<PAGE>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, 1995
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)
(216) 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 November 10, 1995: 4,036,248 shares
Class of Common Stock: $1.00 par value
<PAGE>2
LNB Bancorp, Inc.
Quarterly Report on Form 10-Q
Quarter Ended September 30, 1995
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 Consolidated Financial Statements 11
Item 2 - Management's Discussion and Analysis 13
of Financial Condition and Results of
Operations
Part II - Other Information
Item 1 - Legal Proceedings 17
Item 2 - Changes in Securities 17
Item 3 - Defaults upon Senior Securities 17
Item 4 - Submission of matters to a Vote of 17
Security Holders
Item 5 - Other Information 17
Item 6 - Exhibit and Reports on Form 8-K 17
Signatures 17
Exhibit Index 18
<PAGE>3
FORM 10-Q LNB BANCORP, INC.
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
SEPTEMBER 30, DECEMBER 31,
CONDENSED CONSOLIDATED BALANCE SHEETS 1995 1994
------------- -------------
(Unaudited) (See Note 1)
ASSETS:
Cash and due from banks $ 20,040,000 $ 21,275,000
Federal funds sold and other interest
bearing instruments 700,000 -0-
Securities:
Securities available for sale 10,326,000 10,137,000
Investment securities 91,946,000 89,387,000
------------- ------------
Total Securities 102,272,000 99,524,000
(Market Value $103,155,000 and ------------- ------------
$ 97,080,000 respectively)
Total loans 277,056,000 261,807,000
Reserve for possible loan losses (3,938,000) (3,832,000)
------------- -------------
Net loans 273,118,000 257,975,000
------------- -------------
Premises and equipment, net 10,856,000 10,682,000
Other assets 6,493,000 5,399,000
------------- -------------
TOTAL ASSETS $413,479,000 $394,855,000
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY:
Noninterest-bearing deposits $ 59,724,000 $ 57,096,000
Interest-bearing deposits 288,342,000 278,123,000
------------- -------------
Total deposits 348,066,000 335,219,000
------------- -------------
Federal funds purchased and securities
sold under agreements to repurchase 21,926,000 19,171,000
Other liabilities 3,517,000 2,954,000
------------- -------------
Total Liabilities 373,509,000 357,344,000
STATEMENT CONTINUED ON NEXT PAGE ------------- -------------
<PAGE>4
STATEMENT CONTINUED FROM PREVIOUS PAGE
Shareholders' equity:
Common stock $1.00 par:
Authorized 5,000,000
Outstanding 4,036,248 and 4,000,068,
respectively 4,036,000 3,200,000
Additional capital 17,836,000 18,415,000
Retained earnings 18,074,000 16,028,000
Net unrealized security losses 24,000 (132,000)
------------- -------------
Total Shareholders' Equity 39,970,000 37,511,000
------------- -------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $413,479,000 $394,855,000
============= =============
NOTE 1: The consolidated balance sheet at December 31, 1994 has been taken
from the audited Financial Statements and condensed.
See Notes to Condensed Consolidated Financial Statements.
<PAGE>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 --------------------------
1995 1994
INTEREST INCOME: --------------------------
Interest and Fees on Loans:
Taxable $18,395,000 $15,564,000
Tax-Exempt 57,000 53,000
Interest and Dividends on Securities:
Taxable 4,073,000 3,337,000
Tax-Exempt 339,000 446,000
Interest on Federal funds sold and other
interest bearing instruments 171,000 178,000
------------ -----------
TOTAL INTEREST INCOME 23,035,000 19,578,000
------------ -----------
INTEREST EXPENSE:
Interest on Certificates of Deposit
of $100,000 or more 1,336,000 487,000
Interest on Other Deposits 6,455,000 5,098,000
Interest on Federal funds purchases
and securities sold under agreements
to repurchase 848,000 473,000
Other Interest 1,000 18,000
------------ -----------
TOTAL INTEREST EXPENSE 8,640,000 6,076,000
------------ -----------
NET INTEREST INCOME 14,395,000 13,502,000
Provision for Possible Loan Losses 300,000 300,000
NET INTEREST INCOME AFTER PROVISION ------------ -----------
FOR POSSIBLE LOAN LOSSES 14,095,000 13,202,000
------------ -----------
OTHER INCOME:
Trust Division income 756,000 656,000
Service charges on deposit accounts 1,008,000 988,000
Other Charges Fees and Exchanges 1,399,000 1,371,000
Gains from Sales of Loans 9,000 -0-
Other operating income -0- 7,000
------------ -----------
TOTAL OTHER INCOME 3,172,000 3,022,000
STATEMENT CONTINUED ON NEXT PAGE ------------ -----------
<PAGE>6
STATEMENT CONTINUED FROM PREVIOUS PAGE
OTHER EXPENSES:
Salaries and employee benefits 5,937,000 5,693,000
Net occupancy expense 914,000 844,000
Furniture and Equipment Expense 1,499,000 1,305,000
FDIC deposit insurance premium 351,000 539,000
Ohio Franchise Tax 387,000 361,000
Other operating expenses 2,959,000 2,838,000
----------- -----------
TOTAL OTHER EXPENSES 12,047,000 11,580,000
----------- -----------
INCOME BEFORE FEDERAL INCOME TAXES 5,220,000 4,644,000
FEDERAL INCOME TAXES 1,646,000 1,396,000
----------- -----------
NET INCOME $ 3,574,000 $ 3,248,000
=========== ===========
PER SHARE DATA:
EARNINGS $ .89 $ .81
====== ======
CASH DIVIDENDS $ .38 $ .34
====== ======
See Notes to Condensed Consolidated Financial Statements.
<PAGE>7
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 --------------------------
1995 1994
INTEREST INCOME --------------------------
Interest and Fees on Loans:
Taxable $ 6,318,000 $ 5,544,000
Tax-Exempt 18,000 19,000
Interest and Dividends on Securities:
Taxable 1,391,000 1,139,000
Tax-Exempt 122,000 161,000
Interest on Federal funds sold and other
interest bearing instruments 51,000 38,000
------------ -----------
TOTAL INTEREST INCOME 7,900,000 6,901,000
------------ -----------
INTEREST EXPENSE:
Interest on certificates of deposit
of $100,000 or more 514,000 202,000
Interest on other deposits 2,194,000 1,746,000
Interest on Federal funds purchased
and securities sold under agreements
to repurchase 224,000 211,000
Other interest -0- 17,000
------------ -----------
TOTAL INTEREST EXPENSE 2,932,000 2,176,000
------------ -----------
NET INTEREST INCOME 4,968,000 4,725,000
Provision for possible loan losses 100,000 100,000
NET INTEREST INCOME AFTER PROVISION ------------ -----------
FOR POSSIBLE LOAN LOSSES 4,868,000 4,625,000
------------ -----------
OTHER INCOME:
Trust division income 279,000 224,000
Service charges on deposit accounts 250,000 240,000
Other charges fees and exchanges 555,000 594,000
Gains from sales of loans -0- -0-
Other operating income 5,000 2,000
------------ -----------
TOTAL OTHER INCOME 1,089,000 1,060,000
STATEMENT CONTINUED ON NEXT PAGE ------------ -----------
<PAGE>8
STATEMENT CONTINUED FROM PREVIOUS PAGE
OTHER EXPENSES:
Salaries and employee benefits 2,173,000 2,024,000
Net occupancy expense 310,000 275,000
Furniture and equipment expense 498,000 442,000
Ohio Franchise Tax 139,000 131,000
Other operating expenses 937,000 1,151,000
----------- -----------
TOTAL OTHER EXPENSES 4,057,000 4,023,000
----------- -----------
INCOME BEFORE FEDERAL INCOME TAXES 1,900,000 1,662,000
FEDERAL INCOME TAXES 591,000 529,000
----------- -----------
NET INCOME $ 1,309,000 $ 1,133,000
=========== ===========
PER SHARE DATA:
EARNINGS $ .33 $ .29
====== ======
CASH DIVIDENDS $ .14 $ .12
====== ======
See Notes to Condensed Consolidated Financial Statements.
<PAGE>9
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 -----------------------
1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES: ------------------------
Interest received $22,142,000 $19,580,000
Other income received 3,188,000 3,058,000
Interest paid (8,315,000) (6,136,000)
Cash paid for salaries and benefits (5,981,000) (5,740,000)
Net occupancy expense of premises paid (679,000) (644,000)
Furniture and equipment expenses paid (704,000) (505,000)
Cash paid for supplies and postage (676,000) (618,000)
Cash paid for other operating expenses (2,643,000) (3,812,000)
Federal income taxes paid (1,480,000) (1,359,000)
------------ ------------
NET CASH PROVIDED BY OPERATING ACTIVITIES: 4,852,000 3,824,000
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturities of securities
available for sale 2,912,000 -0-
Proceeds from sales of investment
securities 24,313,000 26,716,000
Purchase of securities available for sale (3,943,000) (88,000)
Purchase of investment securities (25,870,000) (29,289,000)
Net (increase) in long-term loans (15,737,000) (16,566,000)
Net decrease in credit card loans 154,000 294,000
Purchases of bank premises, equipment
and software (1,568,000) (2,899,000)
Proceeds from sales of bank premises,
and equipment -0- -0-
------------ ------------
NET CASH USED IN INVESTING ACTIVITIES (19,739,000) (21,832,000)
------------ ------------
STATEMENT CONTINUED ON NEXT PAGE
<PAGE>10
STATEMENT CONTINUED FROM PREVIOUS PAGE
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in demand and other
non-interest bearing deposits 2,628,000 5,699,000
Net (decrease) in savings
and passbook deposits (15,518,000) (1,596,000)
Net increase in time deposits 25,737,000 2,277,000
Net increase (decrease) in federal funds
purchased and other interest bearing
instruments 2,755,000 10,656,000
Proceeds from line of credit -0- 1,500,000
Proceeds from exercise of stock options 257,000 48,000
Dividends paid (1,507,000) (1,376,000)
------------ ------------
NET CASH PROVIDED BY FINANCING
ACTIVITIES 14,352,000 17,208,000
------------ ------------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (535,000) (800,000)
CASH AND CASH EQUIVALENTS AT BEGINNING
OF YEAR 21,275,000 21,276,000
------------ ------------
CASH AND CASH EQUIVALENTS AT END OF
QUARTER $20,740,000 $20,476,000
============ ============
See Notes to Condensed Consolidated Financial Statements.
<PAGE>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, 1995, compared to
December 31, 1994, and the results of operations for the nine months ending
September 30, 1995 compared to the same period in 1994. 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, 1995, the
condensed consolidated statements of income and the condensed consolidated
statements of cash flows for the nine months ended September 30, 1995 and 1994
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, 1994
Annual Report to Shareholders.
The results of operations for the period ended September 30, 1995 are not
necessarily indicative of the operating results for the full year.
ASSETS HELD FOR SALE
The Corporation has specifically identified certain investment securities and
loans which may be sold prior to maturity. These securities and loans are
recorded at the lower of amortized cost or market value.
RECLASSIFICATIONS
Certain 1994 amounts have been reclassified to conform to 1995 presentation.
<PAGE>12
INVESTMENT SECURITIES
The Corporation adopted SFAS 115 "Accounting For Certain Investments in Debt and
Equity Securities" on January 1, 1994. As required by SFAS 115, management
determines the appropriate classification of debt securities at the time of
purchase and re-evaluates such designation as of each balance sheet date. The
Corporation does not maintain a trading account. Debt securities are classified
as held-to-maturity when the Corporation has the positive intent and ability to
hold the securities to maturity. Securities held to maturity are carried at
amortized cost. Debt securities not classified as held-to-maturity and
marketable equity securities are classified as available-for-sale. Securities
available-for-sale are carried at fair value with unrealized gains and losses
reported separately through retained earnings, net of tax.
LOANS
The Corporation adopted SFAS No. 114 "Accounting by Creditors for Impairment of
a Loan" on January 1, 1995. This Statement impacts the accounting by creditors
for impairment of certain loans. It requires that certain impaired loans be
measured based on the present value of expected future cash flows discounted at
the loan's effective interest rate or, as a practical expedient, at the loan's
observable market price or the fair market value of collateral. Corporate
management determined that the adoption on SFAS No. 114 did not have a
significant impact on the carrying value of the impaired loans or on net income
during the first three quarters of 1995.
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 five-for-four stock split and a three percent stock dividend which
were approved by shareholders during 1995 and 1994, respectively.
<PAGE>13
PART I - FINANCIAL INFORMATION
ITEM 2 - MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL
CONDITION & RESULTS OF OPERATION
FINANCIAL CONDITION
Total assets of the Corporation increased $18,624,000 during the first nine
months, to $413,479,000. A portion of this growth is attributable to the
cyclical influx of municipal county tax money.
Federal funds sold and other interest bearing investments increased by
$700,000 during the first nine months of 1995. This increase was partially
reflected in the $1,235,000 decrease in cash and due from banks.
Total investment securities increased $2,748,000 ending the third
quarter at $102,272,000. At September 30,1995 unrealized gains (losses)in the
investment securities portfolio were approximately $1,299,000 and ($416,000),
respectively.
The level of nonperforming assets decreased $139,000 and $103,000 during the
first and second quarters respectively, in 1995 and increased $18,000 in the
third quarter 1995. The third quarter increase results primarily from an
increase in other real estate owned. The 1995 level of nonperforming assets
has decreased and leveled off in the third quarter. 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 09/30/95 06/30/95 03/31/95 12/31/94
-------- -------- -------- --------
Nonperforming Assets:
Nonaccrual $ 356 $ 368 $ 389 $ 318
Past Due Loans 124 127 209 419
Restructured 0 0 0 0
Other Real Estate Owned 0 0 0 0
------ ------ ------ ------
Total Nonperforming Assets $ 513 $ 495 $ 598 $ 737
====== ====== ====== ======
Net loans increased $15,143,000 during the first nine months to $273,118,000 at
September 30, 1995. The reserve for possible loan losses ended the quarter at
$3,938,000 supported by a provision for loan losses of $300,000, recoveries of
$79,000 and loan charge-offs of $273,000. The reserve for possible loan losses
as a percentage of ending loans decreased .04% from 1.46% at December 31, 1994
to 1.42% at September 30, 1995. 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.
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 September 30, 1995, there are no
significant concentrations of credit in the loan portfolio.
The Corporation had outstanding loan and credit commitments to make loans
totalling $61,718,000 and $61,101,000 at September 30, 1995 and 1994,
respectively. The increase in outstanding loan commitments results from
increased loan demand due to better local economic conditions.
<PAGE>14
Total deposits increased $12,847,000 during the first nine months to
$348,066,000. Non-interest bearing deposits increased to $59,724,000, at
September 30,1995 for an increase of $2,628,000, while interest bearing
deposits climbed to $288,342,000 for an increase of $10,219,000.
Federal funds purchased and securities sold under agreements to repurchase
increased $2,755,000 during the first nine months of 1995. 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 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 the 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 September 30,
1995, short-term security investments with maturities of one year or less
totalled $42,531,000 which represented 41.6% of total securities. Adding
cash and due from banks of $20,040,000, total liquid assets represented
15.1% of total assets.
CAPITAL RESOURCES
Total shareholders' equity increased to $39,970,000, at September 30, 1995.
The increase resulted primarily from $3,574,000 of net income generated from
the first nine months of operations less a cash dividend payable to
shareholders of $1,528,000. 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
decrease in interest rates experienced in the first three quarters of 1995 has
caused an increase in the market value of these securities with a resulting
positive impact on shareholders' equity of $156,000 for the nine months ended
September 30, 1995.
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 September 30, 1995 and 1994
follow.
September 30
-----------------
1995 1994
------ ------
Tier I capital ratio 17.02% 15.99%
Required Tier I capital ratio 4.00% 4.00%
Total capital ratio 18.20% 17.17%
Required total capital ratio 8.00% 8.00%
Leverage ratio 9.90% 9.53%
Required leverage ratio 3.00% 3.00%
<PAGE>15
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.
The Corporation has decided to let a lease lapse on June 30, 1996 for
its Plaza branch which is located at 1147 Meister Road, Lorain. A new branch
facility is under construction next to the Corporation's nearby Oberlin Avenue
Auto Bank. The Corporation expects the new facility to be opened in the spring
of 1996 at a cost of approximately $600,000 for the building, improvements
and equipment.
There were no material commitments outstanding at June 30, 1995, other than
the loan commitments and the contractual obligation for the new Plaza office.
RESULTS OF OPERATIONS
Interest and fees on loans increased when compared to the first nine months of
1994. This was the net result of the impact of slight increases in rates in
conjunction with loan portfolio growth. Interest and dividends on securities
was $4,407,000 for the first nine months of 1995 for a increase of $629,000
over the same period in 1994. Interest and dividends on securities represented
19.1% of total interest income at September 30, 1995 compared to 19.3% at
September 30, 1994. Interest on Federal funds sold and other interest
bearing instruments was $171,000 at September 30, 1995 compared to $178,000
at September 30, 1994. The decrease resulted from declining average balances
invested in this form of financial instrument which was not sufficient to
offset higher interest rates.
Total interest expense increased by $2,564,000 when compared to the first nine
months of 1994. The impacts of changes in the mix of interest bearing
liabilities combined with increases in both volume and rate were primarily
responsible for this increase in interest expense.
Total other income increased by $150,000 when compared to the first nine months
of 1994. This increase resulted from increases in income from fiduciary
fees of $100,000, increases in service charges of $20,000 and increases in
other charges of $28,000. The increase in other charges is the result of
pricing increases in credit card and merchant fees. Other income decreased
by $7,000 and gains from sales of loans increased by $9,000 respectively.
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, 1995
was $12,047,000, 4.0% above the first nine months of 1994. This increase was
due primarily to increases in salaries and benefits, net occupancy, equipment
expense, and the impacts of inflation.
The effective tax rate increased from 30.1% during the first nine months of
1994 to 31.5% during the first nine months of 1995. The increase in the
effective tax rat is due primarily to the decrease in tax exempt interest
income. Net income was $3,574,000 and $3,248,000 for the nine months ended
September 30, 1995 and 1994, respectively. Net income per share after
adjusting for the five-for-four stock split in 1995 and the three percent
stock dividend in 1994 was .89 and $.81 for the nine months ended September
1995 and 1994, respectively.
<PAGE>16
IMPACTS OF ACCOUNTING AND REGULATORY PRONOUNCEMENTS
Corporate management is not aware of any current rrecommendationsby 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 114 "Accounting by Creditors for Impairment of a Loan"
Implementation date by the Corporation: December 31, 1994
Impact on the Corporation: This Statement will impact the accounting by
creditors for impairment of certain loans. It requires that certain impaired
loans be measured based on the present value of expected future cash flows
discounted at the loan's effective interest rate or, as a practical expedient,
at the loan's observable market price or the fair value of the collateral.
Corporate Management does not believe that adoption of SFAS 114 will have a
significant impact on the carrying value of impaired loans or on net income.
All other applicable Statements of Financial Accounting Standards that have
been issued and have effective dates impacting 1995 and prior years financial
statements have been adopted by the Corporation. Corporate management believes
there are no Statements of Financial Accounting Standards which have been
issued and have implementation dates in the future which will materially
impact the financial statements of future years.
Significant actions by the Federal Government and its agencies, affecting the
financial institution industry in general, are currently having and will
continue to have an impact on the Corporation. A discussion of these actions
will follow:
"Omnibus Budget Reconciliation Act of 1993"
Effective date of impact on the Corporation: August 10, 1993
Impact on the Corporation: Although the cost of tax compliance will increase,
Corporate Management does not anticipate that this tax act will have a
material impact on net income.
During 1993, a risk-related assessment system was developed by the Federal
Deposit Insurance Corporation. Effective, January 1, 1993, the Bank was
assigned to the lowest deposit insurance assessment rate currently possible.
Under the system, the FDIC will reevaluate the Bank's deposit insurance rate
on a semi-annual basis. The Corporation's subsidiary Bank will have a
significantly lower deposit insurance assessment rate for the second half
of 1995. The FDIC has approved a new rate schedule due to the fact that the
Bank Insurance Fund (BIF) has reached its designated reserve ratio. The
new rates became effective September 15, 1995 and are applied retroactive
to June 1, 1995. June is the month following the month in which the BIF
reached the 1.25 percent reserve ratio mandated by the Federal Deposit
Insurance Corporation Improvement Act (FDICIA).
During the third quarter of 1995, the Bank received a refund for second
and third quarter FDIC Insurance Premiums totalling about $207,000.
The Bank was assigned to the lowest deposit insurance assessment rate
under the September 15, 1995 guidelines.
<PAGE>17
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 (10a) - Employment Agreement by and between James F. Kidd and
LNB Bancorp, Inc. and The Lorain National Bank dated September 11,
1995.
(b) Exhibit (10b) - Employment Agreement by and between Thomas P. Ryan
and LNB Bancorp, Inc. and The Lorain National Bank dated
September 11, 1995.
(c) Exhibit (11) - Computation of Shares Used for Earnings Per Share
Calculation.
(d) Exhibit (19) - Third Quarter Report to Shareholders of LNB Bancorp,
Inc., September 30, 1995 - EDGAR Version.
(e) Exhibit (27) - Financial Data Schedule.
(f) Reports on Form 8-K - There were no reports on Form 8-K filed for the
nine months ended September 30, 1995.
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: November 13, 1995
/s/ J. F. Kidd /s/ Gregory D. Friedman
- ------------------------- -------------------------
J. F. Kidd, Gregory D. Friedman,
President & C.E.O. Senior Vice President &
and Acting Chief Accounting Chief Financial Officer
Officer
<PAGE>18
LNB Bancorp, Inc.
Form 10-Q
Exhibit Index
Pursuant to Item 601 (a) of Regulation S-K
S-K Reference Exhibit Page
Number Number
(10a) Employment Agreement by and between James F. Kidd
and LNB Bancorp, Inc. and The Lorain National Bank
dated September 11, 1995. 19
(10b) Employement Agreement by and between Thomas P. Ryan
and LNB Bancorp, Inc. and The Lorain National Bank
dated September 11, 1995. 23
(11) Computation of Shares Used for Earnings Per Share
Calculations. 27
(19) Third Quarter Report to Shareholders of LNB Bancorp,
Inc. September 30, 1995 - EDGAR Version. 28
(27) Financial Data Schedule. 33
<PAGE>19
LNB Bancorp, Inc.
Exhibit to Form 10-Q
(For the nine months ended September 30, 1995)
S - K Reference Number (10a)
Employment Agreement by and between James F. Kidd and
LNB Bancorp, Inc. and The Lorain National Bank dated
September 11, 1995.
<PAGE>20
DPB/ss
09/06/95
EMPLOYMENT AGREEMENT
This is an Agreement entered into as of the 11th day of
September, 1995, by and between JAMES F. KIDD, referred to below as
"Kidd" and LNB BANCORP, INC., an Ohio corporation and THE LORAIN
NATIONAL BANK, a banking organization organized and existing under
the laws of the United States of America, which, together with their
successors and assigns are collectively referred to below as the
"Employer". Kidd and the Employer, also referred to below,
collectively, as the "Parties" and individually as a "Party".
RECITALS
The Employer desires to continue the employment of Kidd and
Kidd desires to continue the performance of services for the
Employer, as described in this Agreement.
NOW, THEREFORE, the Employer and Kidd, in consideration of the
mutual covenants and promises set forth below, agree as follows:
[1] The Employer shall continue to employ Kidd as President
and Chief Operating Officer and Kidd accepts such employment.
Kidd's duties shall be those normally undertaken by President and
Chief Operating Officers of corporations similar to the Employer in
type and size. The duties to be performed by Kidd shall
additionally be determined from time-to-time by the Chairman of The
Board and CEO and/or Boards of Directors of the Employer.
[2] The duties of Kidd may be changed from time-to-time by the
mutual consent of the Employer and Kidd without resulting in a
rescission of this Agreement. Notwithstanding any changes in
duties, the employment of Kidd shall be construed as continuing
under this Agreement.
[3] The Employer shall compensate Kidd at the initial rate of
One Hundred Twenty Four Thousand and Two Hundred Dollars
($124,200.00) per year payable in equal semi-monthly amounts and
pro-rated for any partial employment period.
[4] At least annually Kidd's compensation shall be reviewed by
Employer's Boards of Directors and adjusted at the sole discretion
of such Boards of Directors. In no event, however, shall Kidd's
compensation be reduced without Kidd's consent to an amount less
than his compensation for the immediately preceding year.
[5] The Employer may pay Kidd a bonus after the end of each
year, during which this Agreement is in effect. The payment of a
bonus, if any, and the amount and terms thereof, shall be in the
sole discretion of the Employer and its Boards of Directors.
[6] The Employer shall furnish an automobile for Kidd's use.
The model and type of automobile shall be agreed upon by Employer.
All operating and maintenance expenses and insurance shall be paid
by Employer.
[7] The Employer shall reimburse Kidd for all reasonable
expenses incurred by him in the performance of his duties for the
Employer.
[8] Kidd shall be entitled to such additional benefits as are
set forth in the Lorain National Bank Employee Manual and as are
provided to other executive officers and personnel of Employer.
<PAGE>21
[9] This Agreement shall become effective on September 1,
1995, and shall remain in effect until Kidd reaches the age of 65,
subject however, to prior termination of this Agreement as provided
hereafter.
[10] Except as provided in this paragraph, Kidd shall devote
his full time to the business of the Employer. Kidd shall be free
to engage in business activities other than banking and to engage in
civic activities, provided that the engaging in such activities does
not interfere with the performance of his duties to the Employer.
[11] Nothing contained in this Agreement shall be deemed to
affect Kidd's eligibility to participate in any pension, retirement,
profit-sharing, stock purchase, life insurance, accident insurance,
medical reimbursement, health insurance or hospitalization plan, or
any other fringe benefit in which other employees and executives of
the Employer are eligible to participate.
[12] Notwithstanding the provisions of Paragraph 9, this
Agreement shall be terminated:
[a] If either party materially violates the terms and conditions of
this Agreement, the other party shall have the right to terminate
this Agreement upon thirty (30) days prior written notice to the
breaching party;
[b] the Employer through its Boards of Directors may terminate this
Agreement without cause at any time upon ninety (90) days prior
written notice to Kidd;
[c] Upon the death of Kidd;
[d] In the event of the disability of Kidd resulting in his
inability to perform his duties for a period of six (6) months, he
shall be considered permanently disabled and he shall, in that
event, be entitled to the salary and benefits he is then receiving
on the date of determination of total disability and continuing for
a period of two (2) years thereafter reduced however, by any amounts
received by Kidd pursuant to a policy of disability insurance in
force at the time of such disability;
[e] Upon the termination of this Agreement pursuant to subparagraph
[a] (but only if Kidd terminates the Agreement due to the Employer's
breach) or paragraph [b] hereof all rights, duties and obligations
of the parties hereto shall cease except that Employer shall
continue to pay Kidd, provided he has not yet reached his 63rd
birthday, his total salary as in effect at such time for a period
of two (2) years from the date of termination. During such two-year
period and in addition to the payment of his salary, Employer shall
continue to provide Kidd, at Employer's cost, all fringe benefits as
though he were still an employee. Fringe benefits include, but are
not limited to, health and hospitalization insurance, life insurance
and full pension accrual. Upon expiration of the two-year payment
period Kidd shall be entitled to participate in Employer's health
and hospitalization plan until he reaches age sixty five (65),
provided he pays either directly or through Employer the premium
attributable to his coverage under the Plan. If Kidd is over the
age of sixty three (63) at the time of termination, salary and
benefits as set forth above shall continue to be provided by
Employer to Kidd until Kidd reaches age sixty five (65). Kidd may
elect, in his sole discretion, to be paid salary due under this
provision in a lump sum upon termination.
<PAGE>22
[f] The termination payments payable to Kidd shall survive Kidd's
death should he die during the period he is receiving termination
payments as provided for in Section [e] above.
[g] During the Agreement Term Kidd may, in his discretion, without
cause, terminate his employment with Employer by giving the Board of
Directors of Employer at least ninety (90) days written notice of
his decision to terminate his Agreement. Upon the effective date of
such employment termination by Kidd, and upon such termination both
parties shall be released from any and all liabilities hereunder.
[13] No amendment to this Agreement shall be effective unless
it is set forth in a written document signed by both parties.
[14] The laws of the State of Ohio shall be applicable to all
questions which may arise relating to the validity, interpretation,
performance and enforcement of this Agreement and each of its
provisions.
[15] This Agreement shall be binding upon, and shall inure to
the benefit of, the parties, the successors and assigns of the
Employer, and the heirs, executors, administrators, guardians and
other personal representatives of Kidd, provided, however, that if
the Employer ceases to exist as a corporate entity for any reason
(including, but not limited to, the merger of the Employer into, or
the consolidation of the Employer with, another corporation), or if
the Employer sells all or substantially all of its assets to a third
party, Kidd shall be entitled, but not required, to treat such an
event as a breach pursuant to paragraph 12[a] of this Agreement by
the Employer by giving written notice to that effect to the
Statutory Agent of the Employer within thirty (30) days after he
learns of the occurrence of the event.
IN WITNESS WHEREOF, the parties hereto have signed and
delivered this Agreement the day and year first above set forth.
In The Presence Of: LNB BANCORP, INC.
/s/ Denise DeVito BY: /s/ S. G. Pijor
- --------------------------- ---------------------------
Chairman & C.E.O.
/s/ Paulette Mager BY: /s/ Thomas P. Ryan
- --------------------------- ---------------------------
Executive Vice President &
Corporate Secretary
THE LORAIN NATIONAL BANK
/s/ Denise DeVito BY: /s/ S. G. Pijor
- --------------------------- ---------------------------
Chairman & C.E.O.
/s/ Paulette Mager BY: /s/ Thomas P. Ryan
- --------------------------- ---------------------------
Executive Vice President &
Corporate Secretary
/s/ Denise DeVito /s/ J. F. Kidd
- --------------------------- ---------------------------
James F. Kidd
<PAGE>23
LNB Bancorp, Inc.
Exhibit to Form 10-Q
(For the nine months ended September 30, 1995)
S - K Reference Number (10b)
Employment Agreement by and between Thomas P. Ryan and
LNB Bancorp, Inc. and The Lorain National Bank dated
September 11, 1995.
<PAGE>24
DPB/ss
09/06/95
EMPLOYMENT AGREEMENT
This is an Agreement entered into as of the 11th day of
September, 1995, by and between Thomas P. Ryan, referred to below as
"Ryan" and LNB BANCORP, INC. an Ohio corporation and THE LORAIN
NATIONAL BANK, a banking organization organized and existing under
the laws of the United States of America, which, together with their
successors and assigns are collectively referred to below as the
"Employer". Ryan and the Employer, also referred to below,
collectively, as the "Parties" and individually as a "Party".
RECITALS
The Employer desires to continue the employment of Ryan and
Ryan desires to continue the performance of services for the
Employer, as described in this Agreement.
NOW, THEREFORE, the Employer and Ryan, in consideration of the
mutual covenants and promises set forth below, agree as follows:
[1] The Employer shall continue to employ Ryan as Executive
Vice President and Ryan accepts such employment. Ryan's duties
shall be those normally undertaken by the Executive Vice Presidents
of corporations similar to the Employer in type and size. The
duties to be performed by Ryan shall additionally be determined from
time-to-time by the Chairman of The Board and CEO, President & COO
and/or Boards of Directors of the Employer.
[2] The duties of Ryan may be changed from time-to-time by the
mutual consent of the Employer and Ryan without resulting in a
rescission of this Agreement. Notwithstanding any changes in
duties, the employment of Ryan shall be construed as continuing
under this Agreement.
[3] The Employer shall compensate Ryan at the initial rate of
Ninety Seven Thousand Five Hundred Dollars ($97,500.00) per year
payable in equal semi- monthly amounts and pro-rated for any partial
employment period.
[4] At least annually Ryan's compensation shall be reviewed by
Employer's Boards of Directors and adjusted at the sole discretion
of such Boards of Directors. In no event, however, shall Ryan's
compensation be reduced without Ryan's consent to an amount less
than his compensation for the immediately preceding year.
[5] The Employer may pay Ryan a bonus after the end of each
year, during which this Agreement is in effect. The payment of a
bonus, if any, and the amount and terms thereof, shall be in the
sole discretion of the Employer and its Boards of Directors.
[6] The Employer shall furnish an automobile for Ryan's use.
The model and type of automobile shall be agreed upon by Employer.
All operating and maintenance expenses and insurance shall be paid
by Employer.
[7] The Employer shall reimburse Ryan for all reasonable
expenses incurred by him in the performance of his duties for the
Employer.
[8] Ryan shall be entitled to such additional benefits as are
set forth in the Lorain National Bank Employee Manual and as are
provided to other executive officers and personnel of Employer.
<PAGE>25
[9] This Agreement shall become effective on September 1,
1995, and shall remain in effect until Ryan reaches the age of 65,
subject however, to prior termination of this Agreement as provided
hereafter.
[10] Except as provided in this paragraph, Ryan shall devote
his full time to the business of the Employer. Ryan shall be free
to engage in business activities other than banking and to engage in
civic activities, provided that the engaging in such activities does
not interfere with the performance of his duties to the Employer.
[11] Nothing contained in this Agreement shall be deemed to
affect Ryan's eligibility to participate in any pension, retirement,
profit-sharing, stock purchase, life insurance, accident insurance,
medical reimbursement, health insurance or hospitalization plan, or
any other fringe benefit in which other employees and executives of
the Employer are eligible to participate.
[12] Notwithstanding the provisions of Paragraph 9, this
Agreement shall be terminated:
[a] If either party materially violates the terms and conditions of
this Agreement, the other party shall have the right to terminate
this Agreement upon thirty (30) days prior written notice to the
breaching party;
[b] the Employer through its Boards of Directors may terminate this
Agreement without cause at any time upon ninety (90) days prior
written notice to Ryan;
[c] Upon the death of Ryan;
[d] In the event of the disability of Ryan resulting in his
inability to perform his duties for a period of six (6) months, he
shall be considered permanently disabled and he shall, in that
event, be entitled to the salary and benefits he is then receiving
on the date of determination of total disability and continuing for
a period of two (2) years thereafter reduced however, by any amounts
received by Ryan pursuant to a policy of disability insurance in
force at the time of such disability;
[e] Upon the termination of this Agreement pursuant to
subparagraph[a] (but only if Ryan terminates the Agreement due to
the Employer's breach) or paragraph [b] hereof all rights, duties
and obligations of the parties hereto shall cease except that
Employer shall continue to pay Ryan, provided he has not yet reached
his 63rd birthday, his total salary as in effect at such time for a
period of two (2) years from the date of termination. During such
two-year period and in addition to the payment of his salary,
Employer shall continue to provide Ryan, at Employer's cost, all
fringe benefits as though he were still an employee. Fringe
benefits include, but are not limited to, health and hospitalization
insurance, life insurance and full pension accrual. Upon expiration
of the two-year payment period Ryan shall be entitled to
participate in Employer's health and hospitalization plan until he
reaches age sixty five (65), provided he pays either directly or
through Employer the premium attributable to his coverage under the
Plan. If Ryan is over the age of sixty three (63) at the time of
termination, salary and benefits as set forth above shall continue
to be provided by Employer to Ryan until Ryan reaches age sixty five
(65). Ryan may elect, in his sole discretion, to be paid salary due
under this provision in a lump sum upon termination.
<PAGE>26
[f] The termination payments payable to Ryan shall survive Ryan's
death should he die during the period he is receiving termination
payments as provided for in Section [e] above.
[g] During the Agreement Term Ryan may, in his discretion, without
cause, terminate his employment with Employer by giving the Board of
Directors of Employer at least ninety (90) days written notice of
his decision to terminate his Agreement. Upon the effective date of
such employment termination by Ryan, and upon such termination both
parties shall be released from any and all liabilities hereunder.
[13] No amendment to this Agreement shall be effective unless
it is set forth in a written document signed by both parties.
[14] The laws of the State of Ohio shall be applicable to all
questions which may arise relating to the validity, interpretation,
performance and enforcement of this Agreement and each of its
provisions.
[15] This Agreement shall be binding upon, and shall inure to
the benefit of, the parties, the successors and assigns of the
Employer, and the heirs, executors, administrators, guardians and
other personal representatives of Ryan, provided, however, that if
the Employer ceases to exist as a corporate entity for any reason
(including, but not limited to, the merger of the Employer into, or
the consolidation of the Employer with, another corporation), or if
the Employer sells all or substantially all of its assets to a third
party, Ryan shall be entitled, but not required, to treat such an
event as a breach pursuant to paragraph 12[a] of this Agreement by
the Employer by giving written notice to that effect to the
Statutory Agent of the Employer within thirty (30) days after he
learns of the occurrence of the event.
IN WITNESS WHEREOF, the parties hereto have signed and
delivered this Agreement the day and year first above set forth.
In The Presence Of: LNB BANCORP, INC.
/s/ Denise DeVito BY: /s/ S. G. Pijor
- --------------------------- ---------------------------
Chairman & C.E.O.
/s/ Paulette Mager BY: /s/ J. F. Kidd
- --------------------------- ---------------------------
President & C.O.O.
THE LORAIN NATIONAL BANK
/s/ Denise DeVito BY: /s/ S. G. Pijor
- --------------------------- ---------------------------
Chairman & C.E.O.
/s/ Paulette Mager BY: /s/ J. F. Kidd
- --------------------------- ---------------------------
President & C.O.O.
/s/ Denise DeVito /s/ Thomas P. Ryan
- --------------------------- ---------------------------
Thomas P. Ryan
<PAGE>27
LNB Bancorp, Inc.
Exhibit to Form 10-Q
(For the nine months ended September 30, 1995)
S - K Reference Number (11)
Computation of Shares Used for Earnings Per Share Calculation.
Nine Months Ended
September 30
--------------------
1995 1994
--------- ---------
Weighted Average Shares Outstanding 4,016,109 3,992,054
Common Stock Equivalents (Stock Options) 18,792 38,435
--------- ---------
4,034,901 4,030,489
========= =========
<PAGE>28
LNB Bancorp, Inc.
Exhibit to Form 10 - Q
(For the nine months ended September 30, 1995)
S - K Reference Number (19)
Third Quarter Report to Shareholders of
LNB Bancorp, Inc. (dated September 30, 1995)
EDGAR Version
DESCRIPTION:
Two sided pamphlet: Outside cover containing the list of Bank Offices and Gray
cover page of pamphlet.
Inside contains: Unaudited Consolidated Balance Sheets for period ending
September 30, 1995 and September 30, 1994 respectively, and unaudited
Consolidated Statements of Income for the Nine Months Ended September 30, 1995
and September 30, 1994 respectively.
<PAGE>29
Consolidated Balance Sheets
September 30
------------------------------
1995 1994
------------------------------
ASSETS:
Cash and Due from Banks $ 20,040,000 $ 20,476,000
Federal Funds Sold 700,000 -0-
Securities Available for Sale 10,326,000 10,210,000
Investment Securities 91,946,000 95,265,000
Loans 277,056,000 261,799,000
Reserve for Possible Loan Losses (3,938,000) (3,832,000)
- --------------------------------------------------------------------------------
NET LOANS 273,118,000 257,967,000
-------------------------------------------------------------------------------
Premises and Equipment (Net) 10,856,000 10,054,000
Other Assets 6,493,000 5,433,000
- -------------------------------------------------------------------------------
TOTAL ASSETS $413,479,000 $399,405,000
- -------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY:
Non-Interest Bearing Deposits $ 59,724,000 $ 55,940,000
Interest Bearing Deposits 288,342,000 271,452,000
- --------------------------------------------------------------------------------
TOTAL DEPOSITS 348,066,000 327,392,000
- -------------------------------------------------------------------------------
Federal Funds Purchased -0- 2,500,000
Securities Sold under Repurchase
Agreements 21,926,000 27,556,000
Other Liabilities 3,517,000 5,049,000
- --------------------------------------------------------------------------------
TOTAL LIABILITIES 373,509,000 362,497,000
- -------------------------------------------------------------------------------
Common Stock 4,036,000 3,198,000
Additional Capital 17,836,000 18,408,000
Retained Earnings 18,074,000 15,390,000
Net Unrealized Security Losses 24,000 (88,000)
- --------------------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY 39,970,000 36,908,000
- --------------------------------------------------------------------------------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $413,479,000 $399,405,000
- --------------------------------------------------------------------------------
(LOGO) LNB
Bancorp, Inc.
and its subsidiary Lorain National Bank
<PAGE>30
Consolidated Statements of Income
Nine Months Ended
September 30
---------------------------
1995 1994
------------- ------------
INTEREST INCOME:
Interest and Fees on Loans $18,452,000 $15,617,000
Interst and Dividends on Securities 4,412,000 3,783,000
Interest on Federal Funds Sold 171,000 178,000
- --------------------------------------------------------------------------------
TOTAL INTEREST INCOME 23,035,000 19,578,000
- -------------------------------------------------------------------------------
INTEREST EXPENSE:
Interest Deposits 7,791,000 5,585,000
Interest on Securities Sold Under
Repurchase Agreements 848,000 473,000
Other Interest Expense 1,000 18,000
- --------------------------------------------------------------------------------
TOTAL INTEREST EXPENSE 8,640,000 6,076,000
- -------------------------------------------------------------------------------
NET INTEREST INCOME 14,395,000 13,502,000
Provision for Loan Losses 300,000 300,000
- -------------------------------------------------------------------------------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 14,095,000 13,202,000
- --------------------------------------------------------------------------------
OTHER INCOME:
Trust Department Income 756,000 656,000
Fees and Service Charges 2,407,000 2,359,000
Gains From Sales of Loans and Securities -0- -0-
Other Operating Income 9,000 7,000
- --------------------------------------------------------------------------------
TOTAL OTHER INCOME 3,172,000 3,022,000
- --------------------------------------------------------------------------------
OTHER EXPENSES:
Salaries and Employee Benefits 5,937,000 5,693,000
Net Occupancy Expense 914,000 844,000
Furniture and Equipment Expenses 1,499,000 1,305,000
Ohio Franchise Tax 387,000 361,000
Other Operating Expenses 3,310,000 3,377,000
- --------------------------------------------------------------------------------
TOTAL OTHER EXPENSES 12,047,000 11,580,000
- --------------------------------------------------------------------------------
INCOME BEFORE FEDERAL INCOME TAXES 5,220,000 4,644,000
Federal Income Taxes 1,646,000 1,396,000
- -------------------------------------------------------------------------------
NET INCOME $3,574,000 $3,248,000
- -------------------------------------------------------------------------------
PER SHARE DATA:
NET INCOME $ .89 $ .81
- -------------------------------------------------------------------------------
DIVIDENDS DECLARED $ .38 $ .34
===============================================================================
The per share data has been adjusted to reflect the 5-for-4 stock split in 1995
and the 3% stock dividend in 1994. Net income per share is based on weighted
average common and common equivalent shares outstanding.
<PAGE>31
Outside Cover: 2 column format
Bank Offices
MAIN OFFICE SECOND STREET OFFICE
457 Broadway 221 Second Street
Lorain, Ohio Elyria, Ohio
(216) 244-6000 (216) 323-4621
SIXTH STREET DRIVE-IN CLEVELAND STREET OFFICE
200 Sixth Street 801 Cleveland Street
Lorain, Ohio Elyria, Ohio
(216) 244-7242 (216) 365-8397
KANSAS AVENUE OFFICE LAKE AVENUE OFFICE
1604 Kansas Avenue 42935 E. North Ridge Road
Lorain, Ohio Elyria, Ohio
(216) 288-9151 (216) 233-7196
PEARL AVENUE OFFICE OBERLIN OFFICE
2850 Pearl Avenue 40 East College Street
Lorain, Ohio Oberlin, Ohio
(216) 277-1103 (216) 775-1361
LORAIN PLAZA OFFICE KENDAL AT OBERLIN OFFICE
1147 Meister Road 600 Kendal Drive
Lorain, Ohio Oberlin, Ohio
(216) 282-9196 (216) 774-5400
W. 37TH & OBERLIN VERMILION OFFICE
AVENUE AUTO BANK 4455 Liberty Avenue
3660 Oberlin Avenue Vermilion, Ohio
Lorain, Ohio (216) 967-3124
(216) 282-9196
OLMSTED OFFICE
WEST PARK DRIVE OFFICE 27095 Bagley Road
2130 West Park Drive Olmsted Twp., Ohio
Lorain, Ohio (216) 235-4600
(216) 989-3131
THE CROSSINGS OF
AMHERST OFFICE WESTLAKE OFFICE
1175 Cleveland Avenue 30210 Detroit Road
Amherst, Ohio Westlake, Ohio
(216) 988-4423 (216) 892-9696
AVON LAKE OFFICE
240 Miller Road
Avon Lake, Ohio
(216) 933-2186
<PAGE>32
Remainder of Outside cover description:
Gray background, black lettering.
(LOGO) LNB
Bancorp, Inc.
and its subsidiary Lorain National Bank
(lower middle of outside cover)
LNB BANCORP, INC.
(middle of outside cover)
Quarterly Report
September 30, 1995
(lower right side of outside cover)
<PAGE>33
LNB Bancorp, Inc.
Exhibit to Form 10 - Q
(For the nine months ended September 30, 1995)
S - K Reference Number (27)
Financial Data Schedule
(Follows as a seperate document)
<TABLE> <S> <C>
<ARTICLE> 9
<CIK> 0000737210
<NAME> LNB BANCORP, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 20,040
<INT-BEARING-DEPOSITS> 288,342
<FED-FUNDS-SOLD> 700
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 10,326
<INVESTMENTS-CARRYING> 91,946
<INVESTMENTS-MARKET> 92,829
<LOANS> 277,056
<ALLOWANCE> 3,938
<TOTAL-ASSETS> 413,479
<DEPOSITS> 348,066
<SHORT-TERM> 21,926
<LIABILITIES-OTHER> 3,517
<LONG-TERM> 0
<COMMON> 4,036
0
0
<OTHER-SE> 35,934
<TOTAL-LIABILITIES-AND-EQUITY> 413,479
<INTEREST-LOAN> 18,452
<INTEREST-INVEST> 4,412
<INTEREST-OTHER> 171
<INTEREST-TOTAL> 23,035
<INTEREST-DEPOSIT> 7,791
<INTEREST-EXPENSE> 8,640
<INTEREST-INCOME-NET> 14,395
<LOAN-LOSSES> 300
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 12,047
<INCOME-PRETAX> 5,220
<INCOME-PRE-EXTRAORDINARY> 3,574
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,574
<EPS-PRIMARY> .89
<EPS-DILUTED> .89
<YIELD-ACTUAL> 5.19
<LOANS-NON> 356
<LOANS-PAST> 124
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 1,382
<ALLOWANCE-OPEN> 3,832
<CHARGE-OFFS> 273
<RECOVERIES> 79
<ALLOWANCE-CLOSE> 3,938
<ALLOWANCE-DOMESTIC> 2,812
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 1,126
</TABLE>
