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8-K - LNB BANCORP, INC. 8-K - LNB BANCORP INC | a50354274.htm |
Exhibit 99.1
LNB Bancorp, Inc. Reports Earnings for the Second Quarter of 2012
- Net income of $1.44 million, up $726,000, or 101.9%, from the prior year
- Completed exit from government-sponsored TARP program through the U.S. Treasury’s sale of preferred stock in a secondary public offering
- Loan balances increased $37 million over prior year, or 4.5%.
- Nonperforming assets declined by $3.7 million, or 9.3%
LORAIN, Ohio--(BUSINESS WIRE)--July 26, 2012--LNB Bancorp, Inc. (NASDAQ: LNBB) (“LNB” or the “Company”) today reported financial results for the quarter ended June 30, 2012. Net income was $1.44 million, up $726,000 or 101.9 percent, from the $712,000 reported for the second quarter of 2011. Net income available to common shareholders was $1.12 million, or $0.14 per common share, compared to $394,000, or $0.05 per common share, for the year-ago quarter, an increase of $0.09 per share. For the first six months of 2012, net income was $2.94 million, up $1.1 million or 59.7 percent, from the prior year. Net income available to common shareholders was $2.3 million, or $0.29 per common share, compared to $1.2 million for the 2011 six-month period, or $0.15 per common share, an increase of $0.14 per share, or 93.3 percent.
“Our ongoing efforts to improve asset quality and grow the balance sheet have contributed to a fourth consecutive quarter of stronger earnings,” stated Daniel E. Klimas, president and chief executive officer of LNB Bancorp. “While we are pleased with a doubling of net income year over year, the one-time costs associated with two recently completed initiatives lowered our earnings this past quarter.
“The first of these projects was the U.S. Treasury’s sale of our TARP preferred stock to private investors through an auction process. We expect that this transfer to private investors will expand the potential alternatives for repaying the TARP preferred stock and is a helpful step toward our intention to retire the entire issue of preferred stock in an appropriate timeframe. In addition, we recently repurchased the warrants for common stock that were held by the Treasury as part of the TARP program.
“We also completed the conversion of our bank operating system for both retail and commercial customers. As in any conversion, we’ve had some issues, but we are working to resolve them. We anticipate that this investment will provide better information and convenience for our customers, and efficiencies to the bank. Our commitment to technology complements our personal service capabilities. In today’s banking environment, all customers have come to expect a high level of efficiency. However, the service factor continues to differentiate a community bank like Lorain National from our large-bank competitors.”
Second Quarter Review
Net income for the 2012 second quarter more than doubled from the year-earlier quarter, primarily as a result of a lower loan loss provision expense. However, LNB Bancorp’s operating performance was impacted this past quarter by one-time charges of $300,000 associated with the systems conversion completed in June 2012 as well as by a $200,000 charge for legal and administrative expenses associated with the Treasury’s sale of the TARP preferred stock.
Operating revenue, including net interest income on a fully tax-equivalent basis ("FTE") plus noninterest income from operations, was $12.6 million for the second quarter of 2012, virtually unchanged from the prior year. Of this total, net interest income (FTE) contributed $10.1 million, up 1.2 percent from the year-ago second quarter. The net interest margin (FTE) for the second quarter was 3.61 percent, a decline of three basis points from the 2011 second quarter; the decline was more than offset by a 2.2 percent increase in average earning assets compared to the year-earlier second quarter.
Noninterest income was $2.5 million for the second quarter of 2012 compared to $2.8 million for the prior-year second quarter. Excluding the $88,000 gain on the sale of securities from the 2011 quarter, noninterest income from recurring operations declined 6.4 percent year over year. For the second quarter of 2012, noninterest expense was $9.0 million compared to $8.5 million for the year-ago quarter. As noted above the quarter’s operating expenses include $500,000 of one time charges related to the system’s conversion and treasury auction of the TARP preferred stock. On a pretax, tax equivalent basis, pre-provision core earnings* for the second quarter were $3.43 million, down 16.7 percent, from the second quarter of 2011.
Total assets were $1.2 billion as of June 30, 2012, up 4.4 percent since June 30 of the previous year. Portfolio loans increased 4.5 percent during the same 12-month period, to $867.5 million. Of the $37.1 million in total loan growth over the past twelve months, $24.4 million was booked since year-end 2011. Commercial lending was the primary contributor to recent loan growth, up $20.5 million since the beginning of the year.
Asset quality continues to improve. Nonperforming assets declined by $3.7 million, or 9.3 percent, over the past twelve months, to $36.5 million. LNB added $1.7 million to the loan loss reserve during the quarter. At quarter-end, the loan loss reserve was 1.99 percent of total portfolio loans compared to 1.98 percent for the linked quarter and 2.09 percent for the year-ago quarter.
Low-cost deposits, namely checking, savings and money market accounts, now account for 51.5 percent of total deposits, up 4.2 percent since June 30, 2011. The improved mix has contributed significantly to the bank's lower funding cost. For the second quarter of 2012, the bank’s cost of deposits was 63 basis points, an improvement of 28 basis points, or 31 percent, since the year-earlier quarter. All regulatory ratios continue to exceed the threshold for “well-capitalized.” Tangible leverage improved by 11 basis points to 5.73 percent as a result of $4.13 million growth in tangible common equity since June 30, 2011.
* 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. 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 its Morgan Bank division serve customers through 20 retail-banking locations and 28 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:
- 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, the terms of the CPP, pursuant to which the Company issued securities to the U.S. Treasury;
- 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.
CONSOLIDATED BALANCE SHEETS | ||||||||
At June 30, 2012 | At December 31, 2011 | |||||||
(unaudited) | ||||||||
(Dollars in thousands except share amounts) | ||||||||
ASSETS | ||||||||
Cash and due from Banks | $ | 37,449 | $ | 34,323 | ||||
Federal funds sold and interest bearing deposits in banks | 19,170 | 6,324 | ||||||
Cash and cash equivalents | 56,619 | 40,647 | ||||||
Securities: | ||||||||
Available for sale, at fair value | 228,788 | 226,012 | ||||||
Total securities | 228,788 | 226,012 | ||||||
Restricted stock | 5,741 | 5,741 | ||||||
Loans held for sale | 1,207 | 3,448 | ||||||
Loans: | ||||||||
Portfolio loans | 867,459 | 843,088 | ||||||
Allowance for loan losses | (17,300 | ) | (17,063 | ) | ||||
Net loans | 850,159 | 826,025 | ||||||
Bank premises and equipment, net | 9,308 | 8,968 | ||||||
Other real estate owned | 1,506 | 1,687 | ||||||
Bank owned life insurance | 18,202 | 17,868 | ||||||
Goodwill, net | 21,582 | 21,582 | ||||||
Intangible assets, net | 664 | 731 | ||||||
Accrued interest receivable | 3,604 | 3,550 | ||||||
Other assets | 10,565 | 12,163 | ||||||
Total Assets | $ | 1,207,945 | $ | 1,168,422 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
Deposits | ||||||||
Demand and other noninterest-bearing | $ | 143,778 | $ | 126,713 | ||||
Savings, money market and interest-bearing demand | 383,685 | 359,977 | ||||||
Certificates of deposit | 496,090 | 504,390 | ||||||
Total deposits | 1,023,553 | 991,080 | ||||||
Short-term borrowings | 827 | 227 | ||||||
Federal Home Loan Bank advances | 47,495 | 42,497 | ||||||
Junior subordinated debentures | 16,238 | 16,238 | ||||||
Accrued interest payable | 1,007 | 1,118 | ||||||
Accrued taxes, expenses and other liabilities | 3,289 | 3,988 | ||||||
Total Liabilities | 1,092,409 | 1,055,148 | ||||||
Shareholders' Equity | ||||||||
Preferred stock, Series A Voting, no par value, authorized 150,000 shares at June 30, 2012 and December 31, 2011. |
- | - | ||||||
Fixed rate cumulative preferred stock, Series B, no par value, $1,000 liquidation value, 25,233 shares authorized and issued at June 30, 2012 and December 31, 2011. | 25,223 | 25,223 | ||||||
Discount on Series B preferred stock | (94 | ) | (101 | ) | ||||
Discount on Series B preferred stock | 146 | 146 | ||||||
Common stock, par value $1 per share, authorized 15,000,000 shares, issued shares 8,272,548 at June 30, 2012 and 8,210,443 at December 31, 2011. |
8,272 | 8,210 | ||||||
Additional paid-in capital | 39,689 | 39,607 | ||||||
Retained earnings | 46,227 | 44,080 | ||||||
Accumulated other comprehensive income | 2,166 | 2,201 | ||||||
Treasury shares at cost, 328,194 shares at June 30, 2012 and at December 31, 2011 | (6,092 | ) | (6,092 | ) | ||||
Total Shareholders' Equity | 115,537 | 113,274 | ||||||
Total Liabilities and Shareholders' Equity | $ | 1,207,945 | $ | 1,168,422 | ||||
Consolidated Statements of Income (unaudited) | ||||||||||||||||
Three Months Ended |
Six Months Ended |
|||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
(Dollars in thousands except |
(Dollars in thousands except |
|||||||||||||||
Interest Income | ||||||||||||||||
Loans | $ | 10,194 | $ | 10,523 | $ | 20,243 | $ | 21,039 | ||||||||
Securities: | ||||||||||||||||
U.S. Government agencies and corporations | 1,281 | 1,612 | 2,541 | 3,089 | ||||||||||||
State and political subdivisions | 291 | 257 | 578 | 513 | ||||||||||||
Trading securities | - | - | - | - | ||||||||||||
Other debt and equity securities | 69 | 71 | 141 | 143 | ||||||||||||
Federal funds sold and short-term investments | 10 | 9 | 19 | 23 | ||||||||||||
Total interest income | 11,845 | 12,472 | 23,522 | 24,807 | ||||||||||||
Interest Expense | ||||||||||||||||
Deposits | 1,527 | 2,205 | 3,158 | 4,488 | ||||||||||||
Federal Home Loan Bank advances | 212 | 261 | 427 | 527 | ||||||||||||
Short-term borrowings | - | - | - | 1 | ||||||||||||
Junior subordinated debenture | 173 | 170 | 349 | 341 | ||||||||||||
Total interest expense | 1,912 | 2,636 | 3,934 | 5,357 | ||||||||||||
Net Interest Income | 9,933 | 9,836 | 19,588 | 19,450 | ||||||||||||
Provision for Loan Losses | 1,667 | 3,345 | 3,567 | 5,445 | ||||||||||||
Net interest income after provision for loan losses | 8,266 | 6,491 | 16,021 | 14,005 | ||||||||||||
Noninterest Income | ||||||||||||||||
Investment and trust services | 425 | 470 | 815 | 873 | ||||||||||||
Deposit service charges | 929 | 1,000 | 1,864 | 1,916 | ||||||||||||
Other service charges and fees | 804 | 819 | 1,552 | 1,725 | ||||||||||||
Income from bank owned life insurance | 169 | 175 | 334 | 349 | ||||||||||||
Other income | 57 | 41 | 400 | 120 | ||||||||||||
Total fees and other income | 2,384 | 2,505 | 4,965 | 4,983 | ||||||||||||
Securities gains, net | - | 88 | - | 500 | ||||||||||||
Gains on sale of loans | 206 | 238 | 552 | 417 | ||||||||||||
Loss on sale of other assets, net | (47 | ) | (27 | ) | (99 | ) | (25 | ) | ||||||||
Total noninterest income | 2,543 | 2,804 | 5,418 | 5,875 | ||||||||||||
Noninterest Expense | ||||||||||||||||
Salaries and employee benefits | 3,894 | 4,072 | 8,005 | 8,163 | ||||||||||||
Furniture and equipment | 877 | 798 | 1,709 | 1,478 | ||||||||||||
Net occupancy | 554 | 588 | 1,133 | 1,200 | ||||||||||||
Professional fees | 564 | 445 | 1,059 | 931 | ||||||||||||
Marketing and public relations | 395 | 275 | 642 | 546 | ||||||||||||
Supplies, postage and freight | 265 | 289 | 508 | 561 | ||||||||||||
Telecommunications | 172 | 169 | 345 | 384 | ||||||||||||
Ohio Franchise tax | 307 | 298 | 623 | 596 | ||||||||||||
FDIC assessments | 394 | 399 | 786 | 973 | ||||||||||||
Other real estate owned | 175 | 207 | 307 | 797 | ||||||||||||
Electronic banking expenses | 323 | 223 | 561 | 432 | ||||||||||||
Loan and collection expense | 308 | 310 | 657 | 752 | ||||||||||||
Other expense | 819 | 449 | 1,256 | 898 | ||||||||||||
Total noninterest expense | 9,047 | 8,522 | 17,591 | 17,711 | ||||||||||||
Income before income tax expense | 1,762 | 773 | 3,848 | 2,169 | ||||||||||||
Income tax expense | 324 | 61 | 905 | 327 | ||||||||||||
Net Income | $ | 1,438 | $ | 712 | $ | 2,943 | $ | 1,842 | ||||||||
Dividends and accretion on preferred stock | 318 | 318 | 637 | 637 | ||||||||||||
Net Income Available to Common Shareholders | $ | 1,120 | $ | 394 | $ | 2,306 | $ | 1,205 | ||||||||
Net Income Per Common Share | ||||||||||||||||
Basic | $ | 0.14 | $ | 0.05 | $ | 0.29 | $ | 0.15 | ||||||||
Diluted | 0.14 | 0.05 | 0.29 | 0.15 | ||||||||||||
Dividends declared | 0.01 | 0.01 | 0.02 | 0.02 | ||||||||||||
Average Common Shares Outstanding | ||||||||||||||||
Basic | 7,944,354 | 7,884,749 | 7,934,458 | 7,878,119 | ||||||||||||
Diluted | 7,950,539 | 7,884,934 | 7,938,408 | 7,878,224 | ||||||||||||
LNB Bancorp, Inc. | |||||||||||||||||||
Supplemental Financial Information | |||||||||||||||||||
(Unaudited - Dollars in thousands except Share and Per Share Data) | |||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||
June 30, | March 31, | December 31, | June 30, | June 30, | June 30, | ||||||||||||||
END OF PERIOD BALANCES | 2012 | 2012 | 2011 | 2011 | 2012 | 2011 | |||||||||||||
Cash and Cash Equivalents | $ | 56,619 | $ | 44,112 | $ | 40,647 | $ | 32,481 | $ | 56,619 | $ | 32,481 | |||||||
Securities | 228,788 | 231,851 | 226,012 | 231,025 | 228,788 | 231,025 | |||||||||||||
Restricted stock | 5,741 | 5,741 | 5,741 | 5,741 | 5,741 | 5,741 | |||||||||||||
Loans held for sale | 1,207 | 4,462 | 3,448 | 1,308 | 1,207 | 1,308 | |||||||||||||
Portfolio loans | 867,459 | 862,220 | 843,088 | 830,312 | 867,459 | 830,312 | |||||||||||||
Allowance for loan losses | 17,300 | 17,115 | 17,063 | 17,351 | 17,300 | 17,351 | |||||||||||||
Net loans | 850,159 | 845,105 | 826,025 | 812,961 | 850,159 | 812,961 | |||||||||||||
Other assets | 65,431 | 67,823 | 66,549 | 73,828 | 65,431 | 73,828 | |||||||||||||
Total assets | $ | 1,207,945 | $ | 1,199,094 | $ | 1,168,422 | $ | 1,157,344 | $ | 1,207,945 | $ | 1,157,344 | |||||||
Total deposits | 1,023,553 | 1,016,166 | 991,080 | 982,037 | 1,023,553 | 982,037 | |||||||||||||
Other borrowings | 64,560 | 64,628 | 58,962 | 59,493 | 64,560 | 59,493 | |||||||||||||
Other liabilities | 4,296 | 4,240 | 5,106 | 4,317 | 4,296 | 4,317 | |||||||||||||
Total liabilities | 1,092,409 | 1,085,034 | 1,055,148 | 1,045,847 | 1,092,409 | 1,045,847 | |||||||||||||
Total shareholders' equity | 115,537 | 114,061 | 113,274 | 111,497 | 115,537 | 111,497 | |||||||||||||
Total liabilities and shareholders' equity | $ | 1,207,945 | $ | 1,199,095 | $ | 1,168,422 | $ | 1,157,344 | $ | 1,207,946 | $ | 1,157,344 | |||||||
AVERAGE BALANCES | |||||||||||||||||||
Assets: | |||||||||||||||||||
Total assets | $ | 1,206,297 | $ | 1,176,454 | $ | 1,168,340 | $ | 1,174,984 | $ | 1,191,376 | $ | 1,167,951 | |||||||
Earning assets* | 1,122,918 | 1,093,618 | 1,082,438 | 1,099,055 | 1,108,268 | 1,094,095 | |||||||||||||
Securities | 226,476 | 222,832 | 224,778 | 244,428 | 224,654 | 234,266 | |||||||||||||
Portfolio loans | 866,909 | 856,364 | 833,811 | 815,618 | 859,722 | 813,300 | |||||||||||||
Liabilities and shareholders' equity: | |||||||||||||||||||
Total deposits | $ | 1,022,428 | $ | 993,839 | $ | 991,105 | $ | 998,303 | $ | 1,008,223 | $ | 992,413 | |||||||
Interest bearing deposits | 885,922 | 869,107 | 866,037 | 877,572 | 877,515 | 874,003 | |||||||||||||
Interest bearing liabilities | 950,647 | 933,033 | 925,530 | 937,250 | 941,839 | 933,706 | |||||||||||||
Total shareholders' equity | 115,281 | 114,156 | 112,925 | 111,495 | 114,817 | 110,785 | |||||||||||||
INCOME STATEMENT | |||||||||||||||||||
Total Interest Income | $ | 11,845 | $ | 11,677 | $ | 12,006 | $ | 12,472 | $ | 23,522 | $ | 24,807 | |||||||
Total Interest Expense | 1,912 | 2,022 | 2,274 | 2,636 | 3,934 | 5,357 | |||||||||||||
Net interest income | 9,933 | 9,655 | 9,732 | 9,836 | 19,588 | 19,450 | |||||||||||||
Provision for loan losses | 1,667 | 1,900 | 2,808 | 3,345 | 3,567 | 5,445 | |||||||||||||
Other income | 2,384 | 2,581 | 2,517 | 2,505 | 4,965 | 4,983 | |||||||||||||
Net gain on sale of assets | 159 | 294 | 481 | 299 | 453 | 892 | |||||||||||||
Noninterest expense | 9,047 | 8,544 | 8,104 | 8,522 | 17,591 | 17,711 | |||||||||||||
Income before income taxes | 1,762 | 2,086 | 1,818 | 773 | 3,848 | 2,169 | |||||||||||||
Income tax expense | 324 | 581 | 329 | 61 | 905 | 327 | |||||||||||||
Net income | 1,438 | 1,505 | 1,489 | 712 | 2,943 | 1,842 | |||||||||||||
Preferred stock dividend and accretion | 318 | 319 | 320 | 318 | 637 | 637 | |||||||||||||
Net income available to common shareholders | $ | 1,120 | $ | 1,186 | $ | 1,169 | $ | 394 | $ | 2,306 | $ | 1,205 | |||||||
Common cash dividend declared and paid | $ | 79 | $ | 79 | $ | 79 | $ | 79 | $ | 79 | $ | 158 | |||||||
Net interest income-FTE (1) | $ | 10,093 | $ | 9,806 | $ | 9,877 | $ | 9,969 | $ | 19,903 | $ | 19,707 | |||||||
Pre-provision core earnings | 3,429 | 3,986 | 4,626 | 4,118 | 7,415 | 7,614 | |||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||
June 30, | March 31, | December 31, | June 30, | June 30, | June 30, | ||||||||||||||||||||
2012 | 2012 | 2011 | 2011 | 2012 | 2011 | ||||||||||||||||||||
PER SHARE DATA | |||||||||||||||||||||||||
Basic net income per common share | $ | 0.14 | $ | 0.15 | $ | 0.15 | $ | 0.05 | $ | 0.29 | $ | 0.15 | |||||||||||||
Diluted net income per common share | 0.14 | 0.15 | 0.15 | 0.05 | 0.29 | 0.15 | |||||||||||||||||||
Cash dividends per common share | 0.01 | 0.01 | 0.01 | 0.01 | 0.02 | 0.02 | |||||||||||||||||||
Book value per common shares outstanding | 11.38 | 11.19 | 11.18 | 10.96 | 11.38 | 10.96 | |||||||||||||||||||
Tangible book value per common shares outstanding** | 8.58 | 8.39 | 8.35 | 8.12 | 8.58 | 8.12 | |||||||||||||||||||
Period-end common share market value | 6.58 | 6.94 | 4.70 | 5.72 | 6.58 | 5.72 | |||||||||||||||||||
Market as a % of book | 57.82 | % | 61.99 | % | 42.04 | % | 52.19 | % | 57.82 | % | 52.19 | % | |||||||||||||
Basic average common shares outstanding | 7,944,354 | 7,924,562 | 7,882,249 | 7,884,749 | 7,934,458 | 7,878,224 | |||||||||||||||||||
Diluted average common shares outstanding | 7,950,539 | 7,925,368 | 7,882,249 | 7,884,934 | 7,938,408 | 7,878,224 | |||||||||||||||||||
Common shares outstanding | 7,944,354 | 7,944,354 | 7,882,249 | 7,884,749 | 7,944,354 | 7,884,749 | |||||||||||||||||||
KEY RATIOS | |||||||||||||||||||||||||
Return on average assets (2) | 0.48 | % | 0.51 | % | 0.51 | % | 0.24 | % | 0.50 | % | 0.32 | % | |||||||||||||
Return on average common equity (2) | 5.02 | % | 5.30 | % | 5.23 | % | 2.56 | % | 5.15 | % | 3.35 | % | |||||||||||||
Efficiency ratio | 71.60 | % | 67.38 | % | 62.94 | % | 66.72 | % | 69.47 | % | 69.23 | % | |||||||||||||
Noninterest expense to average assets (2) | 3.02 | % | 2.92 | % | 2.75 | % | 2.91 | % | 2.97 | % | 3.06 | % | |||||||||||||
Average equity to average assets | 9.56 | % | 9.70 | % | 9.67 | % | 9.49 | % | 9.64 | % | 9.49 | % | |||||||||||||
Net interest margin (FTE) (1) | 3.61 | % | 3.61 | % | 3.62 | % | 3.64 | % | 3.61 | % | 3.63 | % | |||||||||||||
Common stock dividend payout ratio | 7.10 | % | 6.68 | % | 6.74 | % | 20.01 | % | 6.88 | % | 13.08 | % | |||||||||||||
Common stock market capitalization | $ | 52,274 | $ | 55,134 | $ | 37,047 | $ | 45,101 | $ | 52,274 | $ | 45,101 | |||||||||||||
ASSET QUALITY | |||||||||||||||||||||||||
Allowance for Loan Losses | |||||||||||||||||||||||||
Allowance for loan losses, beginning of period | $ | 17,115 | $ | 17,063 | $ | 17,845 | $ | 17,315 | 17,063 | 16,136 | |||||||||||||||
Provision for loan losses | 1,667 | 1,900 | 2,808 | 3,345 | 3,567 | 5,445 | |||||||||||||||||||
Charge-offs | 1,621 | 2,076 | 3,747 | 3,499 | 3,697 | 4,611 | |||||||||||||||||||
Recoveries | 139 | 228 | 157 | 190 | 367 | 381 | |||||||||||||||||||
Net charge-offs | 1,482 | 1,848 | 3,590 | 3,309 | 3,330 | 4,230 | |||||||||||||||||||
Allowance for loan losses, end of period | $ | 17,300 | $ | 17,115 | $ | 17,063 | $ | 17,351 | $ | 17,300 | $ | 17,351 | |||||||||||||
CAPITAL & LIQUIDITY | |||||||||||||||||||||||||
Period-end tangible common equity to assets** | 5.73 | % | 5.65 | % | 5.73 | % | 5.62 | % | 5.73 | % | 5.62 | % | |||||||||||||
Average equity to assets | 9.56 | % | 9.70 | % | 9.67 | % | 9.49 | % | 9.64 | % | 9.49 | % | |||||||||||||
Average equity to loans | 13.30 | % | 13.33 | % | 13.54 | % | 13.67 | % | 13.36 | % | 13.62 | % | |||||||||||||
Average loans to deposits | 84.79 | % | 86.17 | % | 84.13 | % | 81.70 | % | 85.27 | % | 81.95 | % | |||||||||||||
Tier 1 leverage ratio | 8.78 | % | 8.87 | % | 8.80 | % | 8.49 | % | 8.78 | % | 8.49 | % | |||||||||||||
Tier 1 risk-based capital ratio | 11.46 | % | 11.37 | % | 11.39 | % | 11.14 | % | 11.46 | % | 11.14 | % | |||||||||||||
Total risk-based capital ratio | 13.97 | % | 13.94 | % | 14.01 | % | 13.84 | % | 13.97 | % | 13.84 | % | |||||||||||||
Nonperforming Assets | |||||||||||||||||||||||||
Nonperforming loans | $ | 34,993 | $ | 36,870 | $ | 34,471 | $ | 37,954 | $ | 34,993 | $ | 37,954 | |||||||||||||
Other real estate owned | 1,506 | 1,845 | 1,687 | 2,277 | 1,506 | 2,277 | |||||||||||||||||||
Total nonperforming assets | $ | 36,499 | $ | 38,715 | $ | 36,158 | $ | 40,231 | $ | 36,499 | $ | 40,231 | |||||||||||||
Ratios | |||||||||||||||||||||||||
Total nonperforming loans to total loans | 4.03 | % | 4.28 | % | 4.09 | % | 4.57 | % | 4.03 | % | 4.57 | % | |||||||||||||
Total nonperforming assets to total assets | 3.02 | % | 3.23 | % | 3.09 | % | 3.48 | % | 3.02 | % | 3.48 | % | |||||||||||||
Net charge-offs to average loans (2) | 0.69 | % | 0.87 | % | 1.71 | % | 1.63 | % | 0.78 | % | 1.05 | % | |||||||||||||
Provision for loan losses to average loans (2) | 0.77 | % | 0.89 | % | 1.34 | % | 1.64 | % | 0.83 | % | 1.35 | % | |||||||||||||
Allowance for loan losses to portfolio loans | 1.99 | % | 1.98 | % | 2.02 | % | 2.09 | % | 1.99 | % | 2.09 | % | |||||||||||||
Allowance to nonperforming loans | 49.44 | % | 46.42 | % | 49.50 | % | 45.72 | % | 49.44 | % | 45.72 | % | |||||||||||||
Allowance to nonperforming assets | 47.40 | % | 44.21 | % | 47.19 | % | 43.13 | % | 47.40 | % | 43.13 | % | |||||||||||||
(1) FTE -- fully tax equivalent at 34% tax rate | |||||||||||||||||||||||||
(2) Annualized | |||||||||||||||||||||||||
* Earning Assets includes Loans Held for Sale | |||||||||||||||||||||||||
* * Non-GAAP measures. | |||||||||||||||||||||||||
Reconciliation of Pre-Provision Core Earnings* | ||||||||||||
Three Months Ended |
Six Months Ended |
|||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||
Pre-provision Core Earnings* | $ | 3,429 | $ | 4,118 | $ | 7,415 | $ | 7,614 | ||||
Provision for Loan Losses | 1,667 | 3,345 | 3,567 | 5,445 | ||||||||
Income before income tax expense | $ | 1,762 | $ | 773 | $ | 3,848 | $ | 2,169 | ||||
* 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.
CONTACT:
LNB Bancorp, Inc.
Peter R. Catanese, Senior Vice
President, 440-244-7126