UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
 
SCHEDULE 14A
(RULE 14a-101)
 
INFORMATION REQUIRED IN
PROXY STATEMENT
 
SCHEDULE 14A INFORMATION
 
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO.     )
 
 
Filed by the Registrant x Filed by a Party other than the Registrant o
 
Check the appropriate box:

o
  
Preliminary Proxy Statement
o
  
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
o
  
Definitive Proxy Statement
o
  
Definitive Additional Materials
x
  
Soliciting Material Pursuant to §240.14a-12
LNB Bancorp, Inc.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
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x
  
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o
  
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
   
(1
)
  
Title of each class of securities to which transaction applies:
           
   
(2
)
  
Aggregate number of securities to which transaction applies:
           
   
(3
)
  
Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
           
   
(4
)
  
Proposed maximum aggregate value of transaction:
           
   
(5
)
  
Total fee paid:
           
           
o
  
Fee paid previously with preliminary materials.
o
  
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
   
(1
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(2
)
  
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(3
)
  
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(4
)
  
Date Filed:
           
 
 
 
 
 
LNB Bancorp, Inc. Reports Fourth Quarter and Full Year 2014 Results
 
 
● 
Entered into a definitive merger agreement to merge with Northwest Bancshares, Inc.
 
● 
Fourth quarter 2014 net income available to common shareholders of $1.5 million. Excluding expenses related to the proposed merger of approximately $.6 million after tax, net income available to common shareholders was $2.1 million during the quarter, a 36% increase year-over-year
 
● 
Full year 2014 net income available to common shareholders of $7.2 million. Excluding merger related expenses of $.6 million after tax, net income available to common shareholders was $7.8 million, a 42% increase year-over-year
 
● 
Loans increased by $28 million or 3.1% year over year
 
● 
Improved asset quality and lower net charge-offs resulted in a reduced provision for loan losses
 
LORAIN, Ohio--(BUSINESS WIRE)--January 29, 2015--LNB Bancorp, Inc. (NASDAQ: LNBB) (“LNB” or the “Company”) today reported financial results for the fourth quarter and the full year ended December 31, 2014. Net income available to common shareholders for the quarter ending December 31, 2014 was $1.5 million, or $0.15 per diluted share, compared to $1.5 million, or $0.16 per diluted share, for the fourth quarter 2013. On December 15, 2014, LNB entered into a definitive merger agreement with Northwest Bancshares, Inc. During the quarter, the Company incurred merger related expenses of $.8 million or $.6 million after tax. Excluding merger related expenses of $.6 million after tax, net income available to common shareholders was $2.1 million during the quarter, a 36% increase year-over-year.
 
“We are very pleased with the fourth quarter results. We saw solid loan growth and continued improvement in credit quality, which reduced charge-offs and the provision for loan losses,” stated Daniel E. Klimas, president and chief executive officer.
 
Loan balances at December 31, 2014 increased by $28 million compared to December 31, 2013, led by the consumer and commercial loan portfolios.
 
The Company continued to make progress on improving credit quality as non-performing assets for the fourth quarter declined $5.2 million as compared to the same quarter in 2013. The ratio of non-performing assets to total assets at December 31, 2014, was 1.40%, down from 1.83% at December 31, 2013.
 
 
 
 
 
Fourth Quarter Review
 
Noninterest income was $3.4 million for the fourth quarter of 2014 compared to $3.3 million for the prior-year fourth quarter. This year-over-year increase was driven primarily by gains on the sale of SBA (Small Business Administration) and consumer loans, an increase in Trust Department revenues and income from bank owned life insurance, which more than offset a decline in deposit and service charge fees.
 
Gain on the sale of loans was $1.0 million for the quarter, compared to $.7 million for the fourth quarter of 2013. This increase is primarily due to the gain on the sale of SBA loans as this initiative continued to contribute nicely to the Company’s operating performance.
 
The provision for loan losses was $.6 million in the fourth quarter of 2014, down $.4 million, or 41%, from the 2013 fourth quarter, reflecting the Company’s improvement in credit quality. Net charge-offs were $.6 million for the fourth quarter of 2014, or 0.26% of average loans (annualized), compared to $1.3 million, or 0.58% of average loans (annualized), in the fourth quarter of 2013. The allowance for loan losses was $17.4 million, or 1.87% of total loans, at December 31, 2014 compared with $17.5 million, or 1.94% of total loans, at December 31, 2013. The allowance for loan losses coverage of nonperforming loans at the end of the fourth quarter improved to 105% from 80% at the end of the same quarter a year ago. “The credit quality indicators continued to improve, resulting in a lower provision for the fourth quarter of 2014,” stated Klimas.
 
Noninterest expense was $9.9 million for the fourth quarter of 2014 compared with $9.0 million for the fourth quarter of 2013, an increase of 10%. The increase in noninterest expense was largely in part due to the merger related costs incurred of $.8 million or $.6 million after tax.
 
Full Year 2014 Review
 
For the year ended December 31, 2014, net income available to common shareholders was $7.2 million, or $0.74 per common share, compared to $5.5 million, or $0.61 per common share for the year 2013. This represents an increase in net income available to common shareholders of $1.7 million, or 31%, and $0.13, or 21%, per common share. Excluding merger related expenses, the annual net income available to common shareholders was $7.8 million, up 42% compared to net income during 2013.
 
Net interest income on a fully tax-equivalent basis (FTE) for 2014 was $37.1 million compared to $36.2 million for 2013. The net interest margin was 3.21% for 2014 compared to 3.19% for 2013.
 
 
 
 
 
Noninterest income for 2014 was $12.9 million, compared to $12.1 million for 2013.
 
Noninterest expense for 2014 totaled $36.4 million, a $1.2 million increase from the total of $35.2 million for 2013.
 
During 2014, nonperforming assets declined $5.2 million, or 23%, to $17.4 million. For 2014, nonperforming assets comprised 1.40% of total assets, compared to 1.83% of total assets for 2013.
 
Net charge-offs were $3.2 million for 2014, or 0.35% of average loans, compared to $4.5 million in 2013, or 0.51% of average loans.
 
The allowance for loan losses was $17.4 million at December 31, 2014, or 1.87% of total loans, compared to $17.5 million at December 31, 2013, or 1.94% of total loans. For the year 2014, the provision for loan losses was $3.1 million compared to the 2013 provision of $4.4 million.
 
The Company continued to maintain capital levels in excess of the regulatory requirements to be categorized as “well capitalized” with a total risk-based capital ratio of 12.51%, Tier 1 leverage ratio of 9.10% and tangible common equity to tangible assets ratio of 7.69% at December 31, 2014.
 
Total assets at December 31, 2014 were $1.24 billion, up $6 million, or 0.5%, from December 31, 2013. Total deposits at December 31, 2014 were $1.03 billion, down $11 million, or 1.0%, from December 31, 2013.
 
About LNB Bancorp, Inc.
 
LNB Bancorp, Inc. is a $1.2 billion bank holding company. Its major subsidiary, The Lorain National Bank, is a full-service commercial bank, specializing in commercial, personal banking services, residential mortgage lending and investment and trust services. The Lorain National Bank and its Morgan Bank division serve customers through 21 retail-banking locations and 30 ATMs in Lorain, Erie, Cuyahoga and Summit counties. North Coast Community Development Corporation is a wholly owned subsidiary of The Lorain National Bank. For more information about LNB Bancorp, Inc., and its related products and services or to view its filings with the Securities and Exchange Commission, visit us at http://www.4lnb.com.
 
 
 
 
 
Forward-Looking Statements
 
This press release contains forward-looking statements within the meaning of the "Safe Harbor" provisions of the Private Securities Litigation Reform Act of 1995. Terms such as "will," "should," "plan," "intend," "expect," "continue," “proposed”, "believe," "anticipate" and "seek," as well as similar comments, are forward-looking in nature. Actual results and events may differ materially from those expressed or anticipated as a result of risks and uncertainties which include but are not limited to: a worsening of economic conditions or slowing of any economic recovery, which could negatively impact, among other things, business activity and consumer spending and could lead to a lack of liquidity in the credit markets; changes in the interest rate environment which could reduce anticipated or actual margins; increases in interest rates or further weakening of economic conditions that could constrain borrowers’ ability to repay outstanding loans or diminish the value of the collateral securing those loans; market conditions or other events that could negatively affect the level or cost of funding, affecting the Company’s ongoing ability to accommodate liability maturities and deposit withdrawals, meet contractual obligations, and fund asset growth, and new business transactions at a reasonable cost, in a timely manner and without adverse consequences; changes in political conditions or the legislative or regulatory environment, including new or heightened legal standards and regulatory requirements, practices or expectations, which may impede profitability or affect the Company’s financial condition (such as, for example, the Dodd-Frank Act and rules and regulations that have been or may be promulgated under the Act); persisting volatility and limited credit availability in the financial markets, particularly if market conditions limit the Company’s ability to raise funding to the extent required by banking regulators or otherwise; significant increases in competitive pressure in the banking and financial services industries, particularly in the geographic or business areas in which the Company conducts its operations; limitations on the Company’s ability to return capital to shareholders, including the ability to pay dividends, and the dilution of the Company’s common shares that may result from, among other things, any capital-raising or acquisition activities of the Company; adverse effects on the Company’s ability to engage in routine funding transactions as a result of the actions and commercial soundness of other financial institutions; general economic conditions becoming less favorable than expected, continued disruption in the housing markets and/or asset price deterioration, which have had and may continue to have a negative effect on the valuation of certain asset categories represented on the Company’s balance sheet; increases in deposit insurance premiums or assessments imposed on the Company by the FDIC; a failure of the Company’s operating systems or infrastructure, or those of its third-party vendors, that could disrupt its business; risks that are not effectively identified or mitigated by the Company’s risk management framework; and difficulty attracting and/or retaining key executives and/or relationship managers at compensation levels necessary to maintain a competitive market position; as well as the risks and uncertainties described from time to time in the Company’s reports as filed with the SEC. The Company undertakes no obligation to update or clarify forward looking statements, whether as a result of new information, future events or otherwise.
 
In addition, expected cost savings, synergies and other financial benefits from the proposed merger with Northwest Bancshares might not be realized within the expected time frame and costs or difficulties relating to integration matters might be greater than expected. The requisite shareholder and regulatory approvals for the proposed merger might not be obtained.
 
 
 
 
 
Important Additional Information and Where to Find It
 
In connection with the proposed merger with Northwest Bancshares, Inc., Northwest Bancshares, Inc. will file with the SEC a Registration Statement on Form S-4 that will include a Proxy Statement of LNB Bancorp, Inc. and a Prospectus of Northwest Bancshares, Inc. as well as other relevant documents concerning the proposed transaction. This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. SHAREHOLDERS OF LNB BANCORP, INC. ARE URGED TO READ THE REGISTRATION STATEMENT AND THE PROXY STATEMENT/PROSPECTUS REGARDING THE MERGER WHEN IT BECOMES AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
 
A free copy of the Proxy Statement/Prospectus, as well as other filings containing information about Northwest Bancshares, Inc. and LNB Bancorp, Inc., may be obtained at the SEC’s Internet site (http://www.sec.gov). You will also be able to obtain these documents, free of charge, from Northwest Bancshares, Inc. at www.northwestsavingsbank.com under the heading “Investor Relations” and then under “SEC Filings” or from LNB Bancorp, Inc. by accessing LNB Bancorp, Inc.’s website at www.4lnb.com under the heading “Investor Relations” and then under “SEC Filings.” Copies of the Proxy Statement/Prospectus can also be obtained, free of charge, by directing a request to Northwest Bancshares, Inc., 100 Liberty Street, Warren, Pennsylvania 16365, Attention: Investor Relations, Telephone: (814) 726-2140 or to LNB Bancorp, Inc., 457 Broadway, Lorain, Ohio 44052, Attention: Investor Relations, Telephone: (440) 244-7317.
 
LNB Bancorp, Inc. and Northwest Bancshares, Inc. and certain of their directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of LNB Bancorp, Inc. in connection with the proposed merger. Information about the directors and executive officers of LNB Bancorp, Inc. and their ownership of LNB Bancorp, Inc. common stock is set forth in the proxy statement for LNB Bancorp, Inc.’s 2014 annual meeting of shareholders, as filed with the SEC on Schedule 14A on March 11, 2014. Information about the directors and executive officers of Northwest Bancshares, Inc. is set forth in the proxy statement for Northwest Bancshares, Inc. 2014 annual meeting of shareholders, as filed with the SEC on a Schedule 14A on March 5, 2014. Additional information regarding the interests of those participants and other persons who may be deemed participants in the transaction may be obtained by reading the Proxy Statement/Prospectus regarding the proposed merger when it becomes available. Free copies of this document may be obtained as described in the preceding paragraph.
 
 
 
 
 
CONSOLIDATED BALANCE SHEETS
         
   
At December 31, 2014
  
At December 31, 2013
   
(unaudited)
    
   
(Dollars in thousands except share amounts)
ASSETS
Cash and due from banks
  
$
17,927
    
$
36,717
  
Federal funds sold and interest bearing deposits in banks
    
6,215
      
15,555
  
Cash and cash equivalents
    
24,142
      
52,272
  
Securities available for sale, at fair value
    
217,572
      
216,122
  
Restricted stock
    
5,741
      
5,741
  
Loans held for sale
    
3,646
      
4,483
  
Loans:
        
Portfolio loans
    
930,025
      
902,299
  
Allowance for loan losses
    
(17,416
)
    
(17,505
)
Net loans
    
912,609
      
884,794
  
Bank premises and equipment, net
    
9,173
      
8,198
  
Other real estate owned
    
772
      
579
  
Bank owned life insurance
    
19,757
      
19,362
  
Goodwill, net
    
21,582
      
21,582
  
Intangible assets, net
    
321
      
457
  
Accrued interest receivable
    
3,635
      
3,621
  
Other assets
    
17,677
      
13,046
  
Total Assets
  
$
1,236,627
    
$
1,230,257
  
         
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
        
Demand and other noninterest-bearing
  
$
158,476
    
$
148,961
  
Savings, money market and interest-bearing demand
    
436,271
      
393,778
  
Certificates of deposit
    
440,178
      
502,850
  
Total deposits
    
1,034,925
      
1,045,589
  
Short-term borrowings
    
10,611
      
4,576
  
Federal Home Loan Bank advances
    
54,321
      
46,708
  
Junior subordinated debentures
    
16,238
      
16,238
  
Accrued interest payable
    
596
      
789
  
Accrued taxes, expenses and other liabilities
    
4,597
      
4,901
  
Total Liabilities
    
1,121,288
      
1,118,801
  
Shareholders' Equity
        
Preferred stock, Series A Voting, no par value, authorized 150,000 shares at December 31, 2014 and December 31, 2013
    
-
      
-
  
Fixed rate cumulative preferred stock, Series B, no par value, $1,000 liquidation value, no shares were issued at December 31, 2014 and 7,689 shares at December 31, 2013
    
-
      
7,689
  
Discount on Series B preferred stock
    
-
      
(19
)
Common stock, par value $1 per share, authorized 15,000,000 shares, issued shares 10,002,139 at December 31, 2014 and 10,001,717 at December 31, 2013
    
10,002
      
10,002
  
Additional paid-in capital
    
51,441
      
51,098
  
Retained earnings
    
60,568
      
53,966
  
Accumulated other comprehensive income (loss)
    
(495
)
    
(5,188
)
Treasury shares at cost, 336,745 shares at December 31, 2014 and 328,194 shares at December 31, 2013
    
(6,177
)
    
(6,092
)
Total Shareholders' Equity
    
115,339
      
111,456
  
Total Liabilities and Shareholders' Equity
  
$
1,236,627
    
$
1,230,257
  
                 
 
 
 
 
 
Consolidated Statements of Income (unaudited)
                 
   
Three Months Ended
December 31,
  
Three Months Ended
December 31,
  
Twelve Months Ended
December 31,
  
Twelve Months Ended
December 31,
   
2014
  
2013
  
2014
  
2013
   
(Dollars in thousands except per share data)
Interest Income
                      
Loans
  
$
9,243
      
$
9,118
    
$
36,319
      
$
36,409
Securities:
                      
U.S. Government agencies and corporations
    
1,022
        
971
      
4,097
        
3,587
State and political subdivisions
    
311
        
304
      
1,235
        
1,191
Other debt and equity securities
    
68
        
127
      
318
        
464
Federal funds sold and short-term investments
    
4
        
5
      
34
        
28
Total interest income
    
10,648
        
10,525
      
42,003
        
41,679
Interest Expense
                      
Deposits
    
1,028
        
1,153
      
4,159
        
4,838
Federal Home Loan Bank advances
    
157
        
159
      
627
        
628
Short-term borrowings
    
13
        
6
      
86
        
7
Junior subordinated debenture
    
172
        
172
      
680
        
683
Total interest expense
    
1,370
        
1,490
      
5,552
        
6,156
Net Interest Income
    
9,278
        
9,035
      
36,451
        
35,523
Provision for Loan Losses
    
600
        
1,025
      
3,113
        
4,375
Net interest income after provision for loan losses
    
8,678
        
8,010
      
33,338
        
31,148
Noninterest Income
                      
Investment and trust services
    
404
        
377
      
1,685
        
1,555
Deposit service charges
    
840
        
901
      
3,309
        
3,509
Other service charges and fees
    
752
        
820
      
3,014
        
3,279
Income from bank owned life insurance
    
374
        
240
      
888
        
752
Other income
    
65
        
186
      
393
        
521
Total fees and other income
    
2,435
        
2,524
      
9,289
        
9,616
Securities gains (losses), net
    
-
        
-
      
(5
)
      
178
Gains on sale of loans
    
963
        
707
      
3,612
        
2,324
Gain (loss) on sale of other assets, net
    
(7
)
      
25
      
19
        
8
Total noninterest income
    
3,391
        
3,256
      
12,915
        
12,126
Noninterest Expense
                      
Salaries and employee benefits
    
5,046
        
4,607
      
18,800
        
18,058
Furniture and equipment
    
1,190
        
1,075
      
4,715
        
4,234
Net occupancy
    
555
        
609
      
2,339
        
2,310
Professional fees
    
1,222
        
457
      
2,563
        
1,870
Marketing and public relations
    
302
        
278
      
1,425
        
1,216
Supplies, postage and freight
    
271
        
236
      
946
        
1,045
Telecommunications
    
163
        
168
      
640
        
669
Ohio Franchise tax
    
129
        
299
      
800
        
1,213
Intangible asset amortization
    
35
        
36
      
136
        
137
FDIC assessments
    
191
        
266
      
979
        
1,039
Other real estate owned
    
44
        
102
      
110
        
382
Loan and collection expense
    
398
        
397
      
1,399
        
1,427
Other expense
    
361
        
453
      
1,530
        
1,587
Total noninterest expense
    
9,907
        
8,983
      
36,382
        
35,187
Income before income tax expense
    
2,162
        
2,283
      
9,871
        
8,087
Income tax expense
    
660
        
577
      
2,654
        
1,926
Net Income
  
$
1,502
      
$
1,706
    
$
7,217
      
$
6,161
Dividends and accretion on preferred stock
    
-
        
163
      
35
        
646
Net Income Available to Common Shareholders
  
$
1,502
      
$
1,543
    
$
7,182
      
$
5,515
                       
Net Income Per Common Share
                      
Basic
  
$
0.16
      
$
0.16
    
$
0.75
      
$
0.61
Diluted
    
0.15
        
0.16
      
0.74
        
0.61
Dividends declared
    
0.03
        
0.01
      
0.06
        
0.04
Average Common Shares Outstanding
                      
Basic
    
9,626,842
        
9,288,745
      
9,623,772
        
8,953,815
Diluted
    
9,692,425
        
9,302,458
      
9,656,774
        
8,966,088
 
 
 
 
 
LNB Bancorp, Inc.
Supplemental Financial Information
(Unaudited - Dollars in thousands except per share data)
                             
   
Three Months Ended
  
Twelve Months Ended
   
December 31,
  
September 30,
  
June 30,
  
March 31,
  
December 31,
  
December 31,
  
December 31,
END OF PERIOD BALANCES
  
2014
  
2014
  
2014
  
2014
  
2013
  
2014
  
2013
Cash and Cash Equivalents
  
$
24,142
  
$
36,167
  
$
47,795
  
$
68,241
  
$
52,272
  
$
24,142
  
$
52,272
Securities
    
217,572
    
218,847
    
219,422
    
217,510
    
216,122
    
217,572
    
216,122
Restricted stock
    
5,741
    
5,741
    
5,741
    
5,741
    
5,741
    
5,741
    
5,741
Loans held for sale
    
3,646
    
1,497
    
2,856
    
1,811
    
4,483
    
3,646
    
4,483
Portfolio loans
    
930,025
    
922,514
    
907,365
    
910,189
    
902,299
    
930,025
    
902,299
Allowance for loan losses
    
17,416
    
17,432
    
17,430
    
17,497
    
17,505
    
17,416
    
17,505
Net loans
    
912,609
    
905,082
    
889,935
    
892,692
    
884,794
    
912,609
    
884,794
Other assets
    
72,917
    
73,765
    
71,093
    
69,398
    
66,845
    
72,917
    
66,845
Total assets
  
$
1,236,627
  
$
1,241,099
  
$
1,236,842
  
$
1,255,393
  
$
1,230,257
  
$
1,236,627
  
$
1,230,257
Total deposits
    
1,034,925
    
1,056,784
    
1,048,938
    
1,076,851
    
1,045,589
    
1,034,925
    
1,045,589
Other borrowings
    
81,170
    
65,779
    
66,413
    
66,723
    
67,522
    
81,170
    
67,522
Other liabilities
    
5,193
    
5,471
    
11,003
    
4,705
    
5,690
    
5,193
    
5,690
Total liabilities
    
1,121,288
    
1,128,034
    
1,126,354
    
1,148,279
    
1,118,801
    
1,121,288
    
1,118,801
Total shareholders' equity
    
115,339
    
113,065
    
110,488
    
107,114
    
111,456
    
115,339
    
111,456
Total liabilities and shareholders' equity
  
$
1,236,627
  
$
1,241,099
  
$
1,236,842
  
$
1,255,393
  
$
1,230,257
  
$
1,236,627
  
$
1,230,257
                             
AVERAGE BALANCES
                            
Assets:
                            
Total assets
  
$
1,233,457
  
$
1,228,769
  
$
1,236,203
  
$
1,234,380
  
$
1,221,830
  
$
1,233,187
  
$
1,216,228
Earning assets*
    
1,160,953
    
1,151,577
    
1,154,063
    
1,150,500
    
1,137,943
    
1,154,295
    
1,132,514
Securities
    
219,861
    
217,791
    
223,198
    
217,753
    
214,860
    
219,652
    
217,882
Portfolio loans
    
924,216
    
915,773
    
907,851
    
906,843
    
899,899
    
914,137
    
887,866
Liabilities and shareholders' equity:
                            
Total deposits
  
$
1,047,688
  
$
1,044,021
  
$
1,056,144
  
$
1,055,980
  
$
1,041,763
  
$
1,050,916
  
$
1,037,273
Interest-bearing deposits
    
876,897
    
883,713
    
905,838
    
910,340
    
891,589
    
894,077
    
895,634
Interest-bearing liabilities
    
943,339
    
951,142
    
972,784
    
978,073
    
956,866
    
961,211
    
960,372
Total shareholders' equity
    
114,135
    
111,394
    
108,624
    
106,681
    
109,814
    
110,232
    
109,712
                             
INCOME STATEMENT
                            
Total Interest Income
  
$
10,648
  
$
10,350
  
$
10,612
  
$
10,393
  
$
10,525
  
$
42,003
  
$
41,679
Total Interest Expense
    
1,370
    
1,374
    
1,376
    
1,432
    
1,490
    
5,552
    
6,156
Net interest income
    
9,278
    
8,976
    
9,236
    
8,961
    
9,035
    
36,451
    
35,523
Provision for loan losses
    
600
    
720
    
893
    
900
    
1,025
    
3,113
    
4,375
Other income
    
2,435
    
2,289
    
2,322
    
2,243
    
2,524
    
9,289
    
9,616
Net gain on sale of assets
    
956
    
1,072
    
929
    
669
    
732
    
3,626
    
2,510
Noninterest expense
    
9,907
    
8,818
    
8,798
    
8,859
    
8,983
    
36,382
    
35,187
Income before income taxes
    
2,162
    
2,799
    
2,796
    
2,114
    
2,283
    
9,871
    
8,087
Income tax expense
    
660
    
713
    
773
    
508
    
577
    
2,654
    
1,926
Net income
    
1,502
    
2,086
    
2,023
    
1,606
    
1,706
    
7,217
    
6,161
Preferred stock dividend and accretion
    
-
    
-
    
-
    
35
    
163
    
35
    
646
Net income available to common shareholders
  
$
1,502
  
$
2,086
  
$
2,023
  
$
1,571
  
$
1,543
  
$
7,182
  
$
5,515
Common cash dividend declared and paid
  
$
290
  
$
97
  
$
97
  
$
97
  
$
93
  
$
580
  
$
358
                             
Net interest income-FTE (1)
  
$
9,436
  
$
9,135
  
$
9,396
  
$
9,117
  
$
9,192
  
$
37,084
  
$
36,156
Total Operating Revenue (4)
  
$
12,827
  
$
12,496
  
$
12,647
  
$
12,029
  
$
12,448
  
$
49,999
  
$
48,282
 
 
 
 
 
   
Three Months Ended
  
Twelve Months Ended
   
December 31,
  
September 30,
  
June 30,
  
March 31,
  
December 31,
  
December 31,
  
December 31,
   
2014
  
2014
  
2014
  
2014
  
2013
  
2014
  
2013
PER SHARE DATA
                            
Basic net income per common share
  
$
0.16
    
$
0.22
    
$
0.21
    
$
0.16
    
$
0.16
    
$
0.75
    
$
0.61
  
Diluted net income per common share
    
0.15
      
0.22
      
0.21
      
0.16
      
0.16
      
0.75
      
0.61
  
Cash dividends per common share
    
0.03
      
0.01
      
0.01
      
0.01
      
0.01
      
0.06
      
0.04
  
Book value per common shares outstanding
    
11.93
      
11.70
      
11.43
      
11.08
      
10.73
      
11.93
      
10.73
  
Tangible book value per common shares outstanding**
    
9.67
      
9.43
      
9.16
      
8.81
      
8.45
      
9.67
      
8.45
  
Period-end common share market value
    
18.03
      
14.29
      
12.18
      
11.42
      
10.03
      
18.03
      
10.03
  
Market as a % of tangible book
    
186.51
%
    
151.57
%
    
132.97
%
    
129.69
%
    
118.69
%
    
186.51
%
    
118.69
%
Basic average common shares outstanding
    
9,626,842
      
9,626,536
      
9,664,972
      
9,668,297
      
9,288,745
      
9,623,772
      
8,953,815
  
Diluted average common shares outstanding
    
9,692,425
      
9,659,593
      
9,682,444
      
9,705,432
      
9,302,458
      
9,656,774
      
8,966,088
  
Common shares outstanding
    
9,665,394
      
9,665,394
      
9,664,972
      
9,664,972
      
9,673,523
      
9,665,394
      
9,673,523
  
                             
KEY RATIOS
                            
Return on average assets (2)
    
0.48
%
    
0.67
%
    
0.66
%
    
0.53
%
    
0.55
%
    
0.59
%
    
0.51
%
Return on average common equity (2)
    
5.22
%
    
7.43
%
    
7.47
%
    
6.11
%
    
6.16
%
    
6.55
%
    
5.62
%
Efficiency ratio
    
77.24
%
    
70.57
%
    
69.57
%
    
73.65
%
    
72.16
%
    
72.77
%
    
72.88
%
Noninterest expense to average assets (2)
    
3.19
%
    
2.85
%
    
2.85
%
    
2.91
%
    
2.92
%
    
2.95
%
    
2.89
%
Average equity to average assets
    
9.25
%
    
9.07
%
    
8.79
%
    
8.64
%
    
8.99
%
    
8.94
%
    
9.02
%
Net interest margin (FTE) (1)
    
3.22
%
    
3.15
%
    
3.27
%
    
3.21
%
    
3.20
%
    
3.21
%
    
3.19
%
Common stock dividend payout ratio
    
19.36
%
    
4.63
%
    
4.79
%
    
6.18
%
    
6.10
%
    
8.04
%
    
6.56
%
Common stock market capitalization
  
$
174,267
    
$
138,118
    
$
117,719
    
$
110,374
    
$
97,025
    
$
174,267
    
$
97,025
  
                             
                             
ASSET QUALITY
                            
Allowance for Loan Losses
                            
Allowance for loan losses, beginning of period
  
$
17,432
    
$
17,430
    
$
17,497
    
$
17,505
    
$
17,791
    
$
17,505
    
$
17,637
  
Provision for loan losses
    
600
      
720
      
893
      
900
      
1,025
      
3,113
      
4,375
  
Charge-offs
    
937
      
856
      
1,033
      
998
      
1,570
      
3,825
      
6,019
  
Recoveries
    
321
      
138
      
73
      
90
      
259
      
623
      
1,512
  
Net charge-offs
    
616
      
718
      
960
      
908
      
1,311
      
3,202
      
4,507
  
Allowance for loan losses, end of period
  
$
17,416
    
$
17,432
    
$
17,430
    
$
17,497
    
$
17,505
    
$
17,416
    
$
17,505
  
                             
Nonperforming Assets
                            
Nonperforming loans
  
$
16,578
    
$
18,193
    
$
19,907
    
$
20,918
    
$
21,986
    
$
16,578
    
$
21,986
  
Other real estate owned
    
772
      
745
      
1,016
      
979
      
579
      
772
      
579
  
Total nonperforming assets
  
$
17,350
    
$
18,938
    
$
20,923
    
$
21,897
    
$
22,565
    
$
17,350
    
$
22,565
  
                             
Ratios
                            
Total nonperforming loans to total loans
    
1.78
%
    
1.97
%
    
2.19
%
    
2.30
%
    
2.44
%
    
1.78
%
    
2.44
%
Total nonperforming assets to total assets
    
1.40
%
    
1.53
%
    
1.69
%
    
1.74
%
    
1.83
%
    
1.40
%
    
1.83
%
Net charge-offs to average loans (2)
    
0.26
%
    
0.31
%
    
0.42
%
    
0.41
%
    
0.58
%
    
0.35
%
    
0.51
%
Provision for loan losses to average loans (2)
    
0.26
%
    
0.31
%
    
0.39
%
    
0.40
%
    
0.45
%
    
0.34
%
    
0.49
%
Allowance for loan losses to portfolio loans
    
1.87
%
    
1.89
%
    
1.92
%
    
1.92
%
    
1.94
%
    
1.87
%
    
1.94
%
Allowance to nonperforming loans
    
105.05
%
    
95.82
%
    
87.56
%
    
83.65
%
    
79.62
%
    
105.05
%
    
79.62
%
Allowance to nonperforming assets
    
100.38
%
    
92.05
%
    
83.31
%
    
79.91
%
    
77.58
%
    
100.38
%
    
77.58
%
                             
CAPITAL & LIQUIDITY
                            
Period-end tangible common equity to assets**
    
7.69
%
    
7.47
%
    
7.29
%
    
6.90
%
    
6.77
%
    
7.69
%
    
6.77
%
Average equity to assets
    
9.25
%
    
9.07
%
    
8.79
%
    
8.64
%
    
8.99
%
    
8.94
%
    
9.02
%
Average equity to loans
    
12.35
%
    
12.16
%
    
11.96
%
    
11.76
%
    
12.20
%
    
12.06
%
    
12.36
%
Average loans to deposits
    
88.21
%
    
87.72
%
    
85.96
%
    
85.88
%
    
86.38
%
    
86.98
%
    
85.60
%
Tier 1 leverage ratio (3)
    
9.10
%
    
9.01
%
    
8.77
%
    
8.61
%
    
9.22
%
    
9.10
%
    
9.22
%
Tier 1 risk-based capital ratio (3)
    
11.26
%
    
11.09
%
    
11.17
%
    
10.90
%
    
11.63
%
    
11.26
%
    
11.63
%
Total risk-based capital ratio (3)
    
12.51
%
    
12.34
%
    
12.43
%
    
12.15
%
    
12.89
%
    
12.51
%
    
12.89
%
                                                         

(1) FTE -- fully tax equivalent at 34% tax rate
(2) Annualized
(3) 12-31-14 ratio is estimated.
(4) Net interest income on a fully tax-equivalent basis ("FTE") plus noninterest income from operations
* Earning Assets includes Loans Held for Sale
** Non-GAAP measures.
 
 
 
 
 
**Non-GAAP Financial Measures - Statements included in this press release include non-GAAP financial measures. The Company’s management uses these non-GAAP financial measures, including the period-end tangible common equity to assets ratio, in analyzing the Company's performance. Period-end tangible common equity excludes preferred stock as well as goodwill and other intangible assets, net, from total stockholders' equity. Management believes that these non-GAAP financial measures provide additional useful information to investors in evaluating the ongoing performance of the Company. Non-GAAP financial measures should not be considered as an alternative to any measure of performance or financial condition as promulgated under GAAP, and investors should consider the Company’s performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the Company. Non-GAAP financial measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the results or financial condition as reported under GAAP.
 
CONTACT:
LNB Bancorp, Inc.
Peter R. Catanese, Senior Vice President, 440-244-7126
 
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