 1999, potential problem loans totaled $2,922,000, a decrease of $19,000 from the December 31, 1998 balance. 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, 1999 there are no significant concentrations of credit in the loan portfolio. The Corporation had outstanding loan and credit commitments to make loans totaling $87,614,000 and $76,927,000 at March 31, 1999 and 1998, respectively. The increase in outstanding loan commitments results in part from an increase in the unused portion of home equity lines of credits from home equity loan sale programs during 1998 plus increase in loan demand during the first quarter of 1999. Mortgage and commercial construction loan demand is expected to increase in the second quarter of 1999 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 $8,998,000 during the first quarter to $452,846,000. Noninterest-bearing deposits decreased to $80,234,000, at March 31, 1999 for a decrease of $5,324,000, while interest-bearing deposits increased to $372,612,000 for an increase of $14,322,000. Federal funds purchased and securities sold under agreements to repurchase increased $6,607,000 during the first quarter of 1999. Due to the volatility of customer repurchase agreements, most funds generated by repurchase activity enter the Corporation's earning assets as short-term investments. 15 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, 1999 short-term security investments with maturities of one year or less totaled $20,692,000 which represented 16.9% of total securities. Adding cash and due from banks of $21,721,000 and Federal Funds sold and other interest-bearing instruments of $2,793,000, total liquid assets represented 8.1% 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 $37,800,000. CAPITAL RESOURCES LNB Bancorp, Inc. continues to maintain a strong capital position. Total shareholders' equity increased to $49,209,000, at March 31, 1999. The increase resulted primarily from $1,833,000 of net income generated from the first quarter of operations less a cash dividend payable to shareholders of $907,000. The slight increase in interest rates experienced in the first quarter of 1999 has caused a decrease in the overall market value of available for sale securities which resulted in a reduction of shareholders' equity by $394,000 for the quarter ended March 31, 1999. As of March 31, 1999, the LNB Bancorp, Inc. held 100,000 shares of common stock as treasury stock. LNB Bancorp, Inc. purchased 2,004 of these shares in 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, 1999 and 1998 follow together with those ratios required for the Corporation to be considered adequately capitalized. MARCH 31, --------------------- 1999 1998 ------ ------- Tier I capital ratio 11.85% 13.60% Required Tier I capital ratio 4.00% 4.00% Total capital ratio 12.79% 14.83% Required total capital ratio 8.00% 8.00% Leverage ratio 8.15% 8.32% Required leverage ratio 3.00% 3.00% 16 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 $740,000 when compared to the first quarter of 1998. This was the result of the impact of increases in the loan portfolio of $66,402,000 offset by decreases in rates. Interest and dividends on securities was $1,765,000 for the first quarter of 1999 for a decrease of $6,000 over the same period in 1998. The first quarter decrease in interest and dividends on securities results from a net increase in the securities portfolio of $3,745,000. Interest and dividends on securities represented 18.1% of total interest income at March 31, 1999 compared to 18.9% at March 31, 1998. Interest on Federal funds sold and other interest-bearing instruments was $33,000 at March 31, 1999 compared to $60,000 at March 31, 1998. The decrease resulted from lower average balances invested in this form of financial instrument along with lower interest rates. Total interest expense increased by $140,000 when compared to the first quarter of 1998. The interest expense increase was fueled by an increase in interest expense from Federal Home Loan Bank advances in the amount of $258,000, offset by decreases in deposit account interest of $91,000 and interest on securities sold under repurchase agreements of $27,000. Also, total interest expense for the first quarter of 1999 was impacted by decreases in interest rates paid on savings and certificate of deposit accounts when compared to the first quarter of 1998. Total other income increased by $128,000 when compared to the first quarter of 1998. This increase resulted from increases in trust income of $33,000, increases in service charges of $38,000 and increases in other service charges, exchanges and fees of $57,000. 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, 1999 was $5,008,000, 10.6% more than the first quarter of 1998. This increase was due primarily to increases in salary expenses, increases in equipment and vehicle expenses plus the operating expenses of one additional branch office which was placed in service in June of 1998. The effective tax rate was 33.2% and 34.0% during the first quarter of 1999 and 1998, respectively. Net income was $1,833,000 and $1,678,000 for the quarters ended March 31, 1999 and 1998, respectively. Net income per basic and diluted share was $.44 and $.41 for the quarters ended March 31, 1999 and 1998, 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. 17 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 expects to incur internal staff costs, consulting, and other expenses to identify, correct or reprogram, and test the systems for the year 2000 compliance issue. The Corporation estimates that compliance costs for the year 2000 issue from 1998 through 1999 will not exceed $250,000. 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 developed strategies and plans to test and validate that these systems are year 2000 compliant. The Corporation has completed successful upgrades, testing and validation of internal mission critical systems and they are Y2K compliant. The Corporation's customer awareness program includes providing: seminars to the business and non-profit entities, Year 2000 information on statements and maintaining a telephone number for customer inquiries. 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. Financial institutions may experience increases in problem loans and credit losses in the event that borrowers fail to properly respond to the "Year 2000" issue. Cost of funds may become greater, if customers react to publicity about this issue by withdrawing deposits. Accordingly, the Corporation has formed an internal task force to assess potential problems relating to credit, liquidity, and third party risk, and where appropriate, develop contingency plans. This task force is conducting a survey of significant credit and deposit relationships to determine their "Year 2000" readiness and to evaluate the potential of credit and liquidity risk to the Corporation. Also, the "Year 2000" issue creates risk for the Corporation from unforseen 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. Based upon testing of mission critical hardware and software, the Corporation does not anticipate that it will have to rely on a contingency plan relating to these areas. However, the Corporation is in the process of developing a contingency plan that would cover the failure of mission critical hardware and software. The contingency plan is also being developed to cover Y2K failure(s) that might result from a failure(s) outside of the control of the Corporation; such as a utility company failure. The Corporation's contingency plan for Y2K failure of its core processing systems will be to handle and process customer transactions 18 manually until the system failure is corrected. In the most reasonably likely worst case scenario where any of the corporation's mission critical systems, either internal or external, would fail, the Corporation will be operating in a manual mode. In preparation for the unlikely event of the most reasonably likely worst case scenario, the Corporation is in the process of planning and training all of its' employees and will have all customer records backed up to ensure the accuracy of our customer records. 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 Market Risk Market risk is the risk of loss in a financial instrument arising from adverse changes in market indices such as interest rates, foreign exchange rates and equity prices. The Corporation's principal market risk exposure is interest rate risk, with no material impact on earnings from changes in foreign exchange rates or equity prices. There have been no material changes in the asset and liability mix of the Corporation since December 31, 1998, which would impact the Corporation's level of market risk. Interest rate risk is the exposure to changes in market interest rates. Interest rate sensitivity is the relationship between market interest rates and net interest income due to the repricing characteristics of assets and liabilities. The Corporation monitors the interest rate sensitivity of its on - and - off balance sheet positions by examining its near-term sensitivity and its longer term gap position. Corporate management has determined no significant changes in the Corporation's interest rate risk profile since December 31, 1998. 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 1999 Annual Meeting of Shareholders was held on April 20, 1999. (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 22, 2002 Annual Meeting of Shareholders as follows: ABSTAIN/ BROKER FOR AGAINST WITHHELD NON-VOTES Terry D. Goode 3,512,406 -0- 8,377 601,892 Wellsley O. Gray 3,513,195 -0- 7,588 601,892 James R. Herrick 3,495,831 -0- 24,952 601,892 Benjamin G. Norton 3,512,960 -0- 7,823 601,892 John W. Schaeffer,MD 3,511,370 -0- 9,413 601,892 The total number of shares of LNB Bancorp, Inc. Common Stock, $1.00 par value, outstanding as of March 9, 1999, the record date of the Annual Meeting, was 4,122,675. 21 ITEM 5 - Other Information (a) The Notice of the Annual Meeting to Shareholders and Proxy Statement (dated March 22, 1999) was previously filed as Exhibit 22 to the Bancorp's 1998 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, 1999 - 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, 1999. 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, 1999 -------------------------- Gregory D. Friedman, Senior Vice President, Chief Operating Officer and Chief Financial Officer /s/ Mitchell J. Fallis Date: May 13, 1999 -------------------------- 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, 1999 - EDGAR Version (27) Financial Data Schedule 23 LNB Bancorp, Inc. Exhibit to Form 10 - Q (For the three months ended March 31, 1999) S - K Reference Number (13) First Quarter Report to Shareholders of LNB Bancorp, Inc. - March 31, 1999 EDGAR Version DESCRIPTION: Three sided pamphlet: Outside cover: green with white stripe First Quarter Report LNB Bancorp, Inc. Logo on right hand side LNB Bancorp, Inc. March 31, 1999 Inside contains: Message to shareholders, Unaudited EDGAR version Consolidated Balance Sheets for period ending March 31, 1999 and March 31, 1998, respectively, Unaudited EDGAR version Consolidated Statements of Income for the Three Months ended March 31, 1999 and March 31, 1998, respectively, LNB Welcomes ConSun Foods and LNB Bancorp, Inc. Introduces New Market Maker and the list of Banking Offices & ATMs. 24 Outside cover description: Green and white background, black and white lettering. Front Cover: First Quarter Report LNB Bancorp, Inc. Logo LNB BANCORP, INC. March 31, 1999 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 wholly owned subsidiary, The Lorain National Bank, after the first quarter of 1999. We are pleased to announce that earnings have increased 9% for the first quarter of the year, compared to the same period one year ago. Earnings for the first quarter of 1999 reached $1,833,000, up from $1,678,000 during the first quarter of 1998. Basic earnings per share for the first quarter of 1999, reached $.44 compared to $.41 for the first quarter of 1998. Earnings for the first quarter ended March 31, 1999 were higher than a year ago because of higher net interest income and other noninterest income, offset in part by higher operating expenses. Increases in net interest income were fueled by robust loan growth. Total assets rose 14% to $560.6 million, as of March 31, 1999 up $70.7 million from March 31, 1998. Net loans grew by $66.4 million from one year ago to $391.8 million at March 31, 1999, for a 20% increase. Consumer loan growth was strong accounting for 67% of total loan growth while commercial and mortgage loans accounted for 20% and 13% of total loan growth during the twelve months ended March 31, 1999. Total deposits climbed over 9% to $452.9 million, up $40.3 million from one year ago. Increases in demand, savings and certificates of deposit accounted for the deposit increase. Lorain National Bank operates 21 retail branches and 26 ATMs in nine local communities. Cash dividends declared per share for the first quarter of 1999 increased by 10% compared to the first quarter of 1998. The first quarter cash dividends per share increased by $.02 to $.22 per share, up from $.20 per share in 1998. Total shareholders' equity increased by $3.4 million to $49.2 million during the twelve months ended March 31, 1999. The relocation of our Second Street Branch Office to Ely Square is on schedule for opening during the second quarter of this year. Lorain National Bank is reconfiguring the Ely Square office floor space to accommodate the delivery of Commercial Lending, Trust & Investment Management and retail banking services. We look forward to being open six days a week in the heart of Elyria to deliver superior service to our new and existing customers. We thank you for your continued support and look forward to addressing you after the completion of our second quarter of operations. /s/ James. F. Kidd /s/ Stanley G. Pijor ------------------------ ------------------------- 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 y-axis and years 1995 through 1999 on the x-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.) 26 TOTAL SHAREHOLDERS' EQUITY millions of dollars (A Total Shareholders' Equity graph follows in printed version with shareholder's equity on the y-axis and years 1995 through 1999 on the x-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 y-axis and years 1995 through 1999 on the x-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' Basic Earnings Total Assets Equity Per Share Year millions of dollars millions of dollars dollars* 1999 $560.6 $49.2 $0.44 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 *Adjusted for stock dividends and splits 27 Consolidated Balance Sheets March 31 -------------------------- 1999 1998 ------------ ------------ ASSETS: Cash and Due from Banks $ 21,721,000 $ 20,117,000 Federal Funds Sold and Other Interest-Bearing Instruments 2,793,000 2,882,000 Federal Home Loan Bank and Federal Reserve Bank Stock, at Cost 2,222,000 2,017,000 Securities Held to Maturity, at Cost 43,523,000 85,845,000 Securities Available for Sale, at Fair Value 76,519,000 30,662,000 Loans Held For Sale 11,223,000 12,047,000 Loans 384,014,000 317,665,000 Reserve for Possible Loan Losses (3,483,000) (4,360,000) - ----------------------------------------------------------------------- NET LOANS 391,754,000 325,352,000 - ----------------------------------------------------------------------- Premises, Equipment and Intangible Assets (net) 15,159,000 16,683,000 Accrued Interest Receivable and Other Assets 6,922,000 6,415,000 - ----------------------------------------------------------------------- TOTAL ASSETS $560,613,000 $489,928,000 - ----------------------------------------------------------------------- LIABILITIES AND STOCKHOLDERS' EQUITY: Noninterest-Bearing Deposits $ 80,234,000 $ 66,346,000 Interest-Bearing Deposits 372,612,000 346,226,000 - ----------------------------------------------------------------------- TOTAL DEPOSITS 452,846,000 412,572,000 - ----------------------------------------------------------------------- Securities Sold under Repurchase Agreements and Other Short-term Borrowings 29,567,000 25,102,000 Federal Home Loan Bank Advances 24,345,000 2,045,000 Accrued Interest, Taxes, Expenses and Other Liabilities 4,646,000 4,422,000 - ----------------------------------------------------------------------- TOTAL LIABILITIES 511,404,000 444,141,000 - ----------------------------------------------------------------------- Common Stock 4,223,000 4,222,000 Additional Capital 22,603,000 22,600,000 Retained Earnings 25,136,000 21,796,000 Accumulated Other Comprehensive Income 147,000 69,000 Treasury Stock, at Cost (2,900,000) (2,900,000) - ----------------------------------------------------------------------- TOTAL SHAREHOLDERS' EQUITY 49,209,000 45,787,000 - ----------------------------------------------------------------------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $560,613,000 $489,928,000 - ----------------------------------------------------------------------- (LOGO) LNB Bancorp, Inc. and its subsidiary Lorain National Bank 28 Consolidated Statements of Income Three Months Ended March 31 ------------------------ 1999 1998 ------------ ----------- INTEREST INCOME: Interest and Fees on Loans $7,980,000 $7,240,000 Interest and Dividends on Securities 1,785,000 1,773,000 Interest on Federal Funds Sold and Other Interest-Bearing Instruments 13,000 58,000 - ---------------------------------------------------------------------- TOTAL INTEREST INCOME 9,778,000 9,071,000 - ---------------------------------------------------------------------- INTEREST EXPENSE: Interest on Deposits 3,048,000 3,139,000 Interest on Securities Sold under Repurchase Agreements and Other Short-term Borrowings 237,000 264,000 Interest on Federal Home Loan Bank Advances 290,000 32,000 - ---------------------------------------------------------------------- TOTAL INTEREST EXPENSE 3,575,000 3,435,000 - ---------------------------------------------------------------------- NET INTEREST INCOME 6,203,000 5,636,000 Provision for Possible Loan Losses 200,000 187,000 - ---------------------------------------------------------------------- NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 6,003,000 5,449,000 - ---------------------------------------------------------------------- OTHER INCOME: Trust and Investment Management Division Income 470,000 437,000 Fees and Service Charges 1,269,000 1,176,000 Gains From Sales of Loans and Securities -0- -0- Other Operating Income 11,000 9,000 - ---------------------------------------------------------------------- TOTAL OTHER INCOME 1,750,000 1,622,000 - ---------------------------------------------------------------------- OTHER EXPENSES: Salaries and Employee Benefits 2,395,000 2,100,000 Net Occupancy Expense of Premises 392,000 352,000 Furniture and Equipment Expenses 608,000 578,000 Supplies and Postage 256,000 255,000 Ohio Franchise Tax 151,000 135,000 Other Operating Expenses 1,206,000 1,107,000 - ---------------------------------------------------------------------- TOTAL OTHER EXPENSES 5,008,000 4,527,000 - ---------------------------------------------------------------------- INCOME BEFORE INCOME TAXES 2,745,000 2,544,000 - ---------------------------------------------------------------------- Income Taxes 912,000 866,000 - ---------------------------------------------------------------------- NET INCOME $1,833,000 $1,678,000 - ---------------------------------------------------------------------- BASIC EARNINGS PER SHARE $.44 $.41 - ---------------------------------------------------------------------- DILUTED EARNINGS PER SHARE $.44 $.41 - ---------------------------------------------------------------------- DIVIDENDS DECLARED PER SHARE $.22 $.20 - ---------------------------------------------------------------------- 29 Inside cover LNB Welcomes ConSun Foods Color photograph of Convenient Food Mart on left side of page ConSun Food Industries, Inc., a regional franchiser and owner of several area Convenient Food Marts and owner of Sunshine Farms Dairy, has chosen Lorain National Bank as its new provider of financial services. "We are pleased to be associated with ConSun Foods and its divisions," said James F. Kidd, LNB Bancorp, Inc. President and Chief Executive Officer. "Like Lorain National Bank, ConSun has a solid history of delivering quality products to members of our community for years. The Convenient Food Mart and Sunshine Farms Dairy names are synonymous with value and customer satisfaction." Headquartered on Gateway Boulevard in Elyria, ConSun employs more than 400 people overall. Its company owned stores can be found in the counties of Lorain, Summit, Stark, Portage, Erie, Medina and Wayne in Ohio. Additionally, its Sunshine Farms dairy division manufactures and distributes approximately 300 food products. We welcome Dennis Walter, President, Roger McVetta, Treasurer, Ron Lattimer, Secretary & Director of Store Operations and the ConSun Food Industries family to Lorain National. LNB Bancorp, Inc. Introduces New Market Maker Thomas P. Ryan, Executive Vice President and Secretary/Treasurer, has announced the addition of Sweney Cartwright & Company of Columbus to the list of LNB Bancorp, Inc. Common stock market makers. Sweney Cartwright, an investment securities firm in business since 1933, specializes in the marketing of stock of independent banks in Ohio. Sweney Cartwright joins Akin Investment Services Group, Everen Securities, McDonald Investments, Mid-Ohio Securities, National Securities, and the Fifth Third/The Ohio Company as market makers in LNB Bancorp, Inc. stock. Shareholders requesting information about their current stock holdings should call or write to: Registrar and Transfer Company Investor Relations Department 10 Commerce Drive Cranford, New Jersey 07016-9982 (800) 368-5948 30 Back Cover: White background with green along top of page and black lettering Four column format Banking Offices and ATMS ATM service available wherever you see this symbol ** Lorain Banking Offices Elyria Banking Offices Main Office **Ely Square Office* 457 Broadway 124 Middle Avenue Lorain, Ohio 44052 Elyria, Ohio 44035 (440) 244-7185 (440) 323-4621 **Sixth Street Drive-In Office **Cleveland Street Office 200 Sixth Street 801 Cleveland Street Lorain, Ohio 44052 Elyria, Ohio 44035 (440) 244-7242 (440) 365-8397 **Cooper-Foster Park **Lake Avenue Office Road Office 42935 North Ridge Road 1920 Cooper-Foster Park Road Elyria Township, Ohio 44035 Lorain, Ohio 44053 (440) 233-7196 (440) 282-1252 **Midway Mall Office **Kansas Avenue Office 6395 Midway Mall Blvd. 1604 Kansas Avenue Elyria, Ohio 44035 Lorain, Ohio 44052 (440) 324-6530 (440) 288-9151 **Second Street Office* **Oberlin Avenue Office 221 Second Street 3660 Oberlin Avenue Elyria, Ohio 44035 Lorain, Ohio 44053 (440) 323-4621 (440) 282-9196 Village of LaGrange **Pearl Avenue Office Banking Office 2850 Pearl Avenue **Village of LaGrange Office Lorain, Ohio 44055 546 North Center Street (440) 277-1103 Village of LaGrange, Ohio 44050 **West Park Drive Office (440) 355-6734 2130 West Park Drive Lorain, Ohio 44053 Oberlin Banking Offices (440) 989-3131 Kendal at Oberlin Office 600 Kendal Drive Amherst Banking Office Oberlin, Ohio 44074 **Amherst Office (440) 774-5400 1175 Cleveland Avenue Amherst, Ohio 44001 **Oberlin Office (440) 988-4423 40 East College Street Oberlin, Ohio 44074 Avon Lake Banking Office (440) 775-1361 **Avon Lake Office 240 Miller Road Olmsted Township Avon Lake, Ohio 44012 Banking Offices (440) 933-2186 **Olmsted Township Office 27095 Bagley Road Olmsted Township, Ohio 44138 (440) 235-4600 31 The Renaissance Office Other Offices 26376 John Road Executive Offices Olmsted Township, Ohio 44138 457 Broadway (440) 427-0041 Lorain, Ohio 44052 (440) 244-7123 Vermilion Banking Office **Vermilion Office Branch Administration 4455 East Liberty Avenue 457 Broadway Vermilion, Ohio 44089 Lorain, Ohio 44052 (440) 967-3124 (440) 244-7253 Westlake Banking Offices Commercial, Consumer **Crossings of Westlake Ohio and Mortgage Loans 30210 Detroit Road 457 Broadway Westlake, Ohio 44145 Lorain, Ohio 44052 (440) 892-9696 (440) 244-7220 (440) 244-7272 Westlake Village Office (440) 244-7216 28550 Westlake Village Drive Westlake, Ohio 44145 Credit Cards (440) 808-0229 2130 West Park Drive Lorain, Ohio 44053 Community-Based (440) 989-3308 Automated Teller Machine Locations Customer Service **Captain Larry's Marathon 2130 West Park Drive 1317 State Route 60 Lorain, Ohio 44053 Vermilion, Ohio (440) 989-3348 **Convenient Food Mart Human Resources 5375 West Erie Avenue 2130 West Park Drive Lorain, Ohio Lorain, Ohio 44053 (440) 989-3139 **Dad's Sunoco 7580 Leavitt Road Operations State Route 58 2130 West Park Drive Amherst, Ohio Lorain, Ohio 44053 (440) 989-3315 **Gateway Plaza Convenient 3451 Colorado Avenue Purchasing Lorain, Ohio 2150 West Park Drive Lorain, Ohio 44053 **Lakeland Medical Center (440) 989-3260 3700 Kolbe Road Lorain, Ohio Trust and Investment Management Services **Lorain County 457 Broadway Community College Lorain, Ohio 44052 1005 North Abbe Road (440) 244-7226 Elyria, Ohio All Other Departments & **Lowe's Home Information Not Listed Improvement Warehouse Telebanker (440) 245-4562 620 Midway Boulevard Toll Free (800) 860-1007 Elyria, Ohio Lorain (440) 244-6000 Elyria (440) 236-5047 **Midway Mall Food Court 3343 Midway Mall Blvd. Internet www.4LNB.com Elyria, Ohio 32 *The Second Street Office will be relocated to Ely Square during the second quarter of 1999. Logos for LNB Bancorp, Inc., FDIC Insured, Federal Home Loan Bank System, and Equal Housing Lender 33 LNB Bancorp, Inc. Exhibit to Form 10 - Q (For the three months ended March 31, 1999) S - K Reference Number (27) Financial Data Schedule EX-27 2
9 0000737210 LNB BANCORP, INC. 1,000 3-MOS DEC-31-1999 JAN-01-1999 MAR-31-1999 21,721 2,793 0 0 76,519 45,745 44,922 395,237 (3,483) 560,613 452,846 29,567 4,646 22,603 0 0 4,223 44,986 560,613 7,980 1,785 13 9,778 3,048 3,575 6,203 200 0 5,008 2,745 1,833 0 0 1,833 .44 .44 4.89 848 479 2,922 7,459 3,483 270 70 3,483 2,549 0 934
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