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 March 31, 1998
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 on 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 April 15, 1998: 4,122,475 shares
Class of Common Stock: $1.00 par value
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LNB Bancorp, Inc.
Quarterly Report on From 10-Q
Quarter Ended March 31, 1998
Part I - Financial Information
Item 1 - Financial Statements
Interim financial information required by Regulation 210.10-01 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
of Cash Flows 7
Notes to the Condensed Consolidated Financial 9
Statements
Item 2 - Management's Discussion and Analysis
of Financial Condition and Results of
Operations 14
Item 3 - Quantitative and Qualitative Disclosure 19
about Market Risk
Part II - Other Information
Item 1 - Legal Proceedings 20
Item 2 - Changes in Securities 20
Item 3 - Defaults upon Senior Securities 20
Item 4 - Submission of matters to a Vote of
Security Holders 20
Item 5 - Other Information 21
Item 6 - Exhibits and Reports on Form 8-K 21
Signatures 21
Exhibit Index 22
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FORM 10-Q LNB BANCORP, INC.
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
MARCH 31, DECEMBER 31,
CONDENSED CONSOLIDATED BALANCE SHEETS 1998 1997
------------- --------------
(Unaudited) (See Note 1)
ASSETS:
Cash and due from banks $ 20,117,000 $ 24,273,000
Federal funds sold and other interest
bearing instruments 2,882,000 134,000
Securities:
Securities available for sale 30,662,000 19,336,000
Investment securities held to maturity 87,862,000 96,038,000
-------------- --------------
Total securities 118,524,000 115,374,000
(Market value $119,413,000 and -------------- --------------
$116,197,000, respectively)
Loans:
Portfolio loans 317,665,000 319,666,000
Loans available for sale 12,047,000 11,365,000
-------------- --------------
Total loans 329,712,000 331,031,000
Reserve for possible loan losses (4,360,000) (4,168,000)
-------------- --------------
Net loans 325,352,000 326,863,000
-------------- --------------
Bank premises and equipment, net 11,133,000 11,321,000
Intangible assets 5,088,000 5,114,000
Accrued interest receivable 3,315,000 3,155,000
Other assets 3,517,000 3,983,000
-------------- --------------
TOTAL ASSETS $489,928,000 $490,217,000
============== ==============
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LIABILITIES AND STOCKHOLDERS' EQUITY:
Deposits:
Demand and other noninterest-
bearing deposits $ 66,346,000 $ 68,565,000
Savings and passbook accounts 173,537,000 172,936,000
Time deposits 172,689,000 169,154,000
-------------- --------------
Total deposits 412,572,000 410,655,000
-------------- --------------
Securities sold under repurchase agreements
and other short-term borrowings 25,102,000 28,950,000
Federal Home Loan Bank advances 2,045,000 2,045,000
Accrued interest payable 1,453,000 1,379,000
Accrued taxes, expenses, and
other liabilities 2,969,000 2,203,000
-------------- --------------
Total liabilities 444,141,000 445,232,000
Shareholders' equity:
Common stock $1.00 par: Shares authorized
5,000,000 Shares issued 4,222,475 and
4,222,375, respectively and Shares outstanding
4,122,475 and 4,124,379 respectively 4,222,000 4,222,000
Additional capital 22,600,000 22,599,000
Retained earnings 21,791,000 20,937,000
Accumulated other comprehensive
income 69,000 70,000
Treasury stock at cost, 100,000 and
97,996 shares, respectively (2,900,000) (2,843,000)
-------------- --------------
Total shareholders' equity 45,787,000 44,985,000
-------------- --------------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $489,928,000 $490,217,000
============== ==============
Note 1: The consolidated balance sheet at December 31, 1997 has
been taken from the audited Financial Statements and
condensed.
See notes to unaudited 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 MARCH 31,
OF INCOME ------------------------------
1998 1997
INTEREST INCOME: ------------------------------
Interest and fees on loans:
Taxable $ 7,284,000 $ 6,642,000
Tax-exempt 11,000 13,000
Interest and dividends on securities:
U.S. Treasury securities 1,720,000 1,556,000
U.S. Government agencies and
corporations
States and political subdivisions
Other debt and equity securities 51,000 35,000
Interest on Federal funds sold and other
interest bearing instruments 60,000 10,000
------------- -------------
TOTAL INTEREST INCOME 9,126,000 8,256,000
------------- -------------
INTEREST EXPENSE:
Interest on deposits:
Time certificates of $100,000 and over 557,000 558,000
Other deposits 2,582,000 2,172,000
Interest on securities sold under
repurchase agreements and other short-
term borrowings 264,000 252,000
Interest on Federal Home Loan Bank advances 32,000 17,000
------------- -------------
TOTAL INTEREST EXPENSE 3,435,000 2,999,000
------------- -------------
NET INTEREST INCOME 5,691,000 5,257,000
Provision for possible loan losses 187,000 125,000
NET INTEREST INCOME AFTER PROVISION ------------- -------------
FOR POSSIBLE LOAN LOSSES 5,504,000 5,132,000
------------- -------------
OTHER INCOME:
Trust and Investment Management 437,000 278,000
division income
Service charges on deposit accounts 639,000 545,000
Other service charges, exchanges and fees 537,000 460,000
Other operating income 9,000 10,000
------------- -------------
TOTAL OTHER INCOME 1,622,000 1,293,000
STATEMENT CONTINUED ON NEXT PAGE
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STATEMENT CONTINUED FROM PREVIOUS PAGE
OTHER EXPENSES:
Salaries and employee benefits 2,155,000 2,008,000
Net occupancy expense of premises 352,000 329,000
Furniture and equipment expenses 578,000 561,000
Amortization of intangible assets 112,000 -0-
Supplies and postage 255,000 247,000
FDIC deposit insurance premium 13,000 11,000
Ohio Franchise Tax 135,000 129,000
Other operating expenses 982,000 828,000
------------- -------------
TOTAL OTHER EXPENSES 4,582,000 4,113,000
------------- -------------
INCOME BEFORE FEDERAL INCOME TAXES 2,544,000 2,312,000
FEDERAL INCOME TAXES
Current 866,000 787,000
Deferred -0- -0-
------------- -------------
TOTAL FEDERAL INCOME TAXES 866,000 787,000
------------- -------------
NET INCOME $1,678,000 $ 1,525,000
============= =============
BASIC EARNINGS PER SHARE $ .41 $ .36
======= =======
DILUTED EARNINGS PER SHARE $ .41 $ .36
======= =======
See notes to unaudited 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 MARCH 31,
OF CASH FLOWS ----------------------------
1998 1997
CASH FLOWS FROM OPERATING ACTIVITIES: ----------------------------
Interest received $ 8,972,000 $ 7,835,000
Other income received 1,565,000 1,294,000
Interest paid (3,373,000) (2,855,000)
Cash paid for salaries and
employee benefits (2,037,000) (1,856,000)
Net occupancy expense of premises paid (259,000) (232,000)
Furniture and equipment expenses paid (192,000) (207,000)
Cash paid for supplies and postage (255,000) (247,000)
Cash paid for other operating expenses (795,000) (908,000)
Federal income taxes paid (25,000) -0-
------------- -------------
NET CASH PROVIDED BY OPERATING
ACTIVITIES 3,601,000 2,824,000
------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturities of investment
securities 8,191,000 5,806,000
Proceeds from maturities of securities
available for sale 4,175,000 -0-
Proceeds from sales of securities
available for sale -0- (33,000)
Purchases of investment securities -0- (6,071,000)
Purchase of securities available
for sale (15,497,000) -0-
Net decrease in credit card loans 353,000 568,000
Net (increase) decrease in
long-term loans 904,000 (4,518,000)
Purchases of bank premises and equipment (239,000) (620,000)
Proceeds from sales of bank premises,
and equipment (2,000) 1,000
------------- -------------
NET CASH USED IN INVESTING ACTIVITIES (2,115,000) (4,867,000)
------------- -------------
STATEMENT CONTINUED ON NEXT PAGE
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STATEMENT CONTINUED FROM PREVIOUS PAGE
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (decrease) in demand and other
on interest-bearing deposits (2,219,000) (2,859,000)
Net increase in savings and
passbook deposits 601,000 1,028,000
Net increase in time deposit 3,535,000 6,455,000
Net increase (decrease) in securities sold
under repurchase agreements and other
short-term borrowings (3,848,000) 960,000
Proceeds from Federal Home Loan
Bank advances -0- -0-
Proceeds from line of credit -0- -0-
Cash paid on line of credit -0- -0-
Purchase of Treasury Stock (57,000) -0-
Proceeds from exercise of stock options 1,000 -0-
Dividends paid (907,000) (662,000)
------------- -------------
NET CASH PROVIDED (USED) BY FINANCING
ACTIVITIES (2,894,000) 4,922,000
------------- -------------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (1,408,000) 2,879,000
CASH AND CASH EQUIVALENTS AT BEGINNING
OF YEAR 24,407,000 18,993,000
------------- -------------
CASH AND CASH EQUIVALENTS AT END OF
QUARTER $22,999,000 $21,872,000
============= =============
RECONCILIATION OF NET INCOME TO
NET CASH PROVIDED BY OPERATING ACTIVITIES:
NET INCOME $1,678,000 $1,525,000
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 479,000 451,000
Amortization of deferred loan fees
and costs, net 76,000 85,000
Provision for possible loan losses 187,000 125,000
Amortization of Intangible Assets 112,000 -0-
(Increase)in accrued interest receivable (160,000) (411,000)
(Increase) decrease in other assets 277,000 (104,000)
Increase in accrued interest payable 62,000 144,000
Increase (decrease) in accrued taxes,
expenses and other liabilities 861,000 770,000
Others, net 9,000 239,000
-------------- --------------
NET CASH PROVIDED BY OPERATING ACTIVITIES $3,601,000 $2,824,000
============== ==============
See notes to unaudited condensed consolidated financial statements.
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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. (the Corporation) at March 31,
1998, compared to December 31, 1997 and the results of operations for the
three months ended March 31, 1998 compared to the same period in 1997. It
is the intent of this discussion to provide the reader with an
understanding of the unaudited 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 March 31, 1998,
the unaudited condensed consolidated statements of income and the
unaudited condensed consolidated statement of cash flows for the three
months ended March 31, 1998 and 1997 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
operation 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, 1997 Annual Report to Shareholders.
The results of operations for the period ended March 31, 1998 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
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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 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.
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.
Under Generally Accepted Accounting Principles, 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.
RECLASSIFICATIONS
Certain 1997 amounts have been reclassified to conform to 1998
presentation.
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2. EARNINGS PER SHARE
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 1997.
In accordance with SFAS No. 128, Earnings per share is calculated as
follows:
For the Quarter ended March 31, 1998
Income Shares Per-Share
(Numerator) (Denominator) Amount
Net Income $1,678,000
Basic EPS
Income available to
common stockholders $1,678,000 4,123,820 $ .41
=====
Effect of Dilutive Securities
Incentive Stock Options -0- 10,148
---------- ---------
Dilutive EPS
Income available to common
stockholders + assumed
conversions $1,678,000 4,133,968 $ .41
========== ========= =====
For the Quarter ended March 31, 1997
Income Shares Per-Share
(Numerator) (Denominator) Amount
Net Income $1,525,000
Basic EPS
Income available to
common stockholders $1,525,000 4,221,304 $ .36
=====
Effect of Dilutive Securities
Incentive Stock Options -0- 10,918
---------- ---------
Dilutive EPS
Income available to common
stockholders + assumed
conversions $1,525,000 4,232,222 $ .36
========== ========= =====
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3. COMPREHENSIVE INCOME
The Corporation adopted SFAS No. 130 "Reporting Comprehensive Income" on
January 1, 1998. This statement requires companies to report all items
that are recognized as components of comprehensive income under accounting
standards. As required, the Corporation displays the accumulated balance
of other comprehensive income separately from retained earnings and
additional paid-in capital. The Corporation's comprehensive income for
the quarters ended March 31, 1998 and 1997 are as follows:
For the quarters ended March 31,
1998 1997
--------------------------------
Net income $1,678,000 $1,525,000
Other comprehensive income:
Unrealized (loss) on securities
available for sale, net of tax
of $-0- and $17,000 (1,000) (33,000)
----------- ------------
Comprehensive Income $1,677,000 $1,492,000
4. DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION
The Corporation adopted SFAS No. 131 "Disclosures about segments of an
Enterprise and Related Information" on January 1, 1998. This statement
provides accounting and reporting standards for the way public business
are to report information about operating segments in annual financial
statements and requires 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 has determined that adoption of SFAS No. 131 will have no
increase in reporting and disclosure requirements.
5. PENSION AND OTHER POSTRETIREMENT BENEFITS
The Corporation adopted SFAS No. 132 "Employers' Disclosures about
Pensions and Other Postretirement Benefits" on January 1, 1998. This
statement revises employers' disclosures about pension and other
postretirement benefit plans. It does not change the measurement or
recognition of those plans. It standardizes the disclosure requirements
for pensions and other postretirement benefits to the extent practicable,
requires additional information on changes in the benefit obligations and
fair values of plan assets that will facilitate financial analysis, and
eliminates certain disclosures that are no longer as useful as the were
when FASB Statements No. 87, No. 88 and No. 106 were issued. Corporate
Management has determined that the adoption of SFAS No. 132 will change
year end reporting requirements for pension and postretirement benefits.
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6. DIVIDEND REINVESTMENT AND CASH STOCK PURCHASE PLAN
The Board of Directors adopted a dividend reinvestment and cash stock
purchase plan on November 18, 1997. Under the plan, the first dividend
reinvestment and cash stock purchase date was April 1, 1998. The plan
allows shareholders to elect to use their quarterly cash dividends to
purchase shares of LNB Bancorp, Inc. common stock. Additionally, cash can
be contributed directly to the plan for the purchase of shares of common
stock with a quarterly limit of $5,000.
The dividend reinvestment plan authorized the sale of 150,000 shares of
the Corporation's authorized but previously unissued common shares to
shareholders who choose to invest all or a portion of their cash dividends
plus additional cash payments. No shares were issued by the Corporation
pursuant to the plan in the first quarter of 1998. In the first quarter
of 1998, stock was purchased in the open market at the then current market
price.
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PART I - FINANCIAL INFORMATION
ITEM 2 - MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL
CONDITION & RESULTS OF OPERATION
FINANCIAL CONDITION
Total assets of the Corporation decreased $289,000 during the first
quarter, to $489,928,000. Federal funds sold and other interest-bearing
investments increased by $2,748,000 during the first quarter of 1998.
The total securities portfolio increased $3,150,000 ending the first
quarter at $118,524,000. At March 31, 1998 unrealized gains (losses)in
the held to maturity securities portfolio were approximately $914,000 and
(25,000), respectively. The decrease in the market value of the security
portfolio is due to market interest rate fluctuations and not due to the
deterioration of the credit worthiness of debt issuers.
The level of nonperforming assets increased $563,000 during the first
quarter 1998. The first quarter increase is the result of a net increase
in nonaccrual loans plus an decrease in other real estate owned in the
amount of $90,000. The increase in nonaccrual loans is due to decreases
in nonaccrual principal balances of $12,000 which have been paid off,
charged-off or brought current and increases in nonaccrual principal
balances of $515,000. The increase in nonaccrual loans in the first
quarter of 1998 was due primarily to six commercial loan customer and
one mortgage loan customer. The level of nonperforming assets 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 03/31/98 12/31/97 09/30/97 06/30/97
-------- -------- -------- --------
Nonperforming Assets:
Nonaccrual $1,078 $ 425 $ 882 $ 376
Restructured 0 0 0 0
Other Real Estate Owned 0 90 0 0
------ ------ ------ ------
Total Nonperforming Assets $1,078 $ 515 $ 882 $ 376
====== ====== ====== ======
Reserve for possible
loan losses to
nonperforming assets 404.4% 809.3% 488.1% 1,127.1%
====== ====== ====== ======
Accruing loans past due
90 days $ 645 $ 461 $ 919 $ 271
====== ====== ====== ======
Net loans decreased $1,511,000 during the first quarter to $325,352,000 at
March 31, 1998. This decrease was a result of a softening in housing
market plus increased competition for mortgage loans as well as a
reduction in consumer loans due to low seasonal demand for automobile
loans during the winter months. The reserve for possible loan losses
ended the quarter at $4,360,000 supported by a provision for loan losses
of $187,000, recoveries of $47,000 and loan charge-offs of $42,000. The
reserve for possible loan losses as a percentage of ending loans was 1.26%
at December 31, 1997 and 1.32% at March 31, 1998. Corporate Management
believes that the reserve for possible loan losses as a percentage of
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ending loans at March 31, 1998 remains at an appropriate level as the
ratio of the reserve for possible loan losses to nonperforming assets
remains strong at 404.4% as of March 31, 1998. Corporate Management
believes that the current level of the reserve for possible loan losses is
adequate based upon quantitative analysis of identified risks and analysis
of historical trends.
Potential problem loans are those loans identified on management's watch
list in which management has some doubt as to the borrower's ability to
comply with the present repayment terms and loans which management is
actively monitoring due to changes in the borrower's financial condition.
At March 31, 1998, potential problem loans totaled $7,459,000, a decrease
of $1,305,000 from the December 31, 1997 balance. The decrease in
potential problem loans during the first quarter of 1998 is primarily due
to a reduction in the gross amount of potential problem loans plus
transfers of potential problem loans to the 90 day past due classification
and nonaccrual status.
The Corporation's credit policies are reviewed and modified on an ongoing
basis in order to remain suitable for the management of credit risk within
the loan portfolio as conditions change. At March 31, 1998 there are no
significant concentrations of credit in the loan portfolio.
The Corporation had outstanding loan and credit commitments to make loans
totaling $76,927,000 and $63,001,000 at March 31, 1998 and 1997,
respectively. The increase in outstanding loan commitments results in part
from an increase in the unused portion of home equity lines of credits
from loans acquired from KeyBank National Association on September 15,
1997, net of a decrease in loan demand in the first quarter of 1998.
Mortgage and commercial construction loan demand is expected to increase
in the second quarter of 1998 as seasonal weather conditions improve and
the construction season begins. Consumer loan demand is expected to
increase in the second quarter for home improvement and automobile loans
as weather conditions improve.
Total deposits increased $1,917,000 during the first quarter to
$412,572,000. Noninterest-bearing deposits decreased to $66,346,000, at
March 31, 1998 for a decrease of $2,219,000, while interest-bearing
deposits increased to $346,226,000 for an increase of $4,136,000. Federal
funds purchased and securities sold under agreements to repurchase
decreased $3,848,000 during the first quarter of 1998. Due to the
volatility of customer repurchase agreements, most funds generated by
repurchase activity enter the Corporation's earning assets as short-term
investments.
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 investment
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.
The Corporation continues to maintain a relatively high liquid position in
order to take advantage of interest rate fluctuations. As of March 31,
1998 short-term security investments with maturities of one year or less
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totaled $37,790,000 which represented 31.9% of total securities. Adding
cash and due from banks of $20,117,000 and Federal Funds sold of
$2,882,000, total liquid assets represented 12.4% of total assets.
CAPITAL RESOURCES
LNB Bancorp, Inc. continues to maintain a strong capital position.
Total shareholders' equity increased to $45,787,000, at March 31, 1998.
The increase resulted primarily from $1,678,000 of net income generated
from the first quarter of operations less a cash dividend payable to
shareholders of $824,000. The slight decrease in interest rates
experienced in the first quarter of 1998 has caused a decrease in the
overall market value of available for sale securities which resulted in a
reduction of shareholders' equity by $1,000 for the quarter ended March
31, 1998. During the first quarter of 1998, LNB Bancorp, Inc. reduced its
stockholders' equity by purchasing 2,004 shares of its common stock at a
cost of $57,000. As of March 31, 1998, the LNB Bancorp, Inc. held 100,000
shares of common stock as treasury stock. LNB Bancorp, Inc. purchased
2,004 of these shares in the first quarter of 1998 and 97,996 shares in
1997 for a total cost of $2,900,000.
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 Corporation's capital and
leverage ratios as of March 31, 1998 and 1997 follow.
MARCH 31,
---------------------
1998 1997
------ -------
Tier I capital ratio 13.60% 17.02%
Required Tier I capital ratio 4.00% 4.00%
Total capital ratio 14.83% 18.28%
Required total capital ratio 8.00% 8.00%
Leverage ratio 8.32% 10.24%
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.
RESULTS OF OPERATIONS
Interest and fees on loans increased $640,000 when compared to the first
quarter of 1997. This was the result of the impact of increases in the
loan portfolio of $24,000,000 offset by decreases in rates. Interest and
dividends on securities was $1,773,000 for the first quarter of 1998 for a
increase of $180,000 over the same period in 1997. The first quarter
increase in Interest and Dividends on Securities results from an increase
in the securities portfolio of over $13,000,000. Interest and dividends
on securities represented 19.4% of total interest income at March 31, 1998
compared to 19.3% at March 31, 1997. Interest on Federal funds sold and
17
other interest bearing instruments was $60,000 at March 31, 1998 compared
to $10,000 at March 31, 1997. The increase resulted from higher average
balances invested in this form of financial instrument along with lower
interest rates.
Total interest expense increased by $436,000 when compared to the first
quarter of 1997. The purchase of three branch offices from KeyBank
National Association on September 15, 1997 increases the volume of
Checkinvest accounts and statement savings and certificates of deposit,
contributing to the increase in total interest expense. Also, total
interest expense for the first quarter of 1998 was impacted by increases
in interest rates paid on certificate of deposit accounts when compared to
the first quarter of 1997.
Total other income increased by $329,000 when compared to the first
quarter of 1997. This increase resulted from increases in trust income of
$159,000, increases in service charges of $94,000 and increases in other
service charges, exchanges and fees of $77,000. The increase in other
service charges, exchanges and fees is due, in part, to an increase in ATM
fee income.
The Corporation continuously monitors noninterest expenses for greater
profitability. The entire staff is geared to improving productivity at
all levels. Noninterest expense for the quarter ended March 31, 1998 was
$4,582,000, 11.4% more than the first quarter of 1997. This increase was
due primarily to certain one-time consulting expenses incurred in the
first quarter of 1998, increases in credit card and merchant expenses plus
the operating expenses of two additional branch offices acquired from
KeyBank and the related intangible amortization expenses.
The effective tax rate remained at 34.0% during the first quarter of 1997
and 1998. Net income was $1,678,000 and $1,525,000 for the quarters ended
March 31, 1998 and 1997, respectively. Net income per share after
adjusting for the two percent stock dividend in 1997 was $.41 and $.36 for
the quarters ended March 31, 1998 and 1997, respectively.
4. YEAR 2000 ISSUE
Several of the Corporation's and Bank's regulators including the
Securities and Exchange Commission, Federal Reserve Board, and the Office
of the Comptroller of Currency have issued guidance relative to the
management and disclosures for year 2000 issues. A discussion of the year
2000 issue as it relates to the Corporation, the Bank and their customers,
suppliers and vendors follows.
The Corporation has formed a strategic task force to perform a
comprehensive review of its computer systems to identify the systems that
could be affected by the "Year 2000" issue and has developed an
implementation plan to resolve the issue. The Year 2000 problem is the
result of computer programs being written using two digits rather than
four to define the applicable year. Any of the Corporation's programs
that have time sensitive software may recognize a date using "00" as the
year 1900 rather than the year 2000.
The Corporation has notified its commercial customers of the year 2000
issue and is in contact with its' suppliers and third party vendors.
The Corporation expects to incur internal staff costs, consulting, and
other expenses to identify, correct or reprogram, and test the systems
18
for the year 2000 compliance issue. The Corporation estimates that
compliance costs for the year 2000 issue from 1998 through 1999 will not
exceed $100,000. The Corporation continues to evaluate appropriate
courses of corrective action, including replacement of certain systems
whose associated costs would be recorded as assets and amortized.
Accordingly, the Corporation does not expect that year 2000 compliance
costs to be expensed over the next two years to have a material effect
on the financial position, liquidity or results of operations.
To date, the Corporation is in the process of obtaining formal
notifications from all of its major vendors and suppliers that their
systems are year 2000 compliant. During 1998, the Corporation will
develop strategies and plans to test and validate that these systems are
year 2000 compliant. The Corporation plans to complete testing of
internal mission critical systems by December 31, 1998. The Corporation
provides quarterly updates to the Board of Directors regarding the status
of the year 2000 issue. The project completion date for the year 2000
issue is slated for June, 1999.
The "Year 2000 Computer Problem" creates risk for the Corporation from
unforeseen problems in its own computer systems and from third parties
with whom the Corporation deals on financial transactions. Such failures
of the Corporation, and/or third parties' computer systems could have a
material impact on the Corporation's ability to conduct its business, and
especially to process and account for the transfer of funds electronically.
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.
19
PART I - OTHER INFORMATION
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There has been no significant change in the interest rate risk or market
risk of LNB Bancorp, Inc. since December 31, 1997.
20
PART II - OTHER INFORMATION
ITEM 1 - Legal Proceedings
None
ITEM 2 - Changes in Securities
See item 4, (c), (1)
ITEM 3 - Defaults Upon Senior Securities
None
ITEM 4 - Submission of Matters to a Vote of Security Holders
(a) LNB Bancorp Inc.'s 1998 Annual Meeting of Shareholders
was held on April 21, 1998.
(b) Proxies were solicited by LNB Bancorp Inc.`s management
pursuant to Regulation 14 under the Securities Exchange
Act of 1934, there was no solicitation in opposition to
management's nominees for election to the board of
directors as listed in the proxy statement, and all
such nominees were elected to the classes in the proxy
statement pursuant to the vote of the shareholders.
(c) Other matters voted upon - complete descriptions of the
matters voted upon is contained in Item 6,
(1) Election of directors to serve as Class II Directors
until April 17, 2001 Annual Meeting of Shareholders as
follows:
ABSTAIN/ BROKER
FOR AGAINST WITHHELD NON-VOTES
Daniel P. Batista 3,518,689 -0- 34,362 569,424
David M. Koethe 3,521,274 -0- 31,777 569,424
Stanley G. Pijor 3,524,594 -0- 28,457 569,424
Eugene M. Sofranko 3,512,390 -0- 40,661 569,424
Leo Weingarten 3,518,056 -0- 34,995 569,424
The total number of shares of LNB Bancorp, Inc. Common Stock,
$1.00 par value, outstanding as of March 9, 1998, the record
date of the Annual Meeting, was 4,122,475.
21
ITEM 5 - Other Information
(a) The Notice of the Annual Meeting to Shareholders and Proxy
Statement (dated March 23, 1998) was previously filed as
Exhibit 22 to the Bancorp's 1997 Annual Report on Form 10-K.
ITEM 6 - Exhibits and Reports on Form 8-K
(a) Exhibit (11) - Computation of Shares Used for Earnings
Per Share Calculations.
(b) Exhibit (13) - First Quarter Report to Shareholders of
LNB Bancorp, Inc. - March 31, 1998 - EDGAR Version.
(c) Exhibit (27) - Financial Data Schedule
(d) Reports on Form 8-K
There were no reports on Form 8-K filed for the three
months ended March 31, 1998.
Also, see the Exhibit Index which is found on the next page of
this Form.
SIGNATURE
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)
/s/ Gregory D. Friedman
Date: May 13, 1998 --------------------------
Gregory D. Friedman,
Senior Vice President,
Chief Operating Officer and
Chief Financial Officer
/s/ Mitchell J. Fallis
Date: May 13, 1998 --------------------------
Mitchell J. Fallis,
Vice President and
Chief Accounting Officer
22
LNB Bancorp, Inc.
Form 10-Q
Exhibit Index
Pursuant to Item 601 (a) of Regulation S-K
S-K Reference Exhibit
Number
(11) Computation of Shares Used for Earnings Per Share
Calculations. Footnote 2 Earnings Per Share on
Page 11 of this Form 10-Q is incorporated by
Reference.
(12) First Quarter Report to Shareholders of LNB Bancorp, Inc.
- March 31, 1998 - EDGAR Version
(27) Financial Data Schedule
23
LNB Bancorp, Inc.
Exhibit to Form 10 - Q
(For the three months ended March 31, 1998)
S - K Reference Number (13)
First Quarter Report to Shareholders of
LNB Bancorp, Inc. - March 31, 1998
EDGAR Version
DESCRIPTION:
Three sided pamphlet: Outside cover first quarter 1998 LNB Bancorp, Inc.,
"Familiar Faces...Friendly places" among 15 assorted pictures.
Inside contains: Message to shareholders, Unaudited EDGAR version
Consolidated Balance Sheets for period ending March 31, 1998 and March 31,
1997, respectively, unaudited EDGAR version Consolidated Statements of
Income for the Three Months ended March 31, 1998 and March 31, 1997,
respectively, a list of Directors and Officers of LNB Bancorp, Inc., and
the list of Banking Offices & ATMs.
24
Outside cover description:
Green and white background, green and beige lettering.
Front Cover:
First Quarter 1998
LNB BANCORP, INC.
"Friendly faces...friendly places" among 15 assorted pictures.
25
Inside of front cover:
Message to shareholders
It's a pleasure, once again, to report on the progress of LNB Bancorp,
Inc., and its subsidiary, The Lorain National Bank, after the first
quarter of 1998.
We are pleased to announce that earnings have increased 10 percent for
the first 90 days of the year, compared to the same period one year ago.
Earnings for the first quarter of 1998 reached $1,678,00, up from
$1,525,000 during the first quarter of 1997.
Basic earnings per share for the first quarter of 1998 reached $0.41
compared to $0.36 for the first quarter of 1997. Earnings for the first
quarter ended March 31, 1998 were higher than a year ago because of higher
net interest income and other non-interest income, offset in part by
higher operating expenses.
Cash dividend declared to shareholders increased 27.5 percent over the
comparative period in 1997. Total shareholders' equity also increased to
$45.8 million at March 31, 1998 and total shareholders' equity, as a
percentage of total assets, reached 9.3 percent. Total assets rose 10
percent to $489.9 million as of March 31, 1998, as compared to a year ago.
We are pleased to report that our Dividend Reinvestment Plan continues
to grow. More than 35 percent of our shareholders are now participating
in the plan.
The planning and construction of our new branch office in LaGrange is on
schedule for opening in the third quarter of this year. We look forward
to expanding banking service to the southern part of Lorain County.
In the graphs presented below, we are please to show increases in total
assets and total shareholders' equity at March 31 from 1994 through 1998
and basic earnings per share for the first quarter, from 1994 through 1998.
We thank you for your continued support and look forward to addressing
you after the completion of our next quarter of operations.
Sincerely,
James F. Kidd Stanley G. Pijor
President and Chairman of the Board
Chief Executive Officer
TOTAL ASSETS millions of dollars
(A Total Assets graph follows in printed version with assets on the x-axis
and years 1994 through 1998 on the y-axis. The graph is a vertical bar
graph. The co-ordinates, by year, which are presented in the table below
are plotted on the previously described grid.)
TOTAL SHAREHOLDERS' EQUITY millions of dollars
(A Total Shareholders' Equity graph follows in printed version with
shareholder's equity on the x-axis and years 1994 through 1998 on the
y-axis. The graph is a vertical bar graph. The co-ordinates, by year,
which are presented in the table below are plotted on the previously
described grid.)
BASIC EARNINGS PER SHARE dollars
(A Basic Earnings Per Share graph follows in printed version with earnings
per share on the x-axis and years 1994 through 1998 on the y-axis. The
graph is a vertical bar graph. The co-ordinates, by year, which are
26
presented in the table below are plotted on the previously described grid.)
Total Shareholders' Basic Earnings
Total Assets Equity Per Share
Year Millions of Dollars Millions of Dollars Dollars
1998 $489.9 $45.8 $0.41
1997 $445.5 $45.0 $0.36
1996 $420.5 $41.5 $0.31
1995 $408.1 $38.3 $0.26
1994 $385.2 $35.6 $0.24
*Adjusted for stock dividends and splits
27
Consolidated Balance Sheets
March 31
--------------------------
1998 1997
------------ ------------
ASSETS:
Cash and Due from Banks $ 20,117,000 $ 19,369,000
Federal Funds Sold and 2,882,000 2,505,000
Other Interest Bearing
Instruments
Securities Available for Sale 30,662,000 16,077,000
Investment Securities 87,862,000 89,158,000
Loans 329,712,000 305,786,000
Reserve for Possible Loan Losses (4,360,000) (4,089,000)
-----------------------------------------------------------------
NET LOANS 325,352,000 301,697,000
-----------------------------------------------------------------
Premises, Equipment and Intangible
Assets (net) 16,221,000 10,726,000
Accrued Interest Receivable and
Other Assets 6,832,000 5,916,000
-----------------------------------------------------------------
TOTAL ASSETS $489,928,000 $445,448,000
-----------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY:
Non-Interest Bearing Deposits $ 66,346,000 $ 60,943,000
Interest Bearing Deposits 346,226,000 310,061,000
-----------------------------------------------------------------
TOTAL DEPOSITS 412,572,000 371,004,000
-----------------------------------------------------------------
Securities Sold under Repurchase
Agreements and Other Short-
term Borrowings 25,102,000 24,346,000
Federal Home Loan Bank Advances 2,045,000 1,095,000
Accrued Taxes, Expenses and
Other Liabilities 4,422,000 3,974,000
-----------------------------------------------------------------
TOTAL LIABILITIES 444,141,000 400,419,000
-----------------------------------------------------------------
Common Stock 4,222,000 4,138,000
Additional Capital 22,600,000 20,178,000
Retained Earnings 21,796,000 20,737,000
Net Unrealized Security Gains (Losses) 69,000 (24,000)
Treasury Stock at Cost (2,900,000) -0-
-----------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY 45,787,000 45,029,000
-----------------------------------------------------------------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $489,928,000 $445,448,000
-----------------------------------------------------------------
(LOGO) LNB
Bancorp, Inc.
and its subsidiary Lorain National Bank
28
Consolidated Statements of Income
Three Months Ended
March 31
------------------------
1998 1997
------------ -----------
INTEREST INCOME:
Interest and Fees on Loans $7,295,000 $6,655,000
Interest and Dividends on Securities: 1,773,000 1,593,000
Interest on Federal Funds Sold 58,000 8,000
----------------------------------------------------------------
TOTAL INTEREST INCOME 9,126,000 8,256,000
----------------------------------------------------------------
INTEREST EXPENSE:
Interest on Deposits 3,139,000 2,730,000
Interest on Securities Sold under
Repurchase Agreements and Other
Short-term Borrowings 264,000 252,000
Interest on Federal Home Loan Bank Advances 32,000 17,000
----------------------------------------------------------------
TOTAL INTEREST EXPENSE 3,435,000 2,999,000
----------------------------------------------------------------
NET INTEREST INCOME 5,691,000 5,257,000
Provision for Loan Losses 187,000 125,000
----------------------------------------------------------------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 5,504,000 5,132,000
----------------------------------------------------------------
OTHER INCOME:
Trust Department Income 437,000 278,000
Fees and Service Charges 1,176,000 1,005,000
Gains from Sales of Loans and Securities -0- -0-
Other Operating Income 9,000 10,000
----------------------------------------------------------------
TOTAL OTHER INCOME 1,622,000 1,293,000
----------------------------------------------------------------
OTHER EXPENSES:
Salaries and Employee Benefits 2,155,000 2,008,000
Net Occupancy Expense of Premises 352,000 329,000
Furniture and Equipment Expenses 578,000 561,000
Supplies and Postage 255,000 247,000
Ohio Franchise Tax 135,000 129,000
Other Operating Expenses 1,107,000 839,000
----------------------------------------------------------------
TOTAL OTHER EXPENSES 4,582,000 4,113,000
----------------------------------------------------------------
INCOME BEFORE FEDERAL INCOME TAXES 2,544,000 2,312,000
Federal Income Taxes 866,000 787,000
----------------------------------------------------------------
NET INCOME $1,678,000 $1,525,000
----------------------------------------------------------------
BASIC EARNINGS PER SHARE $ .41 $ .36
DILUTED EARNINGS PER SHARE $ .41 $ .36
----------------------------------------------------------------
DIVIDENDS DECLARED PER SHARE $ .20 $ .16
----------------------------------------------------------------
29
Inside cover
Three column format
Directors and Officers of LNB Bancorp, Inc.
Directors
Stanley G. Pijor Benjamin G. Norton
Chairman of the Board Employee and Community
LNB Bancorp, Inc. and Relations Manager
Lorain National Bank RELTEC Corporation
James L. Bardoner Jeffrey F. Riddell
Retired, Former President President
Dorn Industries, Inc. Consumers Builders Supply Co.
President and
Daniel P. Batista Chief Executive Officer,
Attorney/Partner Consumeracq, Inc.
Cook & Batista Co., L.P.A.
Thomas P. Ryan
Robert M. Campana Executive Vice President
Managing Director and Secretary/Treasurer
P.C. Campana Inc. LNB Bancorp, Inc.
Executive Vice President
Terry D. Goode and Secretary
Vice President Lorain National Bank
Lorain County Title Company
T.L. Smith, M.D.
Wellsley O. Gray Retired Physician
Retired
Eugene M. Sofranko
James F. Kidd President and
President and Chief Executive Officer
Chief Executive Officer Lorain Glass Company, Inc.
LNB Bancorp, Inc. and
Lorain National Bank Paul T. Stack
Retired
David M. Koethe
Chairman of the Board Leo Weingarten
The Lorain Printing Company Retired
Directors Emeritus of Lorain National Bank
Don A. Sanborn
Retired
30
Officers
Stanley G. Pijor
Chairman of the Board
LNB Bancorp, Inc. and
Lorain National Bank
James F. Kidd
President and
Chief Executive Officer
Thomas P. Ryan
Executive Vice President
and Secretary/Treasurer
Sandra L. Dubell
Senior Vice President and
Chief Lending Officer
Gregory D. Friedman
Senior Vice President,
Chief Operating Officer and
Chief Financial Officer
Michael D. Ireland
Senior Vice President
Emma N. Mason
Senior Vice President
James H. Weber
Senior Vice President
Mitchell J. Fallis
Vice President and
Chief Accounting Officer
Photo credit
We'd like to thank the Lorain County
Visitors Bureau and Terry Jonasson for
the use of their photos in this report.
31
Back Cover:
White background with black lettering
Four column format
Banking Offices and ATMS
ATM service available wherever you see this symbol **
Lorain banking officers Avon Lake banking office
Main Office **Avon Lake Office
457 Broadway 240 Miller Road
Lorain, Ohio 44052 Avon Lake, Ohio 44012
244-7185 933-2186
**Sixth Street Drive-In Office Elyria banking offices
200 Sixth Street **Second Street Office
Lorain, Ohio 44052 221 Second Street
244-7242 Elyria, Ohio 44035
323-4621
**Kansas Avenue Office
1604 Kansas Avenue **Cleveland Street Office
Lorain, Ohio 44052 801 Cleveland Street
288-9151 Elyria, Ohio 44035
365-8397
**Oberlin Avenue Office
3660 Oberlin Avenue **Midway Mall Office
Lorain, Ohio 44053 6395 Midway Mall Blvd.
282-9196 Elyria, Ohio 44035
324-6530
**Cooper-Foster Park
Road Office Oberlin banking office
1920 Cooper-Foster Park Rd **Oberlin Office
Lorain, Ohio 44053 40 E College Street
282-1252 Oberlin, Ohio 44074
775-1361
**Pearl Avenue Office
2850 Pearl Avenue Kendal at Oberlin Office
Lorain, Ohio 44055 600 Kendal Drive
277-1103 Oberlin, Ohio 44074
774-5400
**Lake Avenue Office
42935 N. Ridge Road Olmsted Township
Elyria Township, Ohio 44035 banking office
233-7196 **Olmsted Township Office
27095 Bagley Road
**West Park Drive Office Olmsted Township, Ohio 44138
2130 West Park Drive 235-4600
Lorain, Ohio 44053
988-3131 The Renaissance Office
26376 John Road
Amherst banking office Olmsted Township, Ohio 44138
**Amherst Office 427-0041
1175 Cleveland Avenue
Amherst, Ohio 44001 Vermilion banking office
988-4423 **Vermilion Office
4455 E. Liberty Avenue
Vermilion, Ohio 44089
967-3124
32
Westlake banking offices Community-based automated
**Crossings of Westlake, Ohio teller machine locations
30210 Detroit Road **Captain Larry's Marathon
Westlake, Ohio 44145 1317 State Route 60
892-9696 Vermilion, Ohio
Westlake Village Office **Convenient Food Mart
28550 Westlake Village Drive 5375 West Erie Avenue
Westlake, Ohio 44145 Lorain, Ohio
808-0229
**Gateway Plaza
Other offices 3451 Colorado Avenue
Executive Offices Lorain, Ohio
457 Broadway
Lorain, Ohio 44052 **Lakeland Medical Center
244-7123 3700 Kolbe Road
Lorain, Ohio
Administration
457 Broadway **Lorain County
Lorain, Ohio 44052 Community College
1005 N. Abbe Road
Operations Elyria, Ohio
2130 West Park Drive
Lorain, Ohio 44053 **Lorain Plaza
989-3315 Shopping Center
1147 Meister Road
Human Resources Lorain, Ohio
2130 West Park Drive
Lorain, Ohio 44053 **Lowe's Home
989-3139 Improvement Warehouse
620 Midway Boulevard
Marketing Elyria, Ohio
457 Broadway
Lorain, Ohio 44052 **Midway Mall Food Court
244-7332 3343 Midway Mall Blvd.
Elyria, Ohio
Purchasing
2150 West Park Drive
Lorain, Ohio 44053
989-3260
All other departments &
information not listed
Lorain
244-6000
1-800-860-1007
Elyria/Cleveland
236-5047
Logos for FDIC Insured, Federal Home Loan Bank System, Equal Housing
Lender, and LNB Bancorp, Inc.
33
LNB Bancorp, Inc.
Exhibit to Form 10 - Q
(For the three months ended March 31, 1998)
S - K Reference Number (27)
Financial Data Schedule