8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of
the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) January 31, 2008

LNB BANCORP, INC.

(Exact name of registrant as specified in its charter)

Ohio	0-13203	34-1406303
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)

457 Broadway, Lorain, Ohio	44052-1769
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (440) 244-6000

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

     On January 31, 2008, LNB Bancorp, Inc. (the “Company”) issued a press release announcing its results of operations for the fourth quarter and year-end 2007. A copy of the press release is furnished herewith as Exhibit No. 99.1.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

     On February 4, 2008, the Compensation Committee (the “Compensation Committee”) of the Board of Directors of the Company approved the grant of an incentive award to Daniel E. Klimas, the Company’s Chief Executive Officer, pursuant to the LNB Bancorp, Inc. 2007 Chief Executive Officer Long Term Incentive Plan (the “2007 CEO Long Term Incentive Plan”). The Compensation Committee determined to pay Mr. Klimas a cash bonus in the amount of $100,000 and granted to Mr. Klimas a nonqualified stock option under the Company’s 2006 Stock Incentive Plan (the “2006 Stock Incentive Plan”) to purchase 50,000 common shares of the Company at an exercise price of $14.47 per share, which will become exercisable in equal annual installments over a three-year period beginning on the first anniversary of the date of grant.

     On February 4, 2008, the Compensation Committee also approved the grant of nonqualified stock options under the 2006 Stock Incentive Plan to certain of the Company’s officers and key employees, including Sharon L. Churchill and Frank Soltis, two of the Company’s named executive officers. Ms. Churchill and Mr. Soltis each received nonqualified stock options to purchase 2,500 common shares of the Company at an exercise price of $14.47 per share, which will become exercisable in equal annual installments over a three-year period beginning on the first anniversary of the date of grant.

     In connection with the stock option grants described above, the Compensation Committee approved a form of nonqualified stock option agreement (the “Form of Nonqualified Stock Option Agreement”) that may be used to govern grants of nonqualified stock options under the 2006 Stock Incentive Plan. A copy of the Form of Nonqualified Stock Option Agreement is included as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated by reference into this Item 5.02.

Item 9.01. Financial Statements and Exhibits.

(c) Exhibits.

Exhibit No.	Description
10.1	Form of Nonqualified Stock Option Agreement under the LNB Bancorp, Inc. 2006 Stock Incentive Plan.
99.1	Press Release issued by LNB Bancorp, Inc., announcing its results of operations for the fourth quarter and year-end 2007.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	LNB BANCORP, INC. (Registrant)
Date: February 6, 2008	By:	/s/ Sharon L Churchill
		Sharon L. Churchill
		Chief Financial Officer

Exhibit Index

Exhibit No.	Description
10.1	Form of Nonqualified Stock Option Agreement under the LNB Bancorp, Inc. 2006 Stock Incentive Plan.
99.1	Press Release issued by LNB Bancorp, Inc., announcing its results of operations for the fourth quarter and year-end 2007.

EX-10.1

Exhibit 10.1

LNB BANCORP, INC.

Non-Qualified Stock Option Agreement
Granted Under 2006 Stock Incentive Plan

     1. Grant of Option.

     This agreement evidences the grant by LNB Bancorp, Inc., an Ohio corporation, on                      , 20___ (the “Grant Date”) to                     , an [employee] of the Company (the “Participant”), of an option to purchase, in whole or in part, on the terms provided herein and in the Company’s 2006 Stock Incentive Plan (the “Plan”), a total of                      Shares at $                      per Share. Unless earlier terminated, this option shall expire at 5:00 p.m., Eastern time, on                      (the “Final Exercise Date”). Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in the Plan.

     It is intended that the option evidenced by this agreement shall be a Non-Qualified Stock Option. Except as otherwise indicated by the context, the term “Participant,” as used in this option, shall be deemed to include any person who acquires the right to exercise this option validly under its terms.

     2. Vesting Schedule.

     This option will become exercisable (“vest”) as to [one-third] of the original number of Shares on the first anniversary of the Grant Date and as to an additional [one-third] of the original number of Shares on each successive anniversary following the first anniversary of the Grant Date until the [third] anniversary of the Grant Date.

     The right of exercise shall be cumulative so that to the extent the option is not exercised in any period to the maximum extent permissible it shall continue to be exercisable, in whole or in part, with respect to all Shares for which it is vested until the earlier of the Final Exercise Date or the termination of this option under Section 3 hereof or the Plan.

     3. Exercise of Option.

     (a) Form of Exercise. Each election to exercise this option shall be in writing, signed by the Participant, and received by the Company at its principal office, accompanied by this agreement, and payment in full in the manner provided in the Plan. The Participant may purchase less than the number of Shares covered hereby, provided that no partial exercise of this option may be for any fractional Share.

     (b) Continuous Relationship with the Company Required. Except as otherwise provided in this Section 3, this option may not be exercised unless the Participant, at the time he or she exercises this option, is, and has been at all times since the Grant Date, an [employee] of the Company or any other entity the employees, officers, directors, consultants, or advisors of which are eligible to receive option grants under the Plan (an “Eligible Participant”).

     (c) Termination of Relationship with the Company. If the Participant ceases to be an Eligible Participant for any reason, then, except as provided in paragraphs (d) and (e) below, the right to exercise this option shall terminate 60 days after such cessation (but in no event after the Final Exercise Date), provided that this option shall be exercisable only to the extent that the Participant was entitled to exercise this option on the date of such cessation.

     (d) Exercise Period Upon Death or Disability. If the Participant dies or becomes disabled (within the meaning of Section 22(e)(3) of the Code) prior to the Final Exercise Date while he or she is an Eligible Participant and the Company has not terminated such relationship for Cause (as defined in paragraph (e) below), this option shall be exercisable, within the period of one year following the date of death or disability of the Participant, by the Participant (or in the case of death by an authorized transferee), provided that this option shall be exercisable only to the extent that this option was exercisable by the Participant on the date of his or her death or disability, and further provided that this option shall not be exercisable after the Final Exercise Date.

     (e) Discharge for Cause. If the Participant, prior to the Final Exercise Date, is discharged by the Company for Cause (as defined below), the right to exercise this option shall terminate immediately upon the effective date of such discharge. “Cause” shall mean (i) the Participant’s commission of any act constituting a felony or a crime involving moral turpitude; (ii) breach by the Participant of any non-competition, non-solicitation or confidentiality obligation to the Company; (iii) any act of the Participant involving embezzlement or fraud against the Company or any Affiliate; or (iv) any act of the Participant involving operational wrongdoing relating to the Company or any Affiliate. Whether “Cause” exists shall be determined by the Committee in its sole and exclusive discretion. The Participant shall be considered to have been discharged for “Cause” if the Company determines, within 30 days after the Participant’s resignation, that discharge for Cause was warranted.

     4. Withholding.

     No Shares will be issued pursuant to the exercise of this option unless and until the Participant pays to the Company, or makes provision satisfactory to the Company for payment of, any federal, state or local withholding taxes required by law to be withheld in respect of this option.

     5. Nontransferability of Option.

     This option may not be sold, assigned, transferred, pledged or otherwise encumbered by the Participant, either voluntarily or by operation of law, except in accordance with the terms of the Plan. During the lifetime of the Participant, this option shall be exercisable only by the Participant.

     6. Change in Control.

     In the event of a Change in Control, this option shall become immediately exercisable in full. Notwithstanding the foregoing, the Committee retains and shall have the right in its sole

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and exclusive discretion to take any or all other actions described in Section 11.2 of the Plan with respect to this option in the event of a Change in Control.

     7. Code Section 409A; Tax Consequences.

     This option is intended to meet the requirements for exemption from Code Section 409A set forth in Treas. Reg. Section 1.409A-1(b)(5), and any other such applicable exemption, and shall be construed and administered accordingly. If the Company reasonably determines that any compensation or benefits payable under this option may be subject to taxation under Code Section 409A, the Company, after consultation with the Participant, shall have the authority to adopt, prospectively or retroactively, such amendments to this option or to take any other actions it determines necessary or appropriate to: (i) exempt the compensation and benefits payable under this option from Code Section 409A; (ii) comply with the requirements of Code Section 409A; or (iii) more generally, avoid adverse taxation under Code Section 409A. In no event, however, shall this section or any other provisions of the Plan or this option be construed to require the Company or its Affiliates to provide any gross-up for the tax consequences of any provisions of, or payments under, the Plan or this option and the Company and its Affiliates shall have no responsibility for tax consequences to the Participant (or anyone claiming through the Participant) resulting from the terms or operation of the Plan or this option.

     8. Provisions of the Plan.

     This option is subject to the provisions of the Plan, a copy of which is furnished to the Participant with this option.

     9. Tax Reporting.

     The option is a nonqualified stock option subject to federal income tax treatment described in Code Section 83. The Company and Participant shall report any transaction relating to the option on federal income tax returns in a manner consistent with that status.

     IN WITNESS WHEREOF, the Company has caused this option to be executed by its duly authorized officer.

	LNB BANCORP, INC.
Dated:	By:
		Name:
		Title:

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PARTICIPANT’S ACCEPTANCE

     The undersigned hereby accepts the foregoing option and agrees to the terms and conditions thereof. The undersigned hereby acknowledges receipt of a copy of the Company’s 2006 Stock Incentive Plan.

PARTICIPANT:  

Address:

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EX-99.1

Exhibit 99.1

Contact:	W. John Fuller
	For LNB Bancorp, Inc.
	216.978.7643

LNB BANCORP, INC. REPORTS FOURTH QUARTER
EARNINGS INCREASE 81 PERCENT

• Solid commercial loan growth

• Credit quality shows improvement in second half of the year

• Subprime mortgage financial crisis has minimal impact on bank

LORAIN, Ohio—January 31, 2008—LNB Bancorp, Inc. (NASDAQ:LNBB) today reported financial results for the fourth quarter and full year ended December 31, 2007.

Net income for the fourth quarter of 2007 was $1,668,000, or $0.23 per diluted share, up 81.7 percent from net income of $918,000 or $0.14 per diluted share, for the fourth quarter of 2006. Net income for 2007 totaled $5,512,000, or $0.79 per diluted share, compared to net income of $5,424,000, or $0.84 per diluted share, for 2006. Much of the growth in net income came in the second half of the year which increased 54% over the first half of 2007.

Both the fourth quarter and full year of 2006 results were impacted by an increase in the provision for loan losses. Earnings per share were affected by the issuance of 851,990 shares in May, 2007 as part of the acquisition of Morgan Bancorp.

“The 54 percent improvement in performance in the second half of 2007 over the first six months of the year was very encouraging and is further testimony to the solid progress we are continuing to make with our long-term strategy,” said Daniel E. Klimas, president and chief executive officer of LNB Bancorp, Inc. Specifically, Klimas pointed to a significant increase in commercial loan growth and improved credit quality.

“Non-performing loans in the fourth quarter of 2007 declined $2 million, or 15.5 percent, from the same period a year ago. This improvement in overall credit quality is very heartening and is a reflection of the additional controls we implemented over our credit administration process over the past 15 months,” said Klimas. The majority of this improvement was primarily due to loans becoming current or paid-off.

“The investments we have made in facilities and personnel over the past two years have enhanced the bank’s income and opportunities for growth,” said Klimas. These investments include the acquisition of Morgan Bancorp of Hudson, Ohio last May, the construction of two offices in high growth areas of Lorain County and the opening of a business development office in adjoining Cuyahoga County.

“With these positive developments, we continue to create a community bank of scale that is competing effectively in our markets,” he said. “We genuinely appreciate the

efforts of our associates and value the strategic support of our board of directors in these positive developments.”

“While we expect to operate in a difficult economic environment in 2008, we will continue our focus on growing revenue, effectively managing our expenses and improving our credit quality,” said Klimas.

Fourth Quarter Review

Fourth quarter net interest income totaled $7.8 million, up $927,000 from the same period a year ago. While some of this increase was attributable to the acquisition of Morgan Bank of Hudson, Ohio in May 2007, the Company experienced solid growth in commercial loans and an increase in interest income from securities. Average earning assets increased 19 percent in the last quarter of 2007 compared with the same quarter a year ago.

The fourth quarter continued to prove to be a difficult banking environment with a rapidly changing yield curve and a challenging competitive environment. The net interest margin was 3.24 percent for the fourth quarter of 2007, down seven basis points from 3.31 percent for the third quarter of 2007 and 26 basis points from 3.50 percent for the fourth quarter of 2006.

Noninterest income was $3.1 million for the fourth quarter of 2007, an increase of $273,000, or 9.75 percent, compared to the fourth quarter of 2006. The increase was largely from net gains of $233,000 recorded on the sale of indirect loans and mortgage loans to the secondary market. The Company retains the servicing rights for these loans. The sale of high quality indirect loans was a primary activity of Morgan Bank prior to the acquisition and is continued by the Company.

Other types of non-interest income grew as well, including an increase of $198,000 in service charges on deposit accounts and ATM charges reflecting continued momentum in fee-based services The fourth quarter of 2006 included a gain of $234,000 on the sale of Other Real Estate Owned as compared to $38,000 during the fourth quarter of 2007.

Non-interest expense was $8.1 million for the quarter as compared to $7.3 million for the fourth quarter of 2006. Increases of approximately $372,000 in occupancy, postage, supplies and delivery, telephone and furniture and equipment primarily are associated with the Morgan acquisition as well as other facilities opened in over the past two years. While making these significant investments for the future, the Company has had success in limiting related increases in overhead expense. The Company also expects to achieve considerable savings in technology costs as LNB and Morgan systems were merged during December 2007. The $744,000 increase in non-interest expense also includes an increase of $208,000 in expenses related to Other Real Estate Owned such as real estate taxes and insurance costs, as well as an increased level of other operating charge-offs and losses primarily related to overdrafts as the economy continues to weaken.

The provision for loan losses was $578,000 for the fourth quarter of 2007, down from $787,000 for the fourth quarter of 2006. Annualized net charge-offs were 0.38 percent of average loans for the quarter compared to 0.24 percent for the fourth quarter of 2006. Non-performing assets to total assets were 1.26 percent at December 31, 2007 compared to 1.37 percent at September 30, 2007 and 1.66 percent at December 31, 2006. Of the $13.3 million of non-performing assets at December 31, 2007, $10.8 were primarily nonperforming commercial loans and approximately $2.5 million is other real estate or repossessed assets in which collateral held is considered collectible. The Company does not make subprime mortgage loans and was, therefore, not significantly impacted by the subprime mortgage financial crisis this year. The allowance for loan losses was 1.04 percent of total loans at December 31, 2007 compared to 1.16 percent at December 31, 2006.

Full year 2007 Review

Net interest income for 2007 was $29.7 million, compared to $28.6 million for the same period a year ago. The net interest margin 2007 was 3.39 percent versus 3.78 percent for 2006. During the second quarter of 2007, the Company completed two private offerings of trust preferred securities which reduced the net interest margin 10 basis points for 2007.

The Company’s progress in improving its credit quality in the commercial real estate development sector is reflected in a lower level of nonperforming loans at December 31, 2007 as compared to December 31, 2006. The local and national economic conditions are not expected to improve substantially for at least the next several months, but the Company continues to work on strategies to further increase net interest margin and reduce nonperforming loans.

Noninterest income this year was $11,499,000, a 17.9 percent increase from the $9,751,000 for the same period in 2006. The increase was largely from net gains recorded on the sale of indirect loans and mortgage loans to the secondary market.

Total assets increased by $205.5 million from December 31, 2006 to $1.1 billion at December 31, 2007. Over the same twelve month period, portfolio loans increased by $125.3 million to $753.6 million, and total deposits increased $139.7 million to $856.9 million. The Company experienced solid growth in its commercial loan portfolio and core deposits during 2007. The Morgan Bancorp acquisition during the second quarter of this year contributed $93.1 million in loans and $101.9 million in deposits.

About LNB Bancorp, Inc.

LNB Bancorp, Inc. is a $1.1 billion financial holding company. Its major subsidiary, The Lorain National Bank, is a full-service commercial bank, specializing in commercial, personal banking services, residential mortgage lending and investment and trust services. The Lorain National Bank and Morgan Bank serve customers through 21 retail-

banking locations and 29 ATMs in Lorain, eastern Erie, western Cuyahoga and Summit counties. North Coast Community Development Corporation is a wholly owned subsidiary of The Lorain National Bank. Brokerage services are provided by the bank through an agreement with Investment Centers of America. For more information about LNB Bancorp, Inc., and its related products and services or to view its filings with the Securities and Exchange Commission, visit us at http://www.4lnb.com.

This press release contains forward-looking statements within the meaning of the “Safe Harbor” provisions of the Private Securities Litigation Reform Act of 1995. Terms such as “will,” “should,” “plan,” “intend,” “expect,” “continue,” “believe,” “anticipate” and “seek,” as well as similar expressions, are forward-looking in nature. Actual results and events may differ materially from those expressed or anticipated as a result of risks and uncertainties which include fluctuations in interest rates, inflation, government regulations, and economic conditions and competition in the geographic and business areas in which LNB Bancorp, Inc. conducts its operations, as well as the risks and uncertainties described from time to time in LNB Bancorp’s reports as filed with the Securities and Exchange Commission. We undertake no obligation to review or update any forward-looking statements, whether as a result of new information, future events or otherwise.

CONSOLIDATED BALANCE SHEETS

	At December 31,
	2007			2006
	(Dollars in thousands except share amounts)
ASSETS
Cash and due from Banks	$	23,523		$	29,122
Federal funds sold and short-term investments		—			—
Securities:
Trading securities		33,402			—
Available for sale, at fair value		179,424			155,810
Federal Home Loan Bank and Federal Reserve Bank Stock		4,579			3,248
Investment in trust preferred securities		620			—
Total securities		218,025			159,058
Loans:
Loans held for sale		4,724			—
Portfolio loans		753,598			628,333
Allowance for loan losses		(7,820	)		(7,300	)
Net loans		750,502			621,033
Bank premises and equipment, net		13,328			12,599
Other real estate owned		2,478			1,289
Bank owned life insurance		15,487			14,755
Goodwill and intangible assets, net		23,617			3,157
Accrued interest receivable		4,074			3,939
Other assets		5,611			6,146
Total Assets	$	1,056,645		$	851,098
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits
Demand and other noninterest-bearing	$	88,812		$	91,216
Savings, money market and interest-bearing demand		331,306			278,401
Certificates of deposit		436,823			347,644
Total deposits		856,941			717,261
Short-term borrowings		42,105			22,163
Federal Home Loan Bank advances		44,207			35,086
Junior subordinated debentures		20,676			—
Accrued interest payable		4,564			3,698
Accrued taxes, expenses and other liabilities		5,499			4,193
Total Liabilities		973,992			782,401
Shareholders’ Equity
Common stock, par value $1 per share, authorized 15,000,000 shares,
issued 7,623,857 shares at December 31, 2007 and 6,771,867 at December 31, 2006.		7,624			6,772
Preferred Shares, Series A Voting, no par value, authorized 750,000 shares, none issued at December 31, 2007 and 2006.		—			—
Additional paid-in capital		37,712			26,382
Retained earnings		42,951			43,728
Accumulated other comprehensive loss		458			(2,093	)
Treasury shares at cost, 328,194 shares at December 31, 2007 and at December 31, 2006		(6,092	)		(6,092	)
Total Shareholders’ Equity		82,653			68,697
Total Liabilities and Shareholders’ Equity	$	1,056,645		$	851,098

Consolidated Statements of Income (unaudited)

	Three Months Ended				Twelve Months Ended
	December 31,				December 31,
	2007		2006		2007		2006
	(Dollars in thousands except share and per share amounts)
Interest Income
Loans	$	13,279	$	11,110	$	49,889	$	42,800
Securities:
U.S. Government agencies and corporations		1,901		1,450		6,771		5,699
State and political subdivisions		163		134		606		464
Trading securities		377		—		817		—
Other debt and equity securities		81		52		285		202
Federal funds sold and short-term investments		56		4		394		77
Total interest income		15,857		12,750		58,762		49,242
Interest Expense
Deposits:
Certificates of deposit, $100 and over		2,680		2,066		9,256		6,884
Other deposits		4,419		3,188		16,279		11,261
Federal Home Loan Bank advances		320		358		1,555		1,585
Short-term borrowings		264		250		1,076		895
Other interest expense		359		—		926		10
Total interest expense		8,042		5,862		29,092		20,635
Net Interest Income		7,815		6,888		29,670		28,607
Provision for Loan Losses		578		1,365		2,255		2,280
Net interest income after provision for loan losses		7,237		5,523		27,415		26,327
Noninterest Income
Investment and trust services		577		542		2,170		2,079
Deposit service charges		1,268		1,199		4,725		4,533
Other service charges and fees		633		504		2,339		1,948
Income from bank owned life insurance		201		265		732		739
Other income		123		56		396		216
Total fees and other income		2,802		2,566		10,362		9,515
Securities gains, net		13		—		274		—
Gains on sale of loans		220		—		766		—
Gains (losses) on sale of other assets, net		38		234		97		236
Total noninterest income		3,073		2,800		11,499		9,751
Noninterest Expense
Salaries and employee benefits		3,846		3,908		15,708		14,894
Furniture and equipment		949		757		3,515		2,984
Net occupancy		573		492		2,256		1,905
Outside services		498		349		1,815		1,609
Marketing and public relations		180		210		1,116		1,279
Supplies, postage and freight		371		324		1,357		1,236
Telecommunications		226		174		849		751
Ohio Franchise tax		184		181		788		817
Other real estate owned		280		72		585		131
Electronic banking expenses		210		152		803		618
Other charge-offs and losses		189		120		576		410
Other expense		544		567		2,383		2,351
Total noninterest expense		8,050		7,306		31,751		28,985
Income before income tax expense		2,260		1,017		7,163		7,093
Income tax expense		592		99		1,651		1,669
Net Income	$	1,668	$	918	$	5,512	$	5,424
Net Income Per Common Share
Basic	$	0.23	$	0.14	$	0.79	$	0.84
Diluted		0.23		0.14		0.79		0.84
Dividends declared		0.18		0.18		0.72		0.72
Average Common Shares Outstanding
Basic		7,295,663		6,443,673		6,992,215		6,461,892
Diluted		7,295,663		6,443,673		6,992,215		6,462,094

LNB Bancorp, Inc.
Supplemental Financial Information
(Unaudited — Dollars in thousands except Share and Per Share Data)

	Three Months Ended											Twelve Months Ended
		December 31,			September 30,			December 31			December 31,			December 31,
		2007			2007			2006			2007			2006
END OF PERIOD BALANCES
Assets		$	1,056,645		$	1,019,197		$	851,098		$	1,056,645		$	851,098
Deposits			856,941			834,323			717,261			856,941			717,261
Portfolio loans			753,598			728,624			628,333			753,598			628,333
Allowance for loan losses			7,820			7,951			7,300			7,820			7,300
Shareholders’ equity			82,653			81,340			68,697			82,653			68,697
AVERAGE BALANCES
Assets:
Total assets		$	1,032,796		$	1,019,758		$	801,295		$	957,782		$	819,635
Earning assets			956,860			937,937			752,410			886,832			763,899
Securities			214,137			200,085			157,429			188,430			162,780
Portfolio loans			742,723			737,853			594,980			698,401			601,119
Liabilities and shareholders’ equity:
Total deposits		$	858,921		$	820,578		$	693,993		$	793,764		$	679,818
Interest bearing deposits			772,660			734,185			586,507			709,411			596,041
Interest bearing liabilities			853,309			841,952			637,482			786,299			660,748
Total shareholders’ equity			82,775			81,964			70,001			78,042			68,735
INCOME STATEMENT
Net interest income		$	7,815		$	7,828		$	6,888		$	29,670		$	28,607
Net interest income-FTE (1)			7,916			7,927			6,977			30,052			28,876
Provision for loan losses			578			441			1,365			2,255			2,280
Noninterest income			3,073			3,004			2,800			11,499			9,751
Noninterest expense			8,050			8,334			7,306			31,751			28,985
Taxes			592			384			99			1,651			1,669
Net income			1,668			1,673			918			5,512			5,424
Total revenue			10,888			10,832			9,688			41,169			38,358
PER SHARE DATA
Basic net income per common share		$	0.23		$	0.23		$	0.14		$	0.79		$	0.84
Diluted net income per common share			0.23			0.23			0.14			0.79			0.84
Cash dividends per common share			0.18			0.18			0.18			0.72			0.72
Basic average common shares outstanding			7,295,663			7,295,663			6,443,673			6,992,215			6,461,892
Diluted average common shares outstanding			7,295,663			7,295,663			6,443,684			6,992,215			6,462,094
KEY RATIOS
Return on average assets (2)			0.64	%		0.65	%		0.45	%		0.58	%		0.66	%
Return on average common equity (2)			7.99	%		8.10	%		5.20	%		7.06	%		7.89	%
Efficiency ratio			73.26	%		76.24	%		74.73	%		76.41	%		75.04	%
Noninterest expense to average assets (2)			3.09	%		3.24	%		3.62	%		3.32	%		3.54	%
Average equity to average assets			8.01	%		8.04	%		8.74	%		8.15	%		8.39	%
Net interest margin			3.24	%		3.31	%		3.63	%		3.35	%		3.74	%
Net interest margin (FTE) (1)			3.28	%		3.35	%		3.68	%		3.39	%		3.78	%
ASSET QUALITY
Nonperforming loans		$	10,831		$	10,942		$	12,812		$	10,831		$	12,812
Other real estate owned			2,478			3,053			1,289			2,478			1,289
Total nonperforming assets			13,309			13,995			14,101			13,309			14,101
Net Charge Offs			708			605			369			2,832			1,602
Total nonperforming loans to total loans			1.44	%		1.50	%		2.04	%		1.44	%		2.04	%
Total nonperforming assets to total assets			1.26	%		1.37	%		1.66	%		1.26	%		1.66	%
Net charge-offs to average loans (2)			0.38	%		0.33	%		0.25	%		0.41	%		0.27	%
Allowance for loan losses			1.04	%		1.09	%		1.16	%		1.04	%		1.16	%
Allowance to nonperforming loans			72.20	%		72.66	%		56.98	%		72.20	%		56.98	%

(1)	FTE — fully tax equivalent at 34% tax rate
(2)	Annualized