1
Form 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-13203
LNB Bancorp, Inc.
(Exact name of the registrant as specified in its charter)
Ohio 34-1406303
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
457 Broadway, Lorain, Ohio 44052 - 1769
(Address of principal executive offices) (Zip Code)
(440) 244 - 6000
Registrant's telephone number, including area code
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months, and (2) has been subject to such
requirements for the past 90 days.
YES X NO
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Outstanding at October 25, 1997: 4,124,279 shares
Class of Common Stock: $1.00 par value
2
LNB Bancorp, Inc.
Quarterly Report on Form 10-Q
Quarter Ended September 30, 1997
Part I - Financial Information
Item 1 - Financial Statements
Interim financial information required by Regulation 210.01-01 of
Regulation S-X is included in this Form 10-Q as referenced below:
Page
Number(s)
Condensed Consolidated Balance Sheets 3
Condensed Consolidated Statements of Income 5
Condensed Consolidated Statements 9
of Cash Flows
Notes to the Condensed Consolidated Financial
Statements 11
Item 2 - Management's Discussion and Analysis 14
of Financial Condition and Results of
Operations
Part II - Other Information
Item 1 - Legal Proceedings 19
Item 2 - Changes in Securities 19
Item 3 - Defaults upon Senior Securities 19
Item 4 - Submission of matters to a Vote of 19
Security Holders
Item 5 - Other Information 19
Item 6 - Exhibit and Reports on Form 8-K 19
Signatures 19
Exhibit Index 20
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FORM 10-Q LNB BANCORP, INC.
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
SEPTEMBER 30, DECEMBER 31,
CONDENSED CONSOLIDATED BALANCE SHEETS 1997 1996
------------- -------------
(Unaudited) (See Note 1)
ASSETS:
Cash and due from banks $ 20,842,000 $ 18,890,000
Federal funds sold and other interest
bearing instruments 9,561,000 103,000
Securities:
Securities available for sale 15,383,000 16,102,000
Investment securities 100,677,000 88,858,000
------------- -------------
Total Securities 116,060,000 104,960,000
(Market Value $116,785,000 and ------------- -------------
$105,639,000 respectively)
Total loans 331,844,000 302,073,000
Reserve for possible loan losses (4,305,000) (4,116,000)
------------- -------------
Net loans 327,539,000 297,957,000
------------- -------------
Premises and equipment, net 11,329,000 10,893,000
Intangible assets 5,268,000 -0-
Accrued interest receivable and other assets 6,180,000 5,440,000
------------- -------------
TOTAL ASSETS $496,779,000 $438,243,000
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY:
Noninterest-bearing deposits $ 65,549,000 $ 63,802,000
Interest-bearing deposits 356,554,000 302,578,000
------------- -------------
Total deposits 422,103,000 366,380,000
------------- -------------
Federal funds purchased and securities
sold under repurchase agreements and
other short-term borrowings 25,930,000 23,386,000
Federal Home Loan Bank Advances 1,095,000 1,095,000
Accrued taxes, expenses and other liabilities 3,226,000 3,184,000
------------- -------------
Total Liabilities 452,354,000 394,045,000
STATEMENT CONTINUED ON NEXT PAGE ------------- -------------
4
STATEMENT CONTINUED FROM PREVIOUS PAGE
Shareholders' equity:
Common stock $1.00 par:
Authorized 5,000,000
Outstanding 4,222,275 and 4,138,533,
respectively 4,222,000 4,138,000
Additional capital 22,598,000 20,178,000
Retained earnings 20,141,000 19,873,000
Net unrealized security gains 47,000 9,000
Treasury Stock at cost, 88,996 and -0-
shares respectively (2,583,000) -0-
------------- -------------
Total Shareholders' Equity 44,425,000 44,198,000
------------- -------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $496,779,000 $438,243,000
============= =============
NOTE 1: The consolidated balance sheet at December 31, 1996 has been
taken from the audited Financial Statements and condensed.
See Notes to Condensed Consolidated Financial Statements.
5
FORM 10-Q LNB BANCORP, INC. UNAUDITED
PART 1 - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
NINE MONTHS ENDED
CONDENSED CONSOLIDATED STATEMENTS SEPTEMBER 30,
OF INCOME -------------------------
1997 1996
INTEREST INCOME: ------------ ------------
Interest and Fees on Loans:
Taxable $20,725,000 $19,136,000
Tax-Exempt 37,000 46,000
Interest and Dividends on Securities:
Taxable 4,818,000 4,578,000
Tax-Exempt 107,000 184,000
Interest on Federal funds sold and other
interest bearing instruments 63,000 167,000
------------ -----------
TOTAL INTEREST INCOME 25,750,000 24,111,000
------------ -----------
INTEREST EXPENSE:
Interest on Certificates of Deposit
of $100,000 or more 1,733,000 1,404,000
Interest on Other Deposits 6,747,000 6,437,000
Interest on securities sold under repurchase
agreements and other short-term borrowings 925,000 690,000
Interest on Federal Home Loan Bank Advances 53,000 7,000
------------ -----------
TOTAL INTEREST EXPENSE 9,458,000 8,538,000
------------ -----------
NET INTEREST INCOME 16,292,000 15,573,000
Provision for Possible Loan Losses 375,000 425,000
NET INTEREST INCOME AFTER PROVISION ------------ -----------
FOR POSSIBLE LOAN LOSSES 15,917,000 15,148,000
------------ -----------
OTHER INCOME:
Trust Division income 955,000 801,000
Service charges on deposit accounts 1,690,000 1,546,000
Other Charges Fees and Exchanges 1,555,000 1,291,000
Gains from Sales of Loans -0- -0-
Other operating income 36,000 64,000
------------ -----------
TOTAL OTHER INCOME 4,236,000 3,702,000
STATEMENT CONTINUED ON NEXT PAGE ------------ -----------
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STATEMENT CONTINUED FROM PREVIOUS PAGE
OTHER EXPENSES:
Salaries and employee benefits 6,321,000 6,059,000
Net occupancy expense 957,000 939,000
Furniture and Equipment Expense 1,719,000 1,630,000
Supplies and postage 725,000 716,000
Ohio Franchise Tax 367,000 427,000
Other operating expenses 2,776,000 2,682,000
----------- -----------
TOTAL OTHER EXPENSES 12,865,000 12,453,000
----------- -----------
INCOME BEFORE FEDERAL INCOME TAXES 7,288,000 6,397,000
FEDERAL INCOME TAXES 2,508,000 2,117,000
----------- -----------
NET INCOME $ 4,780,000 $ 4,280,000
=========== ===========
PER SHARE DATA:
EARNINGS $ 1.14 $ 1.02
====== ======
CASH DIVIDENDS $ .49 $ .43
====== ======
See Notes to Condensed Consolidated Financial Statements.
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FORM 10-Q LNB BANCORP, INC. Unaudited
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
THREE MONTHS ENDED
CONDENSED CONSOLIDATED STATEMENTS SEPTEMBER 30,
OF INCOME --------------------------
1997 1996
INTEREST INCOME ------------ ------------
Interest and Fees on Loans:
Taxable $ 7,165,000 $ 6,521,000
Tax-Exempt 12,000 15,000
Interest and Dividends on Securities:
Taxable 1,661,000 1,553,000
Tax-Exempt 36,000 49,000
Interest on Federal funds sold and other
interest bearing instruments 26,000 49,000
------------ -----------
TOTAL INTEREST INCOME 8,900,000 8,187,000
------------ -----------
INTEREST EXPENSE:
Interest on certificates of deposit
of $100,000 or more 582,000 507,000
Interest on other deposits 2,330,000 2,137,000
Interest on securities sold under repurchase
agreements and other short-term borrowings 372,000 240,000
Interest on Federal Home Loan Bank Advances 18,000 6,000
------------ -----------
TOTAL INTEREST EXPENSE 3,302,000 2,890,000
------------ -----------
NET INTEREST INCOME 5,598,000 5,297,000
Provision for possible loan losses 125,000 125,000
NET INTEREST INCOME AFTER PROVISION ------------ -----------
FOR POSSIBLE LOAN LOSSES 5,473,000 5,172,000
------------ -----------
OTHER INCOME:
Trust division income 378,000 265,000
Service charges on deposit accounts 597,000 536,000
Other charges fees and exchanges 553,000 439,000
Gains from sales of loans -0- -0-
Other operating income 16,000 14,000
------------ -----------
TOTAL OTHER INCOME 1,544,000 1,254,000
STATEMENT CONTINUED ON NEXT PAGE ------------ -----------
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STATEMENT CONTINUED FROM PREVIOUS PAGE
OTHER EXPENSES:
Salaries and employee benefits 2,184,000 2,049,000
Net occupancy expense 314,000 300,000
Furniture and equipment expense 593,000 552,000
Supplies and postage 255,000 248,000
Ohio Franchise Tax 115,000 137,000
Other operating expenses 1,014,000 866,000
----------- -----------
TOTAL OTHER EXPENSES 4,475,000 4,152,000
----------- -----------
INCOME BEFORE FEDERAL INCOME TAXES 2,535,000 2,274,000
FEDERAL INCOME TAXES 882,000 771,000
----------- -----------
NET INCOME $ 1,660,000 $ 1,503,000
=========== ===========
PER SHARE DATA:
EARNINGS $ .40 $ .36
====== ======
CASH DIVIDENDS $ .17 $ .14
====== ======
See Notes to Condensed Consolidated Financial Statements.
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FORM 10-Q LNB BANCORP, INC. Unaudited
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
NINE MONTHS ENDED
CONDENSED CONSOLIDATED STATEMENTS SEPTEMBER 30,
OF CASH FLOWS -------------------------
1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES: ------------ ------------
Interest received $25,601,000 $23,953,000
Other income receivd 4,221,000 3,760,000
Interest paid (9,315,000) (8,589,000)
Cash paid for salaries and benefits (6,310,000) (5,733,000)
Net occupancy expense of premises paid (675,000) (720,000)
Furniture and equipment expenses paid (627,000) (579,000)
Cash paid for supplies and postage (725,000) (716,000)
Cash paid for other operating expenses (3,132,000) (3,362,000)
Federal income taxes paid (2,311,000) (2,060,000)
------------ ------------
NET CASH PROVIDED BY OPERATING ACTIVITIES: 6,187,000 5,954,000
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturities of securities
available for sale 3,250,000 9,667,000
Proceeds from maturities of investment
securities 11,979,000 18,971,000
Purchase of securities available for sale (4,201,000) (10,446,000)
Purchase of investment securities (22,120,000) (17,725,000)
Net (increase) in long-term loans (30,672,000) (21,297,000)
Net decrease in credit card loans 430,000 200,000
Purchases of bank premises, equipment
and software (1,789,000) (1,094,000)
Purchase of intangible assets (5,286,000) -0-
Proceeds from sales of bank premises,
and equipment 9,000 5,000
------------ ------------
NET CASH USED IN INVESTING ACTIVITIES (48,370,000) (29,719,000)
------------ ------------
STATEMENT CONTINUED ON NEXT PAGE
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STATEMENT CONTINUED FROM PREVIOUS PAGE
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in demand and other
non-interest bearing deposits 1,747,000 3,012,000
Net increase (decrease) in savings
and passbook deposits 13,349,000 (4,874,000)
Net increase in time deposits 41,627,000 8,871,000
Net increase in Federal funds purchased and
other interest bearing instruments 144,000 2,035,000
Proceeds from Federal Home Loan Bank -0- 360,000
Proceeds from Line of Credit 2,400,000 -0-
Proceeds from exercise of stock options 19,000 127,000
Purchase of Treasury Stock (2,583,000) -0-
Dividends paid (2,110,000) (1,790,000)
------------ ------------
NET CASH PROVIDED BY FINANCING
ACTIVITIES 53,593,000 7,741,000
------------ ------------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 11,410,000 (8,024,000)
CASH AND CASH EQUIVALENTS AT BEGINNING
OF YEAR 18,993,000 27,530,000
------------ ------------
CASH AND CASH EQUIVALENTS AT END OF
QUARTER $30,403,000 $19,506,000
============ ============
See Notes to Condensed Consolidated Financial Statements.
11
Form 10-Q LNB Bancorp, Inc. Unaudited
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INTRODUCTION
The following areas of discussion pertain to the condensed consolidated
financial statements of LNB Bancorp, Inc. at September 30, 1997, compared to
December 31, 1996, and the results of operations for the nine months
ending September 30, 1997 compared to the same period in 1996. It is the
intent of this discussion to provide the reader with a more thorough
understanding of the condensed consolidated financial statements and
supporting schedules, and should be read in conjunction with those
condensed consolidated financial statements and schedules.
LNB Bancorp, Inc. is not aware of any trends, events, or uncertainties
that might have a material effect on the soundness of operations; neither
is LNB Bancorp, Inc. aware of any proposed recommendations by regulatory
authorities which would have a similar effect if implemented.
BASIS OF PRESENTATION
The unaudited condensed consolidated balance sheet as of September 30, 1997,
the condensed consolidated statements of income and the condensed
consolidated statements of cash flows for the nine months ended September
30, 1997 and 1996 are prepared in accordance with generally accepted
accounting principles for interim financial information. The above
mentioned statements reflect all normal and recurring adjustments which
are, in the opinion of management, necessary for a fair presentation of
the financial position and the results of operations for the interim
periods presented.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. It is suggested
that these condensed consolidated financial statements be read in
conjunction with the financial statements and notes thereto included in the
Corporation's December 31, 1996 Annual Report to Shareholders.
The results of operations for the period ended September 30, 1997 are not
necessarily indicative of the operating results for the full year.
RESERVE FOR POSSIBLE LOAN LOSSES
Because some loans may not be repaid in full, a reserve for possible loan
losses is recorded. This reserve is increased by provisions charged to
earnings and is reduced by loan charge-offs, net of recoveries. Estimating
the risk of loss on any loan is necessarily subjective. Accordingly, the
reserve is maintained by Management at a level considered adequate to
cover possible loan losses that are currently anticipated based on
Management's evaluation of several key factors including information about
specific borrower situations, their financial position and collateral
values, current economic conditions, changes in the mix and levels of the
various types of loans, past charge-off experience and other pertinent
information. The reserve for possible loan losses is based on estimates
using currently available information, and ultimate losses may vary from
current estimates due to changes in circumstances. These estimates are
reviewed periodically and, as adjustments become necessary, they are reported
in earnings in the periods in which they become known. While Management may
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periodically allocate portions of the reserve for specific problem
situations, the entire reserve is available for any charge-offs that may
occur. Charge-offs are made against the reserve for possible loan losses
when Management concludes that it is probable that all or a portion of a
loan is uncollectible. After a loan is charged-off,collection efforts
continue and future recoveries may occur.
The Corporation adopted the provision of Statement of Financial Accounting
Standards No. 114 (SFAS No. 114), "Accounting by Creditors for Impairment
of a Loan" and SFAS No. 118 "Accounting for Creditors for Impairment of a
Loan - Income Recognition and Disclosure" on January 1, 1995. SFAS No.
114 provides guidelines for measuring impairment losses on loans. Under
SFAS No. 114, a loan is considered impaired, based on current information
and events, if it is probable that the Bank will be unable to collect the
scheduled payments of principal or interest when due according to the
contractual terms of the loan agreement. The measurement of impaired
loans is generally based on the present value of the expected future cash
flows discounted at the loans initial effective interest rate, except that
all collateral-dependent loans are measured for impairment based on the
fair value of the collateral. If the loan valuation is less than the
recorded value of the loan, an impairment reserve must be established for
the difference. The impairment reserve is established by either an
allocation of the reserve for possible loan losses or by a provision for
possible loan losses, depending upon the adequacy of the reserve for
possible loan losses. SFAS No. 118 permits existing income recognition
practices to continue.
RECLASSIFICATIONS
Certain 1996 amounts have been reclassified to conform to 1997 presentation.
2. PER SHARE DATA
Earnings per common and common equivalent shares (stock options) have been
computed using the weighted average number of shares outstanding during
each period after giving consideration to the dilutive effect of incentive
stock options, a two percent stock dividend and a five-for-four stock
split which were approved by shareholders during 1996 and 1995, respectively.
The Corporation adopted SFAS No. 128 "Earnings Per Share" on January 1,
1997. This Statement specifies the computation, presentation and
disclosure requirements for earnings per share, for entities with publicly
held common stock or potential common stock. The per share data has been
adjusted to reflect the two percent stock dividend in 1996.
In accordance with SFAS No. 128, Earnings per share is calculated as
follows:
For the Quarter ended September 30, 1997
Income Shares Per-Share
(Numerator) (Denominator) Amount
Income before extraordinary
Item and accounting change $4,780,000
Basic EPS
Income available to
common stockholders $4,780,000 4,182,228 $1.14
=====
Effect of Dilutive Securities
Incentive Stock Options -0- 10,650
---------- ---------
Dilutive EPS
Income available to common
stockholders + assumed
conversions $4,780,000 4,192,878 $1.14
========== ========= =====
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3. DISCLOSURE OF INFORMATION ABOUT CAPITAL STRUCTURE
The Corporation adopted SFAS No. 129 "Disclosure of Information about
Capital Structure" on January 1, 1997. This statement requires in summary
form within the financial statements, the pertinent rights and privileges
of the various securities outstanding. Corporate Management has
determined that the adoption of SFAS No. 129 will increase year-end
disclosure requirements for capital.
4. ACQUISITION OF ASSETS AND DEPOSITS
Effective September 15, 1997, Lorain National Bank, a wholly owned
subsidiary of LNB Bancorp, Inc., acquired three branch offices from
KeyBank National Association (KeyBank) headquartered in Cleveland, Ohio
pursuant to a Branch Purchase and Assumption Agreement dated April 10,
1997.
The three branch offices, located in Lorain County, Ohio, included an
aggregate of $45 million in deposits, certain real estate and personal
property associated with the branches, and $18 million in consumer and
commercial loans associated with the branches.
The KeyBank acquisition has been accounted for as a purchase, and
accordingly, the acquired assets and liabilities were recorded based on
the fair values at the date of acquisition.
Most interest bearing deposit accounts other than time certificates of
deposits (CD's) were converted into Lorain National Bank products on the
acquisition date and will earn interest at the current rates in effect for
Lorain National Bank's deposit products. Other interest bearing deposit
accounts acquired from KeyBank were grandfathered and their interest rate
will be the KeyBank rate at purchase date. CD's and IRA's acquired will
carry the rates of interest per those contracts until their maturity
dates.
KeyBank National Association, is a national banking association with its
headquarters located in Cleveland, Ohio. There is no relationship between
KeyBank National Association and LNB Bancorp, Inc. and its wholly-owned
subsidiary Lorain National Bank.
The effect of the KeyBank acquisition is included in the results of
operations prospectively from the date of acquisition. The pro forma
effect of this acquisition on prior periods is not shown herein as Lorain
National Bank did not acquire the entire businesses of the seller.
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PART I - FINANCIAL INFORMATION
ITEM 2 - MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL
CONDITION & RESULTS OF OPERATION
INTRODUCTION
On September 15, 1997 Lorain National Bank, a wholly-owned subsidiary of
LNB Bancorp, Inc., Lorain, Ohio, purchased and assumed $45.3 million in
deposits and other liabilities of three branch offices, located in Lorain
County, from KeyBank National Association (KeyBank), headquartered in
Cleveland, Ohio. In addition to the deposits assumed, Lorain National Bank
also acquired approximately $26.6 million in cash and $0.4 million in
premises and equipment, and $18.3 million in consumer and commercial
loans. Two of the banking offices acquired by the Lorain National Bank,
located in Lorain county, are being operated as part of the Bank's branch
office network. The third branch office, located at 383 Broadway, Lorain,
Ohio will be open through November 14, 1997 and then merged into our Main
Office at 457 Broadway, Lorain, Ohio.
Management believes that the purchase will enhance the Bank's long-term
profitability and has projected a positive impact of approximately $450,000 for
the 1998 fiscal year. However, management anticipates the purchase will have a
break-even or slight increase on net income for fiscal 1997, even though
approximately $120,000 of consulting, system conversion and employee related
expenses associated with the purchase were charged to the third quarter
expenses.
In May 1997, the Board of Directors of LNB Bancorp, Inc. authorized the
repurchase of up to 100,000 shares of common stock. At September 30,
1997, the Corporation had repurchased 88,996 shares under the 100,000
share repurchase program.
FINANCIAL CONDITION
Total assets at September 30, 1997 increased by $58,536,000, or 13.4%,
during the first nine months in 1997. Prior to the KeyBank purchase, cash
flows from deposits were used to fund approximately, $11,500,000 in loan
growth. At quarter-end, $17,000,000 in proceeds from the KeyBank purchase
were temporarily invested in short-term interest bearing time deposits
with banks in addition to more permanent investments in United States
Treasury Securities and United States Government Agency securities with
intermediate maturities. After the quarter-end, temporary investments
will be replaced with higher yielding securities with staggered maturities
in order to meet the cash flow needs of anticipated loan growth through
the remainder of 1997 and into 1998. A portion of asset growth is
attributable to the cyclical influx of municipal county tax money.
Total earning assets increased $50,329,000 or 12.3% from December 31,
1996. The ratio of earning assets to total assets has decreased slightly
from 92.9% at December 31, 1996 to 92.0% at September 30, 1997. With the
addition of the KeyBank loans and deposits to the balance sheet, the loan
to deposit ratio has declined from 82.4% at 1996 year-end to 78.6% at
September 30, 1997.
Federal funds sold and other interest bearing investments increased by
$9,458,000 during the first nine months of 1997. Total securities increased
$11,100,000 ending the third quarter at $116,060,000. At September 30, 1997
unrealized gains (losses)in the investment securities portfolio were
approximately $869,000 and ($144,000), respectively.
Nonperforming assets at September 30, 1997 totaled $882,000, up from
$376,000 at June 30, 1997. The third quarter increase in nonperforming
assets of $506,000 resulted from loans being brought current in the amount
of $101,000, loans charged-off in the amount of $5,000 and increases in
nonaccrual loans of
15
$612,000. The increase in nonaccrual loans in the third quarter of 1997
was due primarily to five commercial loan customers and three consumer
loan customers.
The level of nonperforming assets at September 30, 1997 remains at
relatively low levels and Corporate management believes nonperforming
assets are well collateralized. The table below presents the level of
nonperforming assets at the end of the last four calendar quarters.
Amounts in thousands 09/30/97 06/30/97 03/31/97 12/31/96
-------- -------- -------- --------
Nonperforming Assets:
Nonaccrual $ 882 $ 376 $ 597 $ 765
Restructured 0 0 0 0
Other Real Estate Owned 0 0 0 39
------ ------ ------ ------
Total Nonperforming Assets $ 882 $ 376 $ 597 $ 804
====== ====== ====== ======
Reserve for possible
loan losses to total
nonperforming assets 488.1% 1,127.1% 684.4% 511.9%
======== ====== ====== =======
Accruing loans past due 90 days 919 271 180 357
====== ====== ====== ======
Net loans increased $29,582,000 during the first nine months to
$327,539,000 at September 30, 1997. Consumer and commercial loans
attributable to the KeyBank acquisition at September 30, 1997 totaled
$18,300,000, or 6.1%, of the increase in net loans from the year-end 1996.
The reserve for possible loan losses ended the quarter at $4,305,000
supported by a provision for loan losses of $375,000 recoveries of
$126,000 and loan charge-offs of $312,000. The reserve for possible loan
losses as a percentage of ending loans decreased .06% from 1.36% at
December 31, 1996 to 1.30% at September 30, 1997. Corporate management
believes that the current level of the reserve for possible loan losses is
adequate based upon quantitative analysis of identified risks, due
diligence performed on the $18,300,000 loan portfolio acquired from
KeyBank, and analysis of historical trends.
The Corporation's credit policies are reviewed and modified on an on-going
basis in order to remain suitable for the management of credit risk within
the loan portfolio as conditions change. At September 30, 1997, there are
no significant concentrations of credit in the loan portfolio.
The Corporation had outstanding loan and credit commitments to make loans
totalling $72,517,000 and $62,933,000 at September 30, 1997 and 1996,
respectively. A major portion of the credit commitment increase is
attributable to the acquisition of unused home equity lines of credit from
KeyBank of approximately $7,500,000. After giving consideration due to the
KeyBank purchase, the consistent outstanding loan and credit commitments
balance from 1996 to 1997 results from loan demand due to good local
economic conditions.
Total deposits increased $55,723,000 during the first nine months to
$422,103,000. Deposits attributable to the KeyBank acquisition at
September 30, 1997 totaled $45,300,000, or 12.4% of the increase in total
deposits from year-end 1996. Non-interest bearing deposits increased to
$65,549,000, at September 30,1997 for an increase of $1,747,000, while
interest bearing deposits climbed to $356,554,000 for an increase of
$53,976,000. Federal funds purchased and securities sold under agreements
to repurchase increased $2,544,000 during the first nine months of 1997.
Due to the volatility of customer repurchase agreements, most funds
generated by repurchase activity enter the Corporation's earning assets
as short-term investments.
The acquired branches experience deposit runoff at September 30, 1997 of
about 1.7%.
16
LIQUIDITY
Liquidity measures a corporation's ability to generate cash or otherwise
obtain funds at reasonable prices to fund commitments to borrowers as well
as the demand of depositors and debt holders. Principal internal sources
of liquidity for the Corporation and the Bank are cash and cash
equivalents, Federal funds sold, and the maturity structures of
investments securities and portfolio loans. Securities and loans
available for sale provide another source of liquidity through the cash
flows of these interest bearing assets as they mature or are sold.
Total cash and securities available for sale of $36,225,000 represent 7.3%
of total assets on September 30, 1997. Securities available for sale of
approximately $11,498,000 is pledged as collateral to secure public funds
or other obligations. Of the securities available for sale, $13,383,000
are held in U.S. Treasury and Agency securities, 71.7% of which mature
within one year. This increase in liquidity from 1996 year-end is a direct
result of the KeyBank deposit acquisition and the funds received from
KeyBank for the assumption of those liabilities. At September 30, 1997,
$9,400,000 of the proceeds were invested in interest bearing deposits with
banks, while $9,000,000 was placed in United States Treasury and Agency
Securities. Another measure which shows the improvement in Lorain
National Bank's liquidity is the loan to deposit ratio which has declined
from 82.4% at December 31,1996 to 78.6% at September 30,1997.
The Corporation continues to maintain a relatively high liquid position in
order to take advantage of interest rate fluctuations. As of September
30, 1997, short-term security investments with maturities of one year or
less totalled $39,712,000 which represented 34.2% of total securities.
Adding cash and due from banks of $20,842,000 and Federal funds sold and
other interest bearing instruments of $9,561,000, total liquid assets
represented 14.1% of total assets. The Corporation's subsidiary bank has
established short-term lines of credit at correspondent banks and the
Federal Home Loan Bank in the amount of $27,800,000.
CAPITAL RESOURCES
Total shareholders' equity increased to $44,425,000, at September 30,
1997. The increase resulted primarily from $4,780,000 of net income
generated from the first nine months of operations less a cash dividend
payable to shareholders of $2,027,000. Financial Accounting Standards
Board Statement No. 115, "Accounting for Certain Investments in Debt and
Equity Securities", requires that securities which the Bank has classified
as "Available-for-Sale" are recorded at market value with any adjustments
recorded to equity. The increase in interest rates experienced in the
first three quarters of 1997 has caused an increase in the market value of
these securities which resulted in an increase of shareholders' equity of
$38,000 for the nine months ended September 30, 1997.
The Corporation continues to monitor growth to stay within the constraints
established by the regulatory authorities. Under Federal banking
regulations, an institution is deemed to be well-capitalized if it has a
Risk-based Tier 1 capital ratio of 6.00 percent or greater, a Risk-based
Total capital ratio of 10.00 percent or greater and a Leverage ratio of
5.00 percent or greater. The Corporation's Risk-based capital and
Leverage ratios have exceeded the ratios for a well-capitalized financial
institution for all periods presented. The primary reason for the
decrease in the capital ratios at September 30, 1997, results from the
purchase and assumption of loans and deposits from KeyBank, and the
purchase of Treasury Stock.
As of September 30, 1997, the LNB Bancorp, Inc. held 88,996 shares of
common stock as treasury stock. LNB Bancorp, Inc. purchased 88,996 of
these shares in the second and third quarters of 1997 with a total cost of
$2,583,000.
17
The Corporation's capital and leverage ratios as of September 30, 1997 and
1996 follow.
September 30
-----------------
1997 1996
------ ------
Tier I capital ratio 12.81% 16.71%
Required Tier I capital ratio 4.00% 4.00%
Total capital ratio 14.04% 17.96%
Required total capital ratio 8.00% 8.00%
Leverage ratio 8.70% 10.26%
Required leverage ratio 3.00% 3.00%
On an ongoing basis the Corporation analyzes acquisition opportunities in
markets which are adjacent to or within the Corporation's current
geographical market. Corporate management believes that it's current
capital resources are sufficient to support any foreseeable acquisition
activity, in addition to the purchase of three branch offices from KeyBank
National Association. Lorain National Bank has received approval from the
Comptroller of Currency to operate a branch office in LaGrange, Ohio,
located in southern Lorain County. The new Lorain National Bank branch is
scheduled to open in July of 1998. Lorain National Bank will lease
property at Sentinel Square in LaGrange for this full-service branch which
will include auto drive-in facilities and an ATM.
Lorain National Bank has signed agreements for the expansion and
remodeling of its Kansas Avenue Branch Office. Construction began in May
and is expected to be completed by October 1997. Total construction costs
plus new equipment is expected to be $450,000.
There were no other material commitments outstanding at September 30,
1997, other than the loan and credit commitments and the construction and
remodeling contracts for the Kansas Avenue Branch Office.
RESULTS OF OPERATIONS
Interest and fees on loans increased by $1,580,000 when compared to the
first nine months of 1996. This was the net result of the impact of
slight increases in rates in conjunction with loan portfolio growth of
$29,771,000. Interest and dividends on securities was $4,925,000 for the
first nine months of 1997 for an increase of $163,000 over the same period
in 1996. Interest and dividends on securities represented 19.1% of total
interest income at September 30, 1997 compared to 19.8% at September 30,
1996. Interest on Federal funds sold and other interest bearing
instruments was $63,000 at September 30, 1997 compared to $167,000 at
September 30, 1996. The decrease resulted from declining average balances
invested in this form of financial instrument along with lower interest
rates.
Total interest expense increased by $920,000 when compared to the first
nine months of 1996. The increase resulted from increases in average
balances of savings, certificates of deposit and checkinvest accounts
coupled with decreases in interest rates paid on certificates of deposit
and checkinvest accounts.
Net interest margin was further effected at the end of the third quarter
by the acquisition of deposits from KeyBank. The rates KeyBank paid on
the acquired deposits are slightly higher than the Bank's comparable
deposit products. To protect against deposit runoff, Lorain National Bank
will continue to pay higher rates on selected grandfathered deposit
products. Rates on Certificates of Deposit, however, will remain
unchanged through the remaining life of those instruments.
18
For the remainder of 1997, the acquisition of the KeyBank consumer and
commercial loans and deposits and its related significant impact on
balance sheet size will have a positive influence on net interest income.
Total other income increased by $534,000 when compared to the first nine
months of 1996. This increase resulted from increases in income from
fiduciary fees of $154,000, increases in service charges of $144,000 and
increases in other charges of $264,000. The increase in service charges
is due, in part, to reevaluating the assessment of transaction account
charges. The increase in other charges is the result of pricing increases
in credit card and merchant fees and increases in ATM fees. Other
operating income decreased by $28,000.
The Corporation continuously monitors non-interest expenses for greater
profitability. The entire staff is geared to improving productivity at
all levels. Non-interest expense for the nine months ended September 30,
1997 was $12,865,000, 3.3% above the first nine months of 1996. This
increase was due primarily to increases in salaries and employee benefits,
net occupancy expense, furniture and equipment expense, KeyBank conversion
expenses and the impacts of inflation.
The effective tax rate increased from 33.1% during the first nine months
of 1996 to 34.4% during the first nine months of 1997. The increase in
the effective tax rate is due primarily to the decrease in tax exempt
interest income. Net income was $4,780,000 and $4,280,000 for the nine
months ended September 30, 1997 and 1996, respectively. Net income per
share after adjusting for the two percent stock dividend in 1997 and 1996
was $1.14 and $1.02 for the nine months ended September 1997 and 1996,
respectively.
IMPACTS OF ACCOUNTING AND REGULATORY PRONOUNCEMENTS
Corporate management is not aware of any current recommendations by the
Financial Accounting Standards Board or by regulatory authorities which,
if they were implemented, would have a material effect on the liquidity,
capital resources or operations of the Corporation. However, the
potential impact of certain accounting and regulatory pronouncements
warrant further discussion.
The Financial Accounting Standards Board (FASB) has issued:
SFAS No. 130, "Reporting Comprehensive Income"
Implementation date by the Corporation: January 1, 1998
Impact on the Corporation: This Statement provides accounting and
reporting standards for reporting and display of comprehensive income and
its components (revenues, expenses, gains, and losses) in a full set of
general-purpose financial statements. Corporate management does not
believe that adoption of SFAS No. 130 will have a significant impact on
net income, but will increase reporting requirements.
SFAS No. 131, "Disclosures about segments of an Enterprise and Related
Information"
Implementation date by the Corporation: January 1, 1998
Impact on the Corporation: This Statement provides accounting and
reporting standards about operating segments in annual financial
statements and requires that those enterprises report selected information
about operating segments in interim financial reports issued to
shareholders. It also establishes standards for related disclosures about
products and services, geographic areas, and major customers. Corporate
management does not believe that adoption of SFAS No. 131 will have a
significant impact on net income but will increase disclosure
requirements.
19
Part II - OTHER INFORMATION
ITEM 1 - Legal Proceedings
None
ITEM 2 - Changes in Securities
None
ITEM 3 - Defaults Upon Senior Securities
None
ITEM 4 - Submission of Matters to a Vote of Security Holders
None
ITEM 5 - Other Information
None
ITEM 6 - Exhibits and Reports on Form 8-K:
(a) Exhibit (11) - Computation of Shares Used for Earnings Per Share
Calculation.
(b) Exhibit (19) - Third Quarter Report to Shareholders of LNB
Bancorp, Inc., September 30, 1997 - EDGAR Version.
(c) Exhibit (27) - Financial Data Schedule.
(d) Reports on Form 8-K - On October 2, 1997, LNB Bancorp, Inc.
filed a Form 8-K with the Securities and Exchange Commission
pursuant to (Form 8-K, Item 5 requirements) concerning the
purchase and assumption of certain assets and liabilities of
three KeyBank branch offices in Lorain County, Ohio by its
wholly owned subsidiary Lorain National Bank from KeyBank
National Association, Cleveland, Ohio as of September 15, 1997.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
LNB BANCORP, INC.
(registrant)
Date: October 30, 1997 /s/ Gregory D. Friedman
_________________________
Gregory D. Friedman,
Senior Vice President,
Chief Operating Officer and
Chief Financial Officer
Date: October 30, 1997 /s/ Mitchell J. Fallis
_________________________
Mitchell J. Fallis,
Vice President and
Chief Accounting Officer
20
LNB Bancorp, Inc.
Form 10-Q
Exhibit Index
Pursuant to Item 601 (a) of Regulation S-K
S-K Reference Exhibit Page
Number Number
(11) Computation of Shares Used for Earnings Per Share
Calculations 21
(19) Third Quarter Report to Shareholders of LNB Bancorp,
Inc. September 30, 1997 - EDGAR Version. 22
(27) Financial Data Schedule. 27
21
LNB Bancorp, Inc.
Exhibit to Form 10-Q
(For the nine months ended September 30, 1997)
S - K Reference Number (11)
Computation of Shares Used for Earnings Per Share Calculation.
Nine Months Ended
September 30
--------------------
1997 1996
--------- ---------
Weighted Average Shares Outstanding 4,182,228 4,125,664
Common Stock Equivalents (Stock Options) 10,650 10,590
--------- ---------
4,192,878 4,136,254
========= =========
22
LNB Bancorp, Inc.
Exhibit to Form 10 - Q
(For the nine months ended September 30, 1997)
S - K Reference Number (19)
Third Quarter Report to Shareholders of
LNB Bancorp, Inc. (dated September 30, 1997)
EDGAR Version
Description:
Two sided pamphlet: Backside cover containing the list of Customer Service
Locations of Lorain National Bank and outside beige cover with brown
lettering stating LNB Bancorp, Inc., Quarterly Report, a picture of five
hands pulling on a rope with a hoist, September 30, 1997 along with logo.
Inside contains: Message to our Shareholders, unaudited EDGAR Version
Consolidated Balance Sheets for period ending September 30, 1997 and
September 30, 1996 and unaudited Consolidated Statements of Income for the
Nine Months Ended September 30, 1997 and September 30, 1996, along with
LNB Bancorp, Inc. logo.
23
Message to Our Shareholders
It's a pleasure to report that we are well on our way to another
successful year of operations of LNB Bancorp, Inc. and its subsidiary,
Lorain National Bank.
As of September 30, we've achieved growth in many significant areas
including earnings, shareholders' equity, total loans and total assets.
Also in September, we completed the acquisition of three branch offices of
KeyBank in Lorain County. We welcome the thousands of former KeyBank
customers who brought over $45 million in deposits and $18 million in
loans to Lorain National Bank. Thus, we've expanded our existing
customers' banking convenience and introduced our new customers to 18 more
bank branches and 25 additional automated teller machine locations.
Earnings have increased 11.7 percent for the nine months ended September
30, 1997, compared to the same period one year ago. Consolidated net
income for the first nine months of 1997 reached $4,780,000, up from
$4,280,000 for the comparative period in 1996.
Year-to-date cash dividends declared to shareholders has increased 13.5
percent over the comparative period in 1996. Total shareholders' equity
also increased $1.1 million during the 12 months ended September 30, 1997
and total shareholder's equity, as a percentage of total assets, was 8.9
percent.
Total assets rose $58,536,000 to $496,779,000 as of September 30, 1997.
Net loans increased $29,582,000 to $327,539,000 at September 30, 1997.
The asset and loan increase was funded by the purchase and assumption of
$45.6 million in deposits and $18.3 million in loans from KeyBank National
Association.
From a local economic standpoint, we would be remiss in failing to mention
the loss of jobs at the Lorain Ford Motor assembly plant. However, we do
not expect Lorain County to suffer significantly. Because of the recent
growth of non-auto related industry, Lorain County is in much better
condition to absorb the loss than in years passed. We are encouraged with
the resiliency of our community.
As a locally owned, independent bank and holding company, we look forward
to providing personal service to our growing four publics - our customers,
shareholders, employees, and community.
We thank you for your continued support and look forward to addressing you
after the completion of another year of successful operations.
Sincerely,
/s/ Stanley G. Pijor /s/ James F. Kidd
_______________________ ______________________
Stanley G. Pijor James F. Kidd
Chairman President & Chief
of the Board Executive Officer
24
Consolidated Balance Sheets
September 30
------------------------------
1997 1996
-------------- --------------
ASSETS:
Cash and Due from Banks $ 20,842,000 $ 19,404,000
Federal Funds Sold and Other Interest Bearing
Instruments 9,561,000 102,000
Securities Available for Sale 15,383,000 14,244,000
Investment Securities 100,677,000 89,725,000
Loans 331,844,000 297,080,000
Reserve for Possible Loan Losses (4,305,000) (4,112,000)
- --------------------------------------------------------------------------
NET LOANS 327,539,000 292,968,000
- --------------------------------------------------------------------------
Premises, Equipment and Intangible Assets (net)16,597,000 10,863,000
Accrued Interest Receivable and Other Assets 6,180,000 6,281,000
- --------------------------------------------------------------------------
TOTAL ASSETS $496,779,000 $433,587,000
- --------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY:
Non-Interest Bearing Deposits $ 65,549,000 $ 63,175,000
Interest Bearing Deposits 356,554,000 297,289,000
- --------------------------------------------------------------------------
TOTAL DEPOSITS 422,103,000 360,464,000
- --------------------------------------------------------------------------
Securities Sold under Repurchase Agreements
and Other Short-Term Borrowings 25,930,000 26,203,000
Federal Home Loan Bank Advances 1,095,000 362,000
Accrued Taxes, Expenses and Other Liabilities 3,226,000 3,240,000
- --------------------------------------------------------------------------
TOTAL LIABILITIES 452,354,000 390,269,000
- --------------------------------------------------------------------------
Common Stock 4,222,000 4,135,000
Additional Capital 22,598,000 20,129,000
Retained Earnings 20,141,000 19,087,000
Net Unrealized Security Gains(Losses) 47,000 (33,000)
Treasury Stock at Cost (2,583,000) -0-
- --------------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY 44,425,000 43,318,000
- --------------------------------------------------------------------------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $496,779,000 $433,587,000
- --------------------------------------------------------------------------
(LOGO) LNB
Bancorp, Inc.
and its subsidiary Lorain National Bank
25
Consolidated Statements of Income
Nine Months Ended
September 30
---------------------------
1997 1996
------------- -------------
INTEREST INCOME:
Interest and Fees on Loans $20,762,000 $19,182,000
Interest and Dividends on Securities 4,932,000 4,767,000
Interest on Federal Funds Sold 56,000 162,000
- --------------------------------------------------------------------------
TOTAL INTEREST INCOME 25,750,000 24,111,000
- --------------------------------------------------------------------------
INTEREST EXPENSE:
Interest on Deposits 8,480,000 7,841,000
Interest on Securities Sold Under Repurchase
Agreements and Other Short-Term Borrowings 925,000 690,000
Interest on Federal Home Loan Bank Advances 53,000 7,000
- --------------------------------------------------------------------------
TOTAL INTEREST EXPENSE 9,458,000 8,538,000
- --------------------------------------------------------------------------
NET INTEREST INCOME 16,292,000 15,573,000
Provision for Loan Losses 375,000 425,000
- --------------------------------------------------------------------------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 15,917,000 15,148,000
- --------------------------------------------------------------------------
OTHER INCOME:
Trust Department Income 955,000 801,000
Fees and Service Charges 3,245,000 2,836,000
Gains From Sales of Loans and Securities -0- -0-
Other Operating Income 36,000 65,000
- --------------------------------------------------------------------------
TOTAL OTHER INCOME 4,236,000 3,702,000
- --------------------------------------------------------------------------
OTHER EXPENSES:
Salaries and Employee Benefits 6,321,000 6,059,000
Net Occupancy Expense of Premises 957,000 939,000
Furniture and Equipment Expenses 1,719,000 1,630,000
Supplies and Postage 725,000 716,000
Ohio Franchise Tax 367,000 427,000
Other Operating Expenses 2,776,000 2,682,000
- --------------------------------------------------------------------------
TOTAL OTHER EXPENSES 12,865,000 12,453,000
- --------------------------------------------------------------------------
INCOME BEFORE FEDERAL INCOME TAXES 7,288,000 6,397,000
Federal Income Taxes 2,508,000 2,117,000
- --------------------------------------------------------------------------
NET INCOME $4,780,000 $4,280,000
- --------------------------------------------------------------------------
PER SHARE DATA:
NET INCOME $ 1.14 $ 1.02
- --------------------------------------------------------------------------
DIVIDENDS DECLARED $ .49 $ .43
==========================================================================
The per share data has been adjusted to reflect the 2% stock dividend in
1997 and 1996. Net income per share is based on weighted average common
and common equivalent shares outstanding.
26
Outside Cover: 3 column format
Customer Service Locations
Banking Offices Midway Mall Office
6396 Midway Mall Boulevard
Lorain Offices Elyria, Ohio 44035
(440) 324-6530
Main Office*
457 Broadway Second Street Office
Lorain, Ohio 44052 221 Second Street
(440) 244-7185 Elyria, Ohio 44035
(440) 323-4621
Sixth Street Drive-In
200 Sixth Street Community Offices
Lorain, Ohio 44052
(440) 244-7242 Amherst Office
1175 Cleveland Avenue
Broadway Office* Amherst, Ohio 44001
383 Broadway (440) 988-4423
Lorain, Ohio 44052
(440) 244-1946 Avon Lake Office
240 Miller Road
Cooper Foster Park Road Office Avon Lake, Ohio 44012
1920 Cooper Foster Park Road (440) 933-2186
Lorain, Ohio 44053
(440) 282-1252 Kendal at Oberlin Office
600 Kendal Drive
Kansas Avenue Office Oberlin, Ohio 44074
1604 Kansas Avenue (440) 774-5400
Lorain, Ohio 44052
(440) 288-9151 Oberlin Office
40 East College Street
Oberlin Avenue Office Oberlin, Ohio 44074
3660 Oberlin Avenue (440) 775-1361
Lorain, Ohio 44053
(440) 282-9196 Olmsted Office
27095 Bagley Road
Pearl Avenue Office Olmsted Township, Ohio 44138
2850 Pearl Avenue (440) 235-4600
Lorain, Ohio 44055
(440) 277-1103 The Renaissance Office
26376 John Road
West Park Office Olmsted Township, Ohio 44138
2130 West Park Drive (440) 427-0041
Lorain, Ohio 44053
(440) 989-3131 Vermilion Office
4455 Liberty Avenue
Elyria Offices Vermilion, Ohio 44089
(440) 967-3124
Cleveland Street Office
801 Cleveland Street The Crossings of Westlake Office
Elyria, Ohio 44035 30210 Detroit Road
(440) 365-8397 Westlake, Ohio 44145
(440) 892-9696
Lake Avenue Office
42935 North Ridge Road Westlake Village Office
Elyria Township, Ohio 44035 28550 Westlake Village Drive
(440) 233-7196 Westlake, Ohio 44045
(440) 808-0229
27
Community Based Automated
Teller Machine Locations
Captain Larry's Marathon
1317 State Route 60
Vermilion, Ohio
Community Health Partners
East Campus
205 West 20th Street
Lorain, Ohio
Convenient Food Mart
Cash Machine
5375 West Erie Avenue
Lorain, Ohio
Gateway Plaza
3451 Colorado Avenue
Lorain, Ohio
Lakeland Medical Center
3700 Kolbe Road
Lorain, Ohio
Lorain County Community
College
1005 North Abbe Road
Elyria, Ohio
Lorain Plaza Shopping Center
1147 Meister Road
Lorain, Ohio
Lowe's Home Improvement
Warehouse
620 Midway Boulevard
Elyria, Ohio
Midway Mall Food Court
3343 Midway Mall
Elyria, Ohio
*Drive-up ATM is available at Sixth
Street Drive-In. All other banking
offices feature ATMs, except the
Broadway and Westlake Village
offices.
**This office will close permanently
at the close of business on
November 14, 1997.
28
Frontside cover description:
Beige background, brown lettering.
LNB Bancorp, Inc.
QUARTERLY REPORT
Picture of five hands pulling on a rope with a hoist.
September 30, 1997
Bottom left:
LNB Bancorp, Inc. Logo
LNB
Bancorp, Inc.
And its subsidiary Lorain National Bank
457 Broadway
Lorain, Ohio 44052-1739
(440) 244-6000 or (800) 860-1007
29
LNB Bancorp, Inc.
Exhibit to Form 10 - Q
(For the nine months ended September 30, 1997)
S - K Reference Number (27)
Financial Data Schedule
(Follows as a separate document)