Exhibit 99.2
FOR IMMEDIATE RELEASE
Contacts:
James H. Weber
Senior Vice President,
Marketing and Investor Relations Officer
Tel: (440) 989-3005
Mitchell J. Fallis, CPA
Vice President and
Chief Accounting Officer
Tel: (440) 244-7145
Gregory D. Friedman, CPA
Executive Vice President,
Corporate Secretary and
Chief Financial Officer
Tel: (440) 244-7143
LNB BANCORP, INC., REPORTS 2003 SECOND-QUARTER EARNINGS
AND FIRST-HALF REVENUE AND EARNINGS
LORAIN, OHIO-JULY 22, 2003-LNB BANCORP, INC. (Nasdaq: LNBB), today announced
financial results for the second quarter and six months ended June 30, 2003,
with earnings reaching the highest level for any second quarter in the
corporation's history.
LNB Bancorp, Inc., parent financial holding company of The Lorain National
Bank, reported 2003 second-quarter earnings of $2,324,000, an increase of two
percent from the previous second-quarter record of $2,281,000 set last year.
Basic and diluted earnings per share for the 2003 second quarter of $0.35 were
unchanged from the year-ago period. Earnings for the first half of 2003
increased to $4,515,000, or $0.68 per basic and diluted share, from
$4,429,000, or $0.67 per basic and diluted share, for the first six months of
2002.
All 2002 financial statements and related per-share amounts herein have been
restated to reflect the adoption of Statement of Financial Accounting
Standards (SFAS) No. 147 "Acquisitions of Certain Financial Institutions" and
SFAS No. 142 "Goodwill and Other Intangible Assets" as related to intangibles.
Per-share amounts have also been adjusted to reflect a two-percent stock
dividend on July 2, 2002, and a three-for-two stock split on March 14, 2003.
Net interest income increased less than one percent during the 2003 first half
versus the comparable year-ago period. Solid growth in commercial loans plus
the downward repricing of interest-bearing liabilities slightly more than
offset lower interest rates on the loan and investment portfolios.
Noninterest income declined by three percent in 2003's first half. Decreases
in Investment and Trust Services Division income of 18 percent, and decreases
in gains on sales of securities of 17 percent and 24 percent in other
noninterest income were partially offset by a 213 percent increase on gain on
sale of loans and a three percent increase in fees and service charges.
Noninterest expenses declined one percent for the first half of 2003 compared
with the same period in 2002. Decreases in salaries and employee expenses,
marketing, and other noninterest expenses offset increases in outside services
and other categories. Income taxes decreased $28,000 due to increases in tax-
exempt income.
Net revenues generated during the second quarter of 2003 decreased less than
one percent to $9.9 million, compared with $10.0 million last year. For the
first half of the year, net revenues of $19.6 million also decreased less than
one percent from $19.7 million in 2002's first six months.
Commenting on the results for the period, Gary C. Smith, LNB Bancorp's
President and Chief Executive Officer, stated: "In light of the soft economic
conditions, we have been working very hard to manage our noninterest expenses.
As a result, total noninterest expenses declined approximately $150,000 in
this year's first half, compared with last year's first six months."
The Bancorp reported that annualized return on average assets (ROAA) for the
2003 first half was 1.26 percent, compared with 1.23 percent for 2002's first
half. The annualized return on average shareholders' equity (ROAE) for first-
half 2003 was 13.45 percent versus 13.15 percent in last year's comparable
period.
Total assets increased eight percent to $753.1 million at June 30, 2003, up
$58.5 million from June 30, 2002. Net loans increased six percent to $520.1
million from $493.0 million, led by strong commercial loan growth offset
somewhat by a refinancing-induced decline in residential mortgage loans during
the 12 months ended June 30, 2003. The security portfolio increased to $165.8
million at June 30, 2003, up $19.0 million or 12.9 percent from one year ago.
Increases in United States government agency securities accounted for most of
the increase.
Total deposits climbed seven percent to $591.6 million, up $38.1 million from
one year ago. Growth in demand deposits, savings, certificates of deposit and
CheckInvest deposits were partially offset by declines in money market and
Market Access deposits.
Other borrowings increased 23 percent to $86.5 million at June 30, 2003, from
$70.5 million one year ago due to increases in Federal Home Loan Bank advances
of $20.6 million, partially offset by decreases in repurchase agreements of
$4.6 million.
At June 30, 2003, shareholders' equity reached an all-time high of $68.6
million, up $4.3 million or seven percent from one year ago; and book value
per share climbed to $10.38 from $9.70 at June 30, 2002. Capital ratios
remained strong during the period, with average equity to average assets of
9.3 percent. LNB Bancorp, Inc., and Lorain National Bank exceed all applicable
regulatory capital requirements. Under Federal Deposit Insurance Corporation
(FDIC) guidelines, Lorain National Bank is categorized as "well capitalized"
the highest rating category available.
Total cash dividends declared during the first half of 2003 increased to
$2,246,000, compared with $2,179,000 for the first half of 2002. Dividends
declared increased three percent, on a per-share basis, in the first half of
2003 reaching $0.34 versus last year's $0.33.
ABOUT LNB BANCORP, INC.
LNB Bancorp, Inc., is a $753-million financial holding company with two
wholly owned subsidiaries: The Lorain National Bank and Charleston Insurance
Agency, Inc., and a 49-percent-owned subsidiary, Charleston Title Agency,
LLC. LNB Bancorp's primary subsidiary, The Lorain National Bank, provides a
full spectrum of financial services, including full-service community
banking, specializing in commercial, mortgage and personal banking services,
and investment and trust services. Lorain National Bank also offers long-
term, fixed-rate mortgages via the secondary mortgage market. Brokerage
services including stocks, bonds, mutual funds and variable-annuity
investments are also offered at Lorain National Bank through Raymond James
Financial Services, Inc. (member NASD/SIPC), a registered broker/dealer.
North Coast Community Development Corporation, a wholly owned subsidiary of
The Lorain National Bank, is a community development entity (CDE), formed and
approved in 2002, that provides qualified community businesses with debt
financing including commercial mortgage, construction, and commercial
equipment loans aimed at stimulating economic growth and job creation in low-
and moderate-income census tracts in Lorain County, Ohio. Charleston
Insurance Agency, Inc., offers life, long-term-care insurance and fixed-
annuity products. Charleston Title Agency, LLC, offers traditional title
services.
Lorain National Bank serves customers through 21 retail-banking centers and
27 ATMs in Ohio's Lorain, eastern Erie and western Cuyahoga counties. For
more information about LNB Bancorp, Inc., and its related products and
services or to view its filings with the Securities and Exchange Commission,
including Forms 10-K, 10-Q and 8-K, please visit http://www.4lnb.com.
This press release contains forward-looking statements based on current
expectations that are covered under the "safe-harbor" provision of the
Securities Litigation Reform Act of 1995. Certain forward-looking statements,
which involve inherent risks and uncertainties, are described in LNB
Bancorp's filings with the Securities and Exchange Commission. A number of
important factors could cause actual results to differ materially from those
in the forward-looking statements. Those factors 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.
--FINANCIAL HIGHLIGHTS FOLLOW--
LNB Bancorp, Inc.
FINANCIAL HIGHLIGHTS
(In thousands, except per-share data; unaudited
PERCENT
THREE MONTHS ENDED JUNE 30, 2003 2002 CHANGE
- ---------------------------- --------- --------- ---------
Net interest income $ 7,274 $ 7,299 (0)%
Noninterest income 2,665 2,667 (0)%
--------- ---------
Revenue $ 9,939 $ 9,966 (0)%
Provision for loan losses 570 525 9%
Noninterest expenses 5,889 6,056 (3)%
--------- ---------
Income before income taxes $ 3,480 3,385 3%
Income taxes 1,156 1,104 (5)%
--------- ---------
Net income $ 2,324 $ 2,281 2%
PER SHARE DATA:
Earnings (basic and diluted) $ 0.35 $ 0.35
Cash dividend declared $ 0.17 $ 0.17
Weighted average shares outstanding:
Basic 6,603,920 6,601,548
Diluted 6,624,263 6,606,758
PERCENT
SIX MONTHS ENDED JUNE 30, 2003 2002 CHANGE
- ---------------------------- --------- --------- ---------
Net interest income $14,434 $14,382 0%
Noninterest income 5,171 5,305 (3)%
--------- ---------
Revenue $19,605 $19,687 (0)%
Provision for loan losses 1,134 1,125 (1)%
Noninterest expenses 11,835 11,984 (1)%
--------- ---------
Income before income taxes $ 6,636 6,578 1%
Income taxes 2,121 2,149 (1)%
--------- ---------
Net income $ 4,515 $ 4,429 2%
FINANCIAL RATIOS:
Annualized Return on average assets 1.26% 1.23%
Annualized Return on average equity 13.45% 13.15%
Net interest margin 4.31% 4.58%
Efficiency ratio 61.01% 62.76%
Loan loss reserve/gross loans 1.35% 1.23%
PER SHARE DATA:
Earnings (basic and diluted) $ 0.68 $ 0.67
Cash dividend declared $ 0.34 $ 0.33
Weighted average shares outstanding:
Basic 6,602,924 6,601,548
Diluted 6,620,932 6,605,630
PERCENT
AT JUNE 30, 2003 2002 CHANGE
- ---------------------------- --------- --------- ---------
Total assets $ 753,085 $ 694,564 8%
Net loans $ 520,118 $ 492,962 6%
Total deposits $ 591,630 $ 553,511 7%
Other borrowings $ 86,505 $ 70,508 23%
Total shareholders' equity $ 68,591 $ 64,277 7%
Book value per share $ 10.38 $ 9.70 7%