pre14a

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

SCHEDULE 14A

(RULE 14a-101)

INFORMATION REQUIRED IN
PROXY STATEMENT

SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934

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o     Soliciting Material Pursuant to §240.14a-12

LNB Bancorp, Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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LNB Bancorp, Inc.
457 Broadway
Lorain, Ohio 44052

Dear Shareholders:

The 2011 Annual Meeting of Shareholders (the “Annual Meeting”) of LNB Bancorp, Inc. (“LNB”) will be held at The Lorain National Bank, 521 Broadway, Lorain, Ohio, 44052, on Tuesday, May 3, 2011 at 9:00 a.m. local time.

The Annual Meeting will be held for the purposes that are described in the notice of the Annual Meeting, and more fully addressed in LNB’s proxy materials accompanying this letter. We encourage you to read all of these materials carefully, and then vote using the enclosed proxy card.

At the Annual Meeting, LNB will ask its shareholders to vote upon a proposal to elect three directors of LNB. The Board of Directors has nominated J. Martin Erbaugh, Terry D. Goode and James R. Herrick, each of whom is currently a director of LNB, for election as directors. LNB will also ask its shareholders for ratification of the appointment of Plante & Moran, PLLC as LNB’s independent registered public accounting firm for its 2011 fiscal year, for approval and adoption of amendments to LNB’s code of regulations to permit amendments to the code of regulations by the Board of Directors to the extent permitted by Ohio law, for advisory approval of LNB’s executive compensation program, and for an advisory vote on the frequency of executive compensation advisory votes.

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE DIRECTOR NOMINEES IN PROPOSAL 1, AND “FOR” PROPOSALS 2, 3 AND 4. THE BOARD OF DIRECTORS MAKES NO RECOMMENDATION ON PROPOSAL 5.

Your vote is important regardless of the number of shares you own. The Board of Directors urges you to sign, date and deliver the enclosed proxy, as promptly as possible, by mail (using the enclosed postage-paid envelope).

I can assure you that the Board of Directors and LNB’s management will continue to act in the best interests of all LNB shareholders. We appreciate your continued support.

Sincerely,

James R. Herrick

Chairman of the Board of Directors

, 2011

LNB Bancorp, Inc.
457 Broadway
Lorain, Ohio, 44052

NOTICE OF 2011 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 3, 2011

, 2011

To the Shareholders of LNB Bancorp, Inc.:

The 2011 Annual Meeting of Shareholders (the “Annual Meeting”) of LNB Bancorp, Inc. (“LNB”) will be held at The Lorain National Bank, 521 Broadway, Lorain, Ohio, 44052, on May 3, 2011 at 9:00 a.m. local time for the purpose of considering and voting upon the following matters as more fully described in the attached Proxy Statement:


	1.	To elect three directors for the next three years;

	2.	To ratify the appointment of Plante & Moran, PLLC as LNB’s independent registered public accounting firm for its 2011 fiscal year;

	3.	To approve and adopt amendments to LNB’s code of regulations to permit amendments to the code of regulations by the Board of Directors to the extent permitted by Ohio law;

4. To seek advisory approval of LNB’s executive compensation program;

5. An advisory vote on the frequency of executive compensation advisory votes; and


	6.	To transact any other business which may properly come before the meeting or any postponement or adjournment of the meeting.

Shareholders of record at the close of business on March 9, 2011 will be entitled to vote the number of common shares held of record in their names on that date at the Annual Meeting.

We urge you to sign, date and return the enclosed proxy card as promptly as possible, whether or not you plan to attend the Annual Meeting in person. Whether or not you plan to attend the Annual Meeting, and regardless of the number of common shares you own, we urge you to vote “FOR” the three director nominees in Proposal 1, and “FOR” Proposals 2, 3 and 4. We make no recommendation with respect to Proposal 5.

By Order of the Board of Directors,

Robert F. Heinrich

Corporate Secretary

Your vote is important. Please mark, sign, date and mail the enclosed proxy form(s) whether or not you plan to attend the Annual Meeting. A return envelope is enclosed for your convenience.

Important Notice Regarding the Availability of Proxy Materials
for the Shareholder Meeting to Be Held on May 3, 2011:

The Proxy Statement and the 2010 Annual Report are available at https://materials.proxyvote.com/502100.

LNB Bancorp, Inc.
457 Broadway
Lorain, Ohio 44052

PROXY STATEMENT FOR 2011 ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD ON MAY 3, 2011

Date, Time and Place of the Annual Meeting

This Proxy Statement is being furnished to shareholders of LNB Bancorp, Inc. (“LNB” or the “Corporation”) in connection with the solicitation of proxies by the Board of Directors of the Corporation for the 2011 Annual Meeting of Shareholders, and any postponement or adjournment thereof, to be held at the time and place set forth in the accompanying notice (the “Annual Meeting”). The notice of the meeting, this Proxy Statement, the Corporation’s annual report to shareholders for the fiscal year ended December 31, 2010 and the enclosed proxy card are first being sent to shareholders on or about , 2011.

Purpose of the Annual Meeting

The purpose of the Annual Meeting is to consider the proposals that are described in the notice of Annual Meeting, and more fully addressed in this Proxy Statement. We encourage you to read all of these materials carefully, and then vote the enclosed proxy card.

At the Annual Meeting, LNB will ask its shareholders to vote upon the following proposals:


	1.	To elect three directors of the Corporation. The Board of Directors has nominated J. Martin Erbaugh, Terry D. Goode and James R. Herrick, each of whom is currently a director of LNB, for election as directors.

The Board of Directors recommends that you vote “FOR” the director nominees in Proposal 1.


	2.	To ratify the appointment of Plante & Moran, PLLC as LNB’s independent registered public accounting firm for its 2011 fiscal year.

The Board of Directors recommends that you vote “FOR” Proposal 2.


	3.	To approve and adopt amendments to LNB’s code of regulations to permit amendments to the code of regulations by the Board of Directors to the extent permitted by Ohio law.

The Board of Directors recommends that you vote “FOR” Proposal 3.


	4.	To seek advisory approval of LNB’s executive compensation program.

The Board of Directors recommends that you vote “FOR” Proposal 4.


	5.	An advisory on the frequency of executive compensation advisory votes.

The Board of Directors makes no recommendation with respect to Proposal 5.

QUESTIONS & ANSWERS ABOUT THE ANNUAL MEETING

The following are some questions that you may have regarding the matters being considered at the Annual Meeting as well as brief answers to those questions. LNB urges you to read the remainder of this Proxy Statement carefully because the information below does not provide all information that might be important to you.


Q:		When and where will the Annual Meeting of the shareholders of LNB take place, and who is entitled to vote at the Annual Meeting?

A:		The Annual Meeting will be held on Tuesday, May 3, 2011 at 9:00 a.m., local time, at The Lorain National Bank, 521 Broadway, Lorain, Ohio 44052. You may attend the Annual Meeting and vote your shares in person, rather than voting the enclosed proxy card; but, whether or not you intend to attend the Annual Meeting, the Board of Directors urges you to sign, date and deliver the enclosed proxy card, as promptly as possible, by mail (using the enclosed postage-paid envelope). If you hold shares in street name and would like to vote your shares in person at the Annual Meeting, you must present a legal proxy from your bank, broker or nominee at the Annual Meeting.

		LNB’s Board of Directors has fixed the close of business on March 9, 2011 as the record date (the “Record Date”) for the determination of shareholders entitled to vote at the Annual Meeting. Only holders of record of LNB’s common shares at the close of business on the Record Date are entitled to notice of and to vote at the Annual Meeting. Each common share entitles record holders to one vote on each matter properly submitted for consideration at the Annual Meeting.

		As of the Record Date, there were record holders of the Corporation’s common shares and of the Corporation’s common shares outstanding.

Q:		What may I vote on at the Annual Meeting?

A:		You may vote on Proposals 1, 2, 3, 4 and 5 as described below.

Q:		What do I need to do now?

		Please carefully read and consider the information contained in this Proxy Statement, and vote your shares in any of the ways provided in this Proxy Statement.

Q:		How does the Board of Directors recommend that I vote?

A:		THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE DIRECTOR NOMINEES IN PROPOSAL 1, “FOR” THE RATIFICATION OF THE APPOINTMENT OF PLANTE & MORAN, PLLC AS THE CORPORATION’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM AS DISCUSSED IN PROPOSAL 2, “FOR” APPROVAL AND ADOPTION OF AMENDMENTS TO LNB’S CODE OF REGULATIONS TO PERMIT AMENDMENTS TO THE CODE OF REGULATIONS BY THE BOARD OF DIRECTORS TO THE EXTENT PERMITTED BY OHIO LAW AS DISCUSSED IN PROPOSAL 3, AND “FOR” ADVISORY APPROVAL OF THE CORPORATION’S EXECUTIVE COMPENSATION PROGRAM AS DISCUSSED IN PROPOSAL 4. THE BOARD OF DIRECTORS MAKES NO RECOMMENDATION WITH RESPECT TO PROPOSAL 5.

Q:		How can I vote my common shares?

A:		If your common shares are registered directly in your name with our transfer agent, you are a shareholder of record with respect to those common shares, and you may either vote in person at the Annual Meeting or by signing, dating and returning the enclosed proxy card in the envelope provided. You may also vote your shares through the internet or via telephone by following the instructions contained on the enclosed proxy card. Whether or not you plan to attend the Annual Meeting in person, you should submit your proxy card as soon as possible. If your LNB common shares are held in “street name” through a broker, bank or other nominee, you should follow the directions provided by your broker, bank or other nominee regarding how to instruct such party to vote. Brokerage firms have the authority to vote shares on certain “routine” matters when their customers do not provide voting instructions. However, on other matters, when the brokerage firm has not received voting instructions from its customers, the brokerage firm cannot vote the shares on that matter and a “broker non-vote” occurs. does not receive instructions from you, so long as it holds your shares in its name. The ratification of Plante & Moran, PLLC as our independent registered public accounting firm (Proposal 2) is


		considered to be a “routine” matter and your brokerage firm will be able to vote on that item even if it does not receive instructions from you, so long as it holds your shares in its name. The election of directors (Proposal 1), the amendment to the code of regulations (Proposal 3) and advisory approval of the executive compensation program and advisory vote on the frequency of executive compensation advisory votes (Proposals 4 and 5) are “non-routine” items. If you do not instruct your broker how to vote with respect to these items, your broker may not vote with respect to these proposals and those votes will be counted as “broker non-votes.” Please be sure to give specific voting instructions to your broker so that your vote can be counted.

		If the enclosed proxy card is properly executed and returned to LNB in time to be voted at the Annual Meeting, the common shares represented by your proxy will be voted in accordance with your instructions marked on the proxy card. Where properly executed proxies are returned but no such instructions are given, the proxy holders will vote “FOR” the election of the three director nominees nominated by the Board of Directors, “FOR” the ratification of the appointment of Plante & Moran, PLLC as the Corporation’s independent registered public accounting firm, “FOR” the approval and adoption of amendments to LNB’s code of regulations to permit amendments by the Board of Directors to the extent permitted by Ohio law, “FOR” advisory approval of the Corporation’s executive compensation program, and “ABSTAIN” on the advisory vote on the frequency of executive compensation advisory votes.

Q:		Will the proxy holders named on the proxy card have discretionary authority to vote my common shares?

A:		As to any matters that may properly come before the meeting that are not on the enclosed proxy card, the proxy grants to Gary J. Elek and Robert F. Heinrich the authority to vote the shares for which they hold proxies in accordance with their discretion.

Q:		Can I change my vote?

A:		You may revoke a proxy at any time prior to its exercise by filing with LNB’s Secretary a written notice of revocation, by delivering to LNB’s Secretary a duly executed proxy bearing a later date, or by attending the Annual Meeting and voting in person. The mere presence of a shareholder at the Annual Meeting will not automatically revoke any proxy previously given by such shareholder. Written notices of revoked proxies may be directed to Mr. Robert F. Heinrich, Corporate Secretary, LNB Bancorp, Inc., 457 Broadway, Lorain, Ohio 44052.

		If you are a beneficial owner of common shares, you may submit new voting instructions by contacting your broker, bank or other nominee. You may also vote in person at the Annual Meeting if you obtain a legal proxy as described above.

Q:		What constitutes a quorum?

A:		Under LNB’s Code of Regulations, the number of common shares held by the shareholders present in person or by proxy at the Annual Meeting constitute a quorum for the transaction of business at the Annual Meeting. Nasdaq Stock Market rules provide, however, that in no case shall a quorum be less than thirty three and one-third percent (331/3%) of the outstanding common shares. Accordingly, so long as at least thirty three and one-third percent (331/3%) of the outstanding common shares of the Corporation are present in person or by proxy at the Annual Meeting, a quorum shall be present for the transaction of business at the Annual Meeting. Abstentions and shares that do not vote on a particular proposal will be counted for purposes of determining whether a quorum exists at the Annual Meeting. Broker non-votes will also be counted for purposes of determining whether a quorum exists at the Annual Meeting, unless the broker has failed to vote as to all matters.

Q:		What vote is required by LNB in connection with the proposals?

A:		A plurality of the votes cast at the meeting is required to elect directors. The three director nominees receiving the highest number of “for” votes at the Annual Meeting will be elected as directors under Proposal 1. Abstentions, broker non-votes and instructions on the enclosed proxy card to “withhold authority” to vote “for” one or more of the nominees will result in the nominee receiving fewer votes, but will not affect the outcome of the election.

		The ratification of the appointment of Plante & Moran, PLLC as LNB’s independent registered public accounting firm for its 2011 fiscal year under Proposal 2 requires the affirmative vote of the holders of a


		majority of the common shares present in person or by proxy at the Annual Meeting. Abstentions with respect to Proposal 3 will not be voted, but will be counted for purposes of determining the number of shares present. Accordingly, abstentions will have the same effect as an “against” vote.

		Article X, Section 1 of LNB’s code of regulations provides that the regulations may be amended by the shareholders at any shareholder meeting by the affirmative vote of the registered holders of a majority of the common shares represented in person or by proxy at the meeting. LNB’s code of regulations further provides that amendments to Article III and Article IV of the regulations may be adopted by the affirmative vote of the registered holders of a majority of the common shares represented in person or by proxy at the meeting, so long as (1) LNB has no “interested shareholder” (as defined in the code of regulations) and the amendments are first approved by a majority of the Board of Directors or (2) LNB has an interested shareholder and the amendments are first approved by a two-thirds majority of the “continuing directors” (as defined in the regulations). LNB does not believe that it has an interested shareholder and, in any event, the amendments to LNB’s code of regulations to permit amendments to the code of regulations by the Board of Directors to the extent permitted by Ohio law has been approved by more than two-thirds of the directors who would constitute “continuing directors.” Accordingly, the approval and adoption of Proposal 3 requires the affirmative vote of the holders of a majority of the common shares present in person or by proxy at the Annual Meeting. Abstentions with respect to Proposal 3 will not be voted, but will be counted for purposes of determining the number of shares present. Accordingly, abstentions and broker non-votes will have the same effect as an “against” vote.

		The approval of the advisory proposal on LNB’s executive compensation program under Proposal 4 requires the affirmative vote of the holders of a majority of the common shares present in person or by proxy at the Annual Meeting. Abstentions with respect to Proposal 4 will not be voted, but will be counted for purposes of determining the number of shares present. Accordingly, abstentions and broker non-votes will have the same effect as an “against” vote.

		The approval of the advisory vote on the frequency of executive compensation advisory votes under Proposal 5 will require the affirmative vote of a majority of the Corporation’s common shares represented in person or by proxy at the Annual Meeting. If none of the alternatives (one year, two years or three years) receive a majority vote, the Corporation will consider the alternative with the highest number of votes cast by shareholders to be the frequency that has been selected by shareholders. Abstentions and broker non-votes with respect to Proposal 5 will not be voted and, accordingly, will result in each alternative receiving fewer votes.

Q:		What should I do if I receive more than one set of voting materials?

A:		If your common shares are registered differently and are held in more than one account, then you will receive more than one Proxy Statement and proxy card. Please be sure to vote all of your accounts so that all of your common shares are represented at the Annual Meeting.

Q:		What identification should I bring to the Annual Meeting?

A:		All shareholders who owned LNB common shares on the Record Date may attend the Annual Meeting. In order to gain admission to the Annual Meeting, please be sure to bring with you a valid government-issued personal identification with a picture (such as a driver’s license or passport). If your common shares are held in the name of a bank, broker or other nominee, you must also bring evidence of your ownership of common shares as of the Record Date, in the form of a letter or statement from your bank, broker or other nominee or the voting instruction card provided by the broker, in each case, indicating that you owned common shares as of the Record Date.

		If you are a proxy holder for a LNB shareholder, then you must bring (1) the validly executed proxy naming you as the proxy holder, signed by a LNB shareholder who owned LNB common shares as of the Record Date, (2) a valid government-issued personal identification with a picture (such as a driver’s license or passport) and (3) if the shareholder whose proxy you hold was not a record holder of LNB common shares as of the Record Date, proof of the shareholder’s ownership of LNB common shares as of the Record Date, in the form of a letter or statement from a bank, broker or other nominee or the voting instruction card provided by the broker, in each case, indicating that the shareholder owned those common shares as of the Record Date.


Q:		How will proxies for the Annual Meeting be solicited?

A:		In addition to soliciting proxies by mail, LNB, through its directors and officers and regular employees, may also solicit proxies personally or by telephone, telegram, advertisement, courier service, or other means of communication (such as e-mail). Such directors and officers and regular employees will not be additionally compensated, but may be reimbursed for out-of-pocket expenses in connection with such solicitation.

Q:		Who will bear the cost of soliciting proxies?

A:		LNB will bear the cost of soliciting proxies in the form enclosed herewith. LNB will request persons, firms and corporations holding common shares in their names or in the name of their nominees, which are beneficially owned by others, to send proxy materials to and obtain proxies from the beneficial owners and LNB will reimburse the holders for their reasonable expenses in doing so.

Q:		Can I access the Notice of Annual Meeting, Proxy Statement and 2010 Annual Report on the internet?

A:		The Notice of Annual Meeting, Proxy Statement and 2010 Annual Report are available on the internet at https://materials.proxyvote.com/502100. We will also provide a copy of any of these documents to any shareholder free of charge, upon request in writing to Corporate Secretary, LNB Bancorp, Inc., 457 Broadway, Lorain, Ohio 44052.

		If you hold your shares in a bank or brokerage account, your bank or broker may also provided copies of these documents electronically. Please check the information provided in the proxy materials mailed to you by your bank or broker regarding the availability of service.

COMPANY PROPOSALS

PROPOSAL 1 — ELECTION OF DIRECTORS

LNB’s Amended Code of Regulations provides that the Board of Directors of the Corporation shall be divided into three classes as nearly equal in number as possible, with the term of office of one class expiring each year. The directors of each class shall hold office for a term of three years. At the Annual Meeting, three directors will be elected.

The Board of Directors has nominated J. Martin Erbaugh, Terry D. Goode and James R. Herrick, each of whom is currently a director of the Corporation, for election to the Board of Directors at the Annual Meeting. Each of the director nominees has indicated his willingness to serve another term as a director if elected, and has consented to be named in this Proxy Statement as a director nominee.

The names and qualifications of all of the current directors are set forth below in this Proxy Statement. The three directors standing for re-election are successful local business people who contribute much to the success of LNB. The Board of Directors believes that the re-election of these three directors is important to LNB’s future growth and the fulfillment of LNB’s strategic plan.

Daniel G. Merkel and Thomas P. Perciak were appointed as directors by the Board of Directors on April 22, 2008 pursuant to a settlement agreement (the “Settlement Agreement”). Additional information regarding the Settlement Agreement is included in the Corporation’s Current Report on Form 8-K filed on April 23, 2008. J. Martin Erbaugh was appointed as a director by the Board of Directors effective May 10, 2007 in connection with the consummation of LNB’s acquisition of Morgan Bancorp, Inc. and in accordance with terms of the related Agreement and Plan of Merger, dated January 15, 2007. There are no other arrangements or understandings pursuant to which any of the persons listed below were selected as directors or director nominees.

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” ALL OF THE DIRECTOR NOMINEES.

Nominees for Election as Directors

Class I Directors. The information below is with respect to the nominees for election as Class I Directors of the Corporation at the Annual Meeting, whose terms will expire in 2014. Benjamin G. Norton has informed the Corporation of his intention to retire from the Board of Directors upon the expiration of his current term at the Annual Meeting in accordance with the Corporation’s internal director retirement guidelines and Mr. Norton will not stand for reelection as a director at the Annual Meeting. Following the Annual Meeting, the size of LNB’s Board of Directors will be fixed at 11 members.

J. Martin Erbaugh, 62, has been a director since 2007. Since 1995, Mr. Erbaugh has been the President of JM Erbaugh Co., a private investment firm. Mr. Erbaugh was the Chairman of the Board of Morgan Bancorp, Inc. from 2002 until it was acquired by the Corporation in May 2007. Mr. Erbaugh served as a director of Lesco, Inc. from March 1995 to May 2007, including as Chairman of the Board from April 2002 to May 2007.

The Board concluded that Mr. Erbaugh should serve as a director of the Corporation primarily due to his experience in managing and serving as a director of businesses in the banking and finance industry, as well as his long experience in leading a financial institution in the Hudson, Ohio and Summit County area, a market in which the Corporation has sought to grow its business. Mr. Erbaugh’s industry experience, experience as a director of other publicly-traded companies and educational background, which includes a law degree from Case Western Reserve University School of Law, enables Mr. Erbaugh to provide valuable contributions to the Board on a range of matters, including strategic direction, business operations and financial results, risk management and the compensation of management.

Terry D. Goode, 56, has been a director since 1997 and Vice Chairman of the Board since April 2010. Since 1987, Mr. Goode has been the Vice President of the Lawyers Title Insurance Corp. and from 1987 to 2001, served as Vice President of Lorain County Title Company.

The Board concluded that Mr. Goode should serve as a director of the Corporation primarily due to his significant knowledge of the Corporation, having served as a director of the Corporation for thirteen years, and experience in real estate development and finance in the markets in which the Corporation operates. Mr. Goode’s knowledge and experience in the industry and the communities in which the Corporations operates allow him to serve a vital role on the Board in its assessment and evaluation of strategic direction and risk management, particularly with respect to the Corporation’s management of credit risk.

James R. Herrick, 59, has been a director since 1999 and Chairman of Board since December 2004. Since 1987, Mr. Herrick has been the President of the Liberty Auto Group, Inc., an automobile dealership organization.

The Board concluded that Mr. Herrick should serve as a director of the Corporation primarily due to his extensive executive leadership experience and significant knowledge of the Corporation, having served on the Board for eleven years. Mr. Herrick’s experience, as well as his leadership of businesses in the communities in which the Corporation operates, enables him to provide the Board with valuable insight and perspective on organizational management, risk assessment and management, local and regional business conditions and trends relating to consumers and borrowers in the markets in which the Corporation operates.

Directors Continuing in Office

Class II Directors. The information below is with regard to Class II Directors of LNB, whose terms expire in 2012.

Lee C. Howley, 63, has been a director since 2001. Since 2000, Mr. Howley has been the President of Howley Bread Group Ltd., a company that operates Panera Bread restaurant franchises. From 1996 to May 2007, Mr. Howley served as director of Lesco, Inc. From 1996 to September 2006, Mr. Howley served as director of Boykin Lodging Company.

The Board concluded that Mr. Howley should serve as a director of the Corporation, primarily due to his extensive executive leadership experience and financial and accounting expertise. Mr. Howley has long experience in managing businesses and serving on public company boards, and is a highly successful entrepreneur. Mr. Howley’s background enables him to provide useful insight in evaluating the business conditions in markets in which the Corporation operates, as well as in setting corporate strategy and motivating the Corporation’s management to achieve corporate goals. Mr. Howley’s financial and accounting expertise is of particular value to the Board in evaluating and managing the Corporation’s financial risk and internal controls in his role on the Audit and Finance Committee.

Daniel E. Klimas, 52, has been a director and the President and Chief Executive Officer of the Corporation and The Lorain National Bank since February 2005. Mr. Klimas was the President of the Northern Ohio Region of Huntington Bank from 2001 until February 2005.

The Board concluded that Mr. Klimas should serve as a director of the Corporation largely due to his role as the Corporation’s Chief Executive Officer. The Board believes that having a member of the Corporation’s management team, who is intimately familiar with the Corporation’s day-to-day business operations, serve as director provides the Board with invaluable insight into the Corporation. Mr. Klimas’ role as Chief Executive Officer and long experience in leadership positions within the banking industry allows Mr. Klimas to provide the Board with the management perspective necessary to successfully overseeing the Corporation and its business operations.

Jeffrey F. Riddell, 59, has been a director since 1995. Since 1992, Mr. Riddell has been the President and, since 1996, the Chief Executive Officer of Consumer Builders Supply Company.

The Board concluded that Mr. Riddell should serve as a director of the Corporation primarily due to his significant knowledge of the Corporation, having served as a director for fifteen years, and his long experience in managing businesses in the Corporation’s markets. Mr. Riddell’s background enables him to provide valuable insight in evaluating the business conditions in markets in which the Corporation does business, as well as in setting corporate strategy and managing the Board’s governance structure.

John W. Schaeffer, M.D., 65, has been a director since 1999. Since 1976, Dr. Schaeffer has been the President of the North Ohio Heart Center, Inc.

The Board concluded that Dr. Schaeffer should serve as a director of the Corporation primarily due to his significant knowledge of the Corporation and its markets, and his strong ties to Corporation’s primary market area, which provides the Board with perspective that is helpful to the Corporation in its role as a community bank. Dr. Schaeffer’s experience and background as a physician and leader of a regional medical institution allow him to bring a perspective to the Board that is unique and different than many of the other members of the Board, which the Board finds valuable in its determination and evaluation of corporate goals, strategic direction and corporate governance structures.

Class III Directors. The information below is with regard to Class III Directors of LNB, whose terms expire in 2013.

Robert M. Campana, 51, has been a director since 1997. Since January 2000, Mr. Campana has been the owner of Campana Development, a real estate development company.

The Board concluded that Mr. Campana should serve as a director of the Corporation primarily due to his long experience in managing businesses and his significant experience in and knowledge of real estate development in the Corporation’s markets. Mr. Campana is the former president of P.C. Campana Inc., owns and operates Campana Development, a real estate development company, and has been recognized in his community for his entrepreneurial skills. In addition, Mr. Campana has significant experience with the Corporation, having served on the Board for thirteen years. This background enables Mr. Campana to provide valuable insights to the Board, particularly in evaluating the business conditions in markets in which the Corporation operates, as well as in setting corporate strategy and compensating the Corporation’s management.

Daniel G. Merkel, 67, has been a director since 2008. From 2001 to 2007, Mr. Merkel was the Regional President-Commercial Lending of Republic Bancorp, Inc., a bank holding company. Following the acquisition of Republic Bancorp by Citizens Bancorp, Inc., Mr. Merkel served as a Senior Vice President of Citizens Bancorp until his retirement in 2008. From 1995 to 2001, Mr. Merkel was the Senior Vice President-Commercial Lending of Republic Bancorp, Inc., and from 1991 to 1995 he was President of Tech Built Manufacturing Company. Prior to that he held senior executive positions in banking and commercial mortgage lending in privately held and public companies.

The Board concluded that Mr. Merkel should serve as a director of the Corporation primarily due to his extensive experience in the banking industry and knowledge of banking operations and finance. Mr. Merkel’s experience in a variety of positions with Republic Bancorp, Inc., as well as his educational background that includes a Masters in Business Administration from Cleveland State University, enables Mr. Merkel to provide valuable contributions to the Board. Mr. Merkel is also a retired senior officer with eight years of active duty and twenty-three years of reserve service to the U.S. Navy. This experience provides a unique perspective through which to evaluate the Corporation’s management and organization.

Thomas P. Perciak, 63, has been a director since 2008. Since 2004, Mr. Perciak has been the mayor of Strongsville, Ohio. From 1999 until 2004, Mr. Perciak was the Executive Vice President of Fifth Third Bank, Northeastern, Ohio. From 1985 to 1999, Mr. Perciak was President and Chief Executive Officer of the Strongsville Savings Bank.

The Board concluded that Mr. Perciak should serve as a director of the Corporation primarily due to his extensive banking industry and management and community leadership experience. Prior to serving as the mayor of one of Northeast Ohio’s most vibrant suburbs, Mr. Perciak spent years leading successful local financial institutions. Mr. Perciak’s long industry experience provides the Board with valuable perspectives on the Corporation’s management, strategy and risks. Mr. Perciak’s role as a community leader and philanthropist also allows him to provide beneficial insights to the Corporation in serving as a community bank.

Donald F. Zwilling, CPA, 65, has been a director since 2005. Since 1976, Mr. Zwilling has been a partner, shareholder and director of Barnes Wendling CPAs, Inc., an accounting firm.

The Board concluded that Mr. Zwilling should serve as a director of the Corporation, primarily due to his extensive public accounting experience. Mr. Zwilling is a certified public accountant and accredited in business valuation with nearly four decades of experience working with businesses regarding tax and financial planning. Mr. Zwilling’s experience is of particular value to the Board in assessing and evaluating the Corporation’s financial performance, internal controls and management of financial risk.

PROPOSAL 2 — RATIFICATION OF

APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit and Finance Committee has appointed Plante & Moran, PLLC to continue as the Corporation’s independent registered public accounting firm and to audit its financial statements for the year ended December 31, 2011. The Audit and Finance Committee and the Board of Directors are asking you to ratify this appointment. During the year ended December 31, 2010, Plante & Moran, PLLC served as the Corporation’s independent registered public accounting firm and provided tax and other services. Representatives of Plante & Moran, PLLC are expected to be present at the annual meeting and will have an opportunity to make a statement if they so desire and will be available to respond to appropriate questions.

Approval of this proposal will require the affirmative vote of a majority of the Corporation’s common shares represented in person or by proxy at the Annual Meeting.

THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” THE ADOPTION OF THIS PROPOSAL.

PROPOSAL 3 — APPROVAL AND ADOPTION OF AMENDMENTS TO LNB’S

CODE OF REGULATIONS TO PERMIT AMENDMENTS TO THE CODE OF REGULATIONS

BY THE BOARD OF DIRECTORS TO THE EXTENT PERMITTED BY OHIO LAW

The Board of Directors recommends that the Corporation’s code of regulations be amended so that in addition to the shareholders’ ongoing right to authorize amendments, the Board also would be authorized to make future amendments to the code of regulations, but only to the extent permitted by the Ohio General Corporation Law. For Ohio corporations, the code of regulations is the equivalent of by-laws for other corporations.

The existing code of regulations provides that an amendment of the code of regulations requires the affirmative vote of registered shareholders holding at least a majority of the Corporation’s common shares, with amendments to Articles III or IV of the code of regulations requiring in some cases the affirmative vote of shareholders holding at least seventy-five percent of the Corporation’s common shares. The Board of Directors is not currently permitted to amend the code of regulations in any respect because the traditional law of Ohio did not allow for boards to authorize code of regulations amendments.

However, the Ohio General Corporation Law was amended in October 2006 to allow boards of directors of Ohio corporations to amend regulations without shareholder approval, within certain statutory limitations, thus bringing Ohio law into line with the laws of most other states. The Ohio statute requires shareholder approval of an amendment to the code of regulations authorizing the Board to make future amendments to the code of regulations.

Under the Ohio General Corporation Law, the Board is not permitted to amend the code of regulations in various areas that are deemed to impact fundamental shareholder rights. Specifically, the Board may not amend the code of regulations to do any of the following: (1) change the authority of the shareholders themselves; (2) establish or change the percentage of shares that must be held by shareholders in order to call a shareholders’ meeting or change the time period required for notice of a shareholders meeting; (3) establish or change the quorum requirements at shareholder meetings; (4) prohibit the shareholders or directors from taking action by written consent without a meeting; (5) change directors’ terms of office or provide for the classification of directors; (6) require more than a majority vote of shareholders to remove directors without cause; (7) change the quorum or voting requirements at director meetings; or (8) remove the requirement that a “control share acquisition” of an “issuing public corporation” must be approved by the shareholders of the corporation to be acquired; or (9) allow the board to delegate to a board committee the authority to amend the code of regulations. This proposal does not seek to change in any way these limitations placed on the Board under the Ohio General Corporation Law with respect to amendments of the code of regulations.

The Board believes that the proposed amendments will enhance the Corporation’s ability to timely adopt changes to the code of regulations to adapt to changes in the law. For example, the proposed amendments would allow the Board to timely adopt modification to the director nomination procedures in the code of regulations if necessary or advisable in order to accommodate the SEC’s proposed “proxy access” rules, when those rules are finalized. Under Ohio law, the shareholders can always override amendments made by the Board, and the code of regulations may never divest the shareholders of the power to adopt, amend or repeal the code of regulations.

The Board of Directors recommends that Article X, Section 1 of the code of regulations, Article III, Section 10 of the code of regulations and Article IV, Section 8 of the code of regulations be amended to add the following underlined language, with deleted text struck through:

Article X, Section 1 of the code of regulations:

Section 1. Amendments.

a. Except as otherwise ~~expressly~~ provided in by law, by the Articles of Incorporation or by these Regulations, ~~the Shareholders may repeal or amend~~ these Regulations ~~or adopt amended regulations:~~(as they may be amended from time to time) may be amended, repealed or added to in any respect (i) by the Board (to the extent permitted by the Ohio General Corporation Law), ~~(i)~~ (ii) at any Shareholder Meeting (with previous notice of such amendment, repeal or ~~adoption~~ addition), by the affirmative vote of the registered holders of a majority of the Shares represented in person or by proxy at such Shareholder Meeting, or ~~(ii)~~ (iii) ~~without a~~

~~Shareholder Meeting,~~ by the written consent of the registered holders of a majority of the Shares without a Shareholder Meeting.

b. If these Regulations are amended, repealed or added to in any respect ~~or amended regulations are adopted~~ by written consent without a Shareholder Meeting, the Secretary of the Corporation (or any other Officer) shall forthwith mail a copy of the amendment, repeal or addition to these Regulations ~~or the amended regulations~~ to each Shareholder who did not participate in the adoption of the amendment, repeal or addition ~~or the amended regulations~~.

Article III, Section 10 of the code of regulations:

Section 10. Amendments to Article III.

Notwithstanding any contrary provision in these Regulations, amendments to any provision of this Article III shall require the affirmative vote of the holders of seventy-five percent (75%) of the Shares; provided, however, that any such amendments shall, instead, be governed by the ~~Shareholder voting~~ requirements of Section 1 of Article X of these Regulations if: (i) the Corporation has no Interested Shareholder (as defined in Section 1 of Article IX) and the proposed amendment is first approved by a majority vote of the whole Board, or (ii) the Corporation has an Interested Shareholder and the proposed amendment is first approved by a two-thirds (2/3) majority of the Continuing Directors (as defined in Section 1 of Article IX).

Article IV, Section 8 of the code of regulations:

Section 8. Amendments to Article IV.

Notwithstanding any contrary provision in these Regulations, amendments to any provisions of this Article IV shall require the affirmative vote of the holders of seventy-five percent (75%) of the Shares; provided, however, that any such amendments shall, instead, be governed by the ~~Shareholder voting~~ requirements of Section 1 of Article X of these Regulations if: (i) the Corporation has no Interested Shareholder (as defined in Section 1 of Article IX) and the proposed amendment is first approved by a majority vote of the whole Board, or (ii) the Corporation has an Interested Shareholder and the proposed amendment is first approved by a two-thirds (2/3) majority of the Continuing Directors (as defined in Section 1 of Article IX).

Adoption of the amendment to the code of regulations proposed in this Proposal 3 requires the affirmative vote of a majority of the Corporation’s common shares represented in person or by proxy at the Annual Meeting.

THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” THE ADOPTION OF THIS PROPOSAL.

PROPOSAL 4 — ADVISORY APPROVAL OF

LNB’S EXECUTIVE COMPENSATION PROGRAM

The Board of Directors is providing the shareholders with the opportunity to cast an advisory vote on the compensation of the Corporation’s Named Executives (“Named Executives”) as disclosed in this Proxy Statement pursuant to Item 402 of Regulation S-K, including in the Compensation Discussion and Analysis section, compensation tables and accompanying narrative disclosures. Item 402 of Regulation S-K is the SEC regulation that sets forth what companies must include in their Compensation Discussion and Analysis and compensation tables. As required by the interim final rules issued by the U.S. Treasury (the “TARP Regulations”) regarding the Emergency Economic Stability Act of 2008 (“EESA”) and by the recent Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), this is an advisory vote, which means that this proposal is not binding on the Corporation. However, the Compensation Committee of the Board of Directors (the “Compensation Committee”) will take into account the outcome of the vote when considering future compensation arrangements for the Named Executives. The following resolution is submitted to the shareholders to vote on the Corporation’s compensation of the Named Executives:

RESOLVED, that the compensation paid to the Corporations’ Named Executives, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion is hereby approved.

Approval of this proposal will require the affirmative vote of a majority of the Corporation’s common shares represented in person or by proxy at the Annual Meeting.

THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” THE ADOPTION OF THIS PROPOSAL.

PROPOSAL 5 — ADVISORY VOTE ON FREQUENCY OF

EXECUTIVE COMPENSATION ADVISORY VOTES

The Board of Directors is asking shareholders to advise it as to how frequently they wish to cast an advisory vote on the compensation of the Named Executives: once every year, once every two years, or once every three years. Under the TARP Regulations, the Corporation is required to provide the shareholders with the opportunity to cast an advisory vote on the compensation of the Corporation’s Named Executives every year. That advisory vote is typically referred to as a “say-on-pay” vote. While the frequency of say-on-pay vote in this proposal is not required to be presented to the shareholders so long as the Corporation is subject to the TARP Regulations, the Board of Directors is asking shareholders to cast an advisory vote on how frequently say-on-pay votes should be held in order to better understand the views of Corporation’s shareholders on its executive compensation programs. Accordingly, the Board of Directors has not made a recommendation as to how you should vote on this proposal.

Shareholders will be able to cast their votes on whether to hold say-on-pay votes every one, two or three years. Alternatively, you may abstain from casting a vote. Approval of this proposal will require the affirmative vote of a majority of the Corporation’s common shares represented in person or by proxy at the Annual Meeting. If none of the alternatives (one year, two years or three years) receive a majority vote, the Corporation will consider the alternative with the highest number of votes cast by shareholders to be the frequency that has been selected by shareholders. However, this vote is advisory, which means that it is not binding on the Corporation.

OWNERSHIP OF VOTING SHARES

Security Ownership of Management and Principal Shareholders

The following table sets forth the beneficial ownership of the Corporation’s common shares by each of the Corporation’s directors and the Corporation’s Named Executives, and the directors and executive officers as a group, as of February 15, 2011. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and includes generally voting power and/or investment power with respect to securities. Common shares that an individual has a right to acquire within 60 days after February 15, 2011, including pursuant to stock options to purchase common shares, are deemed outstanding for purposes of computing the percentage of beneficial ownership owned by the person holding such security, but are not deemed outstanding for purposes of computing the percentage beneficially owned by any other person. Except as indicated by footnote, the Corporation believes that the persons named in this table, based on information provided by these persons, have sole voting and investment power with respect to the securities indicated. The address of each of the Corporation’s directors and executive officers is care of LNB Bancorp, Inc., 457 Broadway, Lorain, Ohio 44052. As of February 15, 2011, a total of 7,825,395 common shares were outstanding.


	Common
	Shares
	Beneficially			Percentage of
Name of Beneficial Owner	Owned(1)			Class

Robert M. Campana		21,183	(2)		*
Gary J. Elek		26,210	(3)		*
J. Martin Erbaugh		103,049			1.32	%
Terry D. Goode		79,000	(4)		1.01	%
David S. Harnett		38,028	(5)		*
James R. Herrick		23,427(6	)		*
Lee C. Howley		21,113(7	)		*
Daniel E. Klimas		191,063(8	)		2.40	%
Daniel G. Merkel		7,296(9	)		*
Kevin W. Nelson		14,858(10	)		*
Benjamin G. Norton		156,801(11	)		2.00	%
Thomas P. Perciak		10,166			*
Jeffrey F. Riddell		103,575(12	)		1.32	%
John W. Schaeffer, M.D.		17,912(13	)		*
Frank A. Soltis		22,817(14	)		*
Donald F. Zwilling		9,399(15	)		*
All Directors and Executive Officers as a Group (19 in group)		876,991(16	)		10.96	%


*		Ownership is less than 1% of the class.

(1)		Except as otherwise noted, none of the named individuals shares with another person either voting or investment power as to the common shares reported.

(2)		Common shares beneficially owned by Mr. Campana which are subject to shared voting and investment power with his spouse.

(3)		Includes 833 common shares beneficially owned by Mr. Elek which are subject to unexercised stock options which are vested and exercisable and 1,877 shares beneficially owned by Mr. Elek which are held in the Corporation’s 401(k) subject to shared voting and investment power.

(4)		Includes 24,947 common shares beneficially owned by Mr. Goode which are subject to shared voting and investment power with his spouse.


(5)		Includes 22,500 common shares beneficially owned by Mr. Harnett which are subject to unexercised stock options which are vested and exercisable and 3,028 shares which are held in the Corporation’s 401(k) subject to shared voting and investment power.

(6)		Includes 8,000 common shares beneficially owned by Mr. Herrick which are held in his company’s 401(k) subject to shared voting and investment power.

(7)		Includes 7,530 common shares beneficially owned by Mr. Howley which are held by a partnership of which Mr. Howley is a partner and which are subject to shared voting and investment power.

(8)		Includes 140,000 common shares beneficially owned by Mr. Klimas which are subject to unexercised stock options which are vested and exercisable and 4,709 shares which are held in the Corporation’s 401(k) subject to shared voting and investment power.

(9)		Includes 6,796 common shares beneficially owned by Mr. Merkel which are subject to shared voting and investment power with his spouse and 500 common shares held by his spouse.

(10)		Includes 2,500 common shares beneficially owned by Mr. Nelson which are subject to unexercised stock options which are vested and exercisable and 2,358 shares which are held in the Corporation’s 401(k) subject to shared voting and investment power.

(11)		Includes 73,809 common shares beneficially owned by Mr. Norton which are held in a trust for the benefit of Mr. Norton’s spouse and subject to shared voting and investment power.

(12)		Includes 31,663 shares beneficially owned by Mr. Riddell which are held in a trust for the benefit of Mr. Riddell.

(13)		Includes 7,403 common shares beneficially owned by Dr. Schaeffer which are held by his spouse and subject to shared voting and investment power.

(14)		Includes 5,000 common shares beneficially owned by Mr. Soltis which are subject to unexercised stock options which are vested and exercisable and 5,217 shares which are held in the Corporation’s 401(k) subject to shared voting and investment power.

(15)		Includes 1,009 common shares beneficially owned by Mr. Zwilling which are held in a trust for the benefit of his spouse and subject to shared voting and investment power.

(16)		Includes 208,958 common shares which are subject to shared voting and investment power and 178,333 common shares which are subject to unexercised stock options which are vested and exercisable.

As of February 15, 2011, no person was known by the Corporation to be the beneficial owner of more than 5% of the outstanding common shares of the Corporation, except as follows:


	Common Shares
Name and Address of	Beneficially		Percent of
Beneficial Owner	Owned		Class

The Lorain National Bank		501,396		6.39	%
457 Broadway Lorain, Ohio 44052(1)
Dimensional Fund Advisors LP		584,724		7.47	%
Palisades West, Building One 6300 Bee Cave Road Austin, Texas, 78746(2)
Umberto P. Fedeli		474,985		6.07	%
5005 Rockside Road, Fifth Floor Independence, Ohio 44131(3)


(1)		These common shares are held in various fiduciary capacities in the ordinary course of business under numerous trust relationships by The Lorain National Bank. As fiduciary, The Lorain National Bank has sole power to dispose of all of these common shares, sole power to vote none of these common shares, and shared power to vote all of these common shares.

(2)		Based solely on a Schedule 13G filed on February 11, 2011, which reports that Dimensional Fund Advisors LP (“DFA”) may be deemed to be the beneficial owner of 584,724 common shares as a result of acting as


		investment adviser or sub-adviser to, or manager of, certain investment companies, trusts and accounts (collectively, the “DFA Funds”). The DFA Funds possess sole voting power over 579,400 common shares and sole dispositive power over 584,724 common shares. DFA disclaims beneficial ownership of such securities.

(3)		Based solely on a Schedule 13G/A filed November 10, 2010 by Umberto P. Fedeli, who has sole voting power and sole dispositive power over 474,985 of the shares.

CORPORATE GOVERNANCE

The Board of Directors met 12 times in 2010. Each director who served on the Board of Directors during 2010 attended at least 75% of the combined total of meetings of the Board of Directors and meetings of each committee on which such director served. The non-employee directors meet in executive sessions after the end of each regularly scheduled Board meeting.

The Board of Directors has implemented a formal policy that requires each director to attend the Corporation’s annual meetings of shareholders, and which requires the Corporation to identify any director who was unable to attend an annual meeting in the following year’s annual meeting proxy statement and explain the reason for such director’s absence. Typically, the Board holds its annual organizational meeting directly following each annual meeting of shareholders, which results in most directors being able to attend the Corporation’s annual meetings of shareholders. All of the directors attended the 2010 Annual Meeting of Shareholders.

In accordance with Nasdaq Stock Market rules, the Board of Directors determines the independence of each director and director nominee in accordance with the standards set forth in Rule 4200(a)(1)-(15) of the Nasdaq Stock Market listing rules. The Board of Directors has determined that all of the Corporation’s directors and director nominees are independent in accordance with the Nasdaq Stock Market listing standards, except for Mr. Klimas.

The Board of Directors has established a Code of Ethics and Business Conduct that applies to all directors, officers and employees, which may be found on the Corporation’s website at www.4lnb.com. The information on the Corporation’s website is not part of this Proxy Statement. The Corporation intends to post on its website all disclosures that are required by law or Nasdaq Stock Market listing standards concerning any amendments to, or waivers from, the Code of Ethics and Business Conduct. Shareholders may request a copy of the Code of Ethics and Business Conduct by written request directed to LNB Bancorp, Inc., Attention: Corporate Secretary, 457 Broadway, Lorain, OH 44052.

Shareholders may communicate directly to the Board of Directors in writing by sending a letter to the Board at: LNB Bancorp, Inc. Board of Directors, 457 Broadway, Lorain, Ohio 44052. All letters directed to the Board of Directors will be received and processed by the Corporate Secretary and will be forwarded to the Chairman of the Governance Committee without any editing or screening.

Board Leadership

While the Corporation’s Chief Executive Officer is a member of Board of Directors, the Board’s governance structure currently separates the roles of Chief Executive Officer and Chairman of the Board. The Chairman of the Board is “independent” in accordance with the Nasdaq Stock Market listing standards. The Board of Directors believes that it serves a vital role in the oversight of the Corporation’s management team on behalf of shareholders and that the Board is more effective in that role when led by an independent Chairman of the Board. The Board of Directors also believes that separating the roles of Chief Executive Officer and Chairman of the Board permits the Chief Executive Officer to focus more on managing the Corporation’s business operations as the Chairman has responsibility for leading the Board in its oversight function and consideration of corporate strategy. The Board recognizes the time, effort and energy that the Chief Executive Officer is required to devote to his position in the current business environment, as well as the commitment required to serve as the Chairman of the Board. Accordingly, the Board believes that the Corporation’s interests are best served by separating the role of Chief Executive Officer and Chairman of the Board.

Committees of the Board

The Board of Directors of LNB Bancorp, Inc., has four standing committees: the Audit and Finance Committee, the Compensation Committee, the Governance Committee and the Executive Committee. Each Committee serves in a dual capacity as a Committee of the Corporation and The Lorain National Bank.

Audit and Finance Committee

Members

Lee C. Howley, Chairman

J. Martin Erbaugh

Terry D. Goode

Donald F. Zwilling

The Audit and Finance Committee met nine (9) times during 2010. Daniel G. Merkel served as a member of the committee until April 27, 2010, when the Board realigned committee assignments. The functions of the Audit and Finance Committee include the engagement of an independent registered public accounting firm, reviewing with that independent registered public accounting firm the plans for and results of its audit of the Corporation, approving the annual audit plan and reviewing the results of the procedures for internal auditing, reviewing the independence of the external auditors, reviewing the Corporation’s financial results and Securities and Exchange Commission filings, reviewing the effectiveness of the Corporation’s internal controls and similar functions and approving all auditing and non-auditing services performed by the Corporation’s independent registered public accounting firm. The Board of Directors has adopted a written charter for the Audit and Finance Committee, which may be found on the Corporation’s website at www.4lnb.com. All members of the Audit and Finance Committee meet the independence standards of Rule 4200(a)(15) of the Nasdaq Stock Market listing standards and Rule 10A-3 under the Securities Exchange Act of 1934, as amended, and the Audit and Finance Committee qualifications of Rule 4350(d)(2) of the Nasdaq Stock Market listing standards. The Board of Directors has determined that Lee C. Howley and Donald F. Zwilling are each an “audit committee financial expert” as that term is defined in Item 407(d)(5) of Regulation S-K. The report of the Audit and Finance Committee for 2010 appears under the caption “Report of the Audit and Finance Committee.”

Compensation Committee

Members

Robert M. Campana, Chairman

Terry D. Goode

Benjamin G. Norton

Thomas P. Perciak

John W. Schaeffer, M.D.

The Compensation Committee is comprised entirely of independent directors as prescribed by Nasdaq Stock Market listing standards. The Board of Directors has adopted a Compensation Committee Charter, which may be found on the Corporation’s website at www.4lnb.com. The Compensation Committee met thirteen (13) times during 2010. James F. Kidd and J. Martin Erbaugh served as members of the committee until April 27, 2010, when Mr. Kidd retired from the Board of Directors and the Board realigned committee assignments. The Compensation Committee is responsible for determining director and executive officer compensation, reviews and establishes policies for benefit programs of the Corporation, and reviews benefit insurance programs of the Corporation. The committee’s role in establishing compensation for the Corporation’s executive compensation is discussed further under the caption “Compensation Discussion and Analysis” and the committee’s report on executive compensation matters for 2010 appears under the caption “Report of the Compensation Committee on Executive Compensation.”

Governance Committee

Members

Jeffrey F. Riddell, Chairman

J. Martin Erbaugh

Benjamin G. Norton

John W. Schaeffer, M.D.

The Governance Committee is comprised entirely of independent directors as prescribed by Nasdaq Stock Market listing standards. The Board of Directors has adopted a Governance Committee Charter which may be found on the Corporation’s website at www.4lnb.com. The Governance Committee met eight (8) times during 2010. Daniel G. Merkel served as a member of the committee until April 27, 2010, when the Board realigned committee assignments.

The Governance Committee is responsible for developing and recommending to the Board corporate governance policies and guidelines for the Corporation. The committee also develops guidelines for identifying director and committee member candidates and recommends qualified candidates to the Board for nomination for election to the Board and appointment to committee membership in accordance with the Corporation’s Amended Code of Regulations. The committee recommends director candidates to the Board of Directors for nomination, in accordance with the Corporation’s Amended Code of Regulations. The committee evaluates and assesses the background and skills of potential directors and committee members. The Governance Committee may engage a third party search firm to assist in identifying potential directors if necessary, but has not done so and, accordingly, has paid no fees to any such firm.

The Governance Committee and the Board of Directors consider the following criteria in determining whether an individual is qualified to serve as a director of the Corporation: independence (a majority of the directors must be independent); honesty and integrity; willingness to devote sufficient time to fulfilling duties as a director; particular experience, skills or expertise relevant to the Corporation’s business; depth and breadth of business and civic experience in leadership positions; and ties to LNB’s geographic markets. The Governance Committee and the Board of Directors also consider the composition of the Board as a whole in evaluating whether a particular individual should serve on the Board, as the Board seeks to comprise itself of members which, collectively, possess a range of relevant skills, experience and expertise. While the Board of Directors does not maintain a policy regarding diversity, the Board of Directors does consider the diversity of the Board when considering director nominees.

Shareholder Recommendations

Shareholders may propose potential director nominees for the consideration of the Governance Committee by submitting the names and qualifications of such persons to the Chairman of the Governance Committee at the Corporation’s executive offices, which submissions then will be forwarded to the Chairman. The Governance Committee will evaluate the qualifications of any such persons using the criteria outlined above and will consider whether to recommend the nomination of any such person in light of the committee’s evaluation of the person’s qualifications, the qualifications of any other potential director nominees and then current size and composition of the Board of Directors. In order for any such potential director nominees to be evaluated for nomination at an annual meeting of shareholders, submissions of the name and qualifications of such potential nominees should be made no later than the December 31st prior to the annual meeting. The Governance Committee is not obligated to recommend to the Board, nor is the Board obligated to nominate any such individual for election as a director.

Executive Committee

Members

James R. Herrick, Chairman

Terry D. Goode, Vice Chairman

Robert M. Campana

Lee C. Howley

Daniel E. Klimas

Daniel G. Merkel

Jeffrey F. Riddell

The Executive Committee is authorized and empowered to exercise, during the intervals between meetings of the Board of Directors, all of the powers of the Board of Directors in the management and control of the Corporation to the extent permitted by law. The Executive Committee did not meet during 2010.

Board Role in Risk Oversight

Risk is inherent in any business and the Corporation’s management is responsible for the day-to-day management of risks that the Corporation faces. The Board, on the other hand, has responsibility for the oversight of risk management. The Board of Directors is responsible for providing oversight of, and direction and authority to management regarding the Corporation’s business activities in a manner consistent with the best interests of the Corporation’s stakeholders. The Board is responsible for identifying and understanding the needs and expectations of key stakeholders and for evaluating possible outcomes that could arise out of the Corporation’s business activities and whether they would be acceptable to stakeholders. To guide management’s decision making process, the Board articulates broad tolerance levels or limits. To ensure that risk management activities are within those tolerance limits, the Board is responsible for ensuring the establishment of satisfactory management information and communication requirements.

The Board believes that full and open communication between management and the Board of Directors is essential for effective risk management and oversight. The Chairman of the Board meets regularly with the Chief Executive Officer and other senior officers to discuss strategy and risks facing the Corporation. Senior management attends the Board’s monthly meetings, as well the monthly Board committee meetings, in order to address any questions or concerns raised by the Board on risk management-related and any other matters. Each month, the Board of Directors receives presentations from senior management on business operations, financial results and strategic matters. The Board holds an annual strategic planning retreat, as well as periodic strategic planning sessions with senior management to discuss strategies, key challenges, and risks and opportunities for the Corporation.

The Board’s committees assist the Board in fulfilling its oversight responsibilities in certain areas of risk. The Audit and Finance Committee assists the Board in fulfilling its oversight responsibilities with respect to enterprise risk management and risk management in the areas of financial reporting, internal controls and compliance with legal and regulatory requirements. A risk management committee comprised of the Corporation’s senior management reports to the Audit and Finance Committee and is responsible for managing the Corporation’s risk management activities and delegating risk management authority to the individuals who responsible for executing specific activities. Risk assessment reports are regularly provided by management and the Corporation’s internal auditors to the Audit and Finance Committee. The Compensation Committee assists the Board in fulfilling its oversight responsibilities with respect to the management of risks arising from the Corporation’s compensation policies and programs. The Governance Committee assists the Board in fulfilling its oversight responsibilities with respect to the management of risks associated with Board organization, membership and structure, succession planning for directors and executive officers, and corporate governance. The Lorain National Bank’s Loan Review Committee monitors and oversees the bank’s management of credit risk in its primary areas of business. All of these committees report back to the full Board of Directors at each Board meeting as to the committee’s activities and matters discussed and reviewed at the committee’s meetings.

Report of the Audit and Finance Committee

The Audit and Finance Committee of the LNB Bancorp, Inc. Board of Directors is comprised of four (4) directors, each of whom is independent as defined by the Nasdaq Stock Market listing standards and Rule 10A-3 under the Securities Exchange Act of 1934, as amended, and operates under a written charter adopted by the Board of Directors.

Management is responsible for the Corporation’s internal controls and the financial reporting process. The independent registered public accounting firm is responsible for performing an independent audit of the Corporation’s consolidated financial statements in accordance with the Standards of the Public Company Accounting Oversight Board and issuing a report thereon. The Audit and Finance Committee’s responsibility is to monitor and oversee these processes.

In this context, the Audit and Finance Committee has met and held discussions with management and Plante & Moran, PLLC, the Corporation’s independent registered public accounting firm in 2010. In fulfilling the Committee’s oversight responsibility as to the audit process, the Audit and Finance Committee obtained from Plante & Moran, PLLC a formal written statement describing all relationships between the firm and the Corporation that might bear on the firm’s independence as required by applicable requirements of the Public Company Accounting Oversight Board regarding Plante & Moran, PLLC’s communications with the Audit and Finance Committee concerning independence and discussed with the firm any relationships that may impact its objectivity and independence and satisfied itself as to the independence of Plante & Moran, PLLC. The Audit and Finance Committee also discussed with management, the Corporation’s internal auditors and Plante & Moran, PLLC the quality and adequacy of LNB’s internal controls and the internal audit function’s organization, responsibilities, budget and staffing. The committee reviewed with Plante & Moran, PLLC and the Corporation’s internal auditors their audit plans, audit scope and identification of audit risks.

The Audit and Finance Committee discussed and reviewed with Plante & Moran, PLLC all communications required by generally accepted auditing standards, including those described in Statement on Auditing Standards No. 61, as amended, “Communication with Audit and Finance Committees,” and, with and without management present, discussed and reviewed the results of Plante & Moran, PLLC’s examination of the financial statements. The Audit and Finance Committee also discussed the results of the internal audit examinations.

The Audit and Finance Committee reviewed the audited consolidated financial statements of LNB Bancorp, Inc. as of and for the year ended December 31, 2010, with management and the independent registered public accounting firm.

Based on the above-mentioned review and discussions with management and the independent registered public accounting firm, the Audit and Finance Committee recommended to the Board that the Corporation’s audited consolidated financial statements be included in its Annual Report on Form 10-K for the year ended December 31, 2010, for filing with the Securities and Exchange Commission. During 2010, the Audit and Finance Committee appointed Plante & Moran, PLLC as the Corporation’s independent registered public accounting firm for 2010.

The Audit and Finance Committee has appointed Plante & Moran, PLLC to continue as the Corporation’s independent registered public accounting firm for its 2011 fiscal year, and the Company is seeking ratification of such appointment at the 2011 Annual Meeting.

Audit and Finance Committee

Lee C. Howley, Chairman

J. Martin Erbaugh

Terry D. Goode

Donald F. Zwilling

Principal Independent Registered Accounting Firm Fees

The Audit and Finance Committee has appointed Plante & Moran, PLLC to continue as the Corporation’s independent registered public accounting firm and to audit the financial statements of the Corporation for the fiscal year ending December 31, 2011. The Corporation is asking its shareholders to ratify this appointment at the Annual Meeting.

The following table sets forth the aggregate fees billed for the fiscal years ended December 31, 2010 and December 31, 2009 by LNB’s principal independent registered public accounting firm, Plante & Moran, PLLC.


	For the Year Ended
	December 31,
	2010		2009

Audit fees	$	282,925	$	275,600
Audit-related fees(a)		—		18,720
Tax fees(b)		25,945		29,600
All other fees(c)		33,075		32,025

Total fees		341,945		355,945


(a)		Includes fees for consulting services related to other accounting and reporting matters.

(b)		Includes fees for services related to tax compliance.

(c)		The Audit and Finance Committee has considered whether the provision of these services is compatible with maintaining the principal independent registered accounting firm’s independence and has determined that the provision of such services has not affected the principal independent registered accounting firm’s independence. In 2010 and 2009, these fees include fees for services related to benefit plan audits.

The Audit and Finance Committee is responsible for pre-approving all auditing services and permitted non-audit services to be performed by its independent registered public accounting firm, except as described below.

The Audit and Finance Committee has established general guidelines for the permissible scope and nature of any permitted non-audit services in connection with its annual review of the audit plan and reviewed such guidelines with the Board of Directors. Pre-approval may be granted by action by the full Audit and Finance Committee Chairman, whose action shall be considered to be that of the entire committee. Pre-approval shall not be required for the provision of non-audit services if (1) the aggregate amount of all such non-audit services constitutes no more than 5% of the total amount of revenues paid by the Corporation to the auditors during the fiscal year in which the non-audit services are provided, (2) such services were not recognized by the Corporation at the time of engagement to be non-audit services are provided, and (3) such services are promptly brought to the attention of the Audit and Finance Committee and approved prior to the completion of the audit. No services were provided by Plante & Moran, PLLC pursuant to these exceptions in 2010 or 2009.

EXECUTIVE COMPENSATION AND OTHER INFORMATION

Compensation Discussion and Analysis

Introduction

The Compensation Committee operates under a written charter adopted by the Board of Directors. The Compensation Committee is responsible for developing and making recommendations to the Board with respect to the Corporation’s executive compensation policies and for the approval and administration of the Corporation’s existing and proposed executive compensation plans. The Compensation Committee’s responsibility includes determining the contents of the Corporation’s executive compensation plans, authorizing the awards to be made pursuant to such plans and annually reviewing and approving all compensation decisions relating to the Corporation’s executive officers, including the President and Chief Executive Officer and the other executive officers named in the Summary Compensation Table (the “Named Executives”).

The members of the Compensation Committee are Robert M. Campana, Chairman, Terry D. Goode, Benjamin G. Norton, Thomas P. Perciak and John W. Schaeffer, M.D. Each of the current members of the Compensation Committee meets the definitions of (i) “independent” within the meaning of the listing standards of The Nasdaq Stock Market and (ii) a “non-employee director” within the meaning of Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended.

Charter

The Board of Directors of the Corporation has adopted a charter which describes the responsibilities, functions and authority of the Compensation Committee. The full text of the charter is available on the Corporation’s website at www.4lnb.com by clicking on the link for “Investor Relations.” There were thirteen (13) meetings of the Compensation Committee in 2010.

Role of Executives in Establishing Compensation

The Corporation’s Human Resources Department and other members of management assist the Compensation Committee in its administration of the Corporation’s executive compensation program and the Corporation’s overall benefits program. The Corporation’s Chief Executive Officer assesses the performance of each of the Corporation’s other executive officers and provides recommendations to the Compensation Committee as to the structure and amounts of salary, cash bonus awards, equity incentive awards and other benefits to be paid to such executive officers. The CEO formulates his recommendations with the assistance of the Corporation’s Senior Vice President of Human Resources. The Senior Vice President of Human Resources provides the CEO and the Compensation Committee with information from external industry data surveys developed by the American Bankers Association, The Ohio Bankers League, Salary.com, and Robert Half and with internally prepared surveys of the annual base salaries, cash bonus awards, equity incentive awards and other benefits for the Named Executives in a group of competitive companies, as described in “Elements of Compensation” below. The Corporation did not engage an independent compensation consultant during 2010.

The CEO and/or the Senior Vice President of Human Resources attend each meeting of the Compensation Committee for the purpose of providing insight into the Corporation’s performance and the performance of individual executives and the executive’s contribution to the Corporation’s performance, and to make recommendations as to the structure and implementation of elements of executive compensation. The CEO and the Senior Vice President of Human Resources are not present during any discussions of their respective individual compensation by the Compensation Committee. The Compensation Committee believes that the input of these executives, together with the external industry and internal competitive group surveys reviewed by the committee, provides the Compensation Committee with information necessary to make informed decisions on executive compensation that are consistent with the Compensation Committee’s overall philosophy.

Limitations on Executive Compensation in Connection with the Corporation’s Participation in the TARP Program

On December 12, 2008, the Corporation issued preferred stock and common stock purchase warrants to the U.S. Department of Treasury under the TARP Capital Purchase Program (“CPP”) created under EESA. As a result of that transaction, the Corporation entered into certain required amendments to incentive compensation plans and compensation agreements with the Named Executives and became subject to certain additional executive compensation and governance requirements under TARP, CPP, EESA, and Treasury Department regulations. Those requirements apply to certain employees of the Corporation, including “senior executive officers” of the Corporation (“SEOs”), which includes the Named Executives. These requirements:


	•	prohibit incentive compensation arrangements that encourage SEOs to take unnecessary and excessive risks;

	•	obligate the Compensation Committee to review SEO incentive compensation arrangements with senior risk officers to ensure that executives are not encouraged to take unnecessary and excessive risks and to meet annually with senior risk officers to discuss and review the relationship between risk management policies and practices and SEO incentive compensation arrangements;

	•	provide for the recovery of any bonus or incentive compensation paid to a SEO where the payment was later found to have been based on statements of earnings, gains, or other criteria which prove to be materially inaccurate;

	•	limit the amounts that can be paid under change in control and similar agreements which provide payments upon separation of service; and

	•	limit the Corporation’s tax deduction for compensation paid to any SEO to $500,000 annually.

On February 17, 2009, the American Recovery and Reinvestment Act of 2009 (“ARRA”) was signed into law. On June 10, 2009, the U.S. Treasury issued the TARP Regulations implementing the compensation and governance requirements under ARRA. The TARP Regulations amend the executive compensation and corporate governance provisions of EESA to, among other things:


	•	prohibit the Corporation from making golden parachute payments to any SEO or any of the next five most highly compensated employees of the Corporation;

	•	require the Corporation to ensure that any bonus payment made to a SEO or the next twenty most highly compensated employees is subject to recovery or “clawback” by the Corporation if the bonus payment was paid based on materially inaccurate financial statements or any other materially inaccurate performance metric criteria;

	•	prohibit tax gross-ups or other reimbursements for the payment of taxes to any of the SEOs or the next twenty most highly compensated employees;

	•	prohibit paying or accruing any bonus, retention award, or incentive compensation to the five most highly compensated employees of the Corporation that fully vests during the period in which any obligation under CPP remains outstanding or that has a value greater than one-third of the total amount of the annual compensation of the employee receiving the award; and

	•	require an annual, non-binding shareholder vote on the Corporation’s executive compensation program.

In accordance with the TARP Regulations, the Board of Directors authorized a non-binding advisory shareholder vote on the Corporation’s executive compensation plans, programs and arrangements. See “Proposal 4 — Advisory Approval of LNB’s Executive Compensation Program.” The Corporation’s shareholders voted on similar proposals at the Corporation’s past two annual meetings and each time those proposals were approved by sizable majorities. The Compensation Committee considers the results of these votes to indicate that shareholders are generally supportive of the Corporation’s executive compensation program and the philosophy and objectives of the program. Accordingly, the Compensation Committee has sought to make executive compensation decisions and implement executive compensation policies that are consistent with the philosophy and objectives that the Corporation’s shareholders have approved in prior years.

Other provisions of ARRA require the participating companies to establish a board compensation committee that must meet at least semi-annually to discuss and evaluate employee compensation plans in light of an assessment of any risk posed to the Corporation from the plans; to adopt a company-wide policy regarding “excessive” or “luxury” expenditures; and to annually file a written certification of the company’s CEO and CFO as to the company’s compliance with the requirements.

The Corporation’s executive compensation program has historically included significant performance-based elements, including annual and long-term incentive cash compensation. The Compensation Committee’s ability to award performance-based elements of compensation has been greatly limited under the TARP Regulations, particularly with respect to the Named Executives. Accordingly, the Compensation Committee has taken action, and continues to assess what further actions may be necessary or appropriate, to modify the Corporation’s executive compensation program for Named Executives to work within the limitations imposed by the TARP Regulations while still ensuring that the executive compensation program continues to fulfill its philosophy and objective.

General Compensation Philosophy

The Compensation Committee has determined that the Corporation, as a performance-driven business, should reward outstanding financial results with appropriate compensation. The Compensation Committee’s strategy for carrying out this philosophy is to seek to link executive compensation with the Corporation’s financial performance while, at the same time, considering external market factors that affect such performance that are outside the control of the Corporation’s executives. The Compensation Committee recognizes the importance of maintaining compensation and benefits at competitive levels in order to attract and retain talented executives. In addition, the Compensation Committee considers how compensation arrangements may affect risk-taking by executives.

The Corporation’s executive compensation program has historically consisted of three primary components: base salary, an annual cash bonus and equity incentive awards. Due to the Corporation’s participation in the CPP and the limitations on executive compensation under the related TARP Regulations, an annual cash bonus is no longer a primary component of the compensation of the Named Executives. In general, base salaries are established at or near market median levels for comparable positions in Northeast Ohio banks and banks of similar size in other regions. Annual cash bonus opportunities (to the extent they are permissible under the TARP Regulations) are dependent upon the achievement of financial objectives established in advance and reflective of the opportunities and challenges present in the Corporation’s industry. In addition, long-term compensation has been awarded in the form of equity awards to the Named Executives and other key executives. The equity awards, granted as restricted shares intended to meet the definition of “long-term restricted stock” under the TARP Regulations, are intended to provide key executives with competitive financial benefits, to the extent shareholder value is enhanced.

The Compensation Committee believes that equity-based compensation aligns the long-term interests of employees with those of shareholders, and has periodically included equity award grants as an element of executive compensation for the Corporation’s key executives, including the Named Executives. In determining appropriate equity-based compensation awards for the Corporation’s executives, the Compensation Committee focuses on the current performance and achievements of the executive, the industry data surveys and comparative peer group information, and the executive’s present and potential future contribution to the Corporation’s success. The Compensation Committee also considers that recommendation of the Chief Executive Officer, with respect to equity award grants to executives other than the Chief Executive Officer.

The Corporation also provides its executives with certain other benefits. Those benefits include the opportunity to participate in a 401(k) retirement savings plan, as well as certain compensatory insurance benefits and other perquisites which are described below and in the Summary Compensation Table included in this proxy statement. In addition, the Chief Executive Officer previously entered into an agreement with the Corporation that provides for specified benefits based upon certain events following a change of control of the Corporation. The Compensation Committee believes that the agreement serves to better align the interests of the Chief Executive Officer and the Corporation’s shareholders should such a change arise, and help ensure that the Chief Executive Officer remains in his position during a period of ownership transition and makes operational decisions which are in the best interests of the Corporation and its shareholders. While this agreement with the Chief Executive Officer remains in effect, in

order to comply with TARP Regulations, it has been amended to prohibit the payment of the change in control benefits under the agreement, except to the extent permitted under the TARP Regulations.

The Compensation Committee believes these various elements of the executive compensation and benefits program further the Corporation’s business objectives and the interests of its shareholders by attracting and retaining the talented executive leadership necessary for the growth and success of the Corporation’s business and motivating its executives to exert the maximum possible effort to further the interests of shareholders. However, as a result of the TARP Regulations, the Corporation is subject to limitations that have required the Compensation Committee to alter, modify or eliminate elements that have historically been a part of the Corporation’s executive compensation program.

Elements of Compensation

A primary role of the Compensation Committee is to analyze the competitiveness and structure of the overall compensation program of the corporate executives. This includes analyzing the salary, annual cash bonus awards and long-term equity incentive awards, where applicable, to be paid to the Corporation’s executives. The Compensation Committee also structures and monitors the Corporation’s equity-based compensation plans with executive officers and its employment and change in control agreement with its Chief Executive Officer. The Compensation Committee does not “benchmark” executive compensation against its competitors, but the committee does gauge the competitiveness of the Corporation’s executive compensation level by analyzing market data regarding annual base salary, annual cash bonus awards, long-term equity incentive awards and other benefits paid by companies in what the Compensation Committee considers the Corporation’s “primary competitor group,” which includes financial institutions within a Tri-State area with $1 billion in assets, and companies in a “secondary competitor group,” which includes financial institutions from across various states having annual revenue similar to that of the Corporation. The Compensation Committee relies on management and external research to identify the individual companies which make up these competitor groups. The Compensation Committee and the Human Resources department believe that the most direct competitors for executive talent are not necessarily the companies that would be included in the peer group established to compare shareholder returns. Accordingly, in identifying the group of surveyed employers, the Human Resources department assembles market data on companies having projected revenues similar to that of the Corporation, with particular emphasis on larger employers which may be significant competitors for executive talent. The assembled data is then reviewed by the Chief Executive Officer, the Senior Vice President of Human Resources and with respect to each of the top executive officer positions, adjusted for the scope of responsibilities of the position within the Corporation as compared to the equivalent responsibilities of positions within the companies included in the survey data. The Compensation Committee then compares the Corporation’s compensation and benefits practices with those of the other companies included in the survey data and takes the results into account when establishing compensation guidelines and recommendations for executives.

Total Compensation

In prior years, before the Corporation participated in the CPP and became subject to the TARP Regulations, the Compensation Committee sought to provide the Named Executives with an annual cash bonus opportunity that, when combined with the executive’s base salary, would result in total annual cash compensation to the executive in an amount competitive when compared to the market data provided by the surveys reviewed by the committee. As a result of the restrictions imposed by the TARP Regulations, the Corporation, in particular, is generally prohibited from paying cash bonuses to the Named Executives. The Compensation Committee believes that the Named Executives have performed well during a period of persistent economic challenges, industry unpredictably and far-reaching regulatory changes and that maintaining compensation and benefits at competitive levels in order to retain the Corporation’s management team is important to the future success of the Corporation. Accordingly, the Compensation Committee has shifted from its historical focus on cash compensation and instead emphasizes providing the Named Executives with total compensation, including base salary, long-term equity compensation awards and other benefits, that is competitive when compared to the market data in the surveys reviewed by the Compensation Committee.

In determining the total compensation for each Named Executive other than the CEO for 2010, the Compensation Committee generally seeks to provide each Named Executive other than the CEO with total compensation, including annual base salary, long-term equity compensation awards and other benefits, that would result in total annual compensation to the executive that is competitive with the market data provided by the surveys.

Chief Executive Officer. In determining the total compensation of the Chief Executive Officer for 2010, the Compensation Committee surveyed the total compensation provided to the chief executive officers of the financial institutions in the Corporation’s primary competitor group and secondary competitor group with assets and operations most closely aligned with those of the Corporation. The Compensation Committee reviewed the total compensation, including annual base salary, annual cash bonus, equity incentive awards and pension and retirement benefits, provided by these other financial institutions.

Annual Base Salary

Generally, the Compensation Committee seeks to establish an annual base salary level for each executive that falls at or near the competitive market levels established for the surveyed positions of executives having similar responsibilities. The Compensation Committee believes that establishing base salaries at this level helps the Corporation attract and retain talented executives and, when paired with long-term equity compensation awards, appropriately rewards executives based on performance.

In establishing salary levels for each executive other than the CEO, the Compensation Committee, at its regular meeting early in the fiscal year, considers annual survey information from the Human Resources Department and also reviews annual recommendations from the CEO. The Compensation Committee also takes into account whether each executive met key objectives, and considers each executive’s potential future contributions to the Corporation. In addition, the Compensation Committee determines whether each executive’s base salary provides an appropriate reward for the executive’s role in the Corporation’s performance and incentive for the executive to contribute to sustaining and enhancing the Corporation’s long-term performance. Important components that are considered by the Compensation Committee in establishing base salary levels are: knowledge and problem solving abilities required to meet the position requirements, span of control, accountability, educational requirements, years of experience, division sales and profit objectives, key departmental objectives, and market salary surveys. Operating objectives vary for each executive and typically change from year-to-year. Financial and operating objectives are considered in the aggregate by the Compensation Committee and are not specifically weighted in establishing base salaries. The base salary levels established for 2010 were based on the judgment of the Compensation Committee, taking into account the CEO’s input regarding each executive’s achievement of applicable 2009 operating and financial objectives and the targeted salary ranges based on market salary information. Where necessary, the Compensation Committee may recognize the particular talents, unique skills, experience, length of service to the Corporation and depth of banking or functional knowledge of certain key executives and determine that their base salary levels must be established above the market range to retain these executives. After reviewing the overall compensation programs of the Named Executives, and considering the economic conditions of the banking industry, market survey information, the Corporation’s 2009 financial results, and the recommendations of the Chief Executive Officer, the Compensation Committee determined to implement merit increases of between 2.2 and 3% of the base salaries for the four Named Executives other than the Chief Executive Officer for 2010.

Chief Executive Officer. In determining the Chief Executive Officer’s base salary for 2010, the Compensation Committee reviewed the compensation arrangements provided by other financial institutions in the Corporation’s competitor groups discussed above, and considered the Corporation’s performance in light of the prevailing economic and industry conditions, as well as the constantly changing regulatory environment. The Compensation Committee also considered the CEO’s individual experience, accountability, know-how, leadership and problem-solving abilities, and determined that the CEO’s base salary was appropriate and, accordingly, it was not increased for 2010.

Indirect Loan Production Commission

While cash bonuses and incentives may not be paid to the Corporation’s five most highly compensated employees pursuant to the TARP Regulations, the TARP Regulations do permit payment of commission compensation under certain circumstances. Accordingly, the Compensation Committee continued in 2010 the Corporation’s use of a commission compensation program as part of its compensation of Kevin W. Nelson, the Corporation’s Senior Vice President of Indirect Lending. Under the program, Mr. Nelson has the opportunity to earn a commission based on the total amount of indirect automobile loans made by the Corporation during 2010 for which Mr. Nelson is responsible. The program provided Mr. Nelson with the opportunity to earn a commission equal to up to 20% of his base salary, based on a graduated scale of 5% to 20% of his base salary paid based on achievement from 80% to 110% of the goal of $122,300,000 in indirect loans for 2010. Mr. Nelson achieved loan production equal to 100% of the goal and, accordingly, was paid a commission of $20,025 for 2010.

Long-Term Equity Compensation Awards

In prior years, the Compensation Committee, from time to time, included grants of long-term equity compensation awards as part of the annual compensation provided to the Named Executives, primarily in the form of stock options. The Compensation Committee believes that the primary benefit to the Corporation of long-term equity compensation awards is to motivate the Named Executives to increase shareholder value, and to ensure adequate executive retention.

Under the TARP Regulations, the Corporation is prohibited from granting equity compensation awards to the Named Executives unless such awards are made in the form of “long-term restricted stock” that complies with various requirements specified in the regulations. In light of those restrictions, as well as the general prohibition on the payment of cash bonuses to the Named Executives under the TARP Regulations, the Compensation Committee determined to make equity compensation awards a more prominent component of the overall compensation of the Named Executives and authorized long-term restricted stock awards under the Corporation’s existing 2006 Stock Incentive Plan. After considering the strong performance of the Corporation’s core business during 2009, to further align the Named Executives’ interests with the Corporation’s shareholders and in order to maintain the competitiveness of the Corporation total executive compensation and help ensure executive retention, in February 2010, the Compensation Committee granted shares of long-term restricted stock under the Corporation’s existing 2006 Stock Incentive Plan to each of the Named Executives. The material terms of the long-term restricted stock awards are further described in this proxy statement under “2006 Stock Incentive Plan — Long-Term Restricted Stock.”

Chief Executive Officer. In prior years, before the Corporation was subject to the requirements imposed by the TARP Regulations, the Compensation Committee established a long-term incentive plan for the CEO that provided for an incentive payment in cash, equity awards, or a combination of both, to the CEO based on achievement of long-term strategic goals. As discussed above, the TARP Regulations prohibit the Corporation from paying the Chief Executive Officer a cash bonus or granting him equity compensation awards other than in the form of long-term restricted stock.

The Compensation Committee believes that the CEO is the primary force for the long term strategic vision of the Corporation. The Compensation Committee also believes that the Chief Executive Officer should receive appropriate compensation for his effective leadership of the Corporation during a period of persistent economic and industry-related challenges, and the strong performance of the Corporation’s core business during 2009 and into 2010 in the face of these challenges. Accordingly, in light of the Corporation’s performance, and in order to further align the CEO’s interests with the Corporation’s shareholders and to maintain the competitiveness of the CEO’s total compensation and help ensure his retention, the Compensation Committee, in February 2010, granted shares of long-term restricted stock to the CEO. In November 2010, the Compensation Committee, approved an additional grant of long-term restricted stock to the CEO in order to enhance the competitiveness of his total compensation relative to the compensation provided to similarly-situated CEO’s in the market data and competitor group data reviewed by the committee and to further recognize his effective leadership of the Corporation.

Personal Benefits and Perquisites

The Corporation has established the Lorain National Bank Retirement Savings Plan, a qualified 401(k) defined contribution plan, to which the Corporation makes contributions on behalf of each of the Named Executives. Consistent with what is generally provided to all of its employees, the Corporation also maintains and pays premiums on behalf of each Named Executive which provide a benefit under the Life Insurance, Long-term Disability, and Accidental Death and Dismemberment Plans of up to two times the Named Executive’s base salary on life and AD&D coverage and up to two-thirds of the Named Executive’s base salary on disability coverage, and provides partial payment of elected medical benefit premiums for the Named Executive.

The Corporation provided certain Named Executives certain perquisites in 2010, which the Compensation Committee believes are commensurate with the types of benefits and perquisites provided to similarly situated executives within the competitor peer groups, and are thus useful to the Corporation in attracting and retaining qualified executives. These perquisites include the payment of automobile expenses and club dues as described below under the Summary Compensation Table.

Elements of Post-Termination Compensation

The Corporation previously entered into an employment agreement with Mr. Klimas which provided for the payment of certain severance benefits upon termination of employment in certain circumstances, including following a change of control of the Corporation, which arrangements are summarized below under Other Potential Post-Employment Compensation. The Compensation Committee believes that the severance arrangements provided for in an agreement such as this are vital to the attraction and retention of a talented CEO and, thus, to the long term success of the Corporation. This agreement also addresses the Corporation’s interest in ensuring the continuity of corporate management and the continued dedication of the CEO during any period of uncertainty caused by the possible threat of a takeover. However, the TARP Regulations restrict the Corporation’s ability to provide the severance arrangements established under this agreement while the Corporation’s TARP obligations remain outstanding, so Mr. Klimas’ agreement was amended in 2009 to comply with the TARP Regulations.

Compensation Policies

Section 162(m) of the Internal Revenue Code

The Compensation Committee believes it is in the shareholders’ best interest to retain as much flexibility as possible in the design and administration of executive compensation plans. The Corporation recognizes, however, that Section 162(m) of the Internal Revenue Code disallows a tax deduction for non-exempted compensation in excess of $1,000,000 paid for any fiscal year to a corporation’s chief executive officer and four other most highly compensated executive officers. Because the statute exempts qualifying performance-based compensation from the deduction limit if certain requirements are met, the Compensation Committee intends generally to structure performance-based compensation to executive officers who may be subject to Section 162(m) in a manner that satisfies the requirements for this exemption whenever administratively and practically feasible. The Board and the Compensation Committee, however, could award non-deductible compensation in other circumstances, as they deem appropriate. Moreover, because of ambiguities in the application and interpretation of Section 162(m) and the regulations issued, there is no assurance that compensation intended to satisfy the requirements for deductibility under Section 162(m) actually will be deductible.

Report of the Compensation Committee on Executive Compensation

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with the Corporation’s management. Based on that review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Corporation’s Annual Report on Form 10-K and in the Corporation’s definitive proxy statement prepared in connection with its 2011 Annual Meeting of Shareholders.

Risk Review

Pursuant to the TARP Regulations, the Compensation Committee, at least once every six months, discusses, evaluates and reviews with the Corporation’s senior risk officers any risks (including long-term and short-term

risks) that the Corporation faces that could threaten the value of the Corporation. In connection with this review, the Compensation Committee discusses, evaluates and reviews with the Corporation’s senior risk officers:


	•	the Corporation’s SEO compensation plans to ensure that those plans do not encourage SEO’s to take “unnecessary and excessive risks” that threaten the value of the Corporation;

	•	all employee compensation plans in light of the risks posed to the Corporation by those plans and how to limit such risks; and

	•	all employee compensation plans of the Corporation to ensure that those plans do not encourage the manipulation of reported earnings of the Corporation to enhance the compensation of any of the Corporation’s employees.

SEO Compensation Plans

The Corporation offers the following plans in which the SEO’s participate:


	•	An employment agreement for the Chief Executive Officer;

	•	The 2006 Stock Incentive Plan and the Stock Appreciation Rights Plan;

	•	An indirect loan production commission arrangement for the Senior Vice President of Indirect Lending; and

	•	The Corporation’s 401(k) Plan.

The Compensation Committee reviewed each of the above plans and arrangements and determined that none of them encourage the SEOs to take unnecessary and excessive risks that threaten the value of the Corporation. In this regard, the employment agreement with the Chief Executive Officer provides for severance payments if a termination of employment occurs under certain circumstances. As discussed under “Compensation Discussion and Analysis” and “Other Potential Post-Employment Compensation,” due to the Corporation’s participation in the TARP Capital Purchase Program, the Corporation is restricted from providing the Chief Executive Officer with any severance payments in connection with the termination of his employment before the preferred stock issued to the U.S. Department of the Treasury pursuant to the TARP Capital Purchase Program is redeemed.

The 2006 Stock Incentive Plan and the Stock Appreciation Rights Plan were each approved by the shareholders of the Corporation and provide for the granting of equity awards, including stock options, stock appreciation rights and restricted stock awards. The Compensation Committee believes that long-term equity incentives help to align the interests of management with shareholders. Awards granted under these plans include a long-term vesting schedule to further encourage positive long-range performance and to assist in the retention of management and are subject to a recovery or “clawback” provision if any applicable award or payment under the plan is based on financial statements or other performance metrics that are later determined to be materially inaccurate. Long-term restricted stock awards granted under the 2006 Stock Incentive Plan are intended to comply with all requirements for such awards under the TARP Regulations. In light of the long-term nature of these equity awards and the recovery provisions established under the plans, the Compensation Committee believes that these equity awards do not encourage the Named Executives to take unnecessary and excessive risks that threaten the value of the Corporation.

The Corporation maintains an indirect loan production commission arrangement for its Senior Vice President of Indirect Lending. The arrangement provides for a commission to be paid based on the total amount of indirect automobile loans made by the Corporation during 2010 for which the executive is responsible. The Compensation Committee believes that the commission, which may constitute any amount equal to up to 20% of the executive’s salary, acts as an appropriate incentive and motivation to the executive without encouraging him to take unnecessary and excessive risks that threaten the value of the Corporation.

The 401(k) Plan is a tax-qualified plan that provides benefits to all employees who meet certain service requirements. Because participation and allocations in the plan are not based on Corporation or individual performance, the Compensation Committee believes that this plan does not encourage the SEOs to take unnecessary and excessive risks that threaten the value of the Corporation.

The Compensation Committee believes that the above plans and arrangements encourage the creation of long-term value instead of behavior focused on achieving short-term results. In addition, as discussed under “Compensation Discussion and Analysis,” the Corporation is restricted from paying any cash bonuses or granting any new stock options to

its five most highly compensated employees due to restrictions imposed on TARP Capital Purchase Program participants. Further, the SEOs and the next five most highly compensated employees are restricted from receiving any severance payments if their employment is terminated before the preferred stock is redeemed. These restrictions further limit the “unnecessary and excessive risks” that could arise from the Corporation’s executive compensation arrangements.

Other Employee Compensation Plans

In addition to the plans and arrangements identified above, the Compensation Committee has identified eight different employee compensation arrangements that provide for variable cash compensation bonus, commission or incentive payments. Each arrangement is available to a different set of employees and the amount received differs depending on level of job responsibility and plan objectives. Incentive compensation to management employees who are not one of the five most highly compensated employees is based on the Corporation’s profitability and the achievement of subjective goals. Incentive compensation to lending employees is based on volume, adjusted for nonperforming loans and credit costs, and subject to approval by a separate credit underwriting approval process. Incentive compensation to retail banking employees is based on deposit and balance growth and is subject to a maximum limit. Incentive compensation to brokerage employees was based on volume of asset management, brokerage and referral fees and commissions, and was subject to an independent review and approval process until the Corporation exited the business in 2010. Incentive compensation to trust employees is based on net new business and is subject to an independent review and approval process. Awards under these plans are subject to a recovery or “clawback” provision if any applicable award or payment under the plan is based on financial statements or other performance metrics that are later determined to be materially inaccurate.

The Compensation Committee reviewed the structure and implementation of these arrangements and discussed the risks faced by the Corporation and the policies and processes in place at the Corporation that mitigate these risks, as well as the allocation of incentive compensation compared to other compensation provided to the various employees and the recovery provisions established under the arrangements, and determined that the arrangements act an as appropriate incentive and motivation to the employees and do not encourage unnecessary and excessive risks that threaten the value of the Corporation or the manipulation of reported earnings to enhance the compensation of any employee.

TARP Certification

The Compensation Committee certifies that, during any part of the most recently completed fiscal year that was a TARP period:


	(1)	It has reviewed, at least every six months, with senior risk officers the SEO compensation plans and has made all reasonable efforts to ensure that these plans do not encourage SEOs to take unnecessary and excessive risks that threaten the value of the Corporation;

	(2)	It has reviewed, at least every six months, with senior risk officers the employee compensation plans and has made all reasonable efforts to limit any unnecessary risks these plans pose to the Corporation; and

	(3)	It has reviewed, at least every six months, the employee compensation plans to eliminate any features of these plans that would encourage the manipulation of reported earnings of the Corporation to enhance the compensation of any employee.

Compensation Committee

Robert M. Campana, Chairman

Terry D. Goode

Benjamin G. Norton

Thomas P. Perciak

John W. Schaeffer, M.D.

The above Report of the Compensation Committee does not constitute soliciting material and should not be deemed filed with the Commission or subject to Regulation 14A or 14C (other than as provided in Item 407 of Regulation S-K) or to the liabilities of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), except to the extent that the Corporation specifically requests that the information in this Report be treated as soliciting material or specifically incorporates it by reference into a document filed under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act. If this Report is incorporated by reference into the Corporation’s Annual Report on Form 10-K, such disclosure will be furnished in such Annual Report on Form 10-K and will not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act as a result of furnishing the disclosure in this manner.

Compensation Committee Interlocks and Insider Participation

During 2010, the Compensation Committee was comprised of Messrs. Campana, Goode, Norton, Perciak, and Schaeffer, each of whom was an independent director.

Summary Compensation Table

The following table presents the total compensation to the Chief Executive Officer, Chief Financial Officer and the three other most highly compensated executive officers of the Corporation in 2010.


												Non-Equity
								Stock		Option		Incentive Plan			All Other
Name and Principal Position	Year		Salary		Bonus			Awards(1)		Awards(2)		Compensation			Compensation(3)			Total

Daniel E. Klimas		2010	$	400,000		—		$	198,750	$	—		—		$	23,021	(4)	$	621,771
President and Chief		2009	$	400,000		—			—	$	—		—		$	21,549		$	421,549
Executive Officer		2008	$	390,769		—			—	$	56,500		—		$	19,497		$	466,766
Gary J. Elek		2010	$	228,846		—		$	43,500	$	—		—		$	25,260	(5)	$	297,606
Chief Financial Officer		2009	$	151,442		—			—	$	1,150		—		$	3,948		$	156,540
David S. Harnett		2010	$	204,615		—		$	32,625	$	—		—		$	38,242	(6)	$	275,482
Chief Credit Officer		2009	$	200,000		—			—	$	—		—		$	19,194		$	219,194
		2008	$	200,192		—			—	$	2,825		—		$	19,613		$	222,630
Frank A. Soltis		2010	$	176,846		—		$	32,625	$	—		—		$	30,446	(7)	$	239,918
Senior Vice President -		2009	$	173,000		—			—	$	—		—		$	13,309		$	186,309
Information Technology & Operations		2008	$	171,846		—			—	$	2,825		—		$	21,060		$	195,731
Kevin W. Nelson		2010	$	132,692		—		$	32,625	$	—	$	20,025	(8)	$	12,729	(9)	$	198,072
Senior Vice President - Indirect Lending		2009	$	128,311	$	24,000	(10)		—	$	—	$	13,000		$	12,425		$	177,736


(1)		The values reported in this column represent the fair value of the long-term restricted stock equity awards granted to the Named Executive during the applicable fiscal year. For a summary of the terms of these awards, see the section captioned “2006 Stock Incentive Plan” elsewhere in this Proxy Statement. For a description of the assumptions made in computing the amounts reported in this table, see the discussion of “Stock-Based Compensation” in the Notes to Consolidated Financial contained in the Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010.

(2)		The values reported in this column represent the grant date fair value of stock options granted to the Named Executive during the applicable fiscal year. For a summary of the terms of these awards, see the section captioned “2006 Stock Incentive Plan” elsewhere in this Proxy Statement. For a description of the assumptions made in computing the amounts reported in this table, see the discussion of “Stock-Based Compensation” in the Notes to Consolidated Financial Statements contained in the Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010.

(3)		For purposes of the disclosure in the Summary Compensation Table, perquisites are valued on the basis of the aggregate incremental cost to the Corporation of providing the perquisite to the applicable officer.

(4)		Compensation reported in this column includes (i) contributions made by the Corporation on behalf of Mr. Klimas to the Corporation’s 401(k) Plan; (ii) premiums paid by the Corporation under the Corporation’s life, long-term disability and accidental death and dismemberment plans on behalf of Mr. Klimas; (iii) payments made for a vehicle owned by the Corporation for use by Mr. Klimas; and (iv) club dues.


(5)		Compensation reported in this column includes (i) contributions made by the Corporation on behalf of Mr. Elek to the Corporation’s 401(k) Plan; (ii) premiums paid by the Corporation under the Corporation’s life, long-term disability and accidental death and dismemberment insurance plans on behalf of Mr. Elek; (iii) premiums paid by the Corporation under the Corporation’s health insurance plans on behalf of Mr. Elek; and (iv) a car allowance paid by the Corporation.

(6)		Compensation reported in this column includes (i) contributions made by the Corporation on behalf of Mr. Harnett to the Corporation’s 401(k) Plan; (ii) premiums paid by the Corporation under the Corporation’s life, long-term disability and accidental death and dismemberment insurance plans on behalf of Mr. Harnett; (iii) premiums paid by the Corporation under the Corporation’s health insurance plans on behalf of Mr. Harnett; (iv) club dues; and (v) a car allowance.

(7)		Compensation reported in this column includes (i) contributions made by the Corporation on behalf of Mr. Soltis to the Corporation’s 401(k) Plan; (ii) premiums paid by the Corporation under the Corporation’s life, long-term disability and accidental death and dismemberment insurance plans on behalf of Mr. Soltis; (iii) premiums paid by the Corporation under the Corporation’s health insurance plans on behalf of Mr. Soltis; and (iv) a car allowance.

(8)		Represents the amount of cash commission paid to Mr. Nelson under the Corporation’s commission compensation program. See “Compensation Discussion and Analysis — Indirect Loan Production Commission.”

(9)		Compensation reported in this column includes (i) contributions made by the Corporation on behalf of Mr. Nelson to the Corporation’s 401(k) Plan; (ii) premiums paid by the Corporation under the Corporation’s life, long-term disability and accidental death and dismemberment insurance plans on behalf of Mr. Nelson; and (iii) premiums paid by the Corporation under the Corporation’s health insurance plans on behalf of Mr. Nelson.

(10)		Represents amount paid to Mr. Nelson as an Exemplary Service Cash Bonus for 2009.

Employment Agreement

Daniel E. Klimas

The Corporation has entered into an employment agreement with Mr. Klimas which had an initial term of three years commencing February 1, 2005, and which provides that, unless the agreement is terminated by either party on or before November 1, 2006 and on or before each November 1 thereafter, the agreement term will automatically renew for one additional year, such that the agreement term (unless terminated prior to such automatic extension) shall not be less than fifteen (15) months, and after November 1, 2006 shall not be greater than twenty seven (27) months. The employment agreement was amended in 2008 to provide for an annual base salary of $400,000, and an annual bonus opportunity of up to 50% of base salary based on the attainment by Mr. Klimas of performance levels determined by the Compensation Committee. The employment agreement also provides for perquisites consistent with those available to the Corporation’s other executives. On February 1, 2005, Mr. Klimas also received a signing bonus of $115,000 and an award of 5,000 unrestricted shares of the registrant’s common stock. The employment agreement also provides for the grant of stock options to purchase 30,000 shares of the registrant’s common stock on February 1, 2005 and each of the first two anniversaries thereof, which options vest over periods ending in 2010. The agreement also contains non-disclosure and non-solicitation provisions that, among other things, prohibit Mr. Klimas from soliciting employees, customers or clients of the Corporation for a period of one year following the termination of his employment. The employment agreement also provides for certain severance and change of control benefits under certain circumstances that are further described below under “Other Potential Post- Employment Compensation.” The Employment Agreement was amended during 2009 in order to comply with the terms of EESA, as amended by ARRA, with respect to CPP participants, and provides that the agreement will be further interpreted or reformed to so comply. The amendment to the agreement also provides for the recovery by the Corporation of any applicable payment under the agreement if it is later determined that the payment is based on financial statements or other performance metrics that are later determined to be materially inaccurate.

Grants of Plan-Based Awards For Fiscal Year 2010

The following table shows, for the Named Executives, plan-based awards to those officers during 2010, including restricted stock awards and stock option grants, as well as other incentive plan awards.


													All Other			Grant
													Stock			Date Fair
				Estimated Future Payouts									Awards:			Value
				Under Non-Equity									Number of			of Stock and
				Incentive Plan Awards									Shares of			Option
	Grant			Threshold			Target			Maximum			Stock or			Awards
Name	Date			($)			($)			($)			Units (#)			($)(1)

Daniel E. Klimas		2/23/10			—			—			—			25,000	(2)	$	108,750
		11/1/10			—			—			—			19,364	(2)	$	89,996
Gary J. Elek		2/23/10			—			—			—			10,000	(2)	$	43,500
David S. Harnett		2/23/10			—			—			—			7,500	(2)	$	32,625
Frank A. Soltis		2/23/10			—			—			—			7,500	(2)	$	32,625
Kevin W. Nelson		2/23/10			—			—			—			7,500	(2)	$	32,625
		(3	)	$	6,675	(3)	$	20,025	(3)	$	26,700	(3)		—			—


(1)		The values reported in this column represent the FAS 123R value of all shares of long-term restricted stock awarded to each officer during 2010. For a description of the assumptions made in computing the FAS 123R values reported in this table, see the discussion of Stock-Based Compensation in footnote [18] in the Notes to Consolidated Financial Statements contained in the Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010.

(2)		Long-term restricted stock award granted under the Corporation’s 2006 Stock Incentive Plan, which vests in 50% increments on the second and third anniversaries of the date of grant and is subject to the terms and conditions described below under “2006 Stock Incentive Plan — Long-Term Restricted Stock.”

(3)		Indirect loan commission program award, under which Mr. Nelson had the opportunity to earn a commission based on the total amount of indirect automobile loans made by the Corporation during 2010 for which Mr. Nelson is responsible. The program provided Mr. Nelson with the opportunity to earn a commission equal to up to 20% of his base salary, based on a graduated scale of 5 to 20% of his base salary paid based on achievement from 80% to 110% of the goal of $122,300,000 in indirect loans for 2010. Mr. Nelson achieved loan production equal to 100% of the goal and, accordingly, was paid a commission of $20,025 for 2010.

Outstanding Equity Awards at December 31, 2010

The following table shows, for the Named Executives, outstanding equity awards held by such officers at December 31, 2010.


	Option Awards											Stock Awards
						Equity
						Incentive
						Plan Awards:									Market
	Number of		Number of			Number of						Number			Value of
	Securities		Securities			Securities						of Shares			Shares or
	Underlying		Underlying			Underlying						or Units of			Units of
	Unexercised		Unexercised			Unexercised		Option				Stock That			Stock That
	Options		Options			Unearned		Exercise		Option		Have Not			Have Not
	(#)		(#)			Options		Price		Expiration		Vested			Vested
Name	Exercisable		Unexercisable			(#)		($)		Date		(#)			($)

Daniel E. Klimas		30,000		—			—	$	19.10		2/1/2015		—			—
		30,000		—			—		19.17		2/1/2016		—			—
		30,000		—			—		16.00		2/1/2017		—			—
		33,333		16,667	(1)		—		14.47		2/4/2018		—			—
		—		—			—		—		—		25,000	(2)	$	124,250
		—		—			—		—		—		19,364	(3)	$	96,239
Gary J. Elek		833		1,667	(4)		—		5.46		5/14/2019		—			—
		—		—			—		—		—		10,000	(2)	$	49,700
David S. Harnett		20,000		—			—		15.35		8/8/2017		—			—
		1,666		834	(1)		—		14.47		2/4/2018		—			—
		—		—			—		—		—		7,500	(2)	$	37,275
Frank A. Soltis		2,500		—			—		16.50		6/27/2015		—			—
		2,500		—			—		19.00		1/20/2016		—			—
		1,666		834	(1)		—		14.47		2/4/2018		—			—
		—		—			—		—		—		7,500	(2)	$	37,275
Kevin W. Nelson		1,666		834	(1)		—		14.47		2/4/2018		—			—
		—		—			—		—		—		7,500	(2)	$	32,625


(1)		These stock options become exercisable in one-third increments over three years commencing February 4, 2009.

(2)		These shares of long-term restricted stock vest in 50% increments on February 23, 2012 and 2013, and are subject to other restrictions as described below under “2006 Stock Incentive Plan — Long-Term Restricted Stock.”

(3)		These shares of long-term restricted stock vest in 50% increments on November 1, 2012 and 2013, and are subject to other restrictions as described below under “2006 Stock Incentive Plan — Long-Term Restricted Stock.”

(4)		These stock options become exercisable in one-third increments over three years commencing May 14, 2010.

None of the Named Executives exercised stock options or stock appreciation rights during 2010.

2006 Stock Incentive Plan

Each of the outstanding stock options granted prior to August 2007 were made pursuant to stock option agreements established outside of a stock option plan. In 2006, the Corporation established the LNB Bancorp, Inc. 2006 Stock Incentive Plan (the “2006 Plan”), a shareholder-approved equity incentive plan which permits the Corporation to grant incentive stock options, nonqualified stock options, stock appreciation rights, performance shares, restricted shares and restricted share units to officers and other key employees of the Corporation who are eligible to participate in the plan as determined by the Compensation Committee in its sole discretion. The maximum number of shares of the Corporation that may be issued pursuant to awards granted under the 2006 Plan is 600,000 shares, up to 400,000 of which may be granted in the form of stock options and 200,000 of which may be granted in the form of restricted shares. The total number of shares underlying awards granted under the Plan to any participant in any fiscal year, regardless of whether any of those awards are subsequently canceled, forfeited, or

terminated, will not exceed 60,000 shares. Awards granted under the 2006 Plan are subject to the terms of the plan and such terms as may be specified by the Compensation Committee. The 2006 Plan is administered by the Compensation Committee, which includes the authority to determine the terms and conditions of awards granted under the plan and to interpret, administer and implement the plan. During 2009, the 2006 Plan was amended in order to comply with the terms of EESA, as amended by ARRA, with respect to CPP participants, and provides that the plan will be further interpreted or reformed to so comply. The amendment to the 2006 Plan also provides for the recovery by the Corporation of any applicable award or payment under the plan if it is later determined that the award or payment is based on financial statements or other performance metrics that are later determined to be materially inaccurate.

Long-Term Restricted Stock. In February 2010, the Compensation Committee first approved grants of long-term restricted stock under the 2006 Stock Incentive Plan. The terms and conditions of the long-term restricted stock are intended to meet the requirements of the long-term restricted stock exception in the TARP Regulations. Accordingly, shares of long-term restricted stock generally vest in two equal installments on the second and third anniversaries of the date of grant, or upon the earlier death or disability of the recipient or a qualified change of control of the Company. Furthermore, the shares will not be transferable by the recipient of the grant prior to the repayment of the TARP investment received by the Corporation, except as permitted under the TARP Regulations and as specified in the agreement governing the grant.

Stock Appreciation Rights Plan

The Stock Appreciation Rights (SAR) Plan permits the Compensation Committee to grant SARs, to be settled in cash only, to officers and other key employees of the Corporation who are eligible to participate in the SAR Plan as determined by the Compensation Committee in its sole discretion. The Compensation Committee may grant SARs for up to an aggregate of 50,000 common shares of the Corporation under the SAR Plan. SARs, when exercised, will entitle the holder thereof to a cash payment based on the appreciation in the fair market value of the common shares underlying the SAR, subject to the terms of the SAR Plan and such terms as may be specified by the Compensation Committee. The purpose of the SAR Plan is to provide long-term incentive compensation opportunities that are intended to help the Corporation attract and retain skilled employees, motivate participants to achieve long-term success and growth of the Corporation, and align the interests of the participating employees with those of the shareholders of the Corporation. The Compensation Committee has the authority to grant SARs under the SAR Plan. During 2009, the SAR Plan was amended in order to comply with the terms of EESA, as amended by ARRA, with respect to CPP participants, and provides that the plan will be further interpreted or reformed to so comply. The amendment to the SAR Plan also provides for the recovery by the Corporation of any applicable award or payment under the plan if it is later determined that the award or payment is based on financial statements or other performance metrics that are later determined to be materially inaccurate.

Other Potential Post-Employment Compensation

Severance and Change of Control Benefits

The Corporation entered into an employment agreement with Daniel E. Klimas that provide severance and/or change of control benefits upon termination of employment for certain reasons. See the discussion of Mr. Klimas’ agreement included above with the Summary Compensation Table. The severance and change of control benefits payable to Mr. Klimas are addressed in the discussion below.

Notwithstanding the following discussions regarding the amount of compensation payable to Mr. Klimas in the event of a termination of employment or a change of control, the TARP Regulations may prohibit such payments from being made upon the termination of the officer’s employment with the Corporation during a period in which any obligations arising from financial assistance provided under TARP remains outstanding. Please refer to the discussion appearing under the caption “Compensation Discussion and Analysis — Limitations on Executive Compensation in Connection with the Corporation’s Participation in the TARP Program.”

If Mr. Klimas terminates his employment with the Corporation as a result of a breach of his employment agreement by the Corporation or for good cause, or if the Corporation terminates his employment without cause, the

Corporation shall continue to pay to Mr. Klimas his salary, and health and life insurance benefits, as in effect immediately prior to the termination, for the then remaining term of the agreement. In addition, Mr. Klimas shall be entitled to a pro rata portion of the annual incentive awards applicable to the year in which such termination occurs and annual incentive awards each equal to 50% of his salary as in effect immediately prior to termination for the then remaining term of the agreement. Mr. Klimas shall also be entitled to be immediately awarded any stock options provided for in the agreement but not then issued, and all unvested stock options held by Mr. Klimas will become immediately exercisable in full. For purposes of the agreement, “good cause” means (i) a material adverse change in Mr. Klimas’ position, responsibilities, duties, or status, or title or offices, with the Corporation, (ii) a reduction in Mr. Klimas’ salary, (iii) a requirement that Mr. Klimas be based at a location more than 50 miles from his current residence, or (iv) failure of the Corporation to comply with the employee benefit provisions of the agreement.

Notwithstanding the terms described above, assuming that Mr. Klimas’ employment with the Corporation was terminated by the Corporation without cause or by Mr. Klimas for good reason as of December 31, 2010, the TARP Regulations prohibit such payments from being made upon the termination of the officer’s employment with the Corporation during a period in which any obligations arising from financial assistance provided under TARP remains outstanding. Accordingly, Mr. Klimas would not have been entitled to receive any such payments under his employment agreement if his employment with the Corporation had been so terminated as of December 31, 2010. Please refer to the discussion appearing under the caption “Compensation Discussion and Analysis — Limitations on Executive Compensation in Connection with the Corporation’s Participation in the TARP Program.”

Under Mr. Klimas’ employment agreement, Mr. Klimas is entitled to continuing indemnification to the fullest extent permitted by Ohio law for actions against him by reason of his being or having been an officer of the Corporation.

Under Mr. Klimas’ employment agreement, if, at any time within two years after the occurrence of a “change in control” (as defined in the agreement), Mr. Klimas’ employment is terminated by the Corporation (except for cause) or Mr. Klimas terminates his employment for good reason, the Corporation will pay to Mr. Klimas a lump sum severance benefit equal to the sum of (a) Mr. Klimas’ highest annual base salary as measured from the date of termination through the end of the term of the agreement (but not less than 24 months), (b) any bonuses earned but unpaid through the date of termination, (c) a pro rated portion of Mr. Klimas’ annual bonus amount for the fiscal year in which the termination occurs, (d) any accrued and unpaid vacation pay, and (e) the annual incentive awards payable for each remaining year of the term of the agreement (but not less than 24 months) in an amount equal to 50% of Mr. Klimas’ salary as in effect on the date of termination. Mr. Klimas shall also be entitled to be immediately awarded any stock options provided for in the agreement but not then issued, and all unvested stock options held by Mr. Klimas will become immediately exercisable in full. If the termination of employment occurs on or before February 1, 2010, Mr. Klimas will be entitled to receive “gross-up” payments to the extent that payment of any of the foregoing amounts results in excise taxes or penalties under Section 280G or 4999 of the Internal Revenue Code. For purposes of the agreement, “good reason” means, at any time after a change in control, (i) a material adverse change in Mr. Klimas’ position, responsibilities, duties, or status, or title or offices, with the Corporation from those in effect before the change of control, (ii) a reduction in Mr. Klimas’ base salary or failure to pay an annual bonus equal to or greater than the annual bonus earned for the year prior to the change in control, (iii) a requirement that Mr. Klimas be based at a location more than 50 miles from where he was located prior to the change in control or a substantial increase in Mr. Klimas’ business travel obligations as compared to such obligations prior to the change in control, and (iv) failure of the Corporation to continue any material employee benefit or compensation plan in which Mr. Klimas was participating prior to the change in control or provide Mr. Klimas with vacation in accordance with the policies in effect prior to the change in control. For purposes of the employment agreement, “cause” includes failure to perform duties as an employee, illegal conduct or gross misconduct, conviction of a felony, or breach of non-competition or non-disclosure obligations of the employee.

Notwithstanding the terms described above, assuming that a change of control of the Corporation occurred as of December 31, 2010 and Mr. Klimas’ employment with the Corporation was terminated by the Corporation without cause or by Mr. Klimas for good reason immediately thereafter, the TARP Regulations prohibited such payments from being made upon the termination of the officer’s employment with the Corporation during a period in which any obligations arising from financial assistance provided under TARP remains outstanding. Accordingly,

Mr. Klimas would not have been entitled to receive any such payments under his employment agreement if his employment with the Corporation had been so terminated as of December 31, 2010. Please refer to the discussion appearing under the caption “Compensation Discussion and Analysis — Limitations on Executive Compensation in Connection with the Corporation’s Participation in the TARP Program.”

In connection with the Corporation’s participating in TARP, Mr. Klimas’ employment agreement was amended to provide that any payment or payments that may be payable by the Corporation thereunder shall be modified to the extent necessary in order to comply with the golden parachute payment prohibitions in the TARP Regulations.

Director Compensation

Non-employee director compensation is determined annually by the Board of Directors acting upon the recommendation of the Governance Committee. Directors who are also employees of the Corporation receive no additional compensation for service as a director.

Each of the directors of the Corporation also serves as a director of The Lorain National Bank, the Corporation’s wholly-owned bank subsidiary. Under the bylaws of The Lorain National Bank each director is to hold common shares of the Corporation in an amount equal to $100,000, based on the market value of the common shares as of the date such shares are acquired by the director. As of December 31, 2010, all of the Corporation’s directors met these stock ownership guidelines.

The following table shows the compensation paid to non-employee directors for service during 2010.

Director Compensation Table


	Fees
	Earned or
	Paid in			All Other
	Cash			Compensation			Total
Name	($)(1)			($)			($)

Daniel P. Batista	$	16,041	(2)	$	—		$	16,041
Robert M. Campana		32,500			—			32,500
J. Martin Erbaugh		27,500			2,000	(3)		29,500
Terry D. Goode		32,500			—			32,500
James R. Herrick		47,500			—			47,500
Lee C. Howley		32,500			—			32,500
James F. Kidd(4)		18,958	(5)		—			18,958
Daniel G. Merkel		30,000			—			30,000
Benjamin G. Norton		27,500			—			28,100
Thomas P. Perciak		27,500			—			27,500
Jeffrey F. Riddell		32,500			—			32,500
John W. Schaeffer, M.D.		27,500			—			27,500
Donald F. Zwilling		27,500			—			27,500


(1)		The Corporation pays a base annual fee to each Director of $27,500. The Vice Chairman of the Board of Directors (Mr. Kidd, and Mr. Goode following Mr. Kidd’s retirement) and each of the Committee Chairmen (Messrs. Campana, Howley and Riddell), as well as Mr. Merkel, who is Chairman of the Loan Review Committee of The Lorain National Bank, are paid a base annual fee of $32,500, and the Chairman of the Board of Directors (Mr. Herrick) is paid a base annual fee of $47,500.

(2)		Mr. Batista served on the Board of Directors of the Corporation until his retirement April 27, 2010.

(3)		Represents fees paid to Mr. Erbaugh for service as a member of the Corporation’s Morgan Advisory Board. The Morgan Advisory Board is a six person committee comprised of former directors of Morgan Bank that the Corporation has formed for the purpose of providing input and advice on the Corporation’s Morgan Bank


		business. The Morgan Advisory Board met two times during 2010, and each member was paid a fee of $1,000 per meeting attended.

(4)		Amounts set forth in this table with respect to Mr. Kidd represent fees paid to Mr. Kidd for serving as Vice Chairman of the Board of Directors. In addition, the Corporation has an individual supplemental retirement agreement with Mr. Kidd, which was entered into during and in connection with Mr. Kidd’s service as an employee of the Corporation. The agreement provides supplemental retirement benefits to Mr. Kidd, in addition to the retirement benefits generally provided to all employees of the Corporation, in the event of: normal retirement; reduced supplemental retirement benefits in the event of early retirement; disability prior to retirement; death; or discharge “without cause.” Upon his retirement as an employee of the Corporation in 1999, Mr. Kidd became entitled under the agreement to receive annual payments of $53,474, commencing March 1, 2000 and continuing for 10 years. These payments were deferred during Mr. Kidd’s term as interim CEO of the Corporation, but resumed in February 2005 and continued until March 2010.

(5)		Mr. Kidd served on the Board of Directors of the Corporation until his retirement April 27, 2010.

Certain Transactions

Directors and executive officers of the Corporation and their associates were customers of, or had transactions with, the Corporation or the Corporation’s banking or other subsidiaries in the ordinary course of business during 2010. Additional transactions may be expected to take place in the future. All outstanding loans to directors and executive officers and their associates, commitments and sales, purchases and placements of investment securities and other financial instruments included in such transactions were made in the ordinary course of business, on substantially the same terms, including interest rates and collateral where applicable, as those prevailing at the time for comparable transactions with other persons, and did not involve greater than normal risk of collectability or present other unfavorable features.

Review of Certain Transactions

The Corporation has written procedures for reviewing transactions between the Corporation and its directors and executive officers, their immediate family members and entities with which they have a position or relationship. These procedures are intended to determine whether any such related person transaction impairs the independence of a director or presents a conflict of interest on the part of a director or executive officer.

The Corporation annually requires each of its directors and executive officers to complete a directors’ and officers’ questionnaire that elicits information about related person transactions. The Corporation’s Audit and Finance Committee and Board of Directors annually review all transactions and relationships disclosed in the director and officer questionnaires, and the Board of Directors makes a formal determination regarding each director’s independence under Nasdaq Stock Market listing standards and applicable SEC rules.

In addition to the annual review, the Corporation’s Code of Ethics and Business Conduct requires that the Corporation’s Chief Executive Officer be notified of any proposed transaction involving a director or executive officer that may present an actual or potential conflict of interest, and that such transaction be presented to and approved by the Audit and Finance Committee.

Upon receiving any notice of a related person transaction involving a director or executive officer, the Chief Executive Officer will discuss the transaction with the Chairman of the Corporation’s Audit and Finance Committee. If any likelihood exists that the transaction would present a conflict of interest or, in the case of a director, impair the director’s independence, the Audit and Finance Committee will review the transaction and its ramifications. If, in the case of a director, the Audit and Finance Committee determines that the transaction presents a conflict of interest or impairs the director’s independence, the Board of Directors will determine the appropriate response. If, in the case of an executive officer, the Audit and Finance Committee determines that the transaction presents a conflict of interest, the Audit and Finance Committee will determine the appropriate response. The related party transactions described above were approved by the Corporation.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16 of the Securities Exchange Act of 1934 requires LNB’s executive officers, directors and greater than ten percent shareholders (“Insiders”) to file with the Securities and Exchange Commission and LNB reports regarding their ownership of and transactions in LNB’s securities. Based upon written representations and copies of reports furnished to LNB by Insiders, all reports required to be filed by Insiders pursuant to Section 16 during the fiscal year ended December 31, 2010 were made on a timely basis.

OTHER BUSINESS

The Board of Directors is not aware of any other matters that may be presented at the Annual Meeting other than those stated in the notice of Annual Meeting and described in this Proxy Statement. However, if any other matters properly come before the Annual Meeting, the enclosed proxy card directs the persons voting such proxy to vote in accordance with their discretion.

DELIVERY OF DOCUMENTS TO SHAREHOLDERS SHARING AN ADDRESS

The SEC has adopted rules that permit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for proxy statements with respect to two or more shareholders sharing the same address by delivering a single proxy statement addressed to those shareholders. This process, which is commonly referred to as “householding,” potentially means extra convenience for shareholders and cost savings for companies.

A single proxy statement will be delivered to multiple shareholders sharing an address unless contrary instructions have been received from the affected shareholders. Once you have received notice from your broker that it will be “householding” communications to your address, “householding” will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in “householding” and would prefer to receive a separate proxy statement, please notify your broker, direct your written request to LNB Bancorp, Inc., Attn: Investor Relations, 457 Broadway, Lorain, Ohio 44052. Shareholders who currently receive multiple copies of the proxy statement at their address and would like to request “householding” of their communications should contact their broker.

SHAREHOLDER PROPOSALS FOR NEXT ANNUAL MEETING

Any shareholder who wishes to submit a proposal for inclusion in the proxy material to be distributed by the Corporation in connection with its annual meeting of shareholders to be held in 2012 must do so no later than , 2011. To be considered eligible for inclusion in the Corporation’s 2012 Proxy Statement, a proposal must conform to the requirements of Regulation 14A under the Securities Exchange Act of 1934, as amended. Shareholder proposals should be directed to LNB Bancorp, Inc. via certified mail, Attention: Corporate Secretary, 457 Broadway, Lorain, Ohio 44052. Unless notice of a shareholder proposal for the 2012 annual meeting of shareholders is received by the Corporation not later than , 2012, the Corporation may vote all proxies in its discretion with respect to any shareholder proposal properly brought before the annual meeting.

The Corporation’s Amended Code of Regulations establishes advance notice procedures as to the nomination by shareholders of candidates for election as directors. In order to make a director nomination, it is necessary that you notify the Corporation in writing no fewer than 14 days nor more than 50 days in advance of next year’s Annual Meeting unless the Corporation gives you less than 21 days notice of the Annual Meeting and then notice of nominations must be given no later than the seventh day after we mailed notice of the Annual Meeting to you. Notice of nominations of directors must also meet all other requirements contained in the Corporation’s Amended Code of Regulations. You may obtain the Code of Regulations by written request. Such request should be directed to LNB Bancorp, Inc., Attention: Corporate Secretary, 457 Broadway, Lorain, OH 44052.

ANNUAL REPORT

We will provide without charge a copy of the Corporation’s Annual Report on Form 10-K for its fiscal year ended December 31, 2010 to any shareholder who makes a written request for it directed to Robert F. Heinrich, Corporate Secretary, LNB Bancorp, Inc., 457 Broadway, Lorain, Ohio 44052.

We urge you to sign and return the enclosed proxy card as promptly as possible whether or not you plan to attend the Annual Meeting in person.

Preliminary Copy

VOTE BY INTERNET - www.proxyvote.com

Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.

Electronic Delivery of Future PROXY MATERIALS

If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.

VOTE BY PHONE - 1-800-690-6903

Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions.

VOTE BY MAIL

Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: x


		KEEP THIS PORTION FOR YOUR RECORDS

		DETACH AND RETURN THIS PORTION ONLY

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

For
All

Withhold
All

For All
Except

To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below.

The Board of Directors recommends that you
vote FOR the following:

Election of Directors
Nominees


01 J. Martin Erbaugh		02 Terry D. Goode		03 James R. Herrick


The Board of Directors recommends you vote FOR proposals 2, 3 and 4 and makes no recommendation on proposal 5:	For		Against	Abstain

2. To ratify the appointment of Plante & Moran, PLLC as LNB’s independent registered public accounting firm	o		o	o

	For		Against	Abstain

3. To approve and adopt amendments to LNB’s code of regulations to permit amendments to the code of regulations by the Board of Directors to the extent permitted by Ohio law	o		o	o

	For		Against	Abstain

4. To provide advisory approval of LNB’s executive compensation program	o		o	o

	1 Yr	2 Yrs 3 Yrs		Abstain

5. Advisory vote on the frequency of executive compensation advisory votes	o	o o		o

NOTE: It is the Board of Directors’ recommendation that you vote for all of the director nominees with respect to the election of directors in Proposal “1” and for Proposals “2,” “3” and “4”. The Board of Directors makes no recommendation with respect to Proposal “5”. If any other matters properly come before the Annual Meeting, the persons named in this proxy will vote the shares represented by the proxy in their discretion.

Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name, by authorized officer.

SHARES
CUSIP #
SEQUENCE #

Signature [PLEASE SIGN WITHIN BOX]

Date

JOB #

Signature (Joint Owners)

Date

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SHAREHOLDERS MEETING TO BE HELD ON MAY 3, 2011.

The following materials are available at https://materials.proxyvote.com/502100
Proxy Statement and 2010 Annual Report

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The AR/10K wrap, Notice & Proxy Statement is/are available at https://materials.proxyvote.com/502100.

Proxy Card for the 2011 Annual Meeting of
Shareholders of LNB Bancorp, Inc.
Scheduled for May 3, 2011

THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS

The undersigned hereby appoints Gary J. Elek and Robert F. Heinrich, or either of them, with full power of substitution, as proxies to vote, for and in the name of the undersigned, all common shares of LNB Bancorp, Inc. that the undersigned is entitled to vote at the Annual Meeting of Shareholders of LNB Bancorp, Inc. scheduled for May 3, 2011 at 9:00 a.m., local time, at The Lorain National Bank, 521 Broadway, Lorain, Ohio 44052, and at any adjournments or postponements of the meeting (the “Annual Meeting”). This proxy will be voted in accordance with your instructions specified below. If you do not give any specific instructions, this proxy will be voted “FOR” all of the director nominees with respect to the election of directors in Proposal 1, “FOR” Proposals 2, 3 and 4 and “ABSTAIN” with respect to Proposal 5. In addition, the proxies are authorized to vote in their discretion on any other matters that may properly come before the Annual Meeting.

Continued and to be signed on reverse side


	Page

PROXY STATEMENT FOR 2011 ANNUAL MEETING OF SHAREHOLDERS		1
Date, Time and Place of the Annual Meeting		1
Purpose of the Annual Meeting		1
QUESTIONS & ANSWERS ABOUT THE ANNUAL MEETING		2
COMPANY PROPOSALS		6
PROPOSAL 1 — Election of Directors		6
PROPOSAL 2 — Ratification of Appointment of Independent Registered Public Accounting Firm		9
PROPOSAL 3 — Approval and Adoption of Amendments to LNB’s Code of Regulations to Permit Amendments to the Code of Regulations by the Board of Directors to the Extent Permitted by Ohio Law		10
PROPOSAL 4 — Advisory Approval of LNB’s Executive Compensation Program		12
PROPOSAL 5 — Advisory Vote on the Frequency of Executive Compensation Advisory Votes		13
OWNERSHIP OF VOTING SHARES		14
CORPORATE GOVERNANCE		16
EXECUTIVE COMPENSATION AND OTHER INFORMATION		22
OTHER BUSINESS		39
DELIVERY OF DOCUMENTS TO SHAREHOLDERS SHARING AN ADDRESS		39
SHAREHOLDER PROPOSALS FOR NEXT ANNUAL MEETING		39
ANNUAL REPORT		39