Attached files
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| 8-K - LNB BANCORP, INC. 8-K - LNB BANCORP INC | a6698297.htm |
Exhibit 99.1
LNB Bancorp, Inc. Reports First Quarter 2011 Results
- First quarter net income of $1,130,000
- Portfolio loans increase 2.3% from one year ago
- Non-performing loans decline 9.6% from year-end 2010
LORAIN, Ohio--(BUSINESS WIRE)--April 27, 2011--LNB Bancorp, Inc. (NASDAQ: LNBB) today reported net income for the three months ended March 31, 2011 of $1,130,000.
“The solid profitability in the first quarter of 2011 continues to demonstrate the Company’s core business strength,” said Daniel E. Klimas, president and chief executive officer of LNB Bancorp, Inc., who pointed to healthy increases in both portfolio loans and total deposits and solid core performances in fee income generation.
“All of this points to the fact that our business strategy is working in the face of continued economic challenges,” said Klimas. “We continue to aggressively manage our credit portfolio and focus on building revenue.”
Net income available to common shareholders for the three months ended March 31, 2011 was $811,000, or $0.10 per diluted share, compared to net income of $1,012,000, or $0.14 per diluted share reported for the same period a year ago. For the fourth quarter of 2010, the Company reported a net loss of $258,000, or $0.03 per diluted share.
Key Performance Measures
Net interest income on a fully tax equivalent basis for the first quarter of 2011 was $9,739,000, compared to $9,904,000 for the first quarter a year ago. The continued lower interest rate environment reduced the yield on the Company’s investment portfolio, which negatively affects the net interest margin. The first quarter 2011 net interest margin on a fully tax-equivalent basis was 3.63 percent, down slightly from 3.69 percent one year ago, but improved from 3.59 percent at the end of the fourth quarter 2010.
The provision for loan losses for the quarter ended March 31, 2011 totaled $2,100,000, essentially flat from $2,109,000 for the first quarter of 2010 and notably down from $3,931,000 in the fourth quarter of 2010.
Noninterest income which is traditionally weak in the first quarter totaled $3,071,000 compared to $2,651,000 for the first quarter of 2010. While the first quarter of 2011 included a gain on the sale of securities totaling $412,000, other fees which include ATM fees and merchant/debit card fees showed improvement year over year. Trust income, gain on the sale of mortgage loans and service charges on deposits were down from a year ago, the latter being negatively impacted by new federal regulations regarding certain bank overdraft fees and charges.
Noninterest expense was $9,189,000 for the first quarter of 2011, compared to $8,693,000 for the first quarter of 2010. The increase was driven by a $509,000 increase in other real estate owned expenses which primarily resulted from the further write-down in the valuation of properties obtained through loan foreclosure proceedings given the current residential and commercial real estate markets, along with higher legal and loan expenses associated with resolving problems loans. Excluding these costs, other noninterest expenses declined from the same period one year ago.
Portfolio loans at the end of the first quarter of 2011 totaled $810,629,000, a 2.28 percent increase from the $792,585,000 at the end of the first quarter a year ago. Total assets for the first quarter of 2011 ended at $1,175,378,000 up from $1,158,763,000 at the end of the first quarter of 2010. Total deposits were $1,001,099,000, up 2.25 percent from $979,052,000 at the end of the first quarter of 2010.
At March 31, 2011 the Company’s non-performing loans totaled $37,808,000, or 4.66 percent of total loans, an improvement from $41,830,000, or 5.15 percent, at December 31, 2010. The allowance for possible loan losses was $17,315,000 at March 31, 2011 compared to $16,136,000 at December 31, 2010 equaling 2.14 percent of total loans compared 1.99 percent at December 31, 2010.
The Company’s net charge-offs decreased to $921,000 in the first quarter of 2011 compared to $1,718,000 a year ago and $4,992,000 for the fourth quarter of 2010. Net charge-offs to average loans for the quarter ending March 31, 2011 was 0.46 percent, compared to 0.88 percent one year ago and 2.48 percent at December 31, 2010.
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:
- 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 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;
- 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 may be promulgated under the Act);
- persisting volatility and limited credit availability in the financial markets, particularly if limitations on the Company's ability to raise funding to the extent required by banking regulators or otherwise; 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;
- 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;
- 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, continued 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 March 31, 2011 | At December 31, 2010 | |||||||||||
| (unaudited) | ||||||||||||
| (Dollars in thousands except share amounts) | ||||||||||||
| ASSETS | ||||||||||||
| Cash and due from Banks | $ | 19,243 | $ | 17,370 | ||||||||
| Federal funds sold and short-term investments | 45,150 | 30,850 | ||||||||||
| Cash and cash equivalents | 64,393 | 48,220 | ||||||||||
| Interest-bearing deposits in other banks | 348 | 348 | ||||||||||
| Securities: | ||||||||||||
| Available for sale, at fair value | 235,563 | 221,725 | ||||||||||
| Total Securities | 235,563 | 221,725 | ||||||||||
| Restricted stock | 5,741 | 5,741 | ||||||||||
| Loans held for sale | 5,261 | 5,105 | ||||||||||
| Loans: | ||||||||||||
| Portfolio loans | 810,629 | 812,579 | ||||||||||
| Allowance for loan losses | (17,315 | ) | (16,136 | ) | ||||||||
| Net loans | 793,314 | 796,443 | ||||||||||
| Bank premises and equipment, net | 9,353 | 9,645 | ||||||||||
| Other real estate owned | 3,348 | 3,119 | ||||||||||
| Bank owned life insurance | 17,320 | 17,146 | ||||||||||
| Goodwill, net | 21,582 | 21,582 | ||||||||||
| Intangible assets, net | 835 | 869 | ||||||||||
| Accrued interest receivable | 3,788 | 3,519 | ||||||||||
| Other assets | 14,532 | 19,075 | ||||||||||
| Total Assets | $ | 1,175,378 | $ | 1,152,537 | ||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||
| Deposits | ||||||||||||
| Demand and other noninterest-bearing | $ | 119,704 | $ | 115,476 | ||||||||
| Savings, money market and interest-bearing demand | 348,412 | 318,434 | ||||||||||
| Certificates of deposit | 532,983 | 544,616 | ||||||||||
| Total deposits | 1,001,099 | 978,526 | ||||||||||
| Short-term borrowings | 580 | 932 | ||||||||||
| Federal Home Loan Bank advances | 42,500 | 42,501 | ||||||||||
| Junior subordinated debentures | 16,238 | 16,238 | ||||||||||
| Accrued interest payable | 1,450 | 1,434 | ||||||||||
| Accrued taxes, expenses and other liabilities | 3,463 | 3,442 | ||||||||||
| Total Liabilities | 1,065,330 | 1,043,073 | ||||||||||
| Shareholders' Equity | ||||||||||||
|
Preferred stock, Series A Voting, no par value, authorized 150,000 shares at March 31, 2011 and December 31, 2010. |
- | - | ||||||||||
| Fixed rate cumulative preferred stock, Series B, no par value, $1,000 liquidation value, 25,233 shares authorized and issued at March 31, 2011 and December 31, 2010. | 25,223 | 25,223 | ||||||||||
| Discount on Series B preferred stock | (112 | ) | (116 | ) | ||||||||
| Warrant to purchase common stock | 146 | 146 | ||||||||||
|
Common stock, par value $1 per share, authorized 15,000,000 shares, issued shares 8,212,943 at March 31, 2011 and 8,172,943 at December 31, 2010. |
8,213 | 8,173 | ||||||||||
| Additional paid-in capital | 39,459 | 39,455 | ||||||||||
| Retained earnings | 41,400 | 40,668 | ||||||||||
| Accumulated other comprehensive income | 1,812 | 2,007 | ||||||||||
| Treasury shares at cost, 328,194 shares at March 31, 2011 and at December 31, 2010 | (6,092 | ) | (6,092 | ) | ||||||||
| Total Shareholders' Equity | 110,049 | 109,464 | ||||||||||
| Total Liabilities and Shareholders' Equity | $ | 1,175,378 | $ | 1,152,537 | ||||||||
| Consolidated Statements of Income (unaudited) | ||||||||||
|
Three Months Ended |
||||||||||
| 2011 | 2010 | |||||||||
| (Dollars in thousands except share and per share amounts) | ||||||||||
| Interest Income | ||||||||||
| Loans | $ | 10,516 | $ | 10,792 | ||||||
| Securities: | ||||||||||
| U.S. Government agencies and corporations | 1,477 | 2,136 | ||||||||
| State and political subdivisions | 256 | 246 | ||||||||
| Trading securities | - | 49 | ||||||||
| Other debt and equity securities | 72 | 61 | ||||||||
|
Federal funds sold and short-term investments |
14 | 9 | ||||||||
| Total interest income | 12,335 | 13,293 | ||||||||
| Interest Expense | ||||||||||
| Deposits | 2,283 | 2,980 | ||||||||
| Federal Home Loan Bank advances | 266 | 318 | ||||||||
| Short-term borrowings | 1 | 1 | ||||||||
| Junior subordinated debenture | 171 | 215 | ||||||||
| Total interest expense | 2,721 | 3,514 | ||||||||
| Net Interest Income | 9,614 | 9,779 | ||||||||
| Provision for Loan Losses | 2,100 | 2,109 | ||||||||
| Net interest income after provision for loan losses | 7,514 | 7,670 | ||||||||
| Noninterest Income | ||||||||||
| Investment and trust services | 403 | 445 | ||||||||
| Deposit service charges | 916 | 939 | ||||||||
| Other service charges and fees | 906 | 794 | ||||||||
| Income from bank owned life insurance | 174 | 171 | ||||||||
| Other income | 79 | 93 | ||||||||
| Total fees and other income | 2,478 | 2,442 | ||||||||
| Securities gains, net | 412 | 38 | ||||||||
| Gains on sale of loans | 179 | 192 | ||||||||
|
Gain (loss) on sale of other assets, net |
2 | (21 | ) | |||||||
| Total noninterest income | 3,071 | 2,651 | ||||||||
| Noninterest Expense | ||||||||||
| Salaries and employee benefits | 4,091 | 3,918 | ||||||||
| Furniture and equipment | 680 | 933 | ||||||||
| Net occupancy | 612 | 615 | ||||||||
| Outside services | 486 | 553 | ||||||||
| Marketing and public relations | 271 | 246 | ||||||||
| Supplies, postage and freight | 272 | 342 | ||||||||
| Telecommunications | 215 | 212 | ||||||||
| Ohio Franchise tax | 298 | 281 | ||||||||
| FDIC assessments | 574 | 528 | ||||||||
| Other real estate owned | 590 | 81 | ||||||||
| Electronic banking expenses | 209 | 184 | ||||||||
| Loan and collection expense | 442 | 323 | ||||||||
| Other expense | 449 | 477 | ||||||||
| Total noninterest expense | 9,189 | 8,693 | ||||||||
| Income before income tax expense | 1,396 | 1,628 | ||||||||
| Income tax expense | 266 | 297 | ||||||||
| Net Income | $ | 1,130 | $ | 1,331 | ||||||
| Dividends and accretion on preferred stock | 319 | 319 | ||||||||
| Net Income Available to Common Shareholders | $ | 811 | $ | 1,012 | ||||||
| Net Income Per Common Share | ||||||||||
| Basic | $ | 0.10 | $ | 0.14 | ||||||
| Diluted | 0.10 | 0.14 | ||||||||
| Dividends declared | 0.01 | 0.01 | ||||||||
| Average Common Shares Outstanding | ||||||||||
| Basic | 7,871,416 | 7,322,662 | ||||||||
| Diluted | 7,871,432 | 7,322,662 | ||||||||
| LNB Bancorp, Inc. | |||||||||||||||||
| Supplemental Financial Information | |||||||||||||||||
| (Unaudited - Dollars in thousands except Share and Per Share Data) | |||||||||||||||||
| Three Months Ended | |||||||||||||||||
| March 31, | March 31, | December 31, | |||||||||||||||
| END OF PERIOD BALANCES | 2011 | 2010 | 2010 | ||||||||||||||
| Cash and Cash Equivalents | $ | 64,393 | $ | 54,367 | $ | 48,220 | |||||||||||
| Securities and interest-bearing deposits | 235,911 | 248,471 | 222,073 | ||||||||||||||
| Restricted stock | 5,741 | 4,985 | 5,741 | ||||||||||||||
| Loans held for sale | 5,261 | 3,691 | 5,105 | ||||||||||||||
| Portfolio loans | 810,629 | 792,585 | 812,579 | ||||||||||||||
| Allowance for loan losses | 17,315 | 19,183 | 16,136 | ||||||||||||||
| Net loans | 793,314 | 773,402 | 796,443 | ||||||||||||||
| Other assets | 70,758 | 73,847 | 74,955 | ||||||||||||||
| Total assets | $ | 1,175,378 | $ | 1,158,763 | $ | 1,152,537 | |||||||||||
| Total deposits | 1,001,099 | 979,052 | 978,526 | ||||||||||||||
| Other borrowings | 59,318 | 64,713 | 59,671 | ||||||||||||||
| Other liabilities | 4,913 | 9,617 | 4,876 | ||||||||||||||
| Total liabilities | 1,065,330 | 1,053,382 | 1,043,073 | ||||||||||||||
| Total shareholders' equity | 110,049 | 105,381 | 109,464 | ||||||||||||||
| Total liabilities and shareholders' equity | $ | 1,175,378 | $ | 1,158,763 | $ | 1,152,537 | |||||||||||
| AVERAGE BALANCES | |||||||||||||||||
| Assets: | |||||||||||||||||
| Total assets | $ | 1,160,851 | $ | 1,160,455 | $ | 1,160,122 | |||||||||||
| Earning assets | 1,089,080 | 1,088,093 | 1,091,067 | ||||||||||||||
| Securities | 229,733 | 256,310 | 234,613 | ||||||||||||||
| Portfolio loans | 816,035 | 796,040 | 799,367 | ||||||||||||||
| Liabilities and shareholders' equity: | |||||||||||||||||
| Total deposits | $ | 986,458 | $ | 979,643 | $ | 984,182 | |||||||||||
| Interest bearing deposits | 870,396 | 868,392 | 871,372 | ||||||||||||||
| Interest bearing liabilities | 930,122 | 934,908 | 932,047 | ||||||||||||||
| Total shareholders' equity | 110,078 | 105,026 | 110,697 | ||||||||||||||
| INCOME STATEMENT | |||||||||||||||||
| Total Interest Income | $ | 12,335 | $ | 13,293 | $ | 12,641 | |||||||||||
| Total Interest Expense | 2,721 | 3,514 | 2,881 | ||||||||||||||
| Net interest income | 9,614 | 9,779 | 9,760 | ||||||||||||||
| Provision for loan losses | 2,100 | 2,109 | 3,931 | ||||||||||||||
| Other income | 2,478 | 2,442 | 2,525 | ||||||||||||||
| Net gain on sale of assets | 593 | 209 | 661 | ||||||||||||||
| Noninterest expense | 9,189 | 8,693 | 9,150 | ||||||||||||||
| Income (loss) before income taxes | 1,396 | 1,628 | (135 | ) | |||||||||||||
| Income tax expense (benefit) | 266 | 297 | (196 | ) | |||||||||||||
| Net income | 1,130 | 1,331 | 61 | ||||||||||||||
| Preferred stock dividend and accretion | 319 | 319 | 319 | ||||||||||||||
| Net income (loss) available to common shareholders | $ | 811 | $ | 1,012 | $ | (258 | ) | ||||||||||
| Common cash dividend declared and paid | $ | 79 | $ | 74 | $ | 78 | |||||||||||
| Net interest income-FTE (1) | $ | 9,739 | $ | 9,904 | $ | 9,886 | |||||||||||
| PER SHARE DATA | |||||||||||||||||
| Basic net income (loss) per common share | $ | 0.10 | $ | 0.14 | $ | (0.03 | ) | ||||||||||
| Diluted net income (loss) per common share | 0.10 | 0.14 | (0.03 | ) | |||||||||||||
| Cash dividends per common share | 0.01 | 0.01 | 0.01 | ||||||||||||||
| Book value per common shares outstanding | 10.77 | 10.90 | 10.75 | ||||||||||||||
| Period-end common share market value | 5.69 | 4.45 | 4.97 | ||||||||||||||
| Book value as a percent of market value | 189 | % | 245 | % | 216 | % | |||||||||||
| Basic average common shares outstanding | 7,871,416 | 7,322,662 | 7,838,228 | ||||||||||||||
| Diluted average common shares outstanding | 7,871,432 | 7,322,662 | 7,838,228 | ||||||||||||||
| Common shares outstanding | 7,884,749 | 7,363,161 | 7,844,749 | ||||||||||||||
| KEY RATIOS | |||||||||||||||||
| Return on average assets (2) | 0.39 | % | 0.47 | % | 0.02 | % | |||||||||||
| Return on average common equity (2) | 4.16 | % | 5.14 | % | 0.22 | % | |||||||||||
| Efficiency ratio | 71.73 | % | 69.24 | % | 70.00 | % | |||||||||||
| Noninterest expense to average assets (2) | 3.21 | % | 3.04 | % | 3.13 | % | |||||||||||
| Average equity to average assets | 9.48 | % | 9.05 | % | 9.54 | % | |||||||||||
| Net interest margin | 3.58 | % | 3.64 | % | 3.55 | % | |||||||||||
| Net interest margin (FTE) (1) | 3.63 | % | 3.69 | % | 3.59 | % | |||||||||||
| Common stock dividend payout ratio | 9.71 | % | 7.24 | % | -30.38 | % | |||||||||||
| Common stock market capitalization | $ | 44,864 | $ | 32,766 | $ | 38,988 | |||||||||||
| ASSET QUALITY | |||||||||||||||||
| Allowance for Loan Losses | |||||||||||||||||
| Allowance for loan losses, beginning of period | $ | 16,136 | $ | 18,792 | $ | 17,197 | |||||||||||
| Provision for loan losses | 2,100 | 2,109 | 3,931 | ||||||||||||||
| Charge-offs | 1,112 | 1,851 | 5,127 | ||||||||||||||
| Recoveries | 191 | 133 | 135 | ||||||||||||||
| Net charge-offs | 921 | 1,718 | 4,992 | ||||||||||||||
| Allowance for loan losses, end of period | $ | 17,315 | $ | 19,183 | $ | 16,136 | |||||||||||
| CAPITAL & LIQUIDITY | |||||||||||||||||
|
Period-end tangible common equity to assets* |
5.40 | % | 5.06 | % | 5.46 | % | |||||||||||
| Average equity to assets | 9.48 | % | 9.05 | % | 9.54 | % | |||||||||||
| Average equity to loans | 13.49 | % | 13.19 | % | 13.85 | % | |||||||||||
| Average loans to deposits | 82.72 | % | 81.26 | % | 81.22 | % | |||||||||||
| Nonperforming Assets | |||||||||||||||||
| Nonperforming loans | $ | 37,808 | $ | 42,907 | $ | 41,830 | |||||||||||
| Other real estate owned | 3,348 | 1,467 | 3,119 | ||||||||||||||
| Total nonperforming assets | $ | 41,156 | $ | 44,374 | $ | 44,949 | |||||||||||
| Ratios | |||||||||||||||||
| Total nonperforming loans to total loans | 4.66 | % | 5.41 | % | 5.15 | % | |||||||||||
| Total nonperforming assets to total assets | 3.50 | % | 3.83 | % | 3.90 | % | |||||||||||
| Net charge-offs to average loans (2) | 0.46 | % | 0.88 | % | 2.48 | % | |||||||||||
| Provision for loan losses to average loans (2) | 1.04 | % | 1.07 | % | 1.95 | % | |||||||||||
| Allowance for loan losses to portfolio loans | 2.14 | % | 2.42 | % | 1.99 | % | |||||||||||
| Allowance to nonperforming loans | 45.80 | % | 44.71 | % | 38.58 | % | |||||||||||
| Allowance to nonperforming assets | 42.07 | % | 43.23 | % | 35.90 | % | |||||||||||
| (1) FTE -- fully tax equivalent at 34% tax rate | |||||||||||||||||
| (2) Annualized | |||||||||||||||||
|
* Tangible common equity ratio and tangible book value per share are non-GAAP measures. |
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CONTACT:
For LNB Bancorp, Inc.
W. John Fuller,
216-978-7643