<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 March 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 0-13203
LNB Bancorp, Inc.
(Exact name of the registrant as specified on its charter)
Ohio 34-1406303
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
457 Broadway, Lorain, Ohio 44052 - 1769
(Address of principal executive offices) (Zip Code)
(440) 244 - 6000
Registrant's telephone number, including area code
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months,
and (2) has been subject to such requirements for the past 90 days.
YES X NO
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Outstanding at April 27, 2000: 4,122,675 shares
Class of Common Stock: $1.00 par value
<PAGE>2
LNB Bancorp, Inc.
Quarterly Report on From 10-Q
Quarter Ended March 31, 2000
Part I - Financial Information
Item 1 - Financial Statements
Interim financial information required by Regulation 210.10-01 of
Regulation S-X is included in this Form 10-Q as referenced below:
Page
Number(s)
Condensed Consolidated Balance Sheets 3
Condensed Consolidated Statements of Income 5
Condensed Consolidated Statements
of Cash Flows 7
Notes to the Condensed Consolidated Financial
Statements 9
Item 2 - Management's Discussion and Analysis
of Financial Condition and Results of
Operations 13
Item 3 - Quantitative and Qualitative Disclosures
about Market Risk 18
Part II - Other Information
Item 1 - Legal Proceedings 19
Item 2 - Changes in Securities 19
Item 3 - Defaults upon Senior Securities 19
Item 4 - Submission of matters to a Vote of
Security Holders 19
Item 5 - Other Information 20
Item 6 - Exhibits and Reports on Form 8-K 20
Signatures 20
Appendix Index 21
<PAGE>3
FORM 10-Q LNB BANCORP, INC.
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
MARCH 31, DECEMBER 31,
CONDENSED CONSOLIDATED BALANCE SHEETS 2000 1999
------------- --------------
(Unaudited) (See Note 1)
ASSETS:
Cash and due from banks $ 24,547,000 $ 28,023,000
Federal funds sold and short-term investments 3,734,000 9,320,000
Securities:
Available for sale, at fair value 77,258,000 75,728,000
Held to maturity, at cost (fair value
$42,014,000 and $41,819,000, respectively) 44,869,000 44,642,000
Federal Home Loan Bank and Federal Reserve
Bank stock, at cost 2,996,000 2,949,000
-------------- --------------
Total securities 125,123,000 123,319,000
-------------- --------------
Loans:
Portfolio loans 418,516,000 409,971,000
Loans available for sale 9,329,000 9,545,000
-------------- --------------
Total loans 427,845,000 419,516,000
Reserve for loan losses (4,790,000) (4,667,000)
-------------- --------------
Net loans 423,055,000 414,849,000
-------------- --------------
Bank premises and equipment, net 11,495,000 11,253,000
Intangible assets 4,145,000 4,245,000
Accrued interest receivable 3,601,000 4,057,000
Other assets 4,565,000 4,449,000
Other foreclosed assets -0- 96,000
-------------- --------------
TOTAL ASSETS $600,265,000 $599,611,000
============== ==============
STATEMENT CONTINUED ON NEXT PAGE
<PAGE>4
STATEMENT CONTINUED FROM PREVIOUS PAGE
LIABILITIES AND STOCKHOLDERS' EQUITY:
Deposits:
Demand and other noninterest-bearing
deposits $ 94,265,000 $ 80,654,000
Savings and passbook accounts 198,406,000 191,928,000
Certificates of deposit 209,299,000 184,249,000
-------------- --------------
Total deposits 501,970,000 456,831,000
-------------- --------------
Securities sold under repurchase agreements
and other short-term borrowings 15,320,000 52,122,000
Federal Home Loan Bank advances, short-term 5,000,000 15,000,000
Federal Home Loan Bank advances, long-term 19,345,000 19,345,000
Accrued interest payable 1,609,000 1,510,000
Accrued taxes, expenses, and
other liabilities 5,115,000 3,750,000
-------------- --------------
Total liabilities 548,359,000 548,558,000
-------------- --------------
Shareholders' equity:
Preferred stock, no par value: Shares
authorized 1,000,000, and shares
outstanding, none
Common stock $1.00 par: Shares authorized
15,000,000, Shares issued 4,227,161 and
4,227,161, respectively and Shares
outstanding 4,127,161 and 4,127,161,
respectively 4,227,000 4,227,000
Additional capital 22,685,000 22,685,000
Retained earnings 29,047,000 28,057,000
Accumulated other comprehensive (loss) (1,153,000) (1,016,000)
Treasury stock at cost, 100,000
and 100,000 shares, respectively (2,900,000) (2,900,000)
-------------- --------------
Total shareholders' equity 51,906,000 51,053,000
-------------- --------------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $600,265,000 $599,611,000
============== ==============
See notes to unaudited condensed consolidated financial statements.
<PAGE>5
FORM 10-Q LNB BANCORP, INC.
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
THREE MONTHS ENDED
CONDENSED CONSOLIDATED STATEMENTS MARCH 31,
OF INCOME (UNAUDITED) ----------------------------
2000 1999
INTEREST INCOME: ----------------------------
Interest and fees on loans:
Taxable $ 9,022,000 $ 7,972,000
Tax-exempt 5,000 8,000
Interest and dividends on securities:
U.S. Treasury securities 156,000 409,000
U.S. Government agencies and corporations 1,559,000 1,264,000
States and political subdivisions 61,000 54,000
Other debt and equity securities 97,000 38,000
Interest on Federal funds sold and other
interest-bearing instruments 39,000 33,000
------------- ------------
TOTAL INTEREST INCOME 10,939,000 9,778,000
------------- -------------
INTEREST EXPENSE:
Interest on Deposits:
Time certificates of $100,000 and over 612,000 611,000
Other deposits 2,960,000 2,437,000
Interest on securities sold under repurchase
agreements and other short-term borrowings 436,000 237,000
Interest on Federal Home Loan Bank advances 376,000 290,000
------------- ------------
TOTAL INTEREST EXPENSE 4,384,000 3,575,000
------------- ------------
NET INTEREST INCOME 6,555,000 6,203,000
Provision for loan losses 300,000 200,000
NET INTEREST INCOME AFTER PROVISION ------------- ------------
FOR LOAN LOSSES 6,255,000 6,003,000
------------- ------------
OTHER INCOME:
Investment and Trust Services Division income 502,000 470,000
Service charges on deposit accounts 762,000 677,000
Other service charges, exchanges and fees 653,000 592,000
Other operating income 14,000 11,000
------------- ------------
TOTAL OTHER INCOME 1,931,000 1,750,000
STATEMENT CONTINUED ON NEXT PAGE
<PAGE>6
STATEMENT CONTINUED FROM PREVIOUS PAGE
OTHER EXPENSES:
Salaries and employee benefits 2,492,000 2,395,000
Net occupancy expense of premises 386,000 392,000
Furniture and equipment expenses 573,000 608,000
Supplies and postage 208,000 256,000
Ohio franchise tax 169,000 151,000
Credit card and merchant expenses 250,000 177,000
Other operating expenses 1,122,000 1,029,000
------------- ------------
TOTAL OTHER EXPENSES 5,200,000 5,008,000
------------- ------------
INCOME BEFORE INCOME TAXES 2,988,000 2,745,000
INCOME TAXES 1,008,000 912,000
------------- ------------
NET INCOME $ 1,980,000 $ 1,833,000
============= ============
PER SHARE DATA:
BASIC EARNINGS PER SHARE $ .48 $ .44
======= =======
DILUTED EARNINGS PER SHARE $ .48 $ .44
======= =======
DIVIDENDS DECLARED PER SHARE $ .24 $ .22
======= =======
See notes to unaudited condensed consolidated financial statements.
<PAGE>7
FORM 10-Q LNB BANCORP, INC.
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
THREE MONTHS ENDED
CONDENSED CONSOLIDATED STATEMENTS MARCH 31,
OF CASH FLOWS (UNAUDITED) ----------------------------
2000 1999
CASH FLOWS FROM OPERATING ACTIVITIES: ----------------------------
Interest received $11,370,000 $10,361,000
Other income received 2,028,000 1,842,000
Interest paid (4,285,000) (3,522,000)
Cash paid for salaries and
employee benefits (2,623,000) (1,842,000)
Net occupancy expense of premises paid (306,000) (290,000)
Furniture and equipment expenses paid (212,000) (206,000)
Cash paid for supplies and postage (208,000) (256,000)
Cash paid for other operating expenses (667,000) (463,000)
Federal income taxes paid (250,000) -0-
------------- -------------
NET CASH PROVIDED BY OPERATING
ACTIVITIES 4,847,000 5,624,000
------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturities of securities
held to maturity -0- 9,000
Proceeds from maturities of securities
available for sale 4,000,000 5,000,000
Purchases of securities held to maturity (78,000) (5,226,000)
Purchase of securities available
for sale (5,941,000) (4,000,000)
Net (increase) in loans made to customers (8,591,000) (26,112,000)
Purchases of bank premises and equipment
and intangible assets (701,000) (98,000)
Proceeds from liquidation of other
foreclosed assets 96,000 767,000
------------- -------------
NET CASH USED IN INVESTING ACTIVITIES (11,215,000) (29,660,000)
------------- -------------
STATEMENT CONTINUED ON NEXT PAGE
<PAGE>8
STATEMENT CONTINUED FROM PREVIOUS PAGE
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (decrease) in demand and other
noninterest-bearing deposits 13,611,000 (6,450,000)
Net increase (decrease) in savings and
passbook deposits 6,478,000 (3,352,000)
Net increase in certificates of deposit 25,050,000 17,674,000
Net increase (decrease) in securities sold
under repurchase agreements and other
short-term borrowings (36,802,000) 6,607,000
Proceeds from Federal Home Loan
Bank advances -0- 2,300,000
Payment on Federal Home Loan advances (10,000,000) -0-
Proceeds from exercise of stock options -0- 1,000
Dividends paid (1,031,000) (1,031,000)
------------- -------------
NET CASH PROVIDED (USED) BY FINANCING
ACTIVITIES (2,694,000) 15,749,000
------------- -------------
NET (DECREASE) IN CASH AND
CASH EQUIVALENTS (9,062,000) (8,287,000)
CASH AND CASH EQUIVALENTS AT BEGINNING
OF YEAR 37,343,000 32,801,000
------------- -------------
CASH AND CASH EQUIVALENTS AT END OF
QUARTER $28,281,000 $24,514,000
============= =============
RECONCILIATION OF NET INCOME TO
NET CASH PROVIDED BY OPERATING ACTIVITIES:
NET INCOME $1,980,000 $1,833,000
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 441,000 504,000
Amortization of intangible assets 100,000 106,000
Amortization of deferred loan fees
and costs, net 163,000 619,000
Provision for loan losses 300,000 200,000
Decrease in accrued interest receivable 456,000 328,000
(Increase) decrease in other assets (169,000) 263,000
Increase in accrued interest payable 99,000 53,000
Increase in accrued taxes,
expenses and other liabilities 1,364,000 1,626,000
Others, net 113,000 92,000
-------------- -------------
NET CASH PROVIDED BY OPERATING ACTIVITIES $4,847,000 $5,624,000
============== ==============
See notes to unaudited condensed consolidated financial statements.
<PAGE>9
FORM 10-Q LNB Bancorp, Inc.
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INTRODUCTION
The following areas of discussion pertain to the unaudited condensed
consolidated financial statements of LNB Bancorp, Inc. (The Parent
Company) and its wholly-owned subsidiary, Lorain National Bank (The Bank)
at March 31, 2000, compared to December 31, 1999 and the results of its
operations and cash flows for the three months ended March 31, 2000
compared to the same period in 1999. The term "the Corporation" refers to
LNB Bancorp, Inc. and its wholly-owned subsidiary. It is the intent of
this discussion to provide the reader with a more thorough understanding
of the unaudited condensed consolidated financial statements and should be
read in conjunction with those unaudited condensed consolidated financial
statements.
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.
In an effort to take advantage of the recently passed Gramm-Leach-Bliley
Act, otherwise known as the financial modernization act, LNB Bancorp, Inc.
has applied for, and received, one of the first charters as a financial
holding company. The Act enables financial holding companies to engage in
business activities previously unavailable to them. The Corporation will
also be able to offer new products and services as they are developed and
approved by regulators. LNB Bancorp, Inc. is strategically reviewing its
new business opportunities under the Gramm-Leach-Bliley Act.
LNB Bancorp, Inc. achieved a significant milestone in its history by the
listing of its common stock on the NASDAQ Stock Market. The NASDAQ
listing will provide greater liquidity for our stock while enhancing our
visibility in the investment community.
FORWARD-LOOKING STATEMENTS
When used in this Form 10Q, the words or phrases "are expected to", "will
continue", "is anticipated", "estimate", "projected", or similar
expressions are intended to identify "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act. Such
statements are subject to certain risks and uncertainties including
changes in economic conditions in the Corporation's market area, changes
in policies by regulatory agencies, fluctuations in interest rates, demand
for loans, and competition, that could cause actual results to differ
materially from historical earnings and those presently anticipated or
projected.
BASIS OF PRESENTATION
The unaudited condensed consolidated balance sheet as of March 31, 2000,
<PAGE>10
the unaudited condensed consolidated statements of income and cash flows
for the three months ended March 31, 2000 and 1999 are prepared in
accordance with generally accepted accounting principles. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. 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.
The consolidated balance sheet at December 31, 1999 has been taken from
the audited Financial Statements and condensed. 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, 1999 Annual Report to Shareholders.
The results of operations for the period ended March 31, 2000 are not
necessarily indicative of the operating results for the full year.
RESERVE FOR LOAN LOSSES
Because some loans may not be repaid in full, a reserve for loan losses is
recorded. This reserve is increased by provisions charged to earnings and
is reduced by loan charge-offs, net of recoveries. Estimating the risk of
loss on any loan is necessarily subjective. Accordingly, the reserve is
maintained by Management at a level considered adequate to cover loan
losses that are currently anticipated based on Management's evaluation of
several key factors including information about specific borrower
situations, their financial position and collateral values, current
economic conditions, changes in the mix and levels of the various types of
loans, past charge-off experience and other pertinent information. The
reserve for loan losses is based on estimates using currently available
information, and ultimate losses may vary from current estimates due to
changes in circumstances. These estimates are reviewed periodically and,
as adjustments become necessary, they are reported in earnings in the
periods in which they become known. While Management may periodically
allocate portions of the reserve for specific problem situations, the
entire reserve is available for any charge-offs that may occur.
Charge-offs are made against the reserve for loan losses when Management
concludes that it is probable that all or a portion of a loan is
uncollectible. After a loan is charged-off, collection efforts continue
and future recoveries may occur.
A loan is considered impaired, based on current information and events, if
it is probable that the Bank will be unable to collect the scheduled
payments of principal or interest when due according to the contractual
terms of the loan agreement. The measurement of impaired loans is
generally based on the present value of the expected future cash flows
discounted at the loans initial effective interest rate, except that all
collateral-dependent loans are measured for impairment based on the fair
value of the collateral. If the loan valuation is less than the recorded
value of the loan, an impairment reserve must be established for the
difference. The impairment reserve is established by either an allocation
of the reserve for loan losses or by a provision for loan losses,
depending upon the adequacy of the reserve for loan losses.
<PAGE>11
RECLASSIFICATIONS
Certain 1999 amounts have been reclassified to conform to 2000
presentation.
2. EARNINGS PER SHARE
Earnings per share is calculated as follows:
For the Quarter ended March 31, 2000
Income Shares Per-Share
(Numerator) (Denominator) Amount
Net Income $1,980,000
Basic EPS
Income available to
common stockholders $1,980,000 4,127,161 $ .48
=====
Effect of Dilutive Securities
Incentive Stock Options -0- 3,581
---------- ---------
Dilutive EPS
Income available to common
stockholders + assumed
conversions $1,980,000 4,130,742 $ .48
========== ========= =====
For the Quarter ended March 31, 1999
Income Shares Per-Share
(Numerator) (Denominator) Amount
Net Income $1,833,000
Basic EPS
Income available to
common stockholders $1,833,000 4,122,638 $ .44
=====
Effect of Dilutive Securities
Incentive Stock Options -0- 9,298
---------- ---------
Dilutive EPS
Income available to common
stockholders + assumed
conversions $1,833,000 4,131,936 $ .44
========== ========= =====
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3. COMPREHENSIVE INCOME
The Corporation adopted SFAS No. 130 "Reporting Comprehensive Income" on
January 1, 1998. This statement requires companies to report all items
that are recognized as components of comprehensive income under accounting
standards. As required, the Corporation displays the accumulated balance
of other comprehensive income as a separate component of shareholders'
equity. The Corporation's comprehensive income for the quarters ended
March 31, 2000 and 1999 are as follows:
For the quarters ended March 31,
2000 1999
--------------------------------
Net income $1,980,000 $1,833,000
Other comprehensive income:
Unrealized (loss) on
securities available for
sale, net of tax (benefit)of
$(207,000) and $(203,000) (137,000) (394,000)
------------ ------------
Comprehensive Income $1,843,000 $1,439,000
============ ============
4. DIVIDEND REINVESTMENT AND CASH STOCK PURCHASE PLAN
The Board of Directors adopted a dividend reinvestment and cash stock
purchase plan on November 18, 1997. Under the plan, the first dividend
reinvestment and cash stock purchase date was April 1, 1998. The plan
allows shareholders to elect to use their quarterly cash dividends to
purchase shares of LNB Bancorp, Inc. common stock. Additionally, cash can
be contributed directly to the plan for the purchase of shares of common
stock with a quarterly limit of $5,000.
The dividend reinvestment plan authorized the sale of 150,000 shares of
the Corporation's authorized but previously unissued common shares to
shareholders who choose to invest all or a portion of their cash dividends
plus additional cash payments. No shares were issued by the Corporation
pursuant to the plan in the first quarter of 2000. In the first quarter
of 2000, stock was purchased in the open market at the then current market
price.
<PAGE>13
PART I - FINANCIAL INFORMATION
ITEM 2 - MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL
CONDITION & RESULTS OF OPERATIONS
FINANCIAL CONDITION
Total assets of the Corporation increased $654,000 during the first
quarter, to $600,265,000. Federal funds sold and other interest-bearing
investments decreased by $5,586,000 during the first quarter of 2000.
This decrease is the result of the bank eliminating its excess liquidity
which was built up for Y2K purposes.
The total securities portfolio increased $1,804,000 ending the first
quarter at $125,123,000. At March 31, 2000 gross unrealized gains
(losses)in the held to maturity securities portfolio were approximately
$45,000 and $(2,704,000), respectively. The decrease in the market value
of the securities portfolio is due to market interest rate fluctuations
and not due to the deterioration of the credit worthiness of debt issuers.
Net loans increased $8,206,000 during the first quarter to $423,055,000
at March 31, 2000. This increase was a result of strong loan demand in our
market. Mortgage and Commercial loan growth was particularly strong,
showing first quarter increases of $2,797,000 and $7,652,000,
respectively. Consumer loans decreased by $2,120,000 during the first
quarter of 2000. The consumer loan portfolio has decreased because the
bank has decided to allow some run-off of the indirect automobile credits.
The reserve for loan losses ended the quarter at $4,790,000 supported by a
provision for loan losses of $300,000, recoveries of $60,000 and loan
charge-offs of $237,000. The reserve for loan losses as a percentage of
ending loans was 1.12% at March 31, 2000 and 1.11% at December 31, 1999.
Corporate management believes that the reserve for loan losses as a
percentage of ending loans at March 31, 2000 remains at an appropriate
level. The ratio of the reserve for loan losses to nonperforming assets
decreased slightly to 332.8% as of March 31, 2000 from 348.5% at December
31, 1999. Corporate management believes that the current level of the
reserve for loan losses is adequate based upon quantitative analysis of
identified risks and analysis of historical trends.
The level of nonperforming assets increased by $100,000 during the first
quarter of 2000. This increase is the result of an increase in nonaccrual
loans of $196,000 as well as by a decrease in other foreclosed assets
owned in the amount of $96,000. The increase in nonaccrual loans is due to
decreases in nonaccrual principal balances of $227,000 which have been
paid off or brought current, loans charged-off in the amount of $170,000
and liquidations of nonaccrual loans of $92,000 and increases in
nonaccrual principal balances of $685,000 which includes one large
commercial loan credit of $384,000 and several small commercial and
consumer loan credits. The decrease in nonaccrual loans in the first
quarter of 2000 was due primarily to one commercial loan customer and 28
personal loan customers. The decrease in Other Foreclosed Assets in the
amount of $96,000 resulted from liquidation of one residential property.
The level of nonperforming assets remains at relatively low levels and
Corporate management believes nonperforming assets are well
collateralized.
<PAGE>14
The table below presents the level of nonperforming assets at the end of
the last four calendar quarters.
Amounts in thousands 03/31/00 12/31/99 09/31/99 06/30/99
-------- -------- -------- --------
Nonperforming Assets:
Nonaccrual $1,439 $1,243 $ 994 $ 285
Restructured 0 0 0 0
Other Foreclosed Assets 0 96 0 209
------ ------ ------ ------
Total Nonperforming Assets $1,439 $1,339 $ 994 $ 494
====== ====== ====== ======
Reserve for loan losses
to nonperforming assets 332.8% 348.5% 413.3% 764.0%
====== ====== ====== ======
Accruing loans past due
90 days $ 781 $ 555 $ 505 $ 494
====== ====== ====== ======
Potential problem loans are those loans identified on management's watch
list in which Management has some doubt as to the borrower's ability to
comply with the present repayment terms and loans which Management is
actively monitoring due to changes in the borrower's financial condition.
At March 31, 2000, potential problem loans totaled $4,461,000, a decrease
of $113,000 from the December 31, 1999 balance.
The Corporation's credit policies are reviewed and modified on an ongoing
basis in order to remain suitable for the management of credit risk within
the loan portfolio as conditions change. At March 31, 2000 there are no
significant concentrations of credit in the loan portfolio.
The Corporation had outstanding loan and credit commitments to make loans
totaling $95,893,000 and $87,614,000 at March 31, 2000 and 1999,
respectively. The increase in outstanding loan commitments results in part
from an increase in the unused portion of home equity lines of credits
from home equity loan sale programs during 1999 plus increase in loan
demand during the first quarter of 2000. Mortgage and commercial
construction loan demand is expected to increase in the second quarter of
2000 as seasonal weather conditions improve and the construction season
begins. Consumer loan demand is expected to increase in the second
quarter for home improvement and automobile loans as weather conditions
improve.
Total deposits increased $45,139,000 during the first quarter to
$501,970,000. Noninterest-bearing deposits increased to $94,265,000, at
March 31, 2000 for an increase of $13,611,000, while interest-bearing
deposits increased to $407,705,000 for an increase of $31,528,000. Federal
funds purchased and securities sold under agreements to repurchase
decreased $36,802,000 during the first quarter of 2000. Due to the
volatility of customer repurchase agreements, most funds generated by
repurchase activity enter the Corporation's earning assets as short-term
investments.
<PAGE>15
LIQUIDITY
Liquidity measures a corporation's ability to generate cash or otherwise
obtain funds at reasonable prices to fund commitments to borrowers as well
as the demand of depositors and debt holders. Principal internal sources
of liquidity for the Corporation and the Bank are cash and cash
equivalents, Federal funds sold, and the maturity structures of investment
securities and portfolio loans. Securities and loans available for sale
provide another source of liquidity through the cash flows of these
interest bearing assets as they mature or are sold.
The Corporation continues to maintain a relatively liquid position in
order to take advantage of interest rate fluctuations. As of March 31,
2000 short-term security investments with maturities of one year or less
totaled $8,433,000 which represented 6.7% of total securities. Adding
cash and due from banks of $24,547,000 and Federal Funds sold and other
short-term investments of $3,734,000, total liquid assets represented 6.1%
of total assets. The Corporation's subsidiary bank has established
short-term lines of credit at correspondent banks, the Federal Home Loan
Bank and the Federal Reserve Bank of Cleveland in the amounts of
$16,000,000, $25,000,000 and $23,000,000, respectively.
CAPITAL RESOURCES
LNB Bancorp, Inc. continues to maintain a strong capital position.
Total shareholders' equity increased to $51,904,000, at March 31, 2000.
The increase resulted primarily from $1,980,000 of net income generated
from the first quarter of operations less a cash dividend payable to
shareholders of $991,000. The increase in interest rates experienced in
the first quarter of 2000 has caused a decrease in the overall market
value of available for sale securities which resulted in a reduction of
shareholders' equity by $137,000 for the quarter ended March 31, 2000. As
of March 31, 2000, the LNB Bancorp, Inc. held 100,000 shares of common
stock as treasury stock. LNB Bancorp, Inc. purchased 2,004 of these
shares in 1998 and 97,996 shares in 1997 for a total cost of $2,900,000.
The Corporation continues to monitor growth to stay within the constraints
established by the regulatory authorities. Under Federal banking
regulations, an institution is deemed to be well-capitalized if it has a
Risk-based Tier 1 capital ratio of 6.00 percent or greater, a Risk-based
Total capital ratio of 10.00 percent or greater and a Leverage ratio of
5.00 percent or greater. The Corporation's Risk-based capital and
Leverage ratios have exceeded the ratios for a well-capitalized financial
institution for all periods presented. The Corporation's capital and
leverage ratios as of March 31, 2000 and 1999 follow together with those
ratios required for the Corporation to be considered adequately
capitalized.
MARCH 31,
---------------------
2000 1999
------- -------
Tier I capital ratio 11.87% 11.85%
Required Tier I capital ratio 4.00% 4.00%
Total capital ratio 13.03% 12.79%
Required total capital ratio 8.00% 8.00%
Leverage ratio 8.21% 8.15%
Required leverage ratio 3.00% 3.00%
<PAGE>16
On an ongoing basis the Corporation analyzes acquisition opportunities in
markets which are adjacent to or within the Corporation's current
geographical market. Corporate management believes that it's current
capital resources are sufficient to support any foreseeable acquisition
activity.
RESULTS OF OPERATIONS
Interest and fees on loans increased $1,047,000 when compared to the first
quarter of 1999. This was the result of the impact of increases in the
loan portfolio of $8,329,000 plus increases in rates. Interest and
dividends on securities was $1,873,000 for the first quarter of 2000 for
an increase of $108,000 over the same period in 1999. The first quarter
increase in interest and dividends on securities results from a net
increase in the securities portfolio of $1,804,000. Interest and
dividends on securities represented 17.1% of total interest income at
March 31, 2000 compared to 18.1% at March 31, 1999. Interest on Federal
funds sold and other interest-bearing instruments was $39,000 at March 31,
2000 compared to $13,000 at March 31, 1999. The increase resulted from
higher average balances invested in this form of financial instrument
along with higher interest rates.
Total interest expense increased by $809,000 when compared to the first
quarter of 1999. The interest expense increase was fueled by an increase
in interest expense from Federal Home Loan Bank advances in the amount of
$86,000, plus increases in deposit account interest of $524,000 and
interest on securities sold under repurchase agreements of $199,000.
Also, total interest expense for the first quarter of 2000 was impacted by
increases in interest rates paid on certificate of deposit and repurchase
agreement accounts when compared to the first quarter of 1999.
Total other income increased by $183,000 when compared to the first
quarter of 1999. This increase resulted from increases in trust income of
$32,000, increases in service charges of $85,000 and increases in other
service charges, exchanges and fees of $66,000.
The Corporation continuously monitors noninterest expenses for greater
profitability. The entire staff is geared to improving productivity at
all levels. Noninterest expense for the quarter ended March 31, 2000 was
$5,200,000, 3.8% more than the first quarter of 1999. This increase was
due primarily to increases in salary expenses and credit card and merchant
expenses.
The effective tax rate was 33.7% and 33.2% during the first quarter of
2000 and 1999, respectively. Net income was $1,980,000 and $1,833,000 for
the quarters ended March 31, 2000 and 1999, respectively. Net income per
basic and diluted share was $.48 and $.44 for the quarters ended March 31,
2000 and 1999, respectively.
IMPACTS OF ACCOUNTING AND REGULATORY PRONOUNCEMENTS
Corporate management is not aware of any current recommendations by the
Financial Accounting Standards Board or by regulatory authorities which,
if they were implemented, would have a material effect on the liquidity,
capital resources or operations of the Corporation.
GRAMM-LEACH-BLILEY ACT OF 1999
In February of 2000, the Corporation filed an application with the Federal
<PAGE>17
Reserve Bank of Cleveland to be regulated as a financial holding company.
In March of 2000, LNB Bancorp, Inc. received approval to operate as a
financial holding company. The Corporation is strategically reviewing its
new business opportunities under the Gramm-Leach-Bliley Act.
<PAGE>18
PART I - OTHER INFORMATION
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market Risk
Market risk is the risk of loss in a financial instrument arising from
adverse changes in market indices such as interest rates, foreign exchange
rates and equity prices. The Corporation's principal market risk exposure
is interest rate risk, with no material impact on earnings from changes in
foreign exchange rates or equity prices. There have been no material
changes in the asset and liability mix of the Corporation since December
31, 1999, which would impact the Corporation's level of market risk.
Interest rate risk is the exposure to changes in market interest rates.
Interest rate sensitivity is the relationship between market interest
rates and net interest income due to the repricing characteristics of
assets and liabilities. The Corporation monitors the interest rate
sensitivity of its on - and - off balance sheet positions by examining its
near-term sensitivity and its longer term gap position. Corporate
management has determined no significant changes in the Corporation's
interest rate risk profile since December 31, 1999.
With the Federal Reserve Board's recent announcements to increase the
prime lending rate by 25 basis points to 8.75% on February 3, 2000, and
its subsequent increase by 25 basis points to 9.00% on March 22, 2000,
the Corporation does not anticipate any significant changes in the net
interest margin. Also, Corporate management does not anticipate any
significant changes in the Corporation's market risk of interest rate
risk portfolio.
<PAGE>19
PART II - OTHER INFORMATION
ITEM 1 - Legal Proceedings
None
ITEM 2 - Changes in Securities
See item 4, (c), (1)
ITEM 3 - Defaults Upon Senior Securities
None
ITEM 4 - Submission of Matters to a Vote of Security Holders
(a) LNB Bancorp Inc.'s 2000 Annual Meeting of Shareholders
was held on April 18, 2000.
(b) Proxies were solicited by LNB Bancorp Inc.`s management
pursuant to Regulation 14 under the Securities Exchange
Act of 1934, there was no solicitation in opposition to
management's nominees for election to the board of
directors as listed in the proxy statement, and all
such nominees were elected to the classes in the proxy
statement pursuant to the vote of the shareholders.
(c) Other matters voted upon - complete descriptions of the
matters voted upon is contained in Item 6,
(1)Election of directors to serve as Class II Directors
until April 22, 2003 Annual Meeting of Shareholders as
follows:
ABSTAIN/ BROKER
FOR AGAINST WITHHELD NON-VOTES
Robert M. Campana 3,448,150 -0- 32,349 646,572
James F. Kidd 3,457,908 -0- 22,591 646,662
Jeffrey F. Riddell 3,458,636 -0- 21,863 646,662
Thomas P. Ryan 3,433,680 -0- 46,819 646,662
(2)Amend Articles of Incorporation and Code of Regulations
ABSTAIN/ BROKER
FOR AGAINST WITHHELD NON-VOTES
2,879,211 104,381 146,734 366,840
The total number of shares of LNB Bancorp, Inc. Common Stock,
$1.00 par value, outstanding as of March 6, 2000, the record
date of the Annual Meeting, was 4,127,161.
<PAGE>20
ITEM 5 - Other Information
(a) The Notice of the Annual Meeting to Shareholders and Proxy
Statement (dated March 20, 2000) was previously filed as
Appendix 22 to the Bancorp's 1999 Annual Report on Form 10-K.
ITEM 6 - Exhibits and Reports on Form 8-K
(a) Appendix (11) - Computation of Shares Used for Earnings
Per Share Calculations.
(b) Appendix (13) - First Quarter Report to Shareholders of
LNB Bancorp, Inc. - March 31, 2000 - EDGAR Version.
(c) Appendix (27) - Financial Data Schedule
(d) Reports on Form 8-K
There were no reports on Form 8-K filed for the three
months ended March 31, 2000.
Also, see the Appendix Index which is found on the next page
of this Form.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
LNB BANCORP, INC.
(registrant)
/s/ Gregory D. Friedman
Date: May 12, 2000 --------------------------
Gregory D. Friedman,
Executive Vice President and
Chief Financial Officer
/s/ Mitchell J. Fallis
Date: May 12, 2000 --------------------------
Mitchell J. Fallis,
Vice President and
Chief Accounting Officer
<PAGE>21
LNB Bancorp, Inc.
Form 10-Q
Appendix Index
Pursuant to Item 601 (a) of Regulation S-K
S-K Reference Appendix
Number
(11) Computation of Shares Used for Earnings Per Share
Calculations. Footnote 2 Earnings Per Share on
Page 11 of this Form 10-Q is incorporated by
Reference.
(12) First Quarter Report to Shareholders of LNB Bancorp, Inc.
- March 31, 2000 - EDGAR Version
(27) Financial Data Schedule
<PAGE>22
LNB Bancorp, Inc.
Appendix to Form 10 - Q
(For the three months ended March 31, 2000)
S - K Reference Number (13)
First Quarter Report to Shareholders of
LNB Bancorp, Inc. - March 31, 2000
EDGAR Version
DESCRIPTION:
Three sided pamphlet:
Outside cover: white with picture showing pen on NASDAQ page
First Quarter Report
LNB Bancorp, Inc.
March 31, 2000
Inside contains:
Message to shareholders,
Unaudited EDGAR version Consolidated Balance Sheets for period ending
March 31, 2000 and March 31, 1999, respectively,
Unaudited EDGAR version Consolidated Statements of Income for the Three
Months ended March 31, 2000 and March 31, 1999, respectively,
(LNB Lenders: Professional, knowledgeable, experienced)
(LNBB receives financial services holding company charter)
Banking Offices & ATMs.
<PAGE>23
Outside cover description:
White background, picture of pen on Nasdaq page
Front Cover:
First Quarter Report
LNB Bancorp, Inc.
March 31, 2000
<PAGE>24
Inside of front cover:
(Message to Shareholders)
It's a pleasure, once again, to report on the progress of LNB Bancorp,
Inc., and its wholly owned subsidiary, The Lorain National Bank, after the
first quarter of 2000. As of March 31, 2000, LNB Bancorp, Inc. achieved
record milestones in earnings, assets and deposits. We have also achieved
significant growth in dividends, loans, and shareholders' equity.
Earnings increased 8% for the first quarter of 2000, compared to the
same quarter one year ago, climbing to $1,980,000, up from last year's
$1,833,000. The 2000 first quarter's earnings were the highest for any
first quarter in the Bancorp's history.
Basic and diluted earnings per share for the first quarter of 2000
reached $.48, a 9% increase from the $.44 for the first quarter of 1999.
Earnings for 2000 were higher than a year ago because of higher net
interest income and noninterest income, offset in part by higher loan loss
provision and operating expenses. Increases in net interest income were
fueled by strong commercial loan growth.
Cash dividends declared per share for the first quarter of 2000
increased 9% compared to the same quarter last year. The first quarter
cash dividends per share in 2000 increased by $.02 to $.24 per share, up
from $.22 per share in 1999.
Asset growth remains solid. Consolidated assets eclipsed the $600
million mark for the first time in the history of the Bancorp. Assets
climbed 7% to $600.3 million at March 31, 2000, up $39.7 million from
March 31, 1999. Net loans grew by $31.3 million from one year ago to
$423.1 million at March 31, 1999, for an 8% increase. Commercial loan
growth was strong accounting for 90% of total loan growth during the
12 months ended March 31, 2000.
Total deposits surpassed the $500 million mark for the first time in the
Bancorp's history, climbing almost 11% to $502.9 million at March 31,
2000, up $49.1 million from one year ago. Increases in demand,
checkinvest, market access and certificates of deposit accounted for the
deposit increase.
Total shareholders' equity increased by $2.7 million during the twelve
months ended March 31, 2000 for a 5% increase. Total shareholders' equity
was $51.9 million or $12.58 per share at March 31, 2000, compared to $49.2
million or $11.94 per share at March 31, 1999. The percentage of
shareholders' equity rose to 15.52% for the quarter ended March 31, 2000
from 15.18% for the same quarter one year ago.
We appreciate and thank you for your continued support and look forward
to addressing you after the completion of our second quarter of
operations.
/s/ Stanley G. Pijor /s/ James F. Kidd /s/ Gary C. Smith
--------------------- -------------------------- ------------------
Stanley G. Pijor James F. Kidd Gary C. Smith
Chairman of the Board Vice Chairman of the Board President and
Chief Executive
Officer
NET INCOME millions of dollars
(A Net Income graph follows in printed version with income on the y-axis
and years 1996 through 2000 on the x-axis. The graph is a vertical bar
graph. The co-ordinates, by year, which are presented in the table below
are plotted on the previously described grid.)
<PAGE>25
DIVIDENDS PER SHARE dollars*
(A Dividends Per Share graph follows in printed version with dividends on
the y-axis and years 1996 through 2000 on the x-axis. The graph is a
vertical bar graph. The co-ordinates, by year, which are presented in the
table below are plotted on the previously described grid.)
BASIC EARNINGS PER SHARE dollars*
(A Basic Earnings Per Share graph follows in printed version with earnings
per share on the y-axis and years 1996 through 2000 on the x-axis. The
graph is a vertical bar graph. The co-ordinates, by year, which are
presented in the table below are plotted on the previously described
grid.)
Basic Earnings
Net Income Dividends Per Share Per Share
Year millions of dollars dollars* dollars*
2000 $1,908 $0.24 $0.48
1999 $1,833 $0.22 $0.44
1998 $1,678 $0.20 $0.41
1997 $1,525 $0.16 $0.36
1996 $1,326 $0.14 $0.31
*Adjusted for stock dividends and splits
<PAGE>26
(Consolidated Balance Sheets)
March 31 2000 1999
- ----------------------------------------------------------------------
ASSETS:
Cash and Due from Banks $ 24,547,000 $ 21,721,000
Federal Funds Sold and Short-term Investments 3,734,000 2,793,000
Federal Home Loan Bank and Federal
Reserve Bank Stock, at Cost 2,996,000 2,222,000
Securities Held to Maturity, at Cost 44,869,000 43,523,000
Securities Available for Sale, at Fair Value 77,258,000 76,519,000
Loans 427,845,000 395,237,000
Reserve for Loan Losses (4,790,000) (3,483,000)
- -----------------------------------------------------------------------
NET LOANS 423,055,000 391,754,000
- -----------------------------------------------------------------------
Premises, Equipment and Intangible
Assets (net) 15,640,000 15,159,000
Accrued Interest Receivable and
Other Assets 8,166,000 6,922,000
- -----------------------------------------------------------------------
TOTAL ASSETS $600,265,000 $560,613,000
- -----------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY:
Noninterest-Bearing Deposits $ 94,265,000 $ 80,234,000
Interest-Bearing Deposits 407,705,000 372,612,000
- -----------------------------------------------------------------------
TOTAL DEPOSITS 501,970,000 452,846,000
- -----------------------------------------------------------------------
Securities Sold under Repurchase Agreements
and Other Short-term Borrowings 15,320,000 29,567,000
Federal Home Loan Bank Advances 24,345,000 24,345,000
Accrued Interest, Taxes, Expenses and
Other Liabilities 6,726,000 4,646,000
- -----------------------------------------------------------------------
TOTAL LIABILITIES 548,361,000 511,404,000
- -----------------------------------------------------------------------
Preferred Stock -0- -0-
Common Stock 4,227,000 4,223,000
Additional Capital 22,685,000 22,603,000
Retained Earnings 29,045,000 25,136,000
Accumulated Other Comprehensive Income(Loss) (1,153,000) 147,000
Treasury Stock, at Cost (2,900,000) (2,900,000)
- -----------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY 51,904,000 49,209,000
- -----------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $600,265,000 $560,613,000
- -----------------------------------------------------------------------
TOTAL ASSETS millions of dollars
(A Total Assets graph follows in printed version with assets on the y-axis
and years 1996 through 2000 on the x-axis. The graph is a vertical bar
graph. The co-ordinates, by year, which are presented in the table below
are plotted on the previously described grid.)
TOTAL SHAREHOLDERS' EQUITY millions of dollars
(A Total Shareholders' Equity graph follows in printed version with
shareholder's equity on the y-axis and years 1996 through 2000 on the
x-axis. The graph is a vertical bar graph. The co-ordinates, by year,
<PAGE>27
which are presented in the table below are plotted on the previously
described grid.)
Total Shareholders'
Total Assets Equity
Year millions of dollars millions of dollars
2000 $600.3 $51.9
1999 $560.6 $49.2
1998 $490.0 $45.8
1997 $445.5 $45.0
1996 $420.5 $41.5
(LOGO) LNB
Bancorp, Inc.
and its subsidiary Lorain National Bank
<PAGE>28
(Consolidated Statements of Income)
Three Months Ended March 31 2000 1999
- ----------------------------------------------------------------------
INTEREST INCOME:
Interest and Fees on Loans $9,027,000 $7,980,000
Interest and Dividends on Securities 1,873,000 1,785,000
Interest on Federal Funds Sold and
Short-term Investments 39,000 13,000
- ----------------------------------------------------------------------
TOTAL INTEREST INCOME 10,939,000 9,778,000
- ----------------------------------------------------------------------
INTEREST EXPENSE:
Interest on Deposits 3,572,000 3,048,000
Interest on Securities Sold under Repurchase Agreements
and Other Short-term Borrowings 436,000 237,000
Interest on Federal Home Loan Bank Advances 376,000 290,000
- ----------------------------------------------------------------------
TOTAL INTEREST EXPENSE 4,384,000 3,575,000
- ----------------------------------------------------------------------
NET INTEREST INCOME 6,555,000 6,203,000
Provision for Loan Losses 300,000 200,000
- ----------------------------------------------------------------------
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 6,255,000 6,003,000
- ----------------------------------------------------------------------
OTHER INCOME:
Investment and Trust Services Division Income 502,000 470,000
Fees and Service Charges 1,417,000 1,269,000
Gains From Sales of Loans, Securities and Buildings -0- -0-
Other Operating Income 14,000 11,000
- ----------------------------------------------------------------------
TOTAL OTHER INCOME 1,933,000 1,750,000
- ----------------------------------------------------------------------
OTHER EXPENSES:
Salaries and Employee Benefits 2,492,000 2,395,000
Net Occupancy Expense of Premises 386,000 392,000
Furniture and Equipment Expenses 573,000 608,000
Supplies and Postage 208,000 256,000
Ohio Franchise Tax 169,000 151,000
Other Operating Expenses 1,372,000 1,206,000
- ----------------------------------------------------------------------
TOTAL OTHER EXPENSES 5,200,000 5,008,000
- ----------------------------------------------------------------------
INCOME BEFORE INCOME TAXES 2,988,000 2,745,000
- ----------------------------------------------------------------------
Income Taxes 1,008,000 912,000
- ----------------------------------------------------------------------
NET INCOME $1,980,000 $1,833,000
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
PER SHARE DATA:
- ----------------------------------------------------------------------
BASIC EARNINGS PER SHARE $.48 $.44
- ----------------------------------------------------------------------
DILUTED EARNINGS PER SHARE $.48 $.44
- ----------------------------------------------------------------------
DIVIDENDS DECLARED PER SHARE $.24 $.22
- ----------------------------------------------------------------------
<PAGE>29
Logos for LNBB NASDAQ LISTED, FDIC Insured, Federal Home Loan Bank System,
and Equal Housing Lender
<PAGE>30
Inside cover
(LNB Lenders: Professional, knowledgeable, experienced)
Color photo on right side of page of Lorain National lending team, Ellen
Walsh, Denise Kosakowski, Sandra Dubell, Kelly Dunfee, Lee Myers, Ed
Klenz, Ken Wayton, John Funderburg, Joel Krueck, Bob Asik and Bruce Diso.
While many competing banks concentrate their efforts on reaching sales
quotas, Lorain National Bank's lenders are busy building lasting
relationships with their customers, both new and established. It's an
approach that requires a little more effort on our part; but one which
enhances our experience in creating shared values, positive results and
long-term customer loyalty.
With more than 175 years of combined lending experience in our market,
Lorain National's lending team continues to nurture established
relationships while cultivating new ones in an expanding and competitive
marketplace.
You will not find a more knowledgeable, professional group of community
bankers like ours anywhere in the area. Our people are dedicated to the
success of our customers and to the welfare of our community.
When you combine those elements, you develop a bond with those in your
market that makes us very difficult to compete against.
Prepared with an array of lending products and services and a reputation
as one of northeast Ohio's most successful small business, retail and
mortgage lenders, Lorain National continues to open new doors by
demonstrating professionalism, knowledge of customer needs and quality
service.
We are already well on our way to meeting our goals for the Year 2000;
but more importantly, we are building more new relationships with our
area's business owners than ever before. We appreciate your support and
look forward to working with you in the coming year.
/s/ Sandi
- -----------------------
Sandra L. Dubell
Senior Vice President
(LNBB receives financial services holding company charter)
In an effort to take advantage of the recently passed Gramm-Leach-Bliley
Act, otherwise known as the financial modernization act, LNB Bancorp, Inc.
has applied for, and received, one of the first charters as a financial
services holding company.
Like two-thirds of the 144 newly-chartered financial services holding
companies whose assets total less than $1 billion, LNB Bancorp, Inc. is
taking the necessary steps to optimally prepare itself for future growth
opportunities.
"Thanks to this legislation, LNB Bancorp, Inc. will be permitted to
enter new areas of financial service," said Stanley G. Pijor, Chairman of
the Board of Directors.
The Act enables financial services holding companies to engage in
business activities previously unavailable to them. Our organization will
also be able to offer new products and services as they are developed and
approved by regulators.
"It's an exciting time for financial holding companies, and we saw this
as an opportunity to add value to our shareholders' investments in the
future," Pijor concluded.
<PAGE>31
Back Cover:
White background with blue and black lettering
Four column format
(Banking Offices and ATMS)
**ATM service available wherever you see this symbol
Lorain Banking Offices Elyria Banking Offices
**Main Office **Ely Square Office
457 Broadway 124 Middle Avenue
Lorain, Ohio 44052 Elyria, Ohio 44035
(440) 244-7185 (440) 323-4621
**Sixth Street Drive-In Office **Cleveland Street Office
200 Sixth Street 801 Cleveland Street
Lorain, Ohio 44052 Elyria, Ohio 44035
(440) 244-7242 (440) 365-8397
**Cooper-Foster Park **Lake Avenue Office
Road Office 42935 North Ridge Road
1920 Cooper-Foster Park Road Elyria Township, Ohio 44035
Lorain, Ohio 44053 (440) 233-7196
(440) 282-1252
**Midway Mall Office
**Kansas Avenue Office 6395 Midway Mall Blvd.
1604 Kansas Avenue Elyria, Ohio 44035
Lorain, Ohio 44052 (440) 324-6530
(440) 288-9151
Village of LaGrange
**Oberlin Avenue Office Banking Office
3660 Oberlin Avenue **Village of LaGrange Office
Lorain, Ohio 44053 546 North Center Street
(440) 282-9196 Village of LaGrange,
Ohio 44050
**Pearl Avenue Office (440) 355-6734
2850 Pearl Avenue
Lorain, Ohio 44055 Oberlin Banking Offices
(440) 277-1103 **Kendal at Oberlin Office*
600 Kendal Drive
**West Park Drive Office Oberlin, Ohio 44074
2130 West Park Drive (440) 774-5400
Lorain, Ohio 44053
(440) 989-3131 **Oberlin Office
40 East College Street
Amherst Banking Office Oberlin, Ohio 44074
**Amherst Office (440) 775-1361
1175 Cleveland Avenue
Amherst, Ohio 44001 Olmsted Township
(440) 988-4423 Banking Offices
**Olmsted Township Office
Avon Lake Banking Office 27095 Bagley Road
**Avon Lake Office Olmsted Township, Ohio 44138
240 Miller Road (440) 235-4600
Avon Lake, Ohio 44012
(440) 933-2186
<PAGE>32
The Renaissance Office Other Offices
26376 John Road Executive Offices
Olmsted Township, Ohio 44138 457 Broadway
(440) 427-0041 Lorain, Ohio 44052
(440) 244-7123
Vermilion Banking Office
**Vermilion Office Branch Administration
4455 East Liberty Avenue 457 Broadway
Vermilion, Ohio 44089 Lorain, Ohio 44052
(440) 967-3124 (440) 244-7253
Westlake Banking Offices Commercial, Consumer
**Crossings of Westlake Ohio and Mortgage Loans
30210 Detroit Road 457 Broadway
Westlake, Ohio 44145 Lorain, Ohio 44052
(440) 892-9696 (440) 244-7220
(440) 244-7272
Westlake Village Office (440) 244-7216
28550 Westlake Village Drive
Westlake, Ohio 44145 Credit Cards
(440) 808-0229 2130 West Park Drive
Lorain, Ohio 44053
ATMS (440) 989-3308
**Captain Larry's Marathon
1317 State Route 60 Customer Service
Vermilion, Ohio 2130 West Park Drive
Lorain, Ohio 44053
**Dad's Sunoco (440) 989-3348
7580 Leavitt Road (800) 860-1007
State Route 58
Amherst, Ohio Human Resources
2130 West Park Drive
**Gateway Plaza Convenient Lorain, Ohio 44053
3451 Colorado Avenue (440) 989-3139
Lorain, Ohio
Operations
2130 West Park Drive
**Lakeland Medical Center Lorain, Ohio 44053
3700 Kolbe Road (440) 989-3315
Lorain, Ohio
Purchasing
**Lorain County 2150 West Park Drive
Community College Lorain, Ohio 44053
1005 North Abbe Road (440) 989-3327
Elyria, Ohio
Investment and Trust Services
**Lowe's Home 457 Broadway
Improvement Warehouse Lorain, Ohio 44052
620 Midway Boulevard (440) 244-7226
Elyria, Ohio
All Other Departments &
**Mobile ATM Information Not Listed
2130 West Park Drive Telebanker (440) 245-4562
Lorain, Ohio Telebanker (800) 610-9033
Toll Free (800) 860-1007
Lorain (440) 244-6000
Internet
*Access restricted to residents, www.4LNB.com
their visitors and employees
<PAGE>33
LNB Bancorp, Inc.
Exhibit to Form 10 - Q
(For the three months ended March 31, 2000)
S - K Reference Number (27)
Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 9
<CIK> 0000737210
<NAME> LNB BANCORP, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 24,547
<INT-BEARING-DEPOSITS> 3,034
<FED-FUNDS-SOLD> 700
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 77,258
<INVESTMENTS-CARRYING> 47,865
<INVESTMENTS-MARKET> 45,010
<LOANS> 427,845
<ALLOWANCE> (4,790)
<TOTAL-ASSETS> 600,265
<DEPOSITS> 501,970
<SHORT-TERM> 15,320
<LIABILITIES-OTHER> 6,726
<LONG-TERM> 24,345
0
0
<COMMON> 4,227
<OTHER-SE> 47,679
<TOTAL-LIABILITIES-AND-EQUITY> 600,265
<INTEREST-LOAN> 9,027
<INTEREST-INVEST> 1,873
<INTEREST-OTHER> 39
<INTEREST-TOTAL> 10,939
<INTEREST-DEPOSIT> 3,572
<INTEREST-EXPENSE> 4,384
<INTEREST-INCOME-NET> 6,555
<LOAN-LOSSES> 300
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 5,200
<INCOME-PRETAX> 2,988
<INCOME-PRE-EXTRAORDINARY> 1,980
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,980
<EPS-BASIC> .48
<EPS-DILUTED> .48
<YIELD-ACTUAL> 4.80
<LOANS-NON> 1,157
<LOANS-PAST> 781
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 4,461
<ALLOWANCE-OPEN> 4,667
<CHARGE-OFFS> 237
<RECOVERIES> 60
<ALLOWANCE-CLOSE> 4,790
<ALLOWANCE-DOMESTIC> 3,435
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 1,355
</TABLE>
