LNB Bancorp, Inc. Reports First Quarter Results.LORAIN, Ohio Lorain is a city in Lorain County, Ohio, United States. The municipality is located in northeastern Ohio on Lake Erie, at the mouth of the Black River, west of Cleveland. As of the 2000 Census, the city had a total population of 68,652 making it Ohio's 10th largest city. -- LNB LNB Low Noise Block LNB Laredo National Bank (Texas) LNB Low Noise Block downconverter (satellite television) LNB Low NOx Burner LNB Lubbock National Bank (Texas) Bancorp, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :LNBB): --Net Income 22-cents per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share for 1st quarter 2006 --Results impacted by margin pressures --Strong deposit growth, stable credit quality, good expense management LNB Bancorp, Inc. (NASDAQ:LNBB) today reported net income for the three months ended March 31, 2006 of $1,448,000, or $.22 per diluted share, compared to $1,571,000, or $.24 per diluted share for the quarter ended March 31, 2005. Included in net income for the three month period ended March 31, 2005 was $317,000 of gains on the sale of assets. Daniel Daniel, book of the Bible Daniel, book of the Bible. It combines "court" tales, perhaps originating from the 6th cent. B.C., and a series of apocalyptic visions arising from the time of the Maccabean emergency (167–164 B.C. E. Klimas, president and chief executive officer, said, "We saw strong deposit growth, good expense management and stable credit quality measures in the first quarter, but we did not reach the revenue levels we had anticipated." Klimas said the flattening
The flattening, ellipticity, or oblateness of an oblate spheroid is the "squashing" of the spheroid's pole, down towards its equator. yield curve put pressure on the net interest margin which, combined with flat loan growth, resulted in a decline in net interest income. While revenue growth in the first quarter did not meet management's expectations, the majority of the company's annual growth traditionally comes in the second through fourth quarters. "Moving into the second quarter, our loan pipeline is increasing," said Klimas. "The financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. industry is extremely competitive in northern Ohio, perhaps the most competitive of any region of the country," said Klimas, who pointed to the fact that there are at least a dozen banking competitors COMPETITORS, French law. Persons who compete or aspire to the same office, rank or employment. As an English word in common use, it has a much wider application. Ferriere, Dict. de Dr. h.t. in Lorain Lorain (lôrān`), city (1990 pop. 71,245), Lorain co., N Ohio, on Lake Erie at the mouth of the Black River; inc. 1834. Once an important ore-shipping point, Lorain has shipyards, steelworks, automobile-assembly plants, and commercial County alone. "However, LNB Bancorp has a clear growth strategy that focuses on its strengths as an independent community bank. "Amid this competitive environment, the keys for 2006 will be stabilizing stabilizing, v to hold a limb motionless in order to ground its energy; a standard isometric resistance technique, it releases tension and lengthens muscle fibers. the net interest margin and growing the loan portfolio, while maintaining stable credit quality," he said. "Our balance sheet remains strong, we are focused on successfully executing the strategy we embarked on in 2005 and remain optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about our long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. prospects." Klimas emphasized em·pha·size tr.v. em·pha·sized, em·pha·siz·ing, em·pha·siz·es To give emphasis to; stress. [From emphasis.] Adj. 1. a number of significant investments that are expected to have positive long-term impact. In 2005, strategic investments were made in the residential mortgage, private banking and small business functions. Earlier this year, Lorain National Bank The Lorain National Bank is a full service bank headquartered in Lorain, Ohio. As of 2002 the bank had total assets of $691 Million US Dollars and today has twenty branches and 24 ATMs [1] [2]. announced plans to construct two new branches in high growth areas of Lorain County and establish a business development office in Cuyahoga Cuyahoga (kī'əhō`gə), river, c.80 mi (130 km) long, flowing SW through Cuyahoga Falls, then N to Lake Erie, NE Ohio, forming part of Cleveland harbor. County with a special focus on small business. Those offices are expected to be operational in the summer and fall of this year, respectively. Key Performance Measures Net interest income for the first quarter was $7,203,000, compared to $7,332,000 for the first quarter a year ago and $7,671,000 for the fourth quarter of 2005. This was a $129,000, or 1.8 percent, decline from the first quarter of 2005 and a $468,000, or 6.1 percent, decline from the fourth quarter of 2005. The net interest margin for the first quarter this year was 3.89 percent, compared to 4.06 percent recorded for the fourth quarter of 2005, and 4.09 percent for the first quarter of 2005. The first quarter net interest margin decline was the result of the flat yield curve Flat Yield Curve A chart that shows that the yields of bonds with short maturities are equal to the yields of bonds with longer maturities. , competitive rates for deposits and loans and a rapid shift from low-cost core funding to higher-priced money market accounts and time deposits. While there was a rapid decline in the net interest margin in January January: see month. , some stabilization Stabilization The action undertakes a country when it buys and sells its own currency to protect its exchange value. Actions registered competitive traders undertake by on the NYSE to meet the exchange requirement that 75% of their traded be stabilizing, meaning that sell orders was apparent by the end of the first quarter. Noninterest income was $2,121,000 in the first quarter of 2006, compared with $2,927,000 for the first quarter of 2005 and $2,204,000 for the fourth quarter of 2005. The decline in noninterest income in the first quarter of 2006 as compared to the same period in 2005 was $806,000, or 27.5 percent. Included in the first quarter of 2005 was $370,000 of revenue from LNB Mortgage LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control . With the closing of this subsidiary, these fees are no longer generated. Also included in the first quarter of 2005 were gains on the sale of assets of $317,000. Deposit service charges and ATM fees increased 6.6 percent and 7.2 percent, respectively, in the first quarter of 2006 as compared to the same period in 2005. The decline in noninterest income in the first quarter 2006 as compared to the fourth quarter of 2005 was primarily due to a one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. loan placement fee recorded in the fourth quarter of 2005. Noninterest expense was $7,209,000 in the first quarter of 2006, a $462,000, or 6.0 percent, decline from $7,671,000 during the same period in 2005, and a $151,000, or 2.0 percent, decline from the fourth quarter in 2005. The $462,000 decline between the first quarter of 2006 and the same period in 2005 was primarily due to lower salary and benefit expense and lower communications expense. Salary and benefit expense was lower due to the closing of LNB Mortgage LLC. The noninterest expense improvement in the first quarter of the year from the fourth quarter of 2005 was attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to decreases in third party services, travel and entertainment, supplies, postage POSTAGE. The money charged by law for carrying letters, packets and documents by mail. By act of congress of March 3, 1851, Minot's Statute at Large, U. S. 587, it is enacted as follows: 2.-Sec. 1. and delivery and communications expense. "While we are making good progress on expense management, continued investments are required to execute To run a program, which causes the computer to carry out its instructions. See executable code, instruction and EXE file. execute - execution our long-term strategy," said Klimas. Credit quality continues to be stable. At March 31, 2006, nonperforming loans were $6,481,000, compared to $6,494,000 and $6,586,000 at December December: see month. 31, 2005 and March 31, 2005 respectively. At the end of the first quarter of 2006, the ratios of total nonperforming loans to total portfolio loans and total nonperforming assets Nonperforming asset An asset that is not effectively producing income, such as an overdue loan. nonperforming asset An asset that produces no income. to total assets were 1.10 percent and 0.88 percent, respectively, as compared to the 1.10 percent and 0.86 percent, respectively, at yearend 2005. The company's senior credit administration team is aggressively pursuing the resolution of these nonperforming loans. Net charge-offs for the first quarter were $204,000 as compared to $1,418,000 and $240,000 in the fourth quarter of 2005 and in the first quarter of 2005, respectively. Net charge-offs (annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. ) for the first quarter were 0.14 percent of average portfolio loans, an improvement over 0.95 percent in the fourth quarter of 2005, and 0.17 percent in the first quarter of 2005. The provision for loan losses was $150,000 in the first quarter of 2006 as compared to $150,000 in the fourth quarter of 2005 and $399,000 in the first quarter of 2005. The allowance for loan losses ended the first quarter of 2006 at $6,568,000 compared to $6,622,000 at year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. 2005 and $7,545,000 at the end of the first quarter of 2005. Total assets at the end of the first quarter of 2006 were $810.1 million, an increase of $29.0 million, or 3.7 percent over the same period a year ago and $9.0 million, or 1.1 percent, compared to December 31, 2005. Total deposits at the end of the first quarter this year were $674.1 million, up from $609.1 million in the same period a year ago and $640.2 million at the end of 2005. Total portfolio loans at March 31, 2006 were $588.2 million, up 2.5 percent from March 31, 2005, but flat compared to December 31, 2005. About LNB Bancorp, Inc. LNB Bancorp, Inc. is an $810.1 million financial holding company. Its major subsidiary, The Lorain National Bank, is a full-service full-ser·vice adj. Associated with or offering complete service: full-service gasoline pumps; full-service banks. commercial bank, specializing in commercial, personal banking services, residential mortgage lending and investment and trust services. Lorain National Bank serves customers through 20 retail-banking locations and 24 ATMs in Lorain, eastern Erie Erie, indigenous people of North America Erie (ĭr`ē), indigenous people of North America of the Iroquoian branch of the Hokan-Siouan linguistic stock (see Native American languages). and western Cuyahoga counties. North Coast Community Development Corporation is a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of The Lorain National Bank. Brokerage BROKERAGE, contracts. The trade or occupation of a broker; the commissions paid to a broker for his services. services are provided by the bank through an agreement with Investment Centers of America America [for Amerigo Vespucci], the lands of the Western Hemisphere—North America, Central (or Middle) America, and South America. The world map published in 1507 by Martin Waldseemüller is the first known cartographic use of the name. . 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. This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the "Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Terms such as "will," "should," "plan," "intend," "expect," "continue," "believe," "anticipate" and "seek," as well as similar expressions, are forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. in nature. Actual results and events may differ materially from those expressed or anticipated as a result of risks and uncertainties which include fluctuations in interest rates, inflation, government regulations, and economic conditions and competition in the geographic geographic /geo·graph·ic/ (je?o-graf´ik) in pathology, of or referring to a pattern that is well demarcated, resembling outlines on a map. geographic pertaining to geography. and business areas in which LNB Bancorp, Inc. conducts its operations, as well as the risks and uncertainties described from time to time in LNB Bancorp's reports as filed with the Securities and Exchange Commission. We undertake no obligation to review or update any forward-looking statements, whether as a result of new information, future events or otherwise.
Consolidated Balance Sheets
March 31, 2006 December 31, 2005
-------------- -----------------
(unaudited)
(Dollars in thousands except
share amounts)
ASSETS
Cash and due from Banks $25,081 $23,923
Federal funds sold and short-term
investments - -
Securities:
Available for sale, at fair value 157,883 151,629
Federal Home Loan Bank and Federal
Reserve Stock 3,242 3,645
-------------- ----------------
Total securities 161,125 155,274
-------------- ----------------
Loans:
Loans held for sale 2,599 2,586
Portfolio loans 588,226 588,425
Allowance for loan losses (6,568) (6,622)
-------------- ----------------
Net loans 584,257 584,389
-------------- ----------------
Bank premises and equipment, net 11,413 10,833
Other real estate owned 608 432
Bank owned life insurance 14,161 13,935
Goodwill and intangible assets, net 3,279 3,321
Accrued interest receivable 3,275 3,053
Other assets 6,894 5,961
-------------- ----------------
Total Assets $810,093 $801,121
============== ================
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Demand and other noninterest-bearing $87,997 $87,597
Savings, money market and interest-
bearing demand 275,304 265,831
Certificates of deposit 310,755 286,788
-------------- ----------------
Total deposits 674,056 640,216
-------------- ----------------
Short-term borrowings 21,901 32,616
Federal Home Loan Bank advances 41,093 53,896
Accrued interest payable 2,153 2,126
Accrued taxes, expenses and other
liabilities 3,513 3,861
-------------- ----------------
Total Liabilities 742,716 732,715
============== ================
Shareholders' Equity
Common stock, par value $1 per
share, authorized 15,000,000
shares, issued 6,771,867 at March
31, 2006 and December 31, 2005 6,772 6,772
Additional paid-in capital 26,334 26,334
Retained earnings 43,235 42,945
Accumulated other comprehensive loss (3,491) (2,996)
Treasury shares at cost, 293,194 at
March 31, 2006 and 250,694 at
December 31, 2005 (5,473) (4,649)
-------------- ----------------
Total Shareholders' Equity 67,377 68,406
-------------- ----------------
Total Liabilities and Shareholders'
Equity $810,093 $801,121
============== ================
Consolidated Statements of Income (unaudited)
Three Months Ended March 31,
----------------------------
2006 2005
------------- --------------
(Dollars in thousands except
share and per share
amounts)
Interest Income
Loans $10,078 $8,833
Securities:
U.S. Government agencies and
corporations 1,339 1,019
State and political subdivisions 103 114
Other debt and equity securities 52 50
Federal funds sold and short-term
investments 36 36
------------- --------------
Total interest income 11,608 10,052
Interest Expense
Deposits:
Certificates of deposit, $100 and
over 1,370 683
Other deposits 2,434 1,447
Federal Home Loan Bank advances 400 501
Short-term borrowings 201 89
------------- --------------
Total interest expense 4,405 2,720
------------- --------------
Net Interest Income 7,203 7,332
Provision for Loan Losses 150 399
------------- --------------
Net interest income after provision
for loan losses 7,053 6,933
Noninterest Income
Investment and trust services 509 517
Deposit service charges 968 908
Other service charges and fees 451 461
Mortgage banking revenue - 370
Income from bank owned life insurance 145 193
Other income 46 161
------------- --------------
Total fees and other income 2,119 2,610
Securities gains, net - 180
Gains on sale of loans - 132
Gains on sale of other assets, net 2 5
------------- --------------
Total noninterest income 2,121 2,927
Noninterest Expense
Salaries and employee benefits 3,578 3,978
Furniture and equipment 737 733
Net occupancy 478 517
Outside services 419 309
Marketing and public relations 391 307
Supplies, postage and freight 298 371
Telecommunications 199 312
Ohio Franchise tax 232 182
Electronic banking expenses 145 123
Other expense 732 839
------------- --------------
Total noninterest expense 7,209 7,671
------------- --------------
Income before income tax expense 1,965 2,189
Income tax expense 517 618
------------- --------------
Net Income $1,448 $1,571
============= ==============
Net Income Per Common Share
Basic $0.22 $0.24
Diluted 0.22 0.24
Dividends declared 0.18 0.18
Average Common Shares Outstanding
Basic 6,504,981 6,641,173
Diluted 6,504,981 6,641,173
LNB Bancorp, Inc.
Supplemental Financial Information
(Unaudited - Dollars in thousands except Share and Per Share Data)
-----------------------------------
March 31, December 31, March 31,
2006 2005 2005
-----------------------------------
END OF PERIOD BALANCES
Assets $810,093 $801,121 $781,092
Deposits 674,056 640,216 609,098
Portfolio loans 588,226 588,425 574,100
Allowance for loan losses 6,568 6,622 7,545
Shareholders' equity 67,377 68,406 68,356
AVERAGE BALANCES
Assets:
Total assets $804,553 $801,045 $780,963
Earning assets 751,537 750,215 726,431
Securities 158,027 156,503 144,501
Portfolio loans 589,888 591,141 572,464
Liabilities and shareholders'
equity:
Total deposits $661,204 $643,592 $619,576
Interest bearing deposits 573,542 557,506 521,514
Interest bearing liabilities 642,058 639,109 606,554
Total shareholders' equity 69,339 69,545 70,707
INCOME STATEMENT
Net interest income $7,203 $7,671 $7,332
Net interest income-FTE(1) 7,251 7,719 7,386
Provision for loan losses 150 150 399
Noninterest income 2,121 2,203 2,927
Noninterest expense 7,209 7,360 7,671
Taxes 517 531 618
----------------------------------------------------------------------
Net income 1,448 1,833 1,571
----------------------------------------------------------------------
Total revenue 9,324 9,874 10,259
PER SHARE DATA
Basic net income Per common share $0.22 $0.28 $0.24
Diluted net income per common
share 0.22 0.28 0.24
Cash dividends per common share 0.18 0.18 0.18
Basic average common shares
outstanding 6,504,981 6,544,706 6,641,181
Diluted average common shares
outstanding 6,504,981 6,544,819 6,641,181
KEY RATIOS
Return on average assets(2) 0.73% 0.91% 0.82%
Return on average common
equity(2) 8.47% 10.46% 9.01%
Efficiency ratio 76.92% 74.18% 74.38%
Noninterest expense to average
assets(2) 3.63% 3.65% 3.98%
Average equity to average assets 8.62% 8.68% 9.05%
Net interest margin 3.89% 4.06% 4.09%
Net interest margin (FTE)(1) 3.91% 4.08% 4.12%
Quarterly asset growth(2) 4.54% -5.53% -0.29%
Quarterly portfolio loan
growth(2) -0.13% -3.67% 1.30%
Quarterly deposit growth(2) 12.14% -5.95% 9.89%
ASSET QUALITY
Nonperforming loans $6,481 $6,494 $6,586
Other real estate owned 608 432 476
Total nonperforming assets 7,089 6,926 7,062
Net Charge Offs 204 1,418 240
Total nonperforming loans to
total loans 1.10% 1.10% 1.15%
Total nonperforming assets to
total assets 0.88% 0.86% 0.90%
Net charge-offs to average
loans(2) 0.14% 0.95% 0.17%
Allowance for loan losses 1.12% 1.13% 1.31%
Allowance to nonperforming loans 101.34% 101.97% 114.56%
(1) FTE -- fully tax equivalent at 34% tax rate
(2) Annualized for the three month periods
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