LNB Bancorp, Inc. Reports Second Quarter Results.

* Earnings impacted by economic challenges

* Total assets surpass $1 billion for first time in company history

* Morgan Bancorp, Inc. acquisition completed

LORAIN, Ohio -- LNB Bancorp, Inc. (NASDAQ:LNBB) today announced net income for the second quarter of 2007. Net income for the quarter was $636,000 or $0.09 per diluted share, compared to net income of $1,639,000 or $0.25 per diluted share, for the second quarter of 2006. Net income for the first six months of 2007 totaled $2,171,000, or $0.32 per diluted share, compared to net income of $3,087,000, or $0.48 per diluted share, for the six months ended June 30, 2006.

"The weak economic environment in our markets continues to have an impact on our performance," said Daniel E. Klimas, president and chief executive officer of LNB Bancorp, Inc. "Specifically, the sluggish residential development sector has had a profound effect on many banks throughout the region."

Klimas indicated that residential building permits in Lorain County declined more than 40 percent in the first five months of this year compared to the first five months a year ago, according to U. S. Census Bureau data. Unemployment in Lorain County for June this year was 6.6 percent, compared to 5.9 percent in June last year.

"We recognize that it will take time for the local economy to rebound and for our customers to begin to see the benefits from any improvement in the economy," said Klimas. "Meanwhile, we are working hard to strategically position ourselves for this economic improvement.

"Despite this challenging operating environment, we are showing solid loan growth, gaining market share, and continuing to invest in people and technology to become an even stronger community bank of scale," said Klimas, who pointed to the fact that LNB Bancorp surpassed $1 billion in total assets for the first time in its history.

While non-performing loans are up $7.0 million since June of last year, they are down $3.4 million since the end of the first quarter. At June 30, 2007, non-performing loans were approximately $13.3 million and represented about 1.82 percent of total loans. "In the last quarter of 2006, the Company instituted additional controls over our credit administration process and have been focused on reviewing our entire commercial portfolio," said Klimas. "We are working diligently to further resolve the level of non-performing loans and have seen improvement in our credit quality."

Management also looks at the level of potential problem loans which the company feels requires a higher level of scrutiny. The level of these loans, which were $19.3 million at June 30, 2007 as compared to $22.1 million at December 31, 2006, is also showing improvement.

A major highlight of the second quarter this year was the successful completion of the merger with Morgan Bank, N.A. of Hudson, Ohio. On May 10, 2007, LNB Bancorp, Inc. announced the completion of the acquisition of Morgan Bancorp, Inc., of Hudson, Ohio and its wholly-owned subsidiary, Morgan Bank, N.A., in a stock and cash merger transaction valued at approximately $27.9 million. With this acquisition, the Company has now expanded its market area to include Summit County. "We are very pleased with the progress of our branch network and other retail delivery systems. We have made some significant investments over the past 18 months in terms of locations and personnel as we create a community bank of scale," said Klimas. "While those investments, including the Morgan acquisition, certainly carry a short-term cost, we are confident that these strategic moves will have a positive long-term impact on our company." The Morgan Bank acquisition contributed approximately $93.2 million in portfolio loans, primarily indirect auto loans, and $101.8 million in deposits.

Second quarter net interest income totaled $7.2 million, a modest increase compared to the second quarter of 2006 and a $369,000 increase from the first quarter of this year. Average earning assets grew by 15 percent, or $111.8 million, from the second quarter of 2006 to the second quarter of 2007, with approximately $96.3 million contributed by the acquired Morgan Bank portfolio. Net interest income for the first half of 2007 was $14.0 million, compared to $14.4 million for the same period a year ago.

The net interest margin was 3.33 percent for the quarter, down seventeen basis points from 3.50 percent for the first quarter of 2007 and 49 basis points from 3.82 percent for the second quarter of 2006. The cost of funds remained flat on a linked quarter basis. In addition to the impact of the increased level in non-performing loans, the decline in net interest margin from the second quarter of 2006 was also impacted as the cost of funds rose more than the yield on assets during that period. The net interest margin for the first six months of 2007 was 3.41 percent versus 3.86 percent for the first half of 2006.

Non-interest income was $2.4 million for the second quarter of 2007, an increase of $56,000, or 2.4 percent, compared to the second quarter of 2006. The increase was largely from net gains recorded on the sale of indirect loans originated by Morgan and mortgage loans to the secondary market. The company retains the servicing rights for these loans. Other types of non-interest income grew as well, including service charges on deposit accounts, and ATM charges reflecting continued momentum in fee-based services.

Non-interest expense was $8.0 million for the quarter as compared to $7.2 million for the second quarter of 2006. The increases in salaries and benefits, occupancy and furniture and equipment primarily relate to operating costs associated with the acquisition of Morgan Bank and other new facilities opened during 2006 and into the first quarter of 2007. In addition to the Morgan Bank acquisition, the company continued to strengthen and expand its presence in Lorain County and adjacent Cuyahoga County. While making these significant investments for the future, the company has had success in limiting related increases in overhead expense. The $818,000 increase in non-interest expense also includes operating costs associated with the new offices, as well as increases in legal and other carrying costs associated with non-performing assets.

The provision for loan losses was $853,000 for the quarter compared to $165,000 for the second quarter of 2006. Annualized net charge-offs were 0.64 percent of average loans for the quarter compared to 0.11 percent for the second quarter of 2006. Non-performing assets to total assets were 1.54 percent at June 30, 2007 compared to 2.08 percent at March 31, 2007 and 0.95 percent at June 30, 2006. Of the $15.4 million of non-performing assets at June 30, 2007, approximately $2.1 million is other real estate or repossessed assets in which collateral held is considered collectible. The allowance for loan losses was 1.11 percent of total loans at June 30, 2007 compared to 1.10 percent at June 30, 2006.

Total assets increased by $178.7 million, or 21.7 percent, from June 30, 2006 to $1.0 billion at June 30, 2007. Over the same twelve month period, portfolio loans increased by $130.8 million to $729.3 million, and total deposits increased $144.9 million to $822.9 million. Since December 31, 2006, portfolio loans increased $101.0 million and total deposits increased $105.6 million. These increases are principally a result of the Morgan Bank acquisition.

About LNB Bancorp, Inc.

LNB Bancorp, Inc. is a $1.0 billion financial 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 serves customers through 22 retail-banking locations and 29 ATMs in Lorain, eastern Erie, western Cuyahoga and Summit counties. North Coast Community Development Corporation is a wholly owned subsidiary of The Lorain National Bank. Brokerage services are provided by the bank through an agreement with Investment Centers of America. 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 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," "believe," "anticipate" and "seek," as well as similar expressions, 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 fluctuations in interest rates, inflation, government regulations, and economic conditions and competition in the geographic 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.

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