<PAGE>1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10K/A
Annual Report Pursuant to Section 13 OR 15(d) of
the Securities Exchange Act of 1934
For the fiscal year ended Commission file
December 31, 1995 number 0-13203
Amendment Number 1
LNB Bancorp, Inc.
(Exact name of the registrant as specified in its Charter)
Ohio 34-1406303
(State of incorporation) (I.R.S. Employer 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)
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934:
Title of Each Class Name of Each Exchange on Which Registered
Common Stock, Par Value $1.00 NASDAQ - OTC
Per Share
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 (or for such shorter period that
the Registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. YES [X] NO [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. [ ]
The aggregate market value of the voting stock held by non-affiliates
of the Registrant at May 31, 1996 was approximately $80,276,000.
The number of shares of Registrant's Common Stock outstanding on
May 31, 1996 was 4,124,781.
1
<PAGE>2
The undersigned registrant hereby amends the following items of its
Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 on Form 10-K for the fiscal year ended December 31, 1995 for
the purpose of furnishing financial statements for the Lorain National Bank
Employee Stock Ownership Plan and the Lorain National Bank Stock Purchase
Plan:
PART II
ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(3) Exhibits:
(99.1) Annual report on Form 11-K of The Lorain National Bank
Employee Stock Ownership Plan (registration number 33-65036)
for the plan year ended December 31, 1995.
(99.2) Annual report on Form 11-K of The Lorain National Bank
Stock Purchase Plan (registration number 33-65036)
for the plan year ended December 31, 1995.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
LNB Bancorp, Inc.
(Registrant)
Date: June 24, 1996 By: /s/ Gregory D. Friedman
------------- -----------------------
Gregory D. Friedman
Senior Vice President
Chief Operating Officer and
Chief Financial Officer
/s/ Mitchell J. Fallis
-----------------------
Mitchell J. Fallis
Vice President and
Chief Accounting Officer
2
<PAGE>3
LNB Bancorp, Inc.
Form 10K/A
Exhibit Index
Pursuant to Item 601 (a) of Regulation S-K
S-K Reference Exhibit
Number
(99.1) Annual report on Form 11-K of The Lorain National Bank
Employee Stock Ownership Plan (registration number 33-65036)
for the plan year ended December 31, 1995.
(99.2) Annual report on Form 11-K of The Lorain National Bank
Stock Purchase Plan (registration number 33-65036)
for the plan year ended December 31, 1995.
3
<PAGE>4
LNB Bancorp, Inc.
Exhibit to Form 10 - K/A
(for the fiscal year ended December 31, 1995)
S - K Reference Number (99.1)
Annual report on Form 11-K of The Lorain National Bank
Employee Stock Ownership Plan (registration number 33-65036)
for the plan year ended December 31, 1995 filed as an
amendment to the annual report on Form 10-K.
4
<PAGE>5
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE, SAVINGS
AND SIMILAR PLANS PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
[ X ] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1995
Note: This Form 11-K is being filed as an amending exhibit to the
Form 10-K of LNB Bancorp, Inc. for the fiscal year ended December
31, 1995 pursuant to Rule 15d-21, therefore no fee is required.
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
---------------- -----------
Commission file number 0-13203
THE LORAIN NATIONAL BANK EMPLOYEE STOCK OWNERSHIP PLAN
------------------------------------------------------
(Full title of the plan)
Lorain National Bank 457 Broadway Lorain, Ohio 44052-1769
-------------------------------------------------------------
(Name of issuer of the securities held pursuant to the plan and
the address of its principal executive office)
5
<PAGE>6
REQUIRED INFORMATION
Audited plan financial statements and schedules prepared in accordance
with the financial reporting requirements of the Employee Retirement
Income Securities Act of 1974, as amended, are filed herewith in lieu of
the requirements of an audited statement of financial condition and
statement of income and changes in plan equity.
Financial Statements and Exhibits
A) The following financial statements and schedules are filed as part of
this annual report.
1) Statements of Assets Available for Distribution to Participants -
December 31, 1995 and 1994
2) Statements of Changes in Assets Available for Distribution to
Participants - Years ended December 31, 1995 and 1994.
3) Notes to Financial Statements - December 31, 1995 and 1994
4) Schedule 1 - Item 27a - Assets Held for Investment Purposes -
December 31, 1995
5) Schedule 2 - Item 27e - Party-In-Interest Transactions -
Year ended December 31, 1995
6) Schedule 3 - Item 27d - Reportable Transactions -
Year ended December 31, 1995
B) The following exhibit is filed as part of this annual report:
24. Consent of Independent Accountants
6
<PAGE>7
(COVER EMBOSSED WITH LOGO)
KPMG Peat Marwick LLP
The Lorain National Bank
Employee Stock Ownership Plan
Financial Statements and Schedules
December 31, 1995 and 1994
(With Independent Auditors' Report Thereon)
7
<PAGE>8
(LETTERHEAD)
(LOGO)
KPMG Peat Marwick LLP
1500 National City Center
1900 East Ninth Street
Cleveland, OH 44114-3495
Independent Auditors' Report
----------------------------
The Board of Directors
The Lorain National Bank
Sponsor of The Lorain National Bank
Employee Stock Ownership Plan:
We have audited the accompanying statements of assets available for
distribution to participants of The Lorain National Bank Employee Stock
Ownership Plan (Plan) as of December 31, 1995 and 1994, and the related
statements of changes in assets available for distribution to
participants for the years then ended. These financial statements are
the responsibility of the Plan's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the assets available for distribution to participants
of the Plan as of December 31, 1995 and 1994, and the changes in those assets
for the years then ended in conformity with generally accepted accounting
principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of
assets held for investment purposes at December 31, 1995, and party-in-interest
and reportable transactions for the year ended December 31, 1995, are
presented for purposes of additional analysis and are not a required part
of the basic financial statements, but are supplementary information required
by the Department of Labor's Rules and Regulations for Reporting and Disclosure
under the Employee Retirement Income Security Act of 1974. The supplemental
schedules have been subjected to the auditing procedures applied in the audit of
the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
/s/ KPMG Peat Marwick LLP
Cleveland, Ohio
April 5, 1996
(LOGO)
Member Firm of
Klynveld Peat Marwick Goerdeler
8
<PAGE>9
THE LORAIN NATIONAL BANK
EMPLOYEE STOCK OWNERSHIP PLAN
Statements of Assets Available for Distribution to Participants
December 31, 1995 and 1994
1995 1994
---- ----
Assets available for distribution
to participants
Short-term cash investments $ 694,122 204,546
Investments, at fair value (note 3)
Common stock - LNB Bancorp, Inc. 2,388,348 1,731,163
Mutual funds - 96,275
United States government securities 251,281 972,873
----------- ----------
Total investments 2,639,629 2,800,311
Employer contribution receivable 60,000 -
Dividends and interest receivable 22,597 16,203
Due from Federal Reserve Bank 150,000 -
Due from LNB Trust Department 6,331 -
----------- ----------
Assets available for
distribution to participants $ 3,572,679 3,021,060
=========== ==========
Assets available for distribution to
participants
Assets payable to terminating participants $ 245,310 204,517
Assets available for continuing participants 3,327,369 2,816,543
----------- ----------
$ 3,572,679 3,021,060
=========== ==========
See accompanying notes to financial statements.
9
<PAGE>10
THE LORAIN NATIONAL BANK
EMPLOYEE STOCK OWNERSHIP PLAN
Statements of Changes in Assets Available for Distribution to Participants
Years ended December 31, 1995 and 1994
1995 1994
---- ----
Additions
Investment income - dividends and interest $ 95,447 77,832
Employer contribution 360,000 375,000
Net appreciation in fair value of investments
(note 3) 286,935 197,709
----------- ----------
Total additions 742,382 650,541
----------- ----------
Distributions to participants (190,763) (35,396)
----------- ----------
Increase in assets available for distribution
to participants 551,619 615,145
Assets available for distribution to participants
Beginning of year 3,021,060 2,405,915
----------- ----------
End of year $3,572,679 3,021,060
=========== ==========
See accompanying notes to financial statements.
10
<PAGE>11
THE LORAIN NATIONAL BANK
EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
December 31, 1995 and 1994
(1) Description of the Plan
-----------------------
The following description of The Lorain National Bank Employee Stock
Ownership Plan (Plan) provides only general information. Participants
should refer to the Plan agreement for a more complete description of
the Plan's provisions.
(a) General
-------
The Plan is a defined contribution plan sponsored by The Lorain
National Bank (Bank), a wholly owned subsidiary of LNB
Bancorp, Inc., covering substantially all employees of the Bank.
An employee is eligible to participate in the Plan after the
attainment of age 21 and completion of one year of service, as
defined in the Plan. The Plan is subject to the provisions of the
Employee Retirement Income Security Act of 1974 (ERISA).
Under the terms of the Plan, the Trust Department of the Bank acts
as trustee for the Plan and, as such, manages a trust fund which
includes all of the Plan's assets. The trustee has been granted
discretionary authority concerning purchases and sales of
investments in the trust fund made from employer contributions.
(b) Bank Contributions
------------------
The amount of the contribution is determined by the Bank's board of
directors in its absolute discretion. The Bank is not required to
make a contribution in any specific year. Contributions are
allocated to participants' accounts in the proportion each
participant's annual compensation bears to the total annual
compensation of all participants for that plan year.
(c) Voluntary Contributions
-----------------------
The Plan does not permit voluntary contributions.
(d) Vesting
-------
Each participant's vested interest in the Bank's contribution is
determined based on the number of years of service, as defined by
the Plan. Forfeitures of nonvested employer contributions are made
available first to reinstate previously forfeited account balances
of former participants. The remaining forfeitures, if any, are used
to reduce the contribution of the Bank for the plan year in which
such forfeitures occur.
(Continued)
11
<PAGE>12
THE LORAIN NATIONAL BANK
EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
(e) Distributions Upon Termination of Employment
--------------------------------------------
A participant whose employment terminates by reason of retirement
on their early retirement date or on their normal retirement
date, receives their vested benefits. The participant may
elect distribution of their vested benefits either in a single
distribution or in annual, semiannual, quarterly, or monthly
installments.
A participant whose employment is terminated for any reason other
than those designated above may receive a single distribution of
their vested benefits.
(f) Plan Termination
----------------
Although it has not expressed any intention to do so, the Bank has
the right to terminate the Plan subject to the provisions set
forth in ERISA. In the event of Plan termination, the assets of
the Plan will be allocated as prescribed by ERISA and its related
regulations.
(g) Plan Administrator
------------------
The plan administrator is the president and chief executive officer
of the Bank.
(2) Summary of Significant Accounting Policies
------------------------------------------
(a) Basis of Presentation
---------------------
The accompanying financial statements of the Plan have been prepared
on an accrual basis of accounting.
(b) Investments
-----------
The fair value of investments and changes therein are determined
through the use of current quoted market values. Purchases and
sales are recorded on a trade date basis. Interest income is
recorded on the accrual basis.
(c) Use of Estimates in the Preparation of Financial Statements.
------------------------------------------------------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect reported amounts. Actual results could
differ from those estimates.
(Continued)
12
<PAGE>13
THE LORAIN NATIONAL BANK
EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
(3) Investments
-----------
The following table presents the fair values of investments at December
31, 1995 and 1994:
1995 1994
-------------------- --------------------
Number of Number of
Shares or Fair Shares or Fair
Units Value Units Value
--------- ----- --------- -----
Common stock
LNB Bancorp, Inc. 86,849 $ 2,388,348 57,466 $ 1,731,163
Mutual funds
Benchmark Mutual Fund - - 9,608 96,275
United States Treasury Bills
$200,000, 5.830%, due
March 9, 1995 - - - 197,910
$200,000, 6.330%, due
June 8, 1995 - - - 194,490
$200,000, 5.200%, due
July 27, 1995 - - - 192,520
United States Treasury Notes
$150,000, 4.250%, due
December 31, 1995 - - - 145,687
$150,000, 6.875%, due
October 31, 1996 - 151,969 - 147,938
$100,000, 4.375%, due
November 15, 1996 - 99,312 - 94,328
--------- ---------
Total investments $ 2,639,629 $ 2,800,311
========= =========
During the years ended December 31, 1995 and 1994, the Plan's investments
(including investments bought, sold, as well as held during the year)
appreciated (depreciated) in value by $286,935 and $197,709,
respectively, as follows:
1995 1994
---- ----
LNB Bancorp, Inc. $ 260,628 220,987
Mutual funds 9,992 (6,190)
United States government securities 16,315 (17,088)
------- -------
$ 286,935 197,709
======= =======
(4) Administrative Expenses
-----------------------
The administrative expenses of the Plan are paid by the Bank.
(5) Federal Income Taxes
--------------------
The Plan has obtained a favorable determination letter under the
provisions of Section 401.1(b)(3) of the Internal Revenue Code and
is exempt from federal income taxes.
13
<PAGE>14
Schedule 1
----------
THE LORAIN NATIONAL BANK
EMPLOYEE STOCK OWNERSHIP PLAN
EIN: 34-0869480
Plan Number: 002
Item 27a - Assets Held for Investment Purposes
(At the end of the Plan Year)
December 31, 1995
Column A Column B Column C Column D
- -------- ------------------ -------------------------- -------------
Description of Investment
Identity of Issue, Including Maturity Date,
Borrower, Lessor, Rate of Interest, Collateral,
or similiar party Par or Maturity Value Cost
------------------ -------------------------- -------------
* LNB Bancorp, Inc. 86,849 shares of common $ 1,558,248
stock -------------
Lorain National Bank Mututal Funds
Treasury Trust Fund 694,122
-------------
United States Treasury United States Treasury Notes
$150,000 par value, due
October 31, 1996 149,987
$100,000 par value, due
November 15, 1996 99,819
--------------
Total United States government securities 249,806
--------------
Total investments $ 2,502,176
==============
Item 27a - Assets Held for Investment Purposes Continued
Column A Column B Column C Column E
- -------- ------------------ -------------------------- -------------
Description of Investment
Identity of Issuer Including Maturity Date,
Borrower, Lessor Rate of Interest, Collateral, Current
or Similiar Party Par or Maturity Value Value
------------------ -------------------------- -------------
* LNB Bancorp, Inc. 86,849 shares of common $ 2,388,348
stock -------------
Lorain National Bank Mututal Funds
Treasury Trust Fund 694,122
-------------
United States Treasury United States Treasury Notes
$150,000 par value, due
October 31, 1996 151,969
$100,000 par value, due
November 15, 1996 99,312
--------------
Total United States government securities 251,281
--------------
Total investments $ 3,333,751
==============
*Party-in-interest
See accompanying independent auditor's report.
14
<PAGE>15
Schedule 2
----------
THE LORAIN NATIONAL BANK
EMPLOYEE STOCK OWNERSHIP PLAN
EIN: 34-0869480
Plan Number: 002
Item 27e - Party-in-Interest Transactions
Year ended December 31, 1995
Transactions in common stock of LNB Bancorp Inc., 100 percent owner of the Bank,
during the year ended December 31, 1995:
Number of Fair
Shares Value
--------- ----------
Balance at December 31, 1994 57,466 $ 1,731,163
Stock split - 5 for 4 13,845 -
Purchases 18,958 499,292
Distributions (3,420) (102,735)
Net appreciation - 260,628
------ ----------
Balance at December 31, 1995 86,849 $ 2,388,348
====== ==========
See accompanying independent auditors' report.
15
<PAGE>16
Schedule 3
----------
THE LORAIN NATIONAL BANK
EMPLOYEE STOCK OWNERSHIP PLAN
EIN: 34-0860480
Plan Number: 002
Item 27d - Reportable Transactions
December 31, 1995
Series transactions, when aggregated, involving an amount in excess of 5 percent
of the current value of plan assets:
Column A Column B Column C Column D Column E
- ---------------------- ---------------------- --------- -------- -------------
Total Dollar
Identity of Description Number of Number Value of
Party Involved of Assets Purchases of Sales Purchases
- ---------------------- ---------------------- --------- -------- ------------
LNB Bancorp, Inc. LNB Bancorp, Inc. 8 - $499,291
Common Stock
United States Treasury United States Treasury
Notes - 4 -
Lorain National Bank Benchmark Mutual Fund - 1 -
Lorain National Bank Treasury Trust Fund 26 - $1,083,245
Lorain National Bank Treasury Trust Fund - 22 -
Item 27d - Reportable Transactions Continued
Column B Column F Column G Column H Column I
- ---------------------- ------------ --------- ---------------- --------
Total Dollar Current Value of
Description Value of Cost of Asset on Net Gain
of Assets Sales Asset Transaction Date or (Loss)
- ---------------------- ------------ --------- ---------------- ---------
LNB Bancorp, Inc. - - $499,291 -
Common Stock
United States Treasury
Notes $581,761 $580,136 $581,761 $1,625
Benchmark Mutual Fund $106,267 $100,000 $106,267 $6,267
Treasury Trust Fund - - $1,083,245 -
Treasury Trust Fund $593,668 $593,668 $593,668 -
See accompanying independent auditor's report.
16
<PAGE>17
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the plan administrator has duly caused this annual report to be signed
on its behalf by the undersigned hereunto duly authorized.
THE LORAIN NATIONAL BANK EMPLOYEE STOCK OWNERSHIP PLAN
------------------------------------------------------
(Name of Plan)
Date: June 24, 1996 By: /s/ Gregory D. Friedman
------------- -----------------------
Gregory D. Friedman
Senior Vice President
Chief Operating Officer and
Chief Financial Officer
/s/ Mitchell J. Fallis
----------------------
Mitchell J. Fallis
Vice President and
Chief Accounting Officer
17
<PAGE>18
The Lorain National Bank
Employee Stock Ownership Plan
Exhibit to Form 11 - K
(for the fiscal year ended December 31, 1995)
S - K Reference Number (24)
Consent of Independent Accountants.
18
<PAGE>19
(LETTERHEAD)
(LOGO)
KPMG Peat Marwick LLP
1500 National City Center
1900 East Ninth Street
Cleveland, OH 44114-3495
Consent of Independent Accountants
----------------------------------
The Board of Directors
LNB Bancorp, Inc.:
We consent to the incorporation by reference in the Registration Statement
No. 33-65036 of LNB Bancorp, Inc. of our report dated April 5, 1996, relating
to the statements of assets available for distribution to participants of
The Lorain National Bank Employee Stock Ownership Plan as of December 31,
1995, and 1994, and the related statements of changes in assets available
for distribution to participants for the years then ended, which report
appears in Amendment No. 1 to the 1995 annual report on Form 10-K of
LNB Bancorp, Inc.
/s/ KPMG Peat Marwick LLP
Cleveland, Ohio
June 24, 1996
(LOGO)
Member Firm of
Klynveld Peat Marwick Goerdeler
19
<PAGE>20
LNB Bancorp, Inc.
Exhibit to Form 10 - K/A
(for the fiscal year ended December 31, 1995)
S - K Reference Number (99.2)
Annual report on Form 11-K of The Lorain National Bank
Stock Purchase Plan (registration number 33-65036)
for the plan year ended December 31, 1995 filed
as an amendment to the annual report on Form 10-K.
20
<PAGE>21
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE, SAVINGS AND
SIMILAR PLANS PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
[ X ] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1995
Note: This Form 11-K is being filed as an amending exhibit to the Form 10-K
of LNB Bancorp, Inc. for the fiscal year ended December 31, 1995
pursuant to Rule 15d-21, therefore no fee is required.
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
---------------- -----------
Commission file number 0-13203
THE LORAIN NATIONAL BANK STOCK PURCHASE PLAN
--------------------------------------------
(Full title of the plan)
Lorain National Bank 457 Broadway Lorain, Ohio 44052-1769
-------------------------------------------------------------
(Name of issuer of the securities held pursuant to the plan and
the address of its principal executive office)
21
<PAGE>22
REQUIRED INFORMATION
Audited plan financial statements and schedules prepared in accordance with
the financial reporting requirements of the Employee Retirement Income
Securities Act of 1974, as amended, are filed herewith in lieu of the
requirements of an audited statement of financial condition and statement of
income and changes in plan equity.
Financial Statements and Exhibits
A) The following financial statements and schedules are filed as
part of this annual report:
1) Statements of Assets Available for Distribution to
Participants - December 31, 1995 and 1994
2) Statements of Changes in Assets Available for Distribution
to Participants - Years ended December 31, 1995 and 1994
3) Notes to Financial Statements - December 31, 1995 and 1994
4) Schedule 1 - Item 27a - Assets Held for Investment Purposes -
December 31, 1995
5) Schedule 2 - Item 27e - Party-in-Interest Transactions -
Year ended December 31, 1995
6) Schedule 3 - Item 27d - Reportable Transactions -
Year ended December 31, 1995
B) The following exhibit is filed as part of this annual
report:
24. Consent of Independent Accountants
22
<PAGE>23
(COVER EMBOSSED WITH LOGO)
KPMG Peat Marwick LLP
1500 National City Center
1900 East Ninth Street
Cleveland, OH 44114-3495
The Lorain National Bank
Stock Purchase Plan
Financial Statements and Schedules
December 31, 1995 and 1994
(With Independent Auditors' Report Thereon)
23
<PAGE>24
(LETTERHEAD)
(LOGO)
KPMG Peat Marwick LLP
1500 National City Center
1900 East Ninth Street
Cleveland, OH 44114-3495
Independent Auditors' Report
----------------------------
The Board of Directors
The Lorain National Bank
Sponsor of The Lorain National Bank
Stock Purchase Plan:
We have audited the accompanying statements of assets available for
distribution to participants of The Lorain National Bank Stock Purchase
Plan (Plan) as of December 31, 1995 and 1994, and the related statements
of changes in assets available for distribution to participants for the
years then ended. These financial statements are the responsibility of
the Plan's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the assets available for distribution to
participants of the Plan as of December 31, 1995 and 1994, and the changes
in those assets for the years then ended in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of
assets held for investment purposes at December 31, 1995 and party-in-interest
and reportable transactions for the year ended December 31, 1995, are
presented for purposes of additional analysis and are not a required
part of the basic financial statements, but are supplementary information
required by the Department of Labor's Rules and Regulations for Reporting
and Disclosure under the Employee Retirement Income Security Act of 1974.
The supplemental schedules have been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion,
are fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
/s/ KPMG Peat Marwick LLP
Cleveland, Ohio
April 5, 1996
(LOGO)
Member Firm of
Klynveld Peat Marwick Goerdeler
24
<PAGE>25
THE LORAIN NATIONAL BANK
STOCK PURCHASE PLAN
Statements of Assets Available for
Distribution to Participants
December 31, 1995 and 1994
1995 1994
---- ----
Assets
Short-term cash investments $ 331,059 105,805
Investment, at fair value
LNB Bancorp, Inc. common stock 3,279,925 3,296,247
Dividends and interest receivable 20,332 18,868
--------- ---------
Assets available for distribution
to participants $ 3,631,316 3,420,920
========= =========
See accompanying notes to financial statements.
25
<PAGE>26
THE LORAIN NATIONAL BANK
STOCK PURCHASE PLAN
Statements of Changes in Assets Available for
Distribution to Participants
Years ended December 31, 1995 and 1994
1995 1994
---- ----
Additions
Investment income
Dividend and interest income $ 79,770 71,294
Net appreciation in fair value of investment 417,860 480,289
--------- ---------
Total investment income 497,630 551,583
--------- ---------
Contributions
Employer 105,166 104,509
Participants 210,313 209,000
--------- ---------
Total contributions 315,479 313,509
--------- ---------
Total additions 813,109 865,092
Deductions
Distributions to participants (602,713) (344,003)
--------- ---------
Increase in assets available for distribution
to participants 210,396 521,089
Assets available for distribution to participants
Beginning of year 3,420,920 2,899,831
--------- ---------
End of year $ 3,631,316 3,420,920
========= =========
See accompanying notes to financial statements.
26
<PAGE>27
THE LORAIN NATIONAL BANK
STOCK PURCHASE PLAN
Notes to Financial Statements
December 31, 1995 and 1994
(1) Description of the Plan
-----------------------
The following description of The Lorain National Bank Stock Purchase
Plan (Plan) provides only general information. Participants should refer
to the Plan agreement for a more complete description of the Plan's
provisions.
(a) General
-------
The Plan is a defined contribution plan sponsored by The Lorain
National Bank (Bank), a wholly owned subsidiary of LNB Bancorp,
Inc., covering substantially all employees of the Bank. An employee
is eligible to participate in the Plan on the January 1 or July 1
after the attainment of age 21 and completion of one year of service,
as defined in the Plan. The Plan is subject to the provisions of the
Employee Retirement Income Security Act of 1974 (ERISA).
Under the terms of the Plan, the Trust Department of the Bank acts
as trustee for the Plan and, as such, manages a trust fund which
includes all of the Plan's assets. The Plan stipulates that employer
and employee contributions will be invested in units of the LNB
Bancorp, Inc. stock fund which primarily consists of stock of
LNB Bancorp, Inc.
(b) Bank Contributions
------------------
The Bank is required to contribute to the Plan for each month, out
of its current or accumulated earnings only, an amount equal to 50
percent of the respective participants' contributions for each
month. In 1994, the contribution year was changed to reflect the
calendar year. As a result, thirteen monthly contributions were
made in 1994.
(c) Participants' Contributions
---------------------------
A participant can make, through payroll deductions, contributions
of one (1) to six (6) percent (in whole integers) of their
compensation. Changes in the amount of compensation paid to a
participant will automatically effect a change in the amount of
the contribution.
(d) Vesting of Contributions
------------------------
Each participant has a fully vested interest in the Bank's
and their contributions as of the date payments are made.
(Continued)
27
<PAGE>28
THE LORAIN NATIONAL BANK
STOCK PURCHASE PLAN
Notes to Financial Statements
(e) Withdrawals While Employed
--------------------------
At any time, subject to certain restrictions, a participant may elect
to withdraw all or a portion of their units.
(f) Distributions Upon Termination of Employment
--------------------------------------------
A participant whose employment terminates by reason of retirement
on their early retirement date or on their normal retirement date,
receives all units credited to their account. The participant may
elect distribution of the units either in a single distribution or
in annual, semiannual, quarterly, or monthly installments.
A participant whose employment is terminated for any reason other
than those designated above may receive a single distribution of
all units credited to the participant.
(g) Plan Termination
----------------
Although it has not expressed any intention to do so, the Bank has
the right to terminate the Plan subject to the provisions set
forth in ERISA. In the event of Plan termination, the assets of
the Plan will be allocated as prescribed by ERISA and its related
regulations.
(h) Plan Administrator
------------------
The plan administrator is the president and chief executive officer
of the Bank.
(2) Summary of Significant Accounting Policies
------------------------------------------
(a) Basis of Presentation
---------------------
The accompanying financial statements of the Plan have been
prepared on an accrual basis of accounting.
(b) Investment
----------
The fair value of the investment in LNB Bancorp, Inc. common stock
and changes therein are determined through the use of current quoted
market values. Purchases and sales are recorded on a trade date
basis. Interest income is recorded on the accrual basis.
(c) Use of Estimates in the Preparation of Financial Statements
-----------------------------------------------------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect reported amounts. Actual results could
differ from those estimates.
(Continued)
28
<PAGE>29
THE LORAIN NATIONAL BANK
STOCK PURCHASE PLAN
Notes to Financial Statements
(3) Federal Income Taxes
--------------------
The Internal Revenue Service issued its latest determination letter on
September 17, 1985 which stated that the Plan and its underlying trust
qualify under the applicable provisions of the Internal Revenue Code
and therefore are exempt from federal income taxes. The Plan and its
underlying trust have subsequently been amended to conform with tax law
changes. In 1995, the amended Plan instruments were submitted to the
Internal Revenue Service for a determination that the Plan continues to
qualify as exempt from federal income taxes; however, a response is not
anticipated until the mid-year of 1996. In the opinion of the plan
administrator, the Plan and its underlying trust have operated
within the terms of the Plan and remain qualified under the applicable
provisions of the Internal Revenue Code.
(4) Administrative Expenses
-----------------------
The administrative expenses of the Plan are paid by the Bank.
(5) Plan Units
----------
The Plan assigned a total number of 902,497.2 and 983,458.7 units to
participants at December 31, 1995 and 1994, with a per unit value of
$4.0236 and $3.4785, respectively.
29
<PAGE>30
Schedule 1
----------
THE LORAIN NATIONAL BANK
STOCK PURCHASE PLAN
EIN: 34-0860480
PLAN NUMBER: 003
Item 27a - Assets Held for Investment Purposes
(At the End of the Plan Year)
December 31, 1995
Column A Column B Column C Column D Column E
- -------- ------------------ ------------------------- ---------- -----------
Description of Investment
Identity of Issue, Including Maturity Date,
Borrower, Lessor, Rate of Interest, Collater- Current
or Similiar Party al, Par or Maturity Value Cost Value
------------------ ------------------------- ---------- -----------
* LNB Bancorp, Inc. 119,270 shares of common $1,031,239 $3,279,925
stock
Lorain National Bank Treasury Trust Fund $ 331,059 $ 331,059
* Party-in-interest
See accompanying independent auditors' report.
30
<PAGE>31
Schedule 2
----------
THE LORAIN NATIONAL BANK
STOCK PURCHASE PLAN
EIN: 34-0869480
PLAN NUMBER: 003
Item 27e - Party-in-Interest Transactions
Year ended December 31, 1995
Transactions in common stock of LNB Bancorp, Inc., 100 percent owner of the
Bank, during the year ended December 31, 1995:
Number
of Shares Fair Value
--------- ------------
Balance at December 31, 1994 109,419.0 $ 3,296,247
Stock split 25,538.5 -
Purchases 5,552.0 153,928
Distributions (21,238.0) (588,068)
Sale of fractional shares (1.5) (41)
Net appreciation - 417,859
---------- ------------
Balance at December 31, 1995 119,270.0 $ 3,279,925
========== ============
See accompanying independent auditors' report.
31
<PAGE>32
Schedule 3
----------
THE LORAIN NATIONAL BANK
STOCK PURCHASE PLAN
EIN: 34-0869480
PLAN NUMBER: 003
Item 27d - Reportable Transactions
December 31, 1995
Series transactions, when aggregated, involving an amount in excess of 5 percent
of the current value of plan assets:
Column A Column B Column C Column D Column E
- -------------------- ----------------- ---------- -------- ------------
Total Dollar
Identity of Description Number of Number Value of
Party Involved of Assets Purchases of Sales Purchases
- -------------------- ----------------- ---------- -------- ------------
LNB Bancorp, Inc. LNB Bancorp, Inc.
Common Stock 5 - $153,928
Lorain National Bank Treasury Trust Fund 42 $391,643
Lorain National Bank Treasury Trust Fund - 30 -
Item 27d - Reportable Transactions Continued
Column B Column F Column G Column H Column I
- -------------------- ------------- --------- ----------------- ---------
Total Dollar Current Value of
Description Value of Cost of Asset on Net Gain
of Assets Sales Assets Transaction Date or (Loss)
- -------------------- ------------- --------- ----------------- ---------
LNB Bancorp, Inc.
Common Stock - - $153,928 -
Treasury Trust Fund - - $391,643 -
Treasury Trust Fund $166,389 $166,389 $166,389 -
See accompanying independent auditors' report.
32
<PAGE>33
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the plan administrator has duly caused this annual report to be signed
on its behalf by the undersigned hereunto duly authorized.
THE LORAIN NATIONAL BANK STOCK PURCHASE PLAN
--------------------------------------------
(Name of Plan)
Date: June 24, 1996 By: /s/ Gregory D. Friedman
------------- ----------------------------
Gregory D. Friedman
Senior Vice President
Chief Operating Officer and
Chief Financial Officer
/s/ Mitchell J. Fallis
----------------------------
Mitchell J. Fallis
Vice President and
Chief Accounting Officer
33
<PAGE>34
The Lorain National Bank
Stock Purchase Plan
Exhibit to Form 11 - K
(for the fiscal year ended December 31, 1995)
S - K Reference Number (24)
Consent of Independent Accountants.
34
<PAGE>35
(LETTERHEAD)
(LOGO)
KPMG Peat Marwick LLP
1500 National City Center
1900 East Ninth Street
Cleveland, Ohio 44114-3495
Consent of Independent Accountants
----------------------------------
The Board of Directors
LNB Bancorp, Inc.:
We consent to the incorporation by reference in the Registration Statement
No. 33-65036 of LNB Bancorp, Inc. of our report dated April 5, 1996, relating
to the statements of assets available for distribution to participants of
The Lorain National Bank Stock Purchase Plan as of December 31, 1995 and
1994, and the related statements of changes in assets available for
distribution to participants for the years then ended, which report appears
in Amendment No. 1 to the 1995 annual report on Form 10-K of LNB Bancorp, Inc.
/s/ KPMG Peat Marwick LLP
Cleveland, Ohio
June 24, 1996
(LOGO)
Member Firm of
Klynveld Peat Marwick Goerdeler
35
