LNB Bancorp (LNBB) 8-K LNB Bancorp, Inc. Reports Earnings for the First Quarter of 2012

Exhibit 99.1

LNB Bancorp, Inc. Reports Earnings for the First Quarter of 2012

• Net income of $1.50 million, up 33% from prior year
• Commercial loan balances increased $38 million over prior year
• Efficiency ratio improved to 67.4%
• Nonperforming assets declined by $2.5 million, or 5.9%

LORAIN, Ohio--(BUSINESS WIRE)--April 26, 2012--LNB Bancorp, Inc. (NASDAQ: LNBB) (“LNB” or the “Company”) today reported financial results for the quarter ended March 31, 2012. Net income was $1.5 million, up $0.38 million or 33.2 percent, from the $1.13 million reported for the first quarter of 2011. Net income available to common shareholders was $1.19 million, or $0.15 per common share, compared to $0.81 million, or $0.10 per common share, for the year-ago quarter, an increase of $0.05 per share, or 46.9 percent.

“We reported another strong quarter of earnings growth,” stated Daniel E. Klimas, president and chief executive officer of LNB Bancorp. “We are pleased with the increased level of loan activity in our communities; this past quarter, we booked nearly $30 million of commercial loans. This is a positive sign of economic recovery as well as a reflection of the success of our business initiatives and the new commercial bankers that we hired in 2010 in anticipation of this activity.”

“We continue to reduce the level of problem loans and their associated costs. The impact of improved asset quality is reflected explicitly in our reduced provision expense and throughout our income statement in the form of reduced administrative expenses.”

“We look forward to a continuation of these slowly improving conditions. The business climate in our markets supports our growing confidence in the bank’s ability to capitalize on opportunities. With strong core earnings and $44 million in cash and cash equivalents as of March 31, we have the liquidity and capital strength to manage continued loan growth.”

First Quarter Review

LNB has made progress over the past year in several key performance areas. Asset quality, tangible and regulatory capital levels, loan growth and profitability have all benefited from management attention and an improved economy.

Operating revenue, including net interest income on a fully tax-equivalent basis (“FTE”) plus noninterest income from operations, was $12.4 million for the first quarters of both 2011 and 2012. Net interest income (FTE) contributed $9.8 million of operating revenue for the first quarter of 2012, also virtually unchanged from the year-ago level; a two basis points decline in the 2012 net interest margin (FTE) to 3.61 percent was offset by a 0.4 percent increase in average earning assets year-over-year.

Noninterest income was $2.88 million for the first quarter of 2012 which included a $0.25 million one-time signing bonus received from a third party service provider. This compares to $3.07 million for the prior-year first quarter, which included a $0.41 million gain on the sale of securities.

Operating expenses continue to be well-controlled. For the first quarter of 2012, noninterest expense was $8.5 million, a decline of $0.65 million, or 7.0 percent, from the year-ago quarter. The decline in expenses related to credit administration and the administration of foreclosed property (“OREO”) accounted for $0.55 million of the improvement. On a pretax tax-equivalent basis, pre-provision core earnings* for the first quarter were $3.98 million, up $0.5 million, or 14.0 percent, from the first quarter of 2011.

Improved asset quality accounted for a majority of the cost savings, both in terms of operational efficiencies and from a $0.2 million decline in the loan loss provision compared to the year-earlier first quarter. Nonperforming assets declined by $2.5 million over the course of the past twelve months, allowing LNB to reduce its loan loss reserve to 1.98 percent of total portfolio loans compared to 2.14 percent at the end of the 2011 first quarter. The $1.9 million loan loss provision closely tracked first quarter net charge-offs of $1.8 million.

Total assets were $1.2 billion as of March 31, 2012, up 2.0 percent since March 31 of the previous year. Portfolio loans rose 6.4 percent during the same 12-month period, to $862.2 million. Of the $51.6 million in total loan growth over the past year, $19 million was booked since year-end 2011. Commercial lending was the primary contributor to recent loan growth, up $29 million since the beginning of the year, whereas auto loans provided the growth opportunities in earlier quarters while all other loan categories marginally decreased year over year.

The growth of low-cost deposits in the bank’s markets, namely checking, savings and money market accounts, has contributed significantly to the bank’s ability to fund loan growth at a reasonable cost. During the first quarter of 2012, low-cost deposits increased by $28 million, lowering the average deposit cost to 0.65 percent from 0.93 percent for the year-ago quarter. Capital ratios continue to build. Tangible common equity grew by $4.2 million over the past twelve months, improving tangible leverage to 5.67 percent; regulatory ratios all remain well in excess of “well-capitalized” levels as of March 31, 2012.

* Pre-provision core earnings is a non-GAAP financial measure that the Company’s management believes is useful in analyzing the Company’s underlying performance trends, particularly in periods of economic stress. Pre-provision core earnings is defined as income before income tax expense, adjusted to exclude the impact of provision for loan losses. Pre-provision core earnings is reconciled to the related GAAP financial measure in the “Reconciliation” table included after the consolidated financial statements and supplemental financial information included in this press release.

About LNB Bancorp, Inc.

LNB Bancorp, Inc. is a $1.2 billion bank 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 20 retail-banking locations and 28 ATMs in Lorain, Erie, Cuyahoga and Summit counties. North Coast Community Development Corporation is a wholly owned subsidiary of The Lorain National Bank. 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.

Forward-Looking Statements

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 comments, 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 but are not limited to:

• asset price deterioration, which has had and may continue to have a negative effect on the valuation of certain asset categories represented on the Company's balance sheet;
• general economic conditions, either nationally or regionally (especially in northeastern Ohio), becoming less favorable than expected resulting in, among other things, further deterioration in credit quality of assets;
• increases in interest rates or further weakening economic conditions that could constrain borrowers' ability to repay outstanding loans or diminish the value of the collateral securing those loans;
• significant increases in competitive pressure in the banking and financial services industries;
• changes in the interest rate environment which could reduce anticipated or actual margins;
• changes in political conditions or the legislative or regulatory environment, including new or heightened legal standards and regulatory requirements, practices or expectations, which may impede profitability or affect the Company's financial condition (such as, for example, the Dodd-Frank Wall Street reform and Consumer Protection Act and rules and regulations that may be promulgated under the Act);
• persisting volatility and limited credit availability in the financial markets, particularly if limitations on the Company's ability to raise funding to the extent required by banking regulators or otherwise; initiatives undertaken by the U.S. government do not have the intended effect on the financial markets;
• limitations on the Company's ability to return capital to shareholders and dilution of the Company's common shares that may result from the terms of the Capital Purchase Program ("CPP"), pursuant to which the Company issued securities to the United States Department of the Treasury (the "U.S. Treasury");
• limitations on the Company's ability to pay dividends;
• adverse effects on the Company's ability to engage in routine funding transactions as a result of the actions and commercial soundness of other financial institutions;
• increases in deposit insurance premiums or assessments imposed on the Company by the FDIC;
• difficulty attracting and/or retaining key executives and/or relationship managers at compensation levels necessary to maintain a competitive market position;
• changes occurring in business conditions and inflation;
• changes in technology;
• changes in trade, monetary, fiscal and tax policies;
• changes in the securities markets, in particular, continued disruption in the fixed income markets and adverse capital market conditions;
• continued disruption in the housing markets and related conditions in the financial markets; and
• changes in general economic conditions and competition in the geographic and business areas in which the Company conducts its operations, particularly in light of the recent consolidation of competing financial institutions; as well as the risks and uncertainties described from time to time in the Company's reports as filed with the Securities and Exchange Commission.

The Company undertakes no obligation to update or clarify forward-looking statements, whether as a result of new information, future events or otherwise.

CONSOLIDATED BALANCE SHEETS
	At March 31, 2012			At December 31, 2011
	(unaudited)
	(Dollars in thousands except share amounts)
ASSETS
Cash and due from Banks	$	37,032		$	34,323
Federal funds sold and interest bearing deposits in banks		7,080			6,324
Cash and cash equivalents		44,112			40,647
Securities:
Available for sale, at fair value		231,851			226,012
Total Securities		231,851			226,012
Restricted stock		5,741			5,741
Loans held for sale		4,462			3,448
Loans:
Portfolio loans		862,220			843,088
Allowance for loan losses		(17,115	)		(17,063	)
Net loans		845,105			826,025
Bank premises and equipment, net		8,947			8,968
Other real estate owned		1,845			1,687
Bank owned life insurance		18,034			17,868
Goodwill, net		21,582			21,582
Intangible assets, net		668			731
Accrued interest receivable		3,651			3,550
Other assets		13,096			12,163
Total Assets	$	1,199,094		$	1,168,422
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Demand and other noninterest-bearing	$	134,368		$	126,713
Savings, money market and interest-bearing demand		380,396			359,977
Certificates of deposit		501,402			504,390
Total deposits		1,016,166			991,080
Short-term borrowings		894			227
Federal Home Loan Bank advances		47,496			42,497
Junior subordinated debentures		16,238			16,238
Accrued interest payable		1,054			1,118
Accrued taxes, expenses and other liabilities		3,186			3,988
Total Liabilities		1,085,034			1,055,148
Shareholders' Equity
Preferred stock, Series A Voting, no par value, authorized 150,000 shares at March 31, 2012 and December 31, 2011.		-			-
Fixed rate cumulative preferred stock, Series B, no par value, $1,000 liquidation value, 25,233 shares authorized and issued at March 31, 2012 and December 31, 2011.		25,223			25,223
Discount on Series B preferred stock		(98	)		(101	)
Discount on Series B preferred stock		146			146
Common stock, par value $1 per share, authorized 15,000,000 shares, issued shares 8,272,548 at March 31, 2012 and 8,210,443 at December 31, 2011.		8,272			8,210
Additional paid-in capital		39,614			39,607
Retained earnings		45,187			44,080
Accumulated other comprehensive income		1,809			2,201
Treasury shares at cost, 328,194 shares at March 31, 2012 and at December 31, 2011		(6,092	)		(6,092	)
Total Shareholders' Equity		114,061			113,274
Total Liabilities and Shareholders' Equity	$	1,199,094		$	1,168,422

CONSOLIDATED STATEMENTS OF INCOME (unaudited)
	Three Months Ended March 31,			Three Months Ended March 31,		Three Months Ended December 31,
	2012			2011		2011
	(Dollars in thousands except share and per share amounts)
Interest Income
Loans	$	10,049		$	10,516	$	10,402
Securities:
U.S. Government agencies and corporations		1,260			1,477		1,253
State and political subdivisions		287			256		265
Other debt and equity securities		72			72		67
Federal funds sold and short-term investments		9			14		19
Total interest income		11,677			12,335		12,006
Interest Expense
Deposits		1,631			2,283		1,836
Federal Home Loan Bank advances		215			266		263
Short-term borrowings		-			1		-
Junior subordinated debenture		176			171		175
Total interest expense		2,022			2,721		2,274
Net Interest Income		9,655			9,614		9,732
Provision for Loan Losses		1,900			2,100		2,808
Net interest income after provision for loan losses		7,755			7,514		6,924
Noninterest Income
Investment and trust services		390			403		359
Deposit service charges		935			916		1,064
Other service charges and fees		748			906		752
Income from bank owned life insurance		165			174		198
Other income		343			79		144
Total fees and other income		2,581			2,478		2,517
Securities gains, net		-			412		325
Gains on sale of loans		346			179		291
Gain (loss) on sale of other assets, net		(52	)		2		(135	)
Total noninterest income		2,875			3,071		2,998
Noninterest Expense
Salaries and employee benefits		4,111			4,091		3,795
Furniture and equipment		832			680		789
Net occupancy		579			612		541
Outside services		495			486		473
Marketing and public relations		247			271		241
Supplies, postage and freight		243			272		281
Telecommunications		173			215		180
Ohio Franchise tax		316			298		399
FDIC assessments		392			574		380
Other real estate owned		132			590		80
Electronic banking expenses		238			209		231
Loan and collection expense		349			442		278
Other expense		437			449		436
Total noninterest expense		8,544			9,189		8,104
Income before income tax expense		2,086			1,396		1,818
Income tax expense		581			266		329
Net Income	$	1,505		$	1,130	$	1,489
Dividends and accretion on preferred stock		319			319		320
Net Income Available to Common Shareholders	$	1,186		$	811	$	1,169
Net Income Per Common Share
Basic	$	0.15		$	0.10	$	0.15
Diluted		0.15			0.10		0.15
Dividends declared		0.01			0.01		0.01
Average Common Shares Outstanding
Basic		7,924,562			7,871,416		7,882,249
Diluted		7,925,368			7,871,432		7,882,249

LNB Bancorp, Inc.
Supplemental Financial Information
(Unaudited - Dollars in thousands except Share and Per Share Data)
	Three Months Ended
	March 31,			March 31,			December 31,
END OF PERIOD BALANCES	2012			2011			2011
Cash and Cash Equivalents	$	44,112		$	64,393		$	40,647
Securities		231,851			235,563			226,012
Restricted stock		5,741			5,741			5,741
Loans held for sale		4,462			5,261			3,448
Portfolio loans		862,220			810,629			843,088
Allowance for loan losses		17,115			17,315			17,063
Net loans		845,105			793,314			826,025
Other assets		67,823			70,758			66,549
Total assets	$	1,199,094		$	1,175,030		$	1,168,422
Total deposits		1,016,166			1,001,099			991,080
Other borrowings		64,628			59,318			58,962
Other liabilities		4,240			4,913			5,106
Total liabilities		1,085,034			1,065,329			1,055,148
Total shareholders' equity		114,061			110,049			113,274
Total liabilities and shareholders' equity	$	1,199,094		$	1,175,378		$	1,168,422
AVERAGE BALANCES
Assets:
Total assets	$	1,176,454		$	1,160,851		$	1,168,340
Earning assets*		1,093,618			1,089,080			1,082,438
Securities		222,832			223,992			224,778
Portfolio loans		856,364			816,035			833,811
Liabilities and shareholders' equity:
Total deposits	$	993,839		$	986,458		$	991,105
Interest bearing deposits		869,107			870,396			866,037
Interest bearing liabilities		933,033			930,122			925,530
Total shareholders' equity		114,156			110,078			112,925
INCOME STATEMENT
Total Interest Income	$	11,677		$	12,335		$	12,006
Total Interest Expense		2,022			2,721			2,274
Net interest income		9,655			9,614			9,732
Provision for loan losses		1,900			2,100			2,808
Other income		2,581			2,478			2,517
Net gain on sale of assets		294			593			481
Noninterest expense		8,544			9,189			8,104
Income before income taxes		2,086			1,396			1,818
Income tax expense		581			266			329
Net income		1,505			1,130			1,489
Preferred stock dividend and accretion		319			319			320
Net income available to common shareholders	$	1,186		$	811		$	1,169
Common cash dividend declared and paid	$	79		$	79		$	79
Net interest income-FTE (1)	$	9,806		$	9,739		$	9,877
Pre-provision core earnings		3,986			3,496			4,626
PER SHARE DATA
Basic net income per common share	$	0.15		$	0.10		$	0.15
Diluted net income per common share		0.15			0.10			0.15
Cash dividends per common share		0.01			0.01			0.01
Book value per common shares outstanding		11.19			10.77			11.18
Tangible book value per common shares outstanding**		8.39			7.93			8.35
Period-end common share market value		6.94			5.69			4.70
Market as a % of book		61.99	%		52.82	%		42.04	%
Basic average common shares outstanding		7,924,562			7,871,416			7,882,249
Diluted average common shares outstanding		7,925,368			7,871,432			7,882,249
Common shares outstanding		7,944,354			7,884,749			7,882,249
KEY RATIOS
Return on average assets (2)		0.51	%		0.39	%		0.51	%
Return on average common equity (2)		5.30	%		4.16	%		5.23	%
Efficiency ratio		67.38	%		71.73	%		62.94	%
Noninterest expense to average assets (2)		2.92	%		3.21	%		2.75	%
Average equity to average assets		9.70	%		9.48	%		9.67	%
Net interest margin (FTE) (1)		3.61	%		3.63	%		3.62	%
Common stock dividend payout ratio		6.68	%		9.71	%		6.74	%
Common stock market capitalization	$	55,134		$	44,864		$	37,047
ASSET QUALITY
Allowance for Loan Losses
Allowance for loan losses, beginning of period	$	17,063		$	16,136		$	17,845
Provision for loan losses		1,900			2,100			2,808
Charge-offs		2,076			1,112			3,747
Recoveries		228			191			157
Net charge-offs		1,848			921			3,590
Allowance for loan losses, end of period	$	17,115		$	17,315		$	17,063
CAPITAL & LIQUIDITY
Period-end tangible common equity to assets**		5.65	%		5.40	%		5.73	%
Average equity to assets		9.70	%		9.48	%		9.67	%
Average equity to loans		13.33	%		13.49	%		13.54	%
Average loans to deposits		86.17	%		82.72	%		84.13	%
Tier 1 leverage ratio		8.87	%		8.51	%		8.80	%
Tier 1 risk-based capital ratio		11.37	%		11.06	%		11.39	%
Total risk-based capital ratio		13.94	%		13.82	%		14.01	%
Nonperforming Assets
Nonperforming loans	$	36,870		$	37,808		$	34,471
Other real estate owned		1,845			3,348			1,687
Total nonperforming assets	$	38,715		$	41,156		$	36,158
Ratios
Total nonperforming loans to total loans		4.28	%		4.66	%		4.09	%
Total nonperforming assets to total assets		3.23	%		3.50	%		3.09	%
Net charge-offs to average loans (2)		0.87	%		0.46	%		1.71	%
Provision for loan losses to average loans (2)		0.89	%		1.04	%		1.34	%
Allowance for loan losses to portfolio loans		1.98	%		2.14	%		2.02	%
Allowance to nonperforming loans		46.42	%		45.80	%		49.50	%
Allowance to nonperforming assets		44.21	%		42.07	%		47.19	%
(1) FTE -- fully tax equivalent at 34% tax rate
(2) Annualized
* Earning Assets includes Loans Held for Sale
* * Non-GAAP measures.

Reconciliation of Pre-Provision Core Earnings*
	Three Months Ended March 31,
	2012	2011
Pre-provision Core Earnings*	$ 3,986	$ 3,496
Provision for Loan Losses	1,900	2,100
Income before income tax expense	$ 2,086	$ 1,396

* Pre-provision core earnings is a non-GAAP financial measure that the Company’s management believes is useful in analyzing the Company’s underlying performance trends, particularly in periods of economic stress.

Pre-provision core earnings is defined as income before income tax expense, adjusted to exclude the impact of provision for loan losses.

CONTACT:
LNB Bancorp, Inc.
Peter R. Catanese, Senior Vice President, 440-244-7126