Attached files
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| 8-K - LNB BANCORP, INC. 8-K - LNB BANCORP INC | a50043250.htm |
Exhibit 99.1
LNB Bancorp Reports Third Quarter 2011 Results
- Pre-provision core earnings* increase 24.3 percent from 3Q 2010
- Third quarter net income of $1,672,000
- Loan growth exceeds 5 percent 3Q2011 vs. 3Q2010
- Non-performing loans decline by 14.8 percent from one year ago
LORAIN, Ohio--(BUSINESS WIRE)--October 27, 2011--LNB Bancorp, Inc. (NASDAQ: LNBB) today reported net income of $1,672,000 for the three months ended September 30, 2011 compared to $2,730,000 for the same period in 2010. The three months ended September 30, 2010 included a one-time after tax gain of $1,459,000 on the extinguishment of debt related to the exchange of trust preferred securities for common shares. Excluding the one-time gain, net income for the third quarter of 2011 of $1,672,000 is up from $1,271,000 for the third quarter of 2010.
“We are encouraged by another strong quarter of solid core earnings performance in a continuing slow growth economy,” said Daniel E. Klimas, President and Chief Executive Officer of LNB Bancorp. “Additionally, expense management continues to be a high priority. Noninterest expense was $8,329,000, down 5 percent from the third quarter of 2010.”
Pre-provision core earnings* equaled $4,272,000 for the third quarter of 2011 compared to $3,438,000 for the third quarter one year ago, an increase of 24.3 percent. For the first nine months of 2011, pre-provision core earnings* totaled $11,886,000 compared to $10,810,000 for the first nine months of 2010.
“In the third quarter, asset quality showed significant improvement from a year ago which is testimony to our aggressive asset management strategy,” said Klimas. Nonperforming assets decreased by $6.5 million from the third quarter 2010 level. At September 30, 2011 non-performing loans totaled $37,115,000, or 4.43 percent of total loans, compared to $43,574,000, or 5.47 percent of total loans at the same time one year ago.
Net income available to common shareholders for the three months ended September 30, 2011 was $1,353,000, or $0.17 per diluted share, compared with a net income available to common shareholders of $2,410,000, or $0.32 per diluted share for the same period a year ago.
Net income for the nine months of 2011 totaled $3,514,000 compared to $5,304,000 for the same period one year ago. Net income available to common shareholders for the nine months ended September 30, 2011 of $2,558,000, or $0.32 per diluted share, compared with a net income available to common shareholders of $4,347,000, or $0.59 per diluted share for the same period a year ago.
The after tax gain in 2010 of $1,459,000 on the extinguishment of debt related to the exchange of trust preferred securities for common shares in the third quarter of 2010 equaled $0.19 per share and $0.20 per share for the three months and nine months ended September 30, 2010, respectively.
Key Performance Measures
Net interest income on a fully taxable equivalent basis (“FTE”) for the third quarter of 2011 was $10,203,000 compared with $9,498,000 for the third quarter a year ago. For the first nine months of 2011, net interest income FTE was $29,909,000, compared to $29,226,000 for the same period in 2010. The net interest margin FTE for the third quarter of 2011 was 3.74 percent, an improvement from 3.49 percent for the third quarter of 2010.
Noninterest income for the third quarter of 2011 was $2,542,000, compared with $5,044,000 for the same quarter a year ago. The 2010 noninterest income included a $2,210,000 gain from the exchange of trust preferred securities. For the first nine months of 2011, noninterest income was $8,417,000 compared to $10,591,000 for the nine-month period a year ago.
Expense management efforts continue to show results. Noninterest expense was $8,329,000, down from $8,768,000 in the third quarter a year ago. Noninterest expense for the first nine months of 2011 was $26,040,000, down from $26,419,000 for the first nine months of 2010.
The provision for loan losses totaled $2,100,000 for the quarter ended September 30, 2011, down from $3,345,000 for the second quarter this year and essentially unchanged from $2,076,000 in the third quarter of 2010. For the nine-month 2011 period, the provision for loan losses was $7,545,000, compared with $6,294,000 for the first nine months of 2010.
Overall loan demand is improving as total loans ended the quarter at $837,492,000 up slightly from $830,312,000 at the end of the second quarter of 2011, but up 5.2 percent from $795,909,000 at the end of the third quarter of 2010. Total assets for the third quarter 2011 ended at $1,170,283,000 compared to $1,156,602,000 at the end of the third quarter of 2010. Total deposits were $989,279,000 at the end of the third quarter of 2011, compared to $979,031,000 at the end of the same quarter of 2010.
The Company continues to work through asset quality challenges amid a difficult economy. At September 30, 2011, the Company’s non-performing assets totaled $39,231,000, or 3.35 percent of total assets, compared to $40,231,000, or 3.48 percent of total assets, at June 30, 2011 and $45,780,000 or 3.96 percent at September 30, 2010.
The allowance for possible loan losses is $17,845,000 at September 30, 2011, up from $17,351,000 at June 30, 2011 and $17,197,000 at September 30, 2010. The allowance to total loans at September 30, 2011 equaled 2.13 percent, up from 2.09 percent at the end of the second quarter of 2011 and down from the 2.16 percent at September 30, 2010.
Net charge-offs to average loans for the quarter ending September 30, 2011 was 0.76 percent compared to 1.63 percent at June 30, 2011 and 2.14 percent one year ago.
* Pre-provision core earnings is a non-GAAP financial measure that the Company’s management believes is useful in analyzing the Company’s underlying performance trends, particularly in periods of economic stress. Pre-provision core earnings is defined as income before income tax expense, adjusted to exclude the impact of provision for loan losses and the gain on extinguishment of debt. Pre-provision core earnings is reconciled to the related GAAP financial measure in the “Reconciliation” table included after the consolidated financial statements and supplemental financial information included in this press release.
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 Morgan Bank serve customers through 20 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," "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:
- significant increases in competitive pressure in the banking and financial services industries;
- changes in the interest rate environment which could reduce anticipated or actual margins;
- 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 Wall Street reform and Consumer Protection 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 or if initiatives undertaken by the U.S. government do not have the intended effect on the financial markets;
- limitations on the Company's ability to return capital to shareholders and dilution of the Company's common shares that may result from the terms of the Capital Purchase Program ("CPP"), pursuant to which the Company issued securities to the United States Department of the Treasury (the "U.S. Treasury");
- limitations on the Company's ability to pay dividends;
- increases in interest rates or further weakening economic conditions that could constrain borrowers' ability to repay outstanding loans or diminish the value of the collateral securing those loans;
- 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;
- asset price deterioration, which has had and may continue to have a negative effect on the valuation of certain asset categories represented on the Company's balance sheet;
- general economic conditions, either nationally or regionally (especially in northeastern Ohio), becoming less favorable than expected resulting in, among other things, further deterioration in credit quality of assets;
- increases in deposit insurance premiums or assessments imposed on the Company by the FDIC;
- difficulty attracting and/or retaining key executives and/or relationship managers at compensation levels necessary to maintain a competitive market position;
- changes occurring in business conditions and inflation;
- changes in technology;
- changes in trade, monetary, fiscal and tax policies;
- changes in the securities markets, in particular, disruption in the fixed income markets and adverse capital market conditions;
- continued disruption in the housing markets and related conditions in the financial markets; and
- changes in general economic conditions and competition in the geographic and business areas in which the Company conducts its operations, particularly in light of the recent consolidation of competing financial institutions; as well as the risks and uncertainties described from time to time in the Company's reports as filed with the Securities and Exchange Commission.
| CONSOLIDATED BALANCE SHEETS | ||||||||
| At September 30, 2011 | At December 31, 2010 | |||||||
| (unaudited) | ||||||||
| (Dollars in thousands except share amounts) | ||||||||
| ASSETS | ||||||||
| Cash and due from Banks | $ | 34,682 | $ | 17,370 | ||||
| Federal funds sold and interest-bearing deposits in banks | 5,966 | 31,198 | ||||||
| Cash and cash equivalents | 40,648 | 48,568 | ||||||
| Securities available for sale, at fair value | 232,358 | 221,725 | ||||||
| Restricted stock | 5,741 | 5,741 | ||||||
| Loans held for sale | 4,069 | 5,105 | ||||||
| Loans: | ||||||||
| Portfolio loans | 837,492 | 812,579 | ||||||
| Allowance for loan losses | (17,845 | ) | (16,136 | ) | ||||
| Net loans | 819,647 | 796,443 | ||||||
| Bank premises and equipment, net | 9,105 | 9,645 | ||||||
| Other real estate owned | 2,116 | 3,119 | ||||||
| Bank owned life insurance | 17,670 | 17,146 | ||||||
| Goodwill, net | 21,582 | 21,582 | ||||||
| Intangible assets, net | 766 | 869 | ||||||
| Accrued interest receivable | 3,667 | 3,519 | ||||||
| Other assets | 12,914 | 19,075 | ||||||
| Total Assets | $ | 1,170,283 | $ | 1,152,537 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Deposits | ||||||||
| Demand and other noninterest-bearing | $ | 121,402 | $ | 115,476 | ||||
| Savings, money market and interest-bearing demand | 352,089 | 318,434 | ||||||
| Certificates of deposit | 515,788 | 544,616 | ||||||
| Total deposits | 989,279 | 978,526 | ||||||
| Short-term borrowings | 371 | 932 | ||||||
| Federal Home Loan Bank advances | 47,498 | 42,501 | ||||||
| Junior subordinated debentures | 16,238 | 16,238 | ||||||
| Accrued interest payable | 1,271 | 1,434 | ||||||
| Accrued taxes, expenses and other liabilities | 2,928 | 3,442 | ||||||
| Total Liabilities | 1,057,585 | 1,043,073 | ||||||
| Shareholders' Equity | ||||||||
|
Preferred stock, Series A Voting, no par value, authorized 150,000
shares at |
- | - | ||||||
|
Fixed rate cumulative preferred stock, Series B, no par value,
$1,000 liquidation value, |
25,223 | 25,223 | ||||||
| Discount on Series B preferred stock | (105 | ) | (116 | ) | ||||
| Warrant to purchase common stock | 146 | 146 | ||||||
|
Common stock, par value $1 per share, authorized 15,000,000 shares, |
8,210 | 8,173 | ||||||
| Additional paid-in capital | 39,559 | 39,455 | ||||||
| Retained earnings | 42,989 | 40,668 | ||||||
| Accumulated other comprehensive income | 2,768 | 2,007 | ||||||
| Treasury shares at cost, 328,194 shares at September 30, 2011 and at December 31, 2010 | (6,092 | ) | (6,092 | ) | ||||
| Total Shareholders' Equity | 112,698 | 109,464 | ||||||
| Total Liabilities and Shareholders' Equity | $ | 1,170,283 | $ | 1,152,537 | ||||
| Consolidated Statements of Income (unaudited) | |||||||||||||||||
|
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
||||||||||||||||
| 2011 | 2010 | 2011 | 2010 | ||||||||||||||
| (Dollars in thousands except share and per share amounts) | (Dollars in thousands except share and per share amounts) | ||||||||||||||||
| Interest Income | |||||||||||||||||
| Loans | $ | 10,692 | $ | 10,740 | $ | 31,731 | $ | 32,112 | |||||||||
| Securities: | |||||||||||||||||
| U.S. Government agencies and corporations | 1,505 | 1,395 | 4,594 | 5,601 | |||||||||||||
| State and political subdivisions | 257 | 246 | 770 | 737 | |||||||||||||
| Trading securities | - | - | - | 49 | |||||||||||||
| Other debt and equity securities | 67 | 72 | 210 | 202 | |||||||||||||
| Federal funds sold and short-term investments | 15 | 10 | 38 | 30 | |||||||||||||
| Total interest income | 12,536 | 12,463 | 37,343 | 38,731 | |||||||||||||
| Interest Expense | |||||||||||||||||
| Deposits | 2,044 | 2,554 | 6,531 | 8,279 | |||||||||||||
| Federal Home Loan Bank advances | 263 | 319 | 790 | 953 | |||||||||||||
| Short-term borrowings | - | 1 | 2 | 3 | |||||||||||||
| Junior subordinated debenture | 170 | 217 | 511 | 648 | |||||||||||||
| Total interest expense | 2,477 | 3,091 | 7,834 | 9,883 | |||||||||||||
| Net Interest Income | 10,059 | 9,372 | 29,509 | 28,848 | |||||||||||||
| Provision for Loan Losses | 2,100 | 2,076 | 7,545 | 6,294 | |||||||||||||
| Net interest income after provision for loan losses | 7,959 | 7,296 | 21,964 | 22,554 | |||||||||||||
| Noninterest Income | |||||||||||||||||
| Investment and trust services | 378 | 403 | 1,251 | 1,411 | |||||||||||||
| Deposit service charges | 1,099 | 1,146 | 3,015 | 3,179 | |||||||||||||
| Other service charges and fees | 769 | 792 | 2,494 | 2,412 | |||||||||||||
| Income from bank owned life insurance | 175 | 171 | 524 | 515 | |||||||||||||
| Other income | 66 | 86 | 186 | 248 | |||||||||||||
| Total fees and other income | 2,487 | 2,598 | 7,470 | 7,765 | |||||||||||||
| Securities gains, net | 7 | - | 507 | 38 | |||||||||||||
| Gains on sale of loans | 181 | 264 | 598 | 651 | |||||||||||||
| Loss on sale of other assets, net | (133 | ) | (28 | ) | (158 | ) | (73 | ) | |||||||||
| Gain on extinguishment of debt | - | 2,210 | - | 2,210 | |||||||||||||
| Total noninterest income | 2,542 | 5,044 | 8,417 | 10,591 | |||||||||||||
| Noninterest Expense | |||||||||||||||||
| Salaries and employee benefits | 3,986 | 3,898 | 12,149 | 11,727 | |||||||||||||
| Furniture and equipment | 821 | 866 | 2,299 | 2,716 | |||||||||||||
| Net occupancy | 569 | 579 | 1,769 | 1,775 | |||||||||||||
| Professional fees | 450 | 538 | 1,381 | 1,686 | |||||||||||||
| Marketing and public relations | 215 | 256 | 761 | 828 | |||||||||||||
| Supplies, postage and freight | 265 | 292 | 826 | 936 | |||||||||||||
| Telecommunications | 163 | 200 | 547 | 623 | |||||||||||||
| Ohio Franchise tax | 303 | 274 | 899 | 836 | |||||||||||||
| FDIC assessments | 396 | 568 | 1,369 | 1,653 | |||||||||||||
| Other real estate owned | 144 | 95 | 941 | 247 | |||||||||||||
| Electronic banking expenses | 236 | 237 | 668 | 659 | |||||||||||||
| Loan and collection expense | 334 | 433 | 1,086 | 1,206 | |||||||||||||
| Other expense | 447 | 532 | 1,345 | 1,527 | |||||||||||||
| Total noninterest expense | 8,329 | 8,768 | 26,040 | 26,419 | |||||||||||||
| Income before income tax expense | 2,172 | 3,572 | 4,341 | 6,726 | |||||||||||||
| Income tax expense | 500 | 842 | 827 | 1,422 | |||||||||||||
| Net Income | $ | 1,672 | $ | 2,730 | $ | 3,514 | $ | 5,304 | |||||||||
| Dividends and accretion on preferred stock | 319 | 320 | 956 | 957 | |||||||||||||
| Net Income Available to Common Shareholders | $ | 1,353 | $ | 2,410 | $ | 2,558 | $ | 4,347 | |||||||||
| Net Income Per Common Share | |||||||||||||||||
| Basic | $ | 0.17 | $ | 0.32 | $ | 0.32 | $ | 0.59 | |||||||||
| Diluted | 0.17 | 0.32 | 0.32 | 0.59 | |||||||||||||
| Dividends declared | 0.01 | 0.01 | 0.03 | 0.03 | |||||||||||||
| Average Common Shares Outstanding | |||||||||||||||||
| Basic | 7,882,439 | 7,514,935 | 7,879,575 | 7,400,957 | |||||||||||||
| Diluted | 7,882,439 | 7,514,935 | 7,879,575 | 7,400,957 | |||||||||||||
| LNB Bancorp, Inc. | |||||||||||||||||||||
| Supplemental Financial Information | |||||||||||||||||||||
| (Unaudited - Dollars in thousands except Share and Per Share Data) | |||||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||
| September 30, | June 30, | September 30, | September 30, | September 30, | |||||||||||||||||
| END OF PERIOD BALANCES | 2011 | 2011 | 2010 | 2011 | 2010 | ||||||||||||||||
| Cash and Cash Equivalents | $ | 40,648 | $ | 32,481 | $ | 83,074 | $ | 40,648 | $ | 83,074 | |||||||||||
| Securities | 232,358 | 231,025 | 215,267 | 232,358 | 215,267 | ||||||||||||||||
| Restricted stock | 5,741 | 5,741 | 5,741 | 5,741 | 5,741 | ||||||||||||||||
| Loans held for sale | 4,069 | 1,308 | 4,676 | 4,069 | 4,676 | ||||||||||||||||
| Portfolio loans | 837,492 | 830,312 | 795,909 | 837,492 | 795,909 | ||||||||||||||||
| Allowance for loan losses | 17,845 | 17,351 | 17,197 | 17,845 | 17,197 | ||||||||||||||||
| Net loans | 819,647 | 812,961 | 778,712 | 819,647 | 778,712 | ||||||||||||||||
| Other assets | 67,820 | 73,828 | 69,132 | 67,820 | 69,132 | ||||||||||||||||
| Total assets | $ | 1,170,283 | $ | 1,157,344 | $ | 1,156,602 | $ | 1,170,283 | $ | 1,156,602 | |||||||||||
| Total deposits | 989,279 | 982,037 | 979,031 | 989,279 | 979,031 | ||||||||||||||||
| Other borrowings | 64,107 | 59,493 | 60,231 | 64,107 | 60,231 | ||||||||||||||||
| Other liabilities | 4,199 | 4,317 | 5,997 | 4,199 | 5,997 | ||||||||||||||||
| Total liabilities | 1,057,585 | 1,045,847 | 1,045,259 | 1,057,585 | 1,045,259 | ||||||||||||||||
| Total shareholders' equity | 112,698 | 111,497 | 111,343 | 112,698 | 111,343 | ||||||||||||||||
| Total liabilities and shareholders' equity | $ | 1,170,283 | $ | 1,157,344 | $ | 1,156,602 | $ | 1,170,283 | $ | 1,156,602 | |||||||||||
| AVERAGE BALANCES | |||||||||||||||||||||
| Assets: | |||||||||||||||||||||
| Total assets | $ | 1,167,114 | $ | 1,174,984 | $ | 1,150,184 | $ | 1,167,432 | $ | 1,155,702 | |||||||||||
| Earning assets* | 1,081,696 | 1,099,055 | 1,081,034 | 1,086,414 | 1,086,456 | ||||||||||||||||
| Securities | 232,252 | 250,169 | 242,172 | 237,394 | 248,720 | ||||||||||||||||
| Portfolio loans | 835,090 | 815,618 | 799,784 | 820,644 | 796,000 | ||||||||||||||||
| Liabilities and shareholders' equity: | |||||||||||||||||||||
| Total deposits | $ | 990,189 | $ | 998,303 | $ | 971,560 | $ | 991,664 | $ | 977,344 | |||||||||||
| Interest bearing deposits | 865,043 | 877,572 | 856,734 | 870,984 | 864,565 | ||||||||||||||||
| Interest bearing liabilities | 925,041 | 937,250 | 920,300 | 930,786 | 929,584 | ||||||||||||||||
| Total shareholders' equity | 112,678 | 111,495 | 108,872 | 111,433 | 106,836 | ||||||||||||||||
| INCOME STATEMENT | |||||||||||||||||||||
| Total Interest Income | $ | 12,536 | $ | 12,472 | $ | 12,463 | $ | 37,343 | $ | 38,731 | |||||||||||
| Total Interest Expense | 2,477 | 2,636 | 3,091 | 7,834 | 9,883 | ||||||||||||||||
| Net interest income | 10,059 | 9,836 | 9,372 | 29,509 | 28,848 | ||||||||||||||||
| Provision for loan losses | 2,100 | 3,345 | 2,076 | 7,545 | 6,294 | ||||||||||||||||
| Other income | 2,487 | 2,505 | 2,598 | 7,470 | 7,765 | ||||||||||||||||
| Net gain on sale of assets | 55 | 299 | 236 | 947 | 616 | ||||||||||||||||
| Gain on extinguishment of debt | - | - | 2,210 | - | 2,210 | ||||||||||||||||
| Noninterest expense | 8,329 | 8,522 | 8,768 | 26,040 | 26,419 | ||||||||||||||||
| Income before income taxes | 2,172 | 773 | 3,572 | 4,341 | 6,726 | ||||||||||||||||
| Income tax expense | 500 | 61 | 842 | 827 | 1,422 | ||||||||||||||||
| Net income | 1,672 | 712 | 2,730 | 3,514 | 5,304 | ||||||||||||||||
| Preferred stock dividend and accretion | 319 | 318 | 320 | 956 | 957 | ||||||||||||||||
| Net income available to common shareholders | $ | 1,353 | $ | 394 | $ | 2,410 | $ | 2,558 | $ | 4,347 | |||||||||||
| Common cash dividend declared and paid | $ | 79 | $ | 79 | $ | 78 | $ | 237 | $ | 225 | |||||||||||
| Net interest income-FTE (1) | $ | 10,203 | $ | 9,969 | $ | 9,498 | $ | 29,909 | $ | 29,226 | |||||||||||
| Pre-provision core earnings | 4,272 | 4,118 | 3,438 | 11,886 | 10,810 | ||||||||||||||||
| PER SHARE DATA | |||||||||||||||||||||
| Basic net income per common share | $ | 0.17 | $ | 0.05 | $ | 0.32 | $ | 0.32 | $ | 0.59 | |||||||||||
| Diluted net income per common share | 0.17 | 0.05 | 0.32 | 0.32 | 0.59 | ||||||||||||||||
| Cash dividends per common share | 0.01 | 0.01 | 0.01 | 0.03 | 0.03 | ||||||||||||||||
| Book value per common shares outstanding | 11.11 | 10.96 | 11.02 | 11.11 | 11.02 | ||||||||||||||||
| Period-end common share market value | 3.75 | 5.72 | 4.62 | 3.75 | 4.62 | ||||||||||||||||
| Book value as a percent of market value | 296 | % | 192 | % | 239 | % | 296 | % | 239 | % | |||||||||||
| Basic average common shares outstanding | 7,882,439 | 7,884,749 | 7,514,935 | 7,879,575 | 7,400,957 | ||||||||||||||||
| Diluted average common shares outstanding | 7,882,439 | 7,884,934 | 7,514,935 | 7,879,575 | 7,400,957 | ||||||||||||||||
| Common shares outstanding | 7,882,249 | 7,884,749 | 7,825,395 | 7,882,249 | 7,825,395 | ||||||||||||||||
| KEY RATIOS | |||||||||||||||||||||
| Return on average assets (2) | 0.57 | % | 0.24 | % | 0.94 | % | 0.40 | % | 0.61 | % | |||||||||||
| Return on average common equity (2) | 5.89 | % | 2.56 | % | 9.95 | % | 4.22 | % | 6.64 | % | |||||||||||
| Efficiency ratio | 65.35 | % | 66.72 | % | 71.10 | % | 67.94 | % | 70.25 | % | |||||||||||
| Noninterest expense to average assets (2) | 2.83 | % | 2.91 | % | 3.02 | % | 2.98 | % | 3.06 | % | |||||||||||
| Average equity to average assets | 9.65 | % | 9.49 | % | 9.47 | % | 9.55 | % | 9.24 | % | |||||||||||
| Net interest margin (FTE) (1) | 3.74 | % | 3.64 | % | 3.49 | % | 3.68 | % | 3.60 | % | |||||||||||
| Common stock dividend payout ratio | 5.83 | % | 20.01 | % | 3.12 | % | 9.24 | % | 5.11 | % | |||||||||||
| Common stock market capitalization | $ | 29,558 | $ | 45,101 | $ | 36,153 | $ | 29,558 | $ | 36,153 | |||||||||||
| ASSET QUALITY | |||||||||||||||||||||
| Allowance for Loan Losses | |||||||||||||||||||||
| Allowance for loan losses, beginning of period | $ | 17,351 | $ | 17,315 | $ | 19,435 | $ | 16,136 | $ | 18,792 | |||||||||||
| Provision for loan losses | 2,100 | 3,345 | 2,076 | 7,545 | 6,294 | ||||||||||||||||
| Charge-offs | 1,751 | 3,499 | 4,460 | 6,362 | 8,499 | ||||||||||||||||
| Recoveries | 145 | 190 | 146 | 526 | 610 | ||||||||||||||||
| Net charge-offs | 1,606 | 3,309 | 4,314 | 5,836 | 7,889 | ||||||||||||||||
| Allowance for loan losses, end of period | $ | 17,845 | $ | 17,351 | $ | 17,197 | $ | 17,845 | $ | 17,197 | |||||||||||
| CAPITAL & LIQUIDITY | |||||||||||||||||||||
| Period-end tangible common equity to assets** | 5.66 | % | 5.62 | % | 5.60 | % | 5.66 | % | 5.60 | % | |||||||||||
| Average equity to assets | 9.65 | % | 9.49 | % | 9.47 | % | 9.55 | % | 9.24 | % | |||||||||||
| Average equity to loans | 13.49 | % | 13.67 | % | 13.61 | % | 13.58 | % | 13.42 | % | |||||||||||
| Average loans to deposits | 84.34 | % | 81.70 | % | 82.32 | % | 82.75 | % | 81.45 | % | |||||||||||
| Nonperforming Assets | |||||||||||||||||||||
| Nonperforming loans | $ | 37,115 | $ | 37,954 | $ | 43,574 | $ | 37,115 | $ | 43,574 | |||||||||||
| Other real estate owned | 2,116 | 2,277 | 2,206 | 2,116 | 2,206 | ||||||||||||||||
| Total nonperforming assets | $ | 39,231 | $ | 40,231 | $ | 45,780 | $ | 39,231 | $ | 45,780 | |||||||||||
| Ratios | |||||||||||||||||||||
| Total nonperforming loans to total loans | 4.43 | % | 4.57 | % | 5.47 | % | 4.43 | % | 5.47 | % | |||||||||||
| Total nonperforming assets to total assets | 3.35 | % | 3.48 | % | 3.96 | % | 3.35 | % | 3.96 | % | |||||||||||
| Net charge-offs to average loans (2) | 0.76 | % | 1.63 | % | 2.14 | % | 0.95 | % | 1.33 | % | |||||||||||
| Provision for loan losses to average loans (2) | 1.00 | % | 1.64 | % | 1.03 | % | 1.23 | % | 1.06 | % | |||||||||||
| Allowance for loan losses to portfolio loans | 2.13 | % | 2.09 | % | 2.16 | % | 2.13 | % | 2.16 | % | |||||||||||
| Allowance to nonperforming loans | 48.08 | % | 45.72 | % | 39.47 | % | 48.08 | % | 39.47 | % | |||||||||||
| Allowance to nonperforming assets | 45.49 | % | 43.13 | % | 37.56 | % | 45.49 | % | 37.56 | % | |||||||||||
| (1) FTE -- fully tax equivalent at 34% tax rate | |||||||||||||||||||||
| (2) Annualized | |||||||||||||||||||||
| * Earnings Assets includes Loans Held For Sale | |||||||||||||||||||||
| ** Tangible common equity to assets ratio is a non-GAAP measure. | |||||||||||||||||||||
| Reconciliation of Pre-Provision Core Earnings* | |||||||||||||||
|
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
||||||||||||||
| 2011 | 2010 | 2011 | 2010 | ||||||||||||
| Pre-provision Core Earnings* | $ | 4,272 | $ | 3,438 | $ | 11,886 | $ | 10,810 | |||||||
| Gain on extinguishment of debt | - | (2,210 | ) | - | (2,210 | ) | |||||||||
| Provision for Loan Losses | 2,100 | 2,076 | 7,545 | 6,294 | |||||||||||
| Income before income tax expense | $ | 2,172 | $ | 3,572 | $ | 4,341 | $ | 6,726 | |||||||
| * Pre-provision core earnings is a non-GAAP financial measure that the Company’s management believes is useful in analyzing the Company’s underlying performance trends, particularly in periods of economic stress. | |||||||||||||||
| Pre-provision core earnings is defined as income before income tax expense, adjusted to exclude the impact of provision for loan losses and the gain on extinguishment of debt. | |||||||||||||||
CONTACT:
LNB Bancorp, Inc.
Peter R. Catanese,
440-244-7126