LNB Bancorp, Inc. 11-K

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JrPkCDopj3RkD4BHEOdudHvaxSXcEj6xQK1VlcLWV+WDlJkg986+5uYUoQ08yezT QND8nZ6BMn8RONPMPzFeGg== 0000950152-05-005741.txt : 20050701 0000950152-05-005741.hdr.sgml : 20050701 20050701144343 ACCESSION NUMBER: 0000950152-05-005741 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20041231 FILED AS OF DATE: 20050701 DATE AS OF CHANGE: 20050701 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LNB BANCORP INC CENTRAL INDEX KEY: 0000737210 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 341406303 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-13203 FILM NUMBER: 05932680 BUSINESS ADDRESS: STREET 1: 457 BROADWAY CITY: LORAIN STATE: OH ZIP: 44052-1769 BUSINESS PHONE: 800-860-1007 11-K 1 l14793be11vk.htm LNB BANCORP, INC. 11-K/401(K) PLAN LNB Bancorp, Inc. 11-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON D.C. 20549

FORM 11-K

FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE, SAVINGS
AND SIMILAR PLANS PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934


þ		ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2004


o		TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 0-13203

THE LORAIN NATIONAL BANK 401 (k) PLAN

(Full title of the plan)

LNB BANCORP, INC. 457 Broadway Lorain, Ohio 44052-1769

(Name of issuer of the securities held pursuant to the plan and

the address of its principal executive office)

REQUIRED INFORMATION

The Lorain National Bank 401(k) Plan (the “Plan”) is subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). Accordingly, in lieu of the requirements of Items 1-3 of this Section, the Plan is filing financial statements and supplemental schedules prepared in accordance with the financial reporting requirements of ERISA. These financial statements and supplemental schedules are attached hereto as Exhibit 99 and incorporated by reference herein.

EXHIBITS, AND FINANCIAL STATEMENT SCHEDULES

Exhibits:

(23) Consent of KPMG LLP

(99) Annual report of The Lorain National Bank 401(k) Plan for the plan year ended December 31, 2004.

SIGNATURES

The Plan. Pursuant to the requirements of the Securities and Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned, hereunto duly authorized.


		The Lorain National Bank 401(k) Plan

		By Lorain National Bank, Trustee

Date: July 1, 2005		By		/s/ Terry M. White
				Terry M. White Executive Vice President and Chief Financial Officer

EX-23 2 l14793bexv23.txt EX-23 CONSENT OF KPMG LLP LNB BANCORP, INC. EXHIBIT TO FORM 11 - K (for the fiscal year ended December 31, 2004) S - K REFERENCE NUMBER (23) Consent of Independent Registered Public Accounting Firm EXHIBIT 23 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Board of Directors LNB Bancorp, Inc.: We consent to the incorporation by reference in the Registration Statement on Form S-8 of LNB Bancorp, Inc. of our report dated June 24, 2005, with respect to the statements of assets available for plan benefits of The Lorain National Bank 401(k)Plan as of December 31, 2004 and 2003, and the related statement of changes in assets available for plan benefits for the year ended December 31, 2004, and all related supplemental schedules, which report appears on Form 11-K of LNB Bancorp, Inc. /s/ KPMG LLP Cleveland, Ohio June 29, 2005 EX-99 3 l14793bexv99.txt EX-99 ANNUAL REPORT OF THE LORAIN NATIONAL BANK 401(K) [KPMG LOGO] THE LORAIN NATIONAL BANK 401(K) PLAN Financial Statements and Schedules December 31, 2004 and 2003 (With Report of Independent Registered Public Accounting Firm Thereon) THE LORAIN NATIONAL BANK 401(K) PLAN TABLE OF CONTENTS

All other schedules required to be filed in accordance with the Employee Retirement Income Security Act of 1974 are not applicable and, accordingly, have been omitted. [KPMG LOGO] KPMG LLP SUITE 2600 ONE CLEVELAND CENTER 1375 EAST NINTH STREET CLEVELAND, OH 44114-1796 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Plan Administrator The Lorain National Bank Sponsor of the Lorain National Bank 401(k) Plan: We have audited the accompanying statements of assets available for plan benefits of The Lorain National Bank 401(k) Plan (Plan) as of December 31, 2004 and 2003, and the related statement of changes in assets available for plan benefits for the year ended December 31, 2004. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the assets available for plan benefits of the Plan as of December 31, 2004 and 2003, and the changes in assets available for plan benefits for the year ended December 31, 2004 in conformity with U.S. generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental Schedule H, line 4i - Schedule of Assets (Held at End of Year) as of December 31, 2004, and Schedule H, line 4j - Schedule of Reportable Transactions for the year ended December 31, 2004 are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. These supplemental schedules are the responsibility of the Plan's management. The supplemental schedules have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. KPMG LLP Cleveland, Ohio June 24, 2005 THE LORAIN NATIONAL BANK 401(K) PLAN Statements of Assets Available for Plan Benefits December 31, 2004 and 2003

See accompanying notes to financial statements. 2 THE LORAIN NATIONAL BANK 401(K) PLAN Statement of Changes in Assets Available for Plan Benefits Year ended December 31, 2004 Additions: Investment income: Dividends $ 134,612 Interest 6,906 Net appreciation in fair value of investments (note 3) 89,371 ----------- Total investment income 230,889 ----------- Contributions: Employer 251,174 Participants 550,937 Participant rollovers 39,891 ----------- Total contributions 842,002 ----------- Total additions 1,072,891 Deductions: Distributions to participants (1,422,704) ----------- Decrease in assets available for plan benefits (349,813) Assets available for plan benefits: Beginning of year 5,624,210 ----------- End of year $ 5,274,397 ===========

See accompanying notes to financial statements. 3 THE LORAIN NATIONAL BANK 401(K) PLAN Notes to Financial Statements December 31, 2004 and 2003 (1) DESCRIPTION OF THE PLAN The following is a general description of The Lorain National Bank 401(k) Plan (Plan). Participants should refer to the Plan agreement for a more complete description of the Plan's provisions. (A) GENERAL The Plan is a defined contribution plan sponsored by The Lorain National Bank (Bank), a wholly owned subsidiary of LNB Bancorp, Inc., covering substantially all employees of the Bank and related Bancorp affiliates for which the Bank acts as common paymaster. An employee is eligible to participate in the Plan after the attainment of age 19 and completion of 90 days of service, as defined in the Plan. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). Under the terms of the Plan, the Investment and Trust Services Division of the Bank acts as trustee for the Plan and, as such, manages a trust fund which includes all of the Plan's assets. The Plan stipulates that employer matching contributions will be invested in LNB Bancorp, Inc. common stock. The board of directors of Lorain National Bank, the Corporation's wholly owned subsidiary, authorized the Bank as employer and trustee to execute an Adoption Agreement for the 401(k) Plan and Trust (the Plan), effective January 1, 2001. The Plan amended and restated the Lorain National Bank Stock Purchase Plan. The Plan is established in accordance with the requirements under Section 401(a) and Section 401(k) of the Internal Revenue Code. The Plan was submitted to the IRS for determination by the IRS that the Plan is qualified under Section 401(a) of the Internal Revenue Code and that its trust qualified under Section 501(a) of the Internal Revenue Code. LNB Bancorp, Inc. believes that the Plan complies with the requirements under Section 401(a) and Section 401(k) of the Internal Revenue Code. The Plan offers the investment choices of Money Market Mutual Funds, U.S. Treasury Index Funds, Equity Mutual Funds, International Mutual Funds, and LNB Bancorp, Inc. common stock. (B) CONTRIBUTIONS The Plan allows participants to make pretax contributions up to the maximum dollar limits set by the IRS which is $13,000 for 2004, plus a $3,000 catch-up contribution for employees over the age of 50. Based on number of hours worked or paid, certain participants in the Plan are eligible to receive Company contributions. The amount of Company contributions were $251,174 and $388,002, for 2004 and 2003, respectively. The Company makes a contribution to the employee's plan account biweekly. Employee contributions are invested according to participant investment elections for pretax contributions. If an employee has not made investment elections, the employee contributions will be invested in the Federated Money Market Fund. Employer contributions are not participant-directed and are invested in LNB Bancorp, Inc. common stock. To receive a Company contribution, a participant must be employed on the last day of the Plan year. A participant's account also receives the Company contribution for the year in which they retire, become disabled, or die. 4 (Continued) THE LORAIN NATIONAL BANK 401(K) PLAN Notes to Financial Statements December 31, 2004 and 2003 (C) PARTICIPANT ACCOUNTS Each participant's account is credited with the participant's contribution and the Company's contribution, and an allocation of Plan earnings. The benefit to which a participant is entitled is the benefit that can be provided from the participant's vested account. (D) FORFEITURES At December 31, 2004, forfeited nonvested accounts had a zero balance. Forfeitures are be used to reduce future employer contributions. (E) VESTING Participants are immediately vested in their voluntary contribution plus any earnings accrued thereon. Participants are immediately vested in the employer's match for the current plan year provided they are employed on the last day of the plan year. (F) PAYMENT OF BENEFITS Upon termination of service, the vested amount of the Company's contributions and earnings thereon is paid at the election of the participant in cash. Participants can elect to receive their voluntary contributions and earnings thereon in a single lump-sum cash payment or in substantially equal installments over a period of not more than the assumed life expectancy of the participant and the participant's beneficiary. (G) WITHDRAWALS Aside from normal retirement distributions, in-service withdrawals of pretax savings may be withdrawn only upon attainment of age 59 1/2. In accordance with plan provisions, pretax savings may also be withdrawn for reasons of extreme financial hardship as defined under federal law. An employee can make only one withdrawal in any twelve-month period, relative to the Stock Purchase Plan provision, of pre-2000 after tax dollars and Company match. (H) PARTICIPANT LOANS Participants may borrow from their fund accounts a minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50% of their account balance, whichever is less. The loans are secured by the balance in the participant's account and are charged a rate of interest commensurate with local prevailing rates as determined by the plan administrator. Principal and interest is paid ratably through biweekly payroll deductions. The amount of participant loans outstanding were $16,242 and $6,726, respectively for 2004 and 2003. (I) PLAN EXPENSES The administrative expenses of the Plan are paid by the Bank. 5 (Continued) THE LORAIN NATIONAL BANK 401(K) PLAN Notes to Financial Statements December 31, 2004 and 2003 (2) SIGNIFICANT ACCOUNTING POLICIES (A) BASIS OF PRESENTATION The financial statements of the Plan are prepared using the accrual basis of accounting. (B) INVESTMENT VALUATION AND INCOME RECOGNITION The Plan's investments are stated at fair value. Quoted market prices are used to value investments. Purchases and sales of securities are recorded on a trade-date basis. Dividends are recorded on the ex-dividend date. Interest income is recorded on the accrual method of accounting. (C) USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires Plan management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and changes therein, and disclosure of contingent assets and liabilities. Actual results could differ from those estimates. (3) INVESTMENTS The following table presents the fair value of investments at December 31, 2004 and 2003. Items that represented 5% or more of the Plan's assets are separately identified.
2004 2003 ---------- ---------- Common stock - LNB Bancorp, Inc.: 164,469 and 194,252 common shares in 2004 and 2003, respectively $3,309,126 $3,943,317 Mutual funds Vanguard 500 Index Fund 280,250 229,376 Dodge & Cox Stock Fund 473,980 331,581
During the year ended December 31, 2004, the Plan's investments (including investments bought, sold, and held during the year) appreciated (depreciated) in value as follows: Common stock - LNB Bancorp, Inc. $ (55,511) Mutual funds 144,882 --------- $ 89,371 =========

(4) PLAN TERMINATION The Company has voluntarily agreed to make contributions to the Plan. Although the Company has not expressed any intent to terminate the Plan agreement, it may do so at any time. In the event of such termination, each participant will receive 100% of the amounts contributed to the Plan and earnings thereon, and the vested amount of the Company's matching contribution. 6 (Continued) THE LORAIN NATIONAL BANK 401(K) PLAN Notes to Financial Statements December 31, 2004 and 2003 (5) FEDERAL INCOME TAXES The Internal Revenue Service (IRS) issued its latest determination letter on January 27, 2003, which stated that the Plan and underlying trust, as designed, qualify under the applicable provisions of the Internal Revenue Code (Code). In the opinion of the plan administrator, the Plan and its underlying Trust have operated within the terms of the Plan and remain qualified under the applicable provisions of the Internal Revenue Code. (6) PARTY-IN-INTEREST TRANSACTIONS The following is a summary of transactions in common stock of LNB Bancorp, Inc., 100% owner of the Bank, during the year ended December 31, 2004:
NUMBER OF SHARES FAIR VALUE ----------- ----------- Balance at December 31, 2003 $ 194,252 $ 3,943,317 Purchases 28,316 578,424 Distributions (58,099) (1,157,104) Net depreciation -- (55,511) ----------- ----------- Balance at December 31, 2004 $ 164,469 $ 3,309,126 =========== ===========
(7) ASSETS AVAILABLE FOR DISTRIBUTION TO PARTICIPANTS
2004 2003 ---------- ---------- Assets payable to terminated participants $ 106,252 $ 737,725 Assets available for continuing participants 5,168,145 4,886,485 ---------- ---------- $5,274,397 $5,624,210 ========== ==========
SCHEDULE 1 THE LORAIN NATIONAL BANK 401(K) PLAN EIN: 34-0869480 Plan Number: 003 Schedule H, line 4i - Schedule of Assets (Held at End of Year) December 31, 2004
(A) (B) (C) (D) (E) IDENTITY OF ISSUE, DESCRIPTION OF INVESTMENT INCLUDING BORROWER, LESSOR MATURITY DATE, RATE OF INTEREST, CURRENT OR SIMILAR PARTY COLLATERAL, PAR OR MATURITY VALUE COST VALUE - --- ------------------ ------------------------------------ ---------- ---------- * LNB Bancorp, Inc. 164,469 shares of LNB Bancorp, Inc. common stock $1,835,207 $3,309,126 Federated Investor Services Federated Money Market Trust 365,372 365,372 * Lorain National Bank Treasury Trust Fund 9,181 9,181 MUTUAL FUNDS Northern Institutional Northern Institutional Funds Balanced Funds Fund X 137,466 Northern Institutional Northern Institutional Focused Growth Portfolio Portfolio X 120,689 Northern Institutional Northern Institutional Funds Funds US Treasury Index A X 166,948 Vanguard Fund Vanguard Explorer Fund X 225,850 Vanguard Fund Vanguard International Value Fund X 108,204 Vanguard Fund Vanguard 500 Index Fund X 280,250 Dodge & Cox Dodge & Cox Stock Fund X 473,980 ---------- Total $5,197,066 ==========
* Party in interest X Historical cost information is no longer required on the Schedule of Assets Held for Investment at End of Year for participant-directed investments. See accompanying report of independent registered public accounting firm. SCHEDULE 2 THE LORAIN NATIONAL BANK 401(K) PLAN EIN: 34-0869480 Plan Number: 003 Schedule H, line 4j - Schedule of Reportable Transactions Year ended December 31, 2004 Series transactions, when aggregated, involving an amount in excess of 5% of the current value of Plan assets:
(A) (B) (C) (D) (E) (F) (G) (H) (I) CURRENT TOTAL TOTAL EXPENSE VALUE OF DOLLAR DOLLAR INCURRED ASSET ON IDENTITY OF PARTY DESCRIPTION OF VALUE OF VALUE OF LEASE WITH COST OF TRANSACTION NET GAIN INVOLVED ASSETS PURCHASES SALES RENTAL TRANSACTION ASSET DATE OR (LOSS) - ------------------- ----------------- ---------- ---------- ------ ----------- ----------- ----------- --------- * LNB Bancorp, Inc. LNB Bancorp, Inc. common stock; 56 purchases $ 578,424 $ -- $ -- $ -- $ 578,424 $ 578,424 $ -- 18 sales -- 416,379 -- -- 276,135 416,379 140,244 Federated Investor Federated Money Services Market Trust; 128 purchases 1,509,354 -- -- -- 1,509,354 1,509,354 -- 124 sales -- 1,435,895 -- -- 1,435,895 1,435,895 --
* Party in interest See accompanying report of independent registered public accounting firm. 9 ~~-----END PRIVACY-ENHANCED MESSAGE-----~~