##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
 Form 10-K
  ANNUAL REPORT PURSUANT TO
    SECTION 13 OR 15(d)
 OF THE SECURITIES EXCHANGE ACT
    OF 1934
  For the fiscal year ended December 31, 2009
  Commission file number 0-13203
 LNB Bancorp, Inc.
 (Exact name of the registrant as
    specified in its charter)
  Ohio(State of
    Incorporation)

34-1406303(I.R.S. Employer
    Identification No.)457 Broadway, Lorain, Ohio(Address of principal
    executive offices)

44052-1769(Zip
    Code)   (440) 244-6000
 (Registrants telephone
    number, including area code)
  Securities Registered Pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Shares
    Par Value $1.00 Per Share
    Preferred Share Purchase Rights

The NASDAQ Stock Market   Securities Registered Pursuant to Section 12(g) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredNone

None   o þ
  o þ
  þ o
  Regulation S-T o o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
  Large accelerated
    filer o

Accelerated
    filer o

Non-accelerated
    filer þ

Smaller reporting
    company o(Do not check if a smaller
    reporting company)   Rule 12b-2 o þ




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##### 



TABLE OF
    CONTENTS
   
 PagePART IItem 1.


Business


1Item 1A.


Risk Factors


5Item 1B.


Unresolved Staff Comments


12Item 2.


Properties


12Item 3.


Legal Proceedings


13Item 4.


Submission of Matters to a Vote of Security
    Holders


13Supplemental Item: Executive Officers of the
    Registrant


13PART IIItem 5.


Market for the Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


15Item 6.


Selected Financial Data


18Item 7.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


19Item 7A.


Quantitative and Qualitative Disclosures About
    Market Risk


35Item 8.


Financial Statements and Supplementary Data


39Item 9.


Changes in and Disagreements With Accountants on
    Accounting and Financial Disclosures


73Item 9A.


Controls and Procedures


73Item 9B.


Other Information


73PART IIIItem 10.


Directors, Executive Officers, Promoters and
    Control Persons of the Registrant


74Item 11.


Executive Compensation


74Item 12.


Security Ownership of Certain Beneficial Owners
    and Management


74Item 13.


Certain Relationships and Related Transactions


75Item 14.


Principal Accounting Fees and Services


75PART IVItem 15.


Exhibits, Financial Statement Schedules


76Exhibit Index


77SIGNATURES


80EX-21.1EX-23.1EX-31.1EX-31.2EX-32.1EX-32.2EX-99.1EX-99.2




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##### Table of Contents





PART I  Item 1.
    Business  Overview
        Services
  Commercial Lending.
  Residential, Installment and Personal
    Lending.
  Deposit Services.
  Other Services.
  Competition
    and Market Information
   1




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Business
    Strategy
    Supervision
    and Regulation
      Regulatory
    Capital Standards and Related Matters
    truth-in-lending truth-in-savings
   2




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EESA and
    ARRA
    Federal
    Deposit Insurance Act
  Deposit Insurance Coverage Limits.
  Deposit Insurance Assessments.
  FICO Assessments. 30-year
  Conservatorship and Receivership of
    Institutions.
  Depositor Preference.
 3




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Prompt Corrective Action.
  USA
    PATRIOT Act
    Employees
    Industry
    Segments
    Available
    Information
  www.4LNB.com. Form 10-K, Form 10-Q, Form 8-K www.sec.gov
  Forward-Looking
    Statements
  Form 10-K
  
    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 Corporations financial
    condition; 4




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
    persisting volatility and limited credit availability in the
    financial markets, particularly if actions taken by the
    U.S. Treasury, in coordination with other financial
    institution regulators and other initiatives undertaken by the
    U.S. government, do not have the intended effect on the
    financial markets;
    limitations on the Corporations ability to return capital
    to shareholders and dilution of the Corporations common
    shares that may result from the terms of the CPP, pursuant to
    which the Corporation issued securities to the
    U.S. Treasury;
    limitations on the Corporations ability to pay dividends;
    increases in interest rates or further weakening economic
    conditions that could further constrain borrowers ability
    to repay outstanding loans or diminish the value of the
    collateral securing those loans;
    adverse effects on the Corporations ability to engage in
    routine funding transactions as a result of the actions and
    commercial soundness of other financial institutions;
    general weakness in the economy that may disproportionately
    impact the financial services industry;
    uncertainties and potential additional regulatory or compliance
    burdens as a result of the Corporations participation in
    TARP;
    risk of failure of third party vendors;
    changes in accounting standards;
    limits on executive compensation due to the Corporations
    participation in the CPP;
    potential lack of capital when needed by the Corporation;
    general economic conditions, either nationally or regionally
    (especially in northeastern Ohio), becoming less favorable than
    expected resulting in, among other things, further deterioration
    in the credit quality of assets;
    increases in deposit insurance premiums or assessments imposed
    on the Corporation 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 Corporation 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
    Corporations reports as filed with the SEC.  Item 1A.
    Risk
    Factors  Form 10-K Form 10-K,
 5




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Current
    market developments may adversely affect the Corporations
    industry, business and results of operations.
    Recent
    developments in the financial services industry and the U.S. and
    global capital markets may adversely impact the
    Corporations operations and results.
    It is
    unclear what impact EESA, ARRA, and other initiatives undertaken
    by the United States government to restore liquidity and
    stability to the U.S. financial system have had and there can be
    no assurance that they will continue to help stabilize the U.S.
    financial system.
   6




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Current
    levels of market volatility may have a material adverse effect
    on the Corporation.
    The
    soundness of other financial institutions could adversely affect
    the Corporation.
    Certain
    industries, including the financial services industry, are
    disproportionately affected by certain economic indicators such
    as unemployment and real estate asset values. Should the
    improvement of these economic indicators lag the improvement of
    the overall economy, the Corporation could be adversely
    affected.
    Strong
    competition may reduce the Corporations ability to
    generate loans and deposits in its market.
    Changes
    in interest rates could adversely affect the Corporations
    earnings and financial condition.
   7




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The
    Corporations business may be adversely affected by changes
    in government policies. The Corporation competes in a highly
    regulated environment.
    The
    Corporation is subject to additional uncertainties, and
    potential additional regulatory or compliance burdens, as a
    result of the Corporations participation in the
    CPP.
      The
    Corporation may be adversely impacted by weakness in the local
    economies it serves.
    The
    Corporations earnings and reputation may be adversely
    affected if credit risk is not properly managed. Originating and
    underwriting loans is critical to the success of the
    Corporation.
     8




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The
    Corporation is subject to liquidity risk.
  and/or
  If the
    Corporations technology and systems are damaged, its
    ability to service customers, comply with regulation and grow
    assets and liabilities may be adversely impacted.
    The
    Corporation is subject to risk from the failure of third party
    vendors.
    Changes
    in accounting standards could materially impact the
    Corporations financial statements.
    The
    Corporation may not be able to attract and retain skilled
    people.
  and/or
 9




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TARP
    and ARRA impose certain executive compensation and corporate
    governance requirements that may adversely affect the
    Corporation, including the Corporations ability to recruit
    and retain qualified employees.
    
    ensuring that incentive compensation for senior executives does
    not encourage unnecessary and excessive risks that threaten the
    value of financial institutions;
    required clawbacks of any bonus or incentive compensation paid
    to a senior executive based on statements of earnings, gains or
    other criteria that are later proven to be materially inaccurate;
    prohibitions on making golden parachute payments to senior
    executives; and
    an agreement not to deduct for tax purposes executive
    compensation in excess of $500,0000 for each senior executive.    
    a prohibition on making any golden parachute payment to a senior
    executive officer or any of the Corporations next five
    most highly compensated employees;
    a prohibition on any compensation plan that would encourage
    manipulation of the Corporations reported earnings to
    enhance the compensation of any of the Corporations
    employees; and
    a prohibition on the payment or accrual of any bonus, retention
    award or incentive compensation to the Corporations five
    highest paid executives except for long-term restricted stock
    with a value not greater than one-third of the total amount of
    annual compensation of the employee receiving the stock.  gross-up
    The
    Corporations issuance of securities to the U.S. Treasury
    may limit the Corporations ability to return capital to
    its shareholders and is dilutive to the Corporations
    common shares. If the Corporation is unable to redeem such
    preferred shares, the dividend rate increases substantially
    after five years.
   10




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The
    Corporations ability to pay dividends is subject to
    limitations.
        Additional
    capital may not be available to the Corporation if and when it
    is needed.
   11




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If the
    Corporation is required to write down goodwill recorded in
    connection with its acquisitions, the Corporations
    profitability would be negatively impacted.
    Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties    Main Banking Center & Corporate Offices

457 Broadway, LorainVermilion

4455 East Liberty Avenue, VermilionAmherst

1175 Cleveland Avenue, AmherstLake Avenue

42935 North Ridge Road, Elyria TownshipAvon

2100 Center Road, AvonAvon Lake

32960 Walker Road, Avon LakePearl Avenue

2850 Pearl Avenue, LorainOberlin

24 East College Street, OberlinEly Square

124 Middle Avenue, ElyriaCleveland Street

801 Cleveland Street, ElyriaOberlin Avenue

3660 Oberlin Avenue, LorainOlmsted Township

27095 Bagley Road, Olmsted TownshipKendal at Oberlin

600 Kendal Drive, OberlinThe Renaissance

26376 John Road, Olmsted TownshipChestnut Commons

105 Chestnut Commons Drive, ElyriaNorth Ridgeville

34085 Center Ridge Road, North RidgevilleVillage of LaGrange

546 North Center Street, LaGrangeWestlake Village

28550 Westlake Village Drive, WestlakeWesleyan Village

807 West Avenue, ElyriaMorgan Bank

178 West Streetsboro Street, HudsonAvon Pointe Loan Center

36711 American Way, AvonCuyahoga Loan Center

2 Summit Park Drive, IndependenceOperations

2130 West Park Drive, LorainMaintenance

2140 West Park Drive, LorainPurchasing

2150 West Park Drive, LorainTraining Center

521 Broadway, LorainMain Office Drive Up

200 West 6th Street, Lorain  12




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Item 3.
    Legal
    Proceedings    Item 4.
    Submission
    of Matters to a Vote of Security Holders   Supplemental
    Item  Executive Officers of the Registrant  Form 10-K,
  Positions andOfficesHeld with

ExecutiveName

Age

Principal Occupation For Past Five Years

LNB Bancorp, Inc.

Officer SinceDaniel E. Klimas


51


President and Chief Executive Officer, LNB Bancorp, Inc.,
    February 2005 to present. President, Northern Ohio Region,
    Huntington Bank from 2001 to February 2005.

President and Chief Executive Officer


2005Gary J. Elek


58


Chief Financial Officer, LNB Bancorp, Inc., from April 27, 2009
    to present. Vice President and Controller for North America of
    A. Schulman, Inc. in Akron, Ohio from 2006 to 2008. Corporate
    Controller of A. Schulman, Inc. from 2004 to 2006. Executive
    Vice President, Corporate Development from 1999 to 2004, as
    Senior Vice President, Corporate Development from 1997 to 1999
    and as Senior Vice President and Treasurer from 1988 to 1997 of
    FirstMerit Corporation.

Chief Financial Officer and Principal Accounting Officer


2009 13




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Positions andOfficesHeld with

ExecutiveName

Age

Principal Occupation For Past Five Years

LNB Bancorp, Inc.

Officer SinceDavid S. Harnett


58


Senior Vice President and Chief Credit Officer, LNB Bancorp,
    Inc., August 7, 2007 to present. Senior Lender and Chief Credit
    Officer, January 2006 to August 2007, and Senior Vice President
    and Chief Credit Officer, January 2002 to January 2006, of the
    Cleveland, Ohio affiliate of Fifth Third Bank.

Senior Vice President and Chief Credit Officer


2007Kevin Nelson


46


Senior Vice President, LNB Bancorp, Inc., from April 2009 to
    present. Director of Indirect Lending, The Lorain National Bank,
    from May 2007 to present.  Senior Vice President, Bank Sales and
    Loan Originations, Morgan Bank, from September 2006 to May 2007.
    President, Nelson Marketing Group, LLC, from November 2005 to
    September 2006.

Senior Vice President


2009Frank A. Soltis


57


Senior Vice President, LNB Bancorp, Inc., July 2005 to present.
    Senior Vice President, Lakeland Financial Corporation, 1997 to
    2005.

Senior Vice President


2005Mary E. Miles


51


Senior Vice President, LNB Bancorp, Inc., April 2005 to present.
    President, Miles Consulting, Inc. from 2001 to 2005.

Senior Vice President


2005John Simacek


57


Senior Vice President, LNB Bancorp, Inc., from April 2009 to
    present. Senior Retail Executive, The Lorain National Bank,
    October 2005 to present. Vice President and Regional Manager of
    the Cleveland, Ohio affiliate of Fifth Third Bank, 1999 to
    October 2005.

Senior Vice President


2009Robert F. Heinrich


56


Senior Vice President, LNB Bancorp, Inc., from April 2009 to
    present. Corporate Secretary, LNB Bancorp, Inc., from February
    2008 to Present. Director of Risk Management, LNB Bancorp, Inc.,
    from 2005 to present. Controller, LNB Bancorp, Inc., from
    January 2004 to March 2005.  Auditor, LNB Bancorp, Inc., from
    May 2003 to January 2004.

Senior Vice President, Corporate Secretary and Director of Risk
    Management


2009Craig B. Bertea


56


Senior Vice President, LNB Bancorp, Inc., from April 2009 to
    present. Department Manager and Chief Investment Officer for the
    Trust Department, The Lorain National Bank, from March 2008 to
    present.  Portfolio Manager, Bank of America in Hartford, CT,
    from November 2007 to February 2008.  Portfolio Manager,
    Department Manager and Chief Investment Officer, LNB Bancorp,
    Inc., from September 2005 to November 2007. Senior Portfolio
    Manager and Chief Investment Officer, Sky Trust, from August
    2000 to May 2005.

Senior Vice President


2009  14




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PART II  Item 5.
    Market
    for the Registrants Common Equity, Related Stockholder
    Matters and Issuer Purchases of Equity Securities  Market Information; Equity Holders;
    Dividends. ®
      (440) 244-7317
  Common
    Stock Trading Ranges and Cash Dividends Declared
  2009CashDividendsDeclaredHigh

Low

Per ShareFirst Quarter

$
7.00


$
4.01


$
0.09Second Quarter


6.49



4.50



0.09Third Quarter


7.70



5.30



0.01Fourth Quarter


6.76



4.00



0.01   2008CashDividendsDeclaredHigh

Low

Per ShareFirst Quarter

$
15.44


$
11.88


$
0.18Second Quarter


12.90



9.65



0.18Third Quarter


11.00



6.50



0.09Fourth Quarter


9.00



4.67



0.09   ©
 15




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COMPARISON
    OF 5 YEAR CUMULATIVE TOTAL RETURN* Among
    LNB Bancorp, Inc., The S&P 500 Index
    And The NASDAQ Bank Index
  
    *
    
    $ 100 invested on 12/31/04 in stock or index. Including
    reinvestment of dividends. Fiscal year ending December 31.Copyright 2010 S&P, a division of The McGrew-Hill
    Companies Inc. All rights reserved.    12/04


12/05


12/06


12/07


12/08


12/09LNB Bancorp, Inc.



100.00




92.89




86.46




82.82




31.47




26.95S&P 500 Index



100.00




104.91




121.48




128.16




80.74




102.11NASDAQ Bank Index



100.00




98.57




111.92




89.33




71.39




60.47   Issuer
    Purchases of Equity Securities
    Total Number of

MaximumShares (or Units)

Number ofPurchased as

Shares (or Units)Total Number of



Part of Publicly

that may yet beShares (or Units)

Average Price Paid

Announced Plans

Purchased UnderPeriod

Purchased

Per Share (or Unit)

or Programs

the Plans or ProgramsOctober 1, 2009  October 31, 2009






n/a







129,500November 1, 2009  November 30, 2009






n/a







129,500December 1, 2009  December 31, 2009






n/a







129,500Total






n/a







129,500   time-to-time
 16




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17




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Item 6.
    Selected
    Financial Data  Year Ended December 31,2009


2008


2007


2006


2005(Dollars in thousands except share andper share amounts and ratios)Total interest income

$
57,647


$
58,328


$
58,762


$
49,242


$
43,432Total interest expense


19,925



26,189



29,092



20,635



13,402Net interest income


37,722



32,139



29,670



28,607



30,030Provision for Loan Losses


19,017



6,809



2,255



2,280



1,248Other income


10,182



11,213



10,362



9,514



10,092Net gain on sale of assets


1,774



1,246



1,137



237



285Other expenses


35,330



34,281



31,751



28,985



30,267Income (loss) before income taxes


(4,669
)


3,508



7,163



7,093



8,892Income tax (benefit)


(2,668
)


112



1,651



1,669



2,479Net income (loss)


(2,001
)


3,396



5,512



5,424



6,413Preferred stock dividend and accretion


1,256



91











Net income available to common shareholders

$
(3,257
)

$
3,305


$
5,512


$
5,424


$
6,413Cash dividend declared

$
1,459


$
3,940


$
5,097


$
4,641


$
4,760Per Common Share(1)Basic earnings (loss)

$
(0.45
)

$
0.45


$
0.79


$
0.84


$
0.97Diluted earnings (loss)


(0.45
)


0.45



0.79



0.84



0.97Cash dividend declared


0.20



0.54



0.72



0.72



0.72Book value per share

$
10.84


$
11.22


$
11.33


$
10.66


$
10.45Financial RatiosReturn on average assets


(0.17
)%


0.31
%


0.58
%


0.66
%


0.81
%Return on average common equity


(1.86
)


4.09



7.06



7.89



9.11Net interest margin (FTE)(2)


3.39



3.23



3.39



3.78



4.09Efficiency ratio


70.37



76.12



76.41



76.03



75.44Period end loans to period end deposits


82.68



87.23



87.94



87.60



91.91Dividend payout


n/a



120.00



91.14



85.78



74.23Average shareholders equity to average assets


9.00



7.67



8.15



8.39



8.88Net charge-offs to average loans


1.46



0.38



0.41



0.27



0.34Allowance for loan losses to period end total loans


2.34



1.45



1.04



1.16



1.13Nonperforming loans to period end total loans


4.84



2.44



1.44



2.04



1.10Allowance for loan losses to nonperforming loans


48.39



59.47



72.20



56.98



101.97At Year EndCash and cash equivalents

$
26,933


$
36,923


$
23,523


$
29,122


$
23,923Securities and interest-bearing deposits


255,841



234,665



212,694



155,688



151,509Restricted stock


4,985



4,884



4,704



3,293



3,690Loans held for sale


3,783



3,580



4,724







2,586Gross loans


803,197



803,551



753,598



628,333



588,425Allowance for loan losses


18,792



11,652



7,820



7,300



6,622Net loans


784,405



791,899



745,778



621,033



581,803Other assets


73,562



64,184



65,222



41,962



37,610Total assets


1,149,509



1,136,135



1,056,645



851,098



801,121Total deposits


971,433



921,175



856,941



717,261



640,216Other borrowings


64,582



96,905



106,932



57,249



86,512Other liabilities


9,353



10,996



10,119



7,891



5,987Total liabilities


1,045,368



1,029,076



973,992



782,401



732,715Total shareholders equity


104,141



107,059



82,653



68,697



68,406Total liabilities and shareholders equity

$
1,149,509


$
1,136,135


$
1,056,645


$
851,098


$
801,121     (1)
    
    Basic and diluted earnings (loss) per share are computed using
    the weighted-average number of shares outstanding during each
    year.(2)
    
    Tax exempt income was converted to a fully taxable equivalent
    basis at a 34% statutory Federal income tax rate in 2005, 2006,
    2007, 2008 and 2009. 18




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Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations    Summary (Dollars
    in thousands except per share data)
               19




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20




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Table 1:
    Condensed Consolidated Average Balance Sheets
  Interest,
    Rate, and Rate/ Volume differentials are stated on a Fully-Tax
    Equivalent (FTE) Basis.
    Year Ended December 31,2009


2008


2007Average








Average








AverageBalance


Interest


Rate


Balance


Interest


Rate


Balance


Interest


Rate(Dollars in thousands)Assets:U.S. Govt agencies and corporations and restricted stock

$
249,517


$
10,696



4.29
%

$
194,633


$
8,786



4.51
%

$
164,876


$
7,873



4.78
%State and political subdivisions


24,207



1,454



6.01



18,697



1,121



6.00



14,277



875



6.13Federal funds sold and short-term investments


41,691



58



0.14



15,667



451



2.88



9,278



394



4.25Commercial loans


450,730



25,412



5.64



437,844



28,082



6.41



400,045



29,805



7.45Real estate mortgage loans


87,362



5,006



5.73



98,397



5,884



5.98



100,161



6,143



6.13Home equity lines of credit


106,055



4,245



4.00



89,847



4,243



4.72



75,453



5,727



7.59Installment loans


168,545



11,301



6.70



153,481



10,200



6.65



122,742



8,327



6.78Total Earning Assets

$
1,128,107


$
58,172



5.16
%

$
1,008,566


$
58,767



5.83
%

$
886,832


$
59,144



6.67
%Allowance for loan loss


(14,851
)










(9,732
)










(7,764
)Cash and due from banks


17,711











20,520











20,855Bank owned life insurance


16,058











15,560











15,112Other assets


47,365











47,585











42,748Total Assets

$
1,194,390










$
1,082,499










$
957,783Liabilities and Shareholders EquityConsumer time deposits

$
482,482


$
14,271



2.96
%

$
395,686


$
15,392



3.89
%

$
289,906


$
13,633



4.70
%Public time deposits


84,761



1,683



1.99



63,652



2,554



4.01



69,804



3,635



5.21Brokered time deposits


7,631



320



4.19



13,890



696



5.01



36,497



1,905



5.22Savings deposits


80,063



177



0.22



82,276



504



0.60



80,513



486



0.60Interest-bearing demand


235,144



928



0.40



236,495



3,160



1.34



232,691



5,876



2.53Short-term borrowings


24,089



124



0.51



27,700



387



1.40



26,334



1,088



4.13FHLB advances


45,425



1,481



3.26



62,341



2,322



3.72



37,088



1,555



4.19Trust preferred securities


20,737



941



4.54



20,778



1,174



5.65



13,466



914



6.79Total Interest-Bearing Liabilities

$
980,332


$
19,925



2.03
%

$
902,818


$
26,189



2.90
%

$
786,299


$
29,092



3.70
%Noninterest-bearing deposits


95,730











87,302











84,352Other liabilities


11,000











9,359











9,090Shareholders Equity


107,328











83,020











78,042Total Liabilities and Shareholders Equity

$
1,194,390










$
1,082,499










$
957,783Net interest Income (FTE)





$
38,247



3.39
%





$
32,578



3.23
%





$
30,052



3.39
%Taxable Equivalent Adjustment






(525
)


(0.05
)






(439
)


(0.04
)






(382
)


(0.04
)Net Interest Income Per Financial Statements





$
37,722










$
32,139










$
29,670Net Yield on Earning Assets










3.34
%










3.19
%










3.35
%  21




---



##### Table of Contents



Results
    of Operations (Dollars
    in thousands except per share data)
  2009
    versus 2008 Net Interest Income Comparison
          Table 2:
    Net Interest Income
  Year Ended December 31,2009

2008

2007(Dollars in thousands)Net interest income

$
37,722


$
32,139


$
29,670Tax equivalent adjustments


525



439



382Net interest income (FTE)

$
38,247


$
32,578


$
30,052Net interest margin


3.34
%


3.19
%


3.35
%Tax equivalent adjustments


0.05
%


0.04
%


0.04
%Net interest margin (FTE)


3.39
%


3.23
%


3.39
%          22




---



##### Table of Contents



Table 3:
    Rate/Volume Analysis of Net Interest Income (FTE)
  Year Ended December 31,Increase (Decrease) in Interest


Increase (Decrease) in InterestIncome/Expense in 2009 over 2008


Income/Expense in 2008 over 2007Volume


Rate


Total


Volume


Rate


Total(Dollars in thousands)U.S. Govt agencies and corporations and restricted stock

$
2,353


$
(443
)

$
1,910


$
1,468


$
(555
)

$
913State and political subdivisions


331



2



333



271



(25
)


246Federal funds sold and short-term investments


36



(429
)


(393
)


(335
)


392



57Commercial loans


727



(3,397
)


(2,670
)


1,975



(3,698
)


(1,723
)Real estate mortgage loans


(633
)


(245
)


(878
)


(106
)


(153
)


(259
)Home equity lines of credit


649



(647
)


2



532



(2,016
)


(1,484
)Installment loans


1,010



91



1,101



2,090



(217
)


1,873Total Interest Income


4,473



(5,068
)


(595
)


5,895



(6,272
)


(377
)Consumer time deposits


2,567



(3,688
)


(1,121
)


8,049



(6,290
)


1,759Public time deposits


419



(1,290
)


(871
)


(265
)


(816
)


(1,081
)Brokered time deposits


(262
)


(114
)


(376
)


(1,178
)


(31
)


(1,209
)Savings deposits


(5
)


(322
)


(327
)


11



7



18Interest bearing demand


(15
)


(2,217
)


(2,232
)


(164
)


(2,552
)


(2,716
)Short-term borrowings


(19
)


(244
)


(263
)


18



(719
)


(701
)FHLB advances


(552
)


(289
)


(841
)


1,112



(345
)


767Trust preferred securities


(2
)


(231
)


(233
)


608



(348
)


260Total Interest Expense


2,131



(8,395
)


(6,264
)


8,191



(11,094
)


(2,903
)Net Interest Income (FTE)

$
2,342


$
3,327


$
5,669


$
(2,296
)

$
4,822


$
2,526    23




---



##### Table of Contents



2008
    versus 2007 Net Interest Income Comparison
        Noninterest
    Income
  Table 4:
    Details of Noninterest Income
  Year Ended December 31,2009 versus


2008 versus2009


2008


2007


2008


2007(Dollars in thousands)Investment and trust services

$
1,919


$
1,908


$
2,170



0.58
%


(12.07
)%Deposit service charges


4,478



4,760



4,725



(5.92
)%


0.74
%Electronic banking fees


2,775



2,710



2,339



2.40
%


15.86
%Income from bank owned life insurance


693



979



732



(29.21
)%


33.74
%Other income


315



856



396



(63.20
)%


116.16
%Total fees and other income


10,180



11,213



10,362



(9.21
)%


8.21
%Gain on sale of securities


690



538



274



28.25
%


96.35
%Gain on sale of loans


1,146



797



766



43.79
%


4.05
%Gains (loss) on sale of other assets


(60
)


(89
)


97



(32.58
)%


(191.75
)%Total noninterest income

$
11,956


$
12,459


$
11,499



(4.04
)%


8.35
%  24




---



##### Table of Contents



2009
    vs 2008 Noninterest Income Comparison
              available-for-sale available-for-sale available-for-sale mark-to-market
 25




---



##### Table of Contents



2008
    vs 2007 Noninterest Income Comparison
        Noninterest
    Expense
  Table 5:
    Details on Noninterest Expense
  Year Ended December 31,2009 versus

2008 versus2009

2008

2007

2008

2007(Dollars in thousands)Salaries and employee benefits


15,142



15,255



15,708



(0.74
)%


(2.88
)%Furniture and equipment


4,344



3,950



3,515



9.97
%


12.38
%Net occupancy


2,354



2,386



2,256



(1.34
)%


5.76
%Outside services


2,459



2,490



1,815



(1.24
)%


37.19
%Marketing and public relations


961



987



1,116



(2.63
)%


(11.56
)%Supplies, postage and freight


1,260



1,468



1,357



(14.17
)%


8.18
%Telecommunications


813



850



849



(4.35
)%


0.12
%Ohio Franchise tax


908



895



788



1.45
%


13.58
%FDIC Assessments


2,622



722



89



263.16
%


711.24
%Other real estate owned


367



1,070



585



(65.70
)%


82.91
%Electronic banking expenses


800



932



809



(14.16
)%


15.20
%Other charge-offs and losses


301



389



576



(22.62
)%


(32.47
)%Loan and collection expense


1,346



908



758



48.24
%


19.79
%Other expense


1,653



1,979



1,530



(16.47
)%


29.35
%Total noninterest expense


35,330



34,281



31,751



3.06
%


7.97
%   2009
    versus 2008 Noninterest Expense Comparison
     26




---



##### Table of Contents



2008
    versus 2007 Noninterest Expense Comparison
    2009
    versus 2008 Income taxes
    2008
    versus 2007 Income taxes
    Financial
    Condition
  Overview
    Securities
  Form 10-K.
 27




---



##### Table of Contents



Table 6:
    Maturity Distribution of Available for Sale Securities at
    Amortized Cost
  From 1 to 5


From 5 to 10


After


At December 31,Years


Years


10 Years


2009


2008


2007(Dollars in thousands)Securities available for sale:U.S. Government agencies and corporations

$
18,733


$
26,409


$



$
45,142


$
46,418


$
90,046Mortgage backed securities


6,508



19,619



146,581



172,708



150,718



72,534State and political subdivisions


2,490



15,999



4,099



22,588



21,969



14,961Total securities available for sale

$
27,731


$
62,027


$
150,680


$
240,438


$
219,105


$
177,541   Table 7:
    The Weighted Average Yield for Each Range of Maturities of
    Securities
  From 1 to 5


From 5 to 10


After


At December 31,Years


Years


10 Years


2009


2008


2007Securities available for sale:U.S. Government agencies and corporations


2.91
%


3.18
%


0.00
%


3.07
%


4.55
%


4.62
%Mortgage backed securities


4.66



4.75



4.89



4.87



5.25



5.28State and political subdivisions(1)


3.01



5.45



4.22



3.80



6.24



6.38Total securities available for sale


3.33
%


4.20
%


4.71
%


4.43
%


5.20
%


5.05
%     (1)
    
    Yields on tax-exempt obligations are computed on a tax
    equivalent basis based upon a 34% statutory Federal income tax
    rate.  Loans
  Form 10-K.
   28




---



##### Table of Contents



Table 8:
    Loan Portfolio Distribution
  At December 31,2009


2008


2007


2006


2005(Dollars in thousands)Commercial

$
452,341


$
450,081


$
433,081


$
374,055


$
363,144Real estate mortgage


77,204



96,241



100,419



99,182



81,367Home equity lines of credit


108,921



100,873



80,049



70,028



66,134Purchased installment














43,019



42,023Installment


164,731



156,356



140,049



42,049



38,343Total Loans


803,197



803,551



753,598



628,333



591,011Allowance for loan losses


(18,792
)


(11,652
)


(7,820
)


(7,300
)


(6,622
)Net Loans

$
784,405


$
791,899


$
745,778


$
621,033


$
584,389   At December 31,2009

2008

2007

2006

2005Loan Mix PercentCommercial


56.32
%


56.01
%


57.47
%


59.53
%


61.44
%Real Estate Mortgage


9.61
%


11.98
%


13.33
%


15.78
%


13.77
%Home Equity lines of credit


13.56
%


12.55
%


10.62
%


11.15
%


11.19
%Purchased installment


0.00
%


0.00
%


0.00
%


6.85
%


7.11
%Installment


20.51
%


19.46
%


18.58
%


6.69
%


6.49
%Total Loans


100.00
%


100.00
%


100.00
%


100.00
%


100.00
%   lines-of-credit,
    loan-to-value loan-to-value
     29




---



##### Table of Contents



Table 9:
    Commercial Loan Maturity and Repricing Analysis
  December 31, 2009(Dollars in thousands)Maturing and repricing in one year or less

$
92,816Maturing and repricing after one year but within five years


252,243Maturing and repricing beyond five years


107,282Total Commercial Loans

$
452,341   Provision
    and Allowance for Loan Losses
    Table 10:
    Analysis of Allowance for Loan Losses
  Year Ended December 31,2009


2008


2007


2006


2005(Dollars in thousands)Balance at beginning of year

$
11,652


$
7,820


$
7,300


$
6,622


$
7,386Charge-offs:Commercial


(7,528
)


(2,305
)


(2,179
)


(1,120
)


(1,582
)Real estate mortgage


(1,338
)


(275
)


(304
)


(171
)


(28
)Home equity lines of credit


(1,651
)


(467
)


(61
)


(81
)


(146
)Purchased installment










(37
)


(69
)


(65
)Installment


(1,741
)


(856
)


(495
)


(347
)


(435
)DDA Overdrafts


(219
)


(265
)


(256
)


(240
)


Total charge-offs


(12,477
)


(4,168
)


(3,332
)


(2,028
)


(2,256
)Recoveries:Commercial


252



920



150



153



75Real estate mortgage


12



21



21



9



Home equity lines of credit


24



10



25







1Purchased installment


















3Installment


266



186



249



150



165DDA Overdrafts


46



54



54



114



Total Recoveries


600



1,191



499



426



244Net Charge-offs


(11,877
)


(2,977
)


(2,833
)


(1,602
)


(2,012
)Provision for loan losses


19,017



6,809



2,255



2,280



1,248Allowance from merger










1,098







Balance at end of year

$
18,792


$
11,652


$
7,820


$
7,300


$
6,622  30




---



##### Table of Contents



Funding
    Sources
      Table 11:
    Funding Sources
  Average Balances Outstanding


Average Rates Paid2009


2008


2007


2009


2008


2007(Dollars in thousands)Demand deposits

$
95,730


$
87,302


$
84,352



0.00
%


0.00
%


0.00
%Interest checking


235,144



236,495



232,691



0.40
%


1.34
%


2.53
%Savings deposits


80,063



82,276



80,513



0.22
%


0.60
%


0.60
%Consumer time deposits


482,482



395,686



289,906



2.96
%


3.89
%


4.70
%Public time deposits


84,761



63,652



69,804



2.01
%


4.01
%


5.21
%Brokered time deposits


7,631



13,890



36,497



4.19
%


5.01
%


5.22
%Total Deposits


985,811



879,301



793,763



1.77
%


2.54
%


3.22
%Short-term borrowings


24,089



27,700



26,334



0.51
%


1.40
%


4.13
%FHLB borrowings


45,425



62,341



37,088



3.26
%


3.72
%


4.19
%Junior subordinated debentures


20,737



20,778



13,466



4.54
%


5.65
%


6.79
%Total borrowings


90,251



110,819



76,888



2.82
%


3.50
%


4.63
%Total funding

$
1,076,062


$
990,120


$
870,651



1.74
%


2.65
%


3.34
%  31




---



##### Table of Contents



Borrowings
  Form 10-K. Form 10-K.
  Capital
    Resources
           32




---



##### Table of Contents



time-to-time
      Contractual
    Obligations and Commitments
    Table 12:
    Contractual Obligations
  One Year or


Two and


Four and


Over FiveLess


Three Years


Five Years


Years


Total(Dollars in thousands)Short-term borrowings

$
1,457


$



$



$



$
1,457FHLB advances


10,000



30,000



55



2,450



42,505Operating leases


765



1,358



935



629



3,687Trust preferred securities














20,620



20,620Benefit payments


299



656



747



1,942



3,644Severance payments


165



198











363Total

$
12,686


$
32,212


$
1,737


$
25,641


$
72,276   Critical
    Accounting Policies and Estimates
   33




---



##### Table of Contents




    Allowance for loan losses      310-10-45,
        
    Income Taxes   34




---



##### Table of Contents




    Goodwill    New
    Accounting Pronouncements
    Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk  RISK
    ELEMENTS
  available-for-sale
  Credit
    Risk Management
     35




---



##### Table of Contents



Nonperforming
    Assets
  and/or
    Table 13:
    Nonperforming Assets
  At December 31,2009


2008


2007


2006


2005(Dollars in thousands)Commercial loans

$
26,846


$
14,209


$
7,927


$
10,322


$
5,129Real estate mortgage


9,139



3,465



2,097



2,165



1,182Home equity lines of credit


1,417



989



429



168



25Installment loans


1,435



929



378



157



158Total nonperforming loans


38,837



19,592



10,831



12,812



6,494Other foreclosed assets


1,264



1,108



2,478



1,289



432Total nonperforming assets

$
40,101


$
20,700


$
13,309


$
14,101


$
6,926Loans 90 days past due accruing interest

$



$



$



$



$
Allowance for loan losses to nonperforming loans


46.86
%


56.29
%


72.20
%


57.00
%


102.00
%     30-90 day 30-90 day
    Liquidity
   36




---



##### Table of Contents



Table 14:
    Liquidity
  Borrowing


UnusedCapacity


Capacity(Dollars in thousands)FHLB Cincinnati

$
59,335


$
13,784FRB Cleveland


1,810



1,810Federal Funds Lines


10,000



10,000Unaffiliated Financial Institutions


4,000



4,000Total

$
75,145


$
29,594     time-to-time,
  Market
    Risk Management
  earnings-at-risk
    earnings-at-risk earnings-at-risk earnings-at-risk
 37




---



##### Table of Contents



Table 15:
    GAP Analysis:
  At December 31, 2009Under 3 Months


3 to 12 Months


1 to 3 Years


3-5 Years


5-15 Years


After 15 Years


Total(Dollars in thousands)Earning Assets:Securities and short-term investments

$
20,008


$
25,915


$
63,786


$
44,333


$
102,356


$



$
256,398Trading securities


8,445























8,445Loans


205,351



114,111



239,053



124,806



104,229



19,431



806,981Total earning assets

$
233,804


$
140,026


$
302,839


$
169,139


$
206,585


$
19,431


$
1,071,824Interest-bearing liabilities:Consumer time deposits

$
144,195


$
264,249


$
122,102


$
17,337


$



$



$
547,883Money Market deposits


84,467























84,467Savings deposits










82,771















82,771Interest-bearing demand deposits










137,807















137,807Short-term borrowings


2,500



7,500



















10,000Long-term debt










31,905



4,600







20,620



57,125Fed Funds, Repos, Other


1,457























1,457Total interest-bearing liabilities

$
232,619


$
271,749


$
374,585


$
21,937


$



$
20,620


$
921,510Cumulative interest rate gap

$
1,185


$
(130,538
)

$
(202,284
)

$
(55,082
)

$
151,503


$
150,314RSA/RSL


101
%


74
%


77
%


94
%


117
%


116
%   At December 31, 2008Under 3 Months


3 to 12 Months


1 to 3 Years


3-5 Years


5-15 Years


After 15 Years


Total(Dollars in thousands)Earning Assets:Securities and short-term investments

$
25,574


$
24,508


$
59,187


$
40,362


$
91,552


$



$
241,183Trading securities


11,261























11,261Loans


173,540



141,097



243,721



137,498



101,897



9,377



807,130Total earning assets

$
210,375


$
165,605


$
302,908


$
177,860


$
193,449


$
9,377


$
1,059,574Interest-bearing liabilities:Consumer time deposits

$
132,284


$
323,032


$
71,019


$
7,731


$
437


$



$
534,503Money Market deposits


99,051























99,051Savings deposits










104,226















104,226Interest-bearing demand deposits










115,102















115,102Short-term borrowings


6,459



19,377



















25,836Long-term debt










27,989



3,000



2,532



20,620



54,141Fed Funds, Repos, Other


22,928























22,928Total interest-bearing liabilities

$
260,722


$
342,409


$
318,336


$
10,731


$
2,969


$
20,620


$
955,787Cumulative interest rate gap

$
(50,347
)

$
(227,151
)

$
(242,579
)

$
(75,451
)

$
115,030


$
103,787RSA/RSL


81
%


62
%


74
%


92
%


112
%


111
%  38




---



##### 



Item 8.
    Financial
    Statements and Supplementary Data  Table of
    Contents
   
 Report of Independent Registered Public
    Accounting Firm


40Consolidated Balance Sheets as of Ended December,
    2009 and 2008


41Consolidated Statements of Income for the Years
    Ended December 31, 2009, 2008 and 2007


42Consolidated Statements of Shareholders
    Equity for the Years Ended December 31, 2009, 2008
    and 2007


43Consolidated Statements of Cash Flows for the
    Years Ended December 31, 2009, 2008 and 2007


44Notes to Consolidated Financial Statements
    December 31, 2009, 2008 and 2007


45   39




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm               
    40




---



##### Table of Contents



CONSOLIDATED
    BALANCE SHEETS  At December 31,2009


2008(Dollars in thousands except share amounts)ASSETSCash and due from banks (Note 3)

$
16,933


$
21,723Federal funds sold and short-term investments


10,000



15,200Cash and cash equivalents


26,933



36,923Interest-bearing deposits in other banks


359



352Securities: (Note 5)Trading securities, at fair value


8,445



11,261Available for sale, at fair value


247,037



223,052Total securities


255,482



234,313Restricted stock


4,985



4,884Loans held for sale


3,783



3,580Loans: (Note 7)Portfolio loans


803,197



803,551Allowance for loan losses


(18,792
)


(11,652
)Net loans


784,405



791,899Bank premises and equipment, net (Note 8)


10,105



11,504Other real estate owned


1,264



1,108Bank owned life insurance


16,435



15,742Goodwill, net (Note 4)


21,582



21,582Intangible assets, net (Note 4)


1,005



1,142Accrued interest receivable


4,072



4,290Other assets (Note 13)


19,099



8,816Total Assets

$
1,149,509


$
1,136,135LIABILITIES AND SHAREHOLDERS EQUITYDeposits (Note 9)Demand and other noninterest-bearing

$
118,505


$
93,994Savings, money market and interest-bearing demand


305,045



292,679Certificates of deposit


547,883



534,502Total deposits


971,433



921,175Short-term borrowings (Note 10)


1,457



22,928Federal Home Loan Bank advances (Note 11)


42,505



53,357Junior subordinated debentures (Note 12)


20,620



20,620Accrued interest payable


2,074



3,813Accrued taxes, expenses and other liabilities (Note 13)


7,279



7,183Total Liabilities


1,045,368



1,029,076Shareholders Equity (Notes 14 and 15)Preferred stock, Series A Voting, no par value, authorized
    750,000 shares, none issued at December 31, 2009 and
    2008






Preferred stock, Series B, no par value, 25,223 shares
    authorized and issued at December 31, 2009 and
    December 31, 2008


25,223



25,223Discount on Series B preferred stock


(131
)


(146
)Warrant to purchase common stock


146



146Common stock, par value $1 per share, authorized
    15,000,000 shares, issued 7,623,857 shares at
    December 31, 2009 and December 31, 2008


7,624



7,624Additional paid-in capital


37,862



37,783Retained earnings


36,883



41,682Accumulated other comprehensive income


2,626



839Treasury shares at cost, 328,194 shares at
    December 31, 2009 and December 31, 2008


(6,092
)


(6,092
)Total Shareholders Equity


104,141



107,059Total Liabilities and Shareholders Equity

$
1,149,509


$
1,136,135    41




---



##### Table of Contents



CONSOLIDATED
    STATEMENTS OF INCOME  Year Ended December 31,2009


2008


2007(Dollars in thousands except share and per share amounts)Interest and Dividend IncomeLoans

$
45,885


$
48,314


$
49,889Securities:U.S. Government agencies and corporations


10,452



8,786



7,588State and political subdivisions


1,008



777



606Other debt and equity securities


244



304



285Federal funds sold and short-term investments


58



147



394Total interest income


57,647



58,328



58,762Interest ExpenseDeposits


17,379



22,306



25,535Federal Home Loan Bank advances


1,481



2,322



1,555Short-term borrowings


124



387



1,088Junior subordinated debentures


941



1,174



914Total interest expense


19,925



26,189



29,092Net Interest Income


37,722



32,139



29,670Provision for Loan Losses (Note 7)


19,017



6,809



2,255Net interest income after provision for loan losses


18,705



25,330



27,415Noninterest IncomeInvestment and trust services


1,919



1,908



2,170Deposit service charges


4,478



4,760



4,725Other service charges and fees


2,775



2,710



2,339Income from bank owned life insurance


693



979



732Other income


315



856



396Total fees and other income


10,180



11,213



10,362Securities gains, net


690



538



274Gains on sale of loans


1,146



797



766Gains (loss) on sale of other assets, net


(60
)


(89
)


97Total noninterest income


11,956



12,459



11,499Noninterest ExpenseSalaries and employee benefits (Notes 18 & 19)


15,142



15,255



15,708Furniture and equipment


4,344



3,950



3,515Net occupancy (Note 8)


2,354



2,386



2,256Outside services


2,459



2,490



1,815Marketing and public relations


961



987



1,116Supplies, postage and freight


1,260



1,468



1,357Telecommunications


813



850



849Ohio franchise tax


908



895



788FDIC assessments


2,622



722



89Other real estate owned


367



1,070



585Electronic banking expenses


800



932



809Loan and collection expense


1,346



908



758Other expense


1,954



2,368



2,106Total noninterest expense


35,330



34,281



31,751Income before income tax expense (benefit)


(4,669
)


3,508



7,163Income tax expense (Note 13)


(2,668
)


112



1,651Net Income (Loss)

$
(2,001
)

$
3,396


$
5,512Dividends and accretion on preferred stock


1,256



91



Net Income (Loss) Available to Common Shareholders

$
(3,257
)

$
3,305


$
5,512Net Income (Loss) Per Common Share (Note 2)Basic

$
(0.45
)

$
0.45


$
0.79Diluted


(0.45
)


0.45



0.79Dividends declared


0.20



0.54



0.72Average Common Shares OutstandingBasic


7,295,663



7,295,663



6,992,215Diluted


7,295,663



7,295,663



6,992,215    42




---



##### Table of Contents



CONSOLIDATED
    STATEMENTS OF SHAREHOLDERS
    EQUITY  Preferred


Warrant to











AccumulatedStock


Purchase





Additional





Other(Net of


Common


Common


Paid-In


Retained


Comprehensive


TreasuryDiscount)


Stock


Stock


Capital


Earnings


Income (Loss)


Stock


Total(Dollars in thousands except share and per share amounts)Balance, January 1, 2007

$







$
6,772


$
26,382


$
43,728


$
(2,093
)

$
(6,092
)

$
68,697Cumulative affect of adoption of fair value for trading
    securities


















(1,192
)


1,192Comprehensive income:Net Income


















5,512











5,512Other comprehensive loss, net of tax:Pension liability adjustments






















(155
)






(155
)Change in unrealized gains and losses on securities






















1,514







1,514Total comprehensive income






























6,871Share-based comprehensive income














58















58Issuance of 851,990 shares of common stock










852



11,272















12,124Common dividends declared, $.72 per share


















(5,097
)










(5,097
)Balance, December 31, 2007

$



$



$
7,624


$
37,712


$
42,951


$
458


$
(6,092
)

$
82,653Cumulative effect of change in accounting principle for
    split-dollar life insurance coverage


















(725
)










(725
)Comprehensive income:Net Income


















3,396











3,396Other comprehensive income, net of tax:Pension liability adjustments






















(1,083
)






(1,083
)Change in unrealized gains and losses on securities






















1,464







1,464Total comprehensive income






























3,777Share-based compensation income














71















71Issuance of 25,223 shares of preferred stock, Series B


25,077



146























25,223Common dividends declared, $.54 per share


















(3,940
)










(3,940
)Balance, December 31, 2008

$
25,077


$
146


$
7,624


$
37,783


$
41,682


$
839


$
(6,092
)

$
107,059Comprehensive income:Net Loss


















(2,001
)










(2,001
)Other comprehensive income, net of tax:Pension liability adjustments






















38







38Change in unrealized gains and losses on securities






















1,749







1,749Total comprehensive income (loss)






























(214
)Share-based compensation income














79















79Preferred dividends and accretion of discount


15















(1,339
)










(1,324
)Common dividends declared, $.20 per share


















(1,459
)










(1,459
)Balance, December 31, 2009

$
25,092


$
146


$
7,624


$
37,862


$
36,883


$
2,626


$
(6,092
)

$
104,141    43




---



##### Table of Contents



CONSOLIDATED
    STATEMENTS OF CASH
    FLOWS  Year Ended December 31,2009


2008


2007(Dollars in thousands)Operating ActivitiesNet income (loss)

$
(2,001
)

$
3,396


$
5,512Adjustments to reconcile net income to net cash provided by
    operating activities:Provision for loan losses


19,017



6,809



2,255Depreciation and amortization


1,632



1,749



1,730Amortization (accretion) of premiums and discounts


1,529



(431
)


(16
)Amortization of intangibles


137



138



167Amortization of loan servicing rights


422



219



153Amortization of deferred loan fees


103



294



264Federal deferred income tax expense (benefit)


(2,578
)


(1,241
)


182Securities gains, net


(690
)


(538
)


(274
)Share-based compensation expense, net of tax


79



71



58Loans originated for sale


(105,623
)


(85,164
)


(90,129
)Proceeds from sales of loan originations


106,566



87,103



86,171Net gain from loan sales


(1,146
)


(797
)


(766
)Federal Home Loan Bank stock dividends






(143
)


Net (gain) loss on sale of other assets


60



89



(97
)Net increase in accrued interest receivable and other assets


(9,092
)


(2,345
)


(4,257
)Net increase (decrease) in accrued interest payable, taxes and
    other liabilities


(1,930
)


727



2,152Net cash provided by operating activities


6,485



9,936



3,105Investing ActivitiesProceeds from sales of
    available-for-sale
    securities


38,141



77,069



Proceeds from maturities of
    available-for-sale
    securities


69,307



37,728



40,042Purchase of
    available-for-sale
    securities


(129,941
)


(155,946
)


(109,044
)Purchase of trading securities


(9,005
)


(81,738
)


(65,082
)Proceeds from maturities of trading securities


1,737







Proceeds from sale of trading securities


10,462



104,433



79,632Change in interest-bearing deposits in other banks


(7
)


(252
)


Purchase of Federal Reserve Bank Stock










(836
)Purchase of Federal Home Loan Bank Stock


(101
)


(117
)


(495
)Acquisition, net of cash and cash equivalents acquired










7,212Net increase in loans made to customers


(12,943
)


(53,912
)


(34,951
)Proceeds from the sale of other real estate owned


917



1,203



1,139Purchase of bank premises and equipment


(549
)


(500
)


(2,889
)Proceeds from sale of bank premises and equipment


197



6



15Net cash used in investing activities


(31,785
)


(72,026
)


(85,257
)Financing ActivitiesNet increase (decrease) in demand and other noninterest-bearing


24,511



5,182



(11,751
)Net increase (decrease) in savings, money market and
    interest-bearing demand


12,366



(2,445
)


(2,358
)Net increase in certificates of deposit


13,381



61,497



51,920Net increase (decrease) in short-term borrowings


(21,471
)


(19,177
)


18,222Proceeds from Federal Home Loan Bank advances


22,500



65,000



233,450Payment of Federal Home Loan Bank advances


(33,352
)


(55,850
)


(228,453
)Issuance of preferred stock






25,223



Proceeds from issuance of junior subordinated debentures










20,620Dividends paid


(2,625
)


(3,940
)


(5,097
)Net cash provided by financing activities


15,310



75,490



76,553Net increase (decrease) in cash and cash equivalents


(9,990
)


13,400



(5,599
)Cash and cash equivalents, January 1


36,923



23,523



29,122Cash and cash equivalents, December 31

$
26,933


$
36,923


$
23,523Supplemental cash flow informationInterest paid

$
21,664


$
25,937


$
28,170Income taxes paid


400



2,555



1,968Transfer of loans to other real estate owned


1,317



688



2,667    44




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (Dollars in thousands except per share amounts)
  (1)
    Summary
    of Significant Accounting Policies  Basis of
    Presentation
    New
    Accounting Pronouncements
    ASC Topic 820, Fair Value Measurement and
    Disclosure.
  ASC Topic 320, Investments  Debt and Equity
    Securities. other-than-temporary
  ASC Topic 855, Subsequent Events.
  ASC Topic 860, Transfers and Servicing.
  ASC Topic 810, Consolidation.
 45




---



##### Table of Contents



Use of
    Estimates
    Segment
    Information
    Statement
    of Cash Flows
    Securities
    Restricted
    Stock
   46




---



##### Table of Contents



Loans
    Held For Sale
    Loans
      case-by-case
  Allowance
    for Loan Losses
      Servicing
   47




---



##### Table of Contents



Bank
    Premises and Equipment
    Goodwill
    and Core Deposit Intangibles
  ASC Topic 350,
    Goodwill and Other Intangibles.
    Other
    Real Estate Owned
    Split-Dollar
    Life Insurance
  715-60, Accounting for Deferred Compensation and Postretirement
    Benefit Aspects of Endorsement Split-Dollar Life Insurance
    Arrangements, 06-4
  Investment
    and Trust Services Assets and Income
    Income
    Taxes
   48




---



##### Table of Contents



Comprehensive
    Income
    available-for-sale
  (2)
    Earnings
    (Loss) Per Common Share    Year Ended December 31,2009


2008


2007(Dollars in thousands except per share amounts)Weighted average shares outstanding used in Basic Earnings per
    Common Share


7,295,663



7,295,663



6,992,215Dilutive effect of stock options










Weighted average shares outstanding used in Diluted Earnings Per
    Common Share

$
7,295,663


$
7,295,663


$
6,992,215Net Income (Loss)


(2,001
)


3,396



5,512Preferred stock dividend and accretion


1,256



91



Income (Loss) Available to Common Shareholders

$
(3,257
)

$
3,305


$
5,512Basic Earnings (Loss) Per Common Share

$
(0.45
)

$
0.45


$
0.79Diluted Earnings (Loss) Per Common Share

$
(0.45
)

$
0.45


$
0.79     (3)
    Cash and
    Due from Banks    (4)
    Goodwill
    and Intangible Assets   49




---



##### Table of Contents



At December 31,2009


2008(Dollars in thousands)Core deposit intangibles

$
1,367


$
1,367Less: accumulated amortization


362



225Carrying value of core deposit intangibles

$
1,005


$
1,142     Core
    Deposits Intangibles
  (Dollars in thousands)2010

$
1372011


1372012


1372013


1372014


1372015 and beyond


320  50




---



##### Table of Contents



(5)
    Securities    At December 31, 2009Amortized








FairCost


Unrealized Gains


Unrealized Losses


Value(Dollars in thousands)Securities available for sale:U.S. Government agencies and corporations

$
45,142


$
354


$
(281
)

$
45,215Mortgage backed securities


172,708



6,092



(21
)


178,779State and political subdivisions


22,588



571



(116
)


23,043Total Securities

$
240,438


$
7,017


$
(418
)

$
247,037   At December 31, 2008Amortized








FairCost


Unrealized Gains


Unrealized Losses


Value(Dollars in thousands)Securities available for sale:U.S. Government agencies and corporations

$
46,418


$
1,134


$



$
47,552Mortgage backed securities


150,718



2,886



(196
)


153,408State and political subdivisions


21,969



438



(315
)


22,092Total Securities

$
219,105


$
4,458


$
(511
)

$
223,052   Trading Securities Held at December 31, 2009Aggregate


AggregateUnrealized Gains


Unrealized Losses


FairCost


Recorded to Income


Recorded to Income


Value(Dollars in thousands)Trading Securities

$
8,327


$
118


$



$
8,445   Trading Securities Held at December 31, 2008Aggregate


AggregateUnrealized Gains


Unrealized Losses


FairCost


Recorded to Income


Recorded to Income


Value(Dollars in thousands)Trading Securities

$
11,245


$
16


$



$
11,261  51




---



##### Table of Contents



At December 31, 2009FairAmortized Cost


Value(Dollars in thousands)Securities available for sale:Due in one year or less

$
691


$
708Due from one year to five years


20,532



20,694Due from five years to ten years


42,407



42,766Due after ten years


4,100



4,090Mortgage-backed


172,708



178,779$
240,438


$
247,037   available-for-sale
  2009


2008


2007(Dollars in thousands)Gross realized gains

$
444


$
612


$
Gross realized losses


(111
)


(76
)


Net Securities Gains

$
333


$
536


$
Proceeds from the sale of available for sale securities

$
38,141


$
77,069


$
             52




---



##### Table of Contents



At December 31, 2009Less than 12 Months


12 Months or Longer


TotalFair Value


Unrealized Losses


Fair Value


Unrealized Losses


Fair Value


Unrealized Losses(Dollars in thousands)U.S. Government agencies and corporations

$
21,440


$
(281
)

$



$



$
21,440


$
(281
)Mortgage backed securities


2,177



(21
)










2,177



(21
)State and political subdivisions


4,549



(116
)










4,549



(116
)Total

$
28,166


$
(418
)

$



$



$
28,166


$
(418
)   At December 31, 2008Less than 12 Months


12 Months or Longer


TotalFair Value


Unrealized Losses


Fair Value


Unrealized Losses


Fair Value


Unrealized Losses(Dollars in thousands)U.S. Government agencies and corporations

$



$



$



$



$



$
Mortgage backed securities


22,569



(195
)


1,642



(1
)


24,211



(196
)State and political subdivisions


6,017



(315
)










6,017



(315
)Total

$
28,586


$
(510
)

$
1,642


$
(1
)

$
30,228


$
(511
)   (6)
    Transactions
    with Related Parties    At December 31,2009


2008(Dollars in thousands)Amount at beginning of year

$
20,306


$
22,833New loans


6,760



1,871Repayments


(7,994
)


(5,083
)Changes in directors and officers and /or affiliations, net


(335
)


685Amount at end of year

$
18,737


$
20,306    53




---



##### Table of Contents



(7)
    Loans and
    Allowance for Loan Losses    At December 31,2009


2008(Dollars in thousands)Real estate loans (includes loans secured primarily by real
    estate only):Construction and land development

$
65,052


$
60,725One to four family residential


219,508



231,757Multi-family residential


28,988



26,284Non-farm non-residential properties


286,778



296,393Commercial and industrial loans


61,929



60,846Personal loans to individuals:Auto, single payment and installment


135,097



123,807All other loans


5,845



3,739Total loans


803,197



803,551Allowance for loan losses


(18,792
)


(11,652
)Net loans

$
784,405


$
791,899     Year Ended December 31,2009


2008


2007(Dollars in thousands)Balance at the beginning of year

$
11,652


$
7,820


$
7,300Provision for loan losses


19,017



6,809



2,255Allowance from merger










1,098Loans charged-off


(12,477
)


(4,168
)


(3,332
)Recoveries on loans previously charged-off


600



1,191



499Balance at the end of the year

$
18,792


$
11,652


$
7,820     At December 31,2009

2008

2007(Dollars in thousands)Year-end impaired loans with allowance for loan losses
    specifically allocated

$
24,250


$
13,213


$
5,456Year-end impaired loans without allowance for loan losses
    specifically allocated


2,804



2,331



2,471Amount of allowance specifically allocated to impaired loans


7,584



3,569



1,549Average of impaired loans during the year


22,872



16,094



10,929Interest income recognized during impairment










Nonaccrual loans at year end


38,837



19,592



10,831  54




---



##### Table of Contents



(8)
    Bank
    Premises, Equipment and Leases    At December 312009


2008(Dollars in thousands)Land

$
2,602


$
2,662Buildings


11,434



12,002Equipment


14,034



14,031Purchased software


3,979



3,967Leasehold improvements


1,078



1,060Total cost

$
33,127


$
33,722Less: accumulated depreciation and amortization


23,022



22,218Net bank premises and equipment

$
10,105


$
11,504       Amount(Dollars in thousands)2010

$
7652011


7382012


6202013


5002014


4352015 and thereafter


629Total

$
3,687     (9)
    Deposits    At December 31,2009


2008(Dollars in thousands)Demand and other noninterest-bearing

$
118,505


$
93,994Interest checking


137,807



115,102Savings


82,771



78,526Money market accounts


84,467



99,051Consumer time deposits


476,798



449,772Public time deposits


71,085



72,247Brokered time deposits






12,483Total deposits

$
971,433


$
921,175  55




---



##### Table of Contents



After 12 Months


After 36 MonthsWithin


but within 36


but within 6012 Months


Months


Months


After 5 Years


Total(Dollars in thousands)Consumer time deposits

$
336,939


$
122,332


$
17,507


$
20


$
476,798Public time deposits


67,468



3,617











71,085Total time deposits

$
404,407


$
125,949


$
17,507


$
20


$
547,883   (10)
    Short-Term
    Borrowings      Year Ended December 312009


2008


2007(Dollars in thousands)Securities sold under repurchase agreementsPeriod End:Outstanding

$
1,457


$
22,928


$
22,105Interest rate


0.15
%


0.50
%


3.21
%Average:Outstanding

$
24,089


$
25,875


$
23,533Interest rate


0.51
%


1.19
%


3.63
%Maximum month-end balance

$
37,295


$
30,781


$
28,039Federal funds purchasedPeriod End:Outstanding

$



$



$
20,000Interest rate


n/a



n/a



4.25
%Average:Outstanding

$



$
1,989


$
7,947Interest rate


n/a



3.87
%


5.30
%Maximum month-end balance

$



$
12,900


$
20,000   (11)
    Federal
    Home Loan Bank Advances   56




---



##### Table of Contents



2009


2008(Dollars in thousands)Maturities January 2009 through December 2009, with fixed rates
    ranging from 3.36% to 5.00%, averaging 3.60% in 2008

$



$
25,794Maturity January 2010, fixed rate 3.58%


10,000



10,000Maturities January 2011 through February 2011, with fixed rates
    ranging from 3.17% to 3.67%, averaging 3.50% for 2009 and 2008


15,000



15,000Maturity January 2012, fixed rate 2.37%


15,000



Maturity January 2014, fixed rate 3.55%


55



63Maturity July 2015, fixed rate 4.76%


2,450



2,500Total FHLB advances

$
42,505


$
53,357   (12)
    Trust Preferred
    Securities        (13)
    Income
    Taxes    Year Ended December 31,2009


2008


2007(Dollars in thousands)Income Taxes:Federal current expense (benefit)

$
(90
)

$
1,353


$
1,469Federal deferred expense (benefit)


(2,578
)


(1,241
)


182Total Income Tax (Benefit)

$
(2,668
)

$
112


$
1,651  57




---



##### Table of Contents



Year Ended December 31,2009


2008


2007(Dollars in thousands)Computed expected tax expense (benefit)

$
(1,587
)

$
1,193


$
2,435Increase (reduction) in income taxes resulting from:Tax exempt interest on obligations of state and political
    subdivisions


(386
)


(265
)


(277
)Tax exempt interest on bank owned life insurance


(236
)


(332
)


(243
)New markets tax credit


(530
)


(476
)


(476
)Other, net


71



(8
)


212Total Income Taxes (Benefit)

$
(2,668
)

$
112


$
1,651       At December 312009


2008(Dollars in thousands)Deferred Federal tax assets:Allowance for loan losses

$
6,365


$
3,922Deferred compensation


308



375Minimum pension liability


889



910Equity based compensation


69



60Accrued loan fees and costs


241



124New Market Tax Credit


430



Mark-to-market
    adjustments


155



250Other deferred tax assets


711



525Total deferred Federal tax assets

$
9,168


$
6,166Deferred Federal tax liabilities:Bank premises and equipment depreciation

$
(106
)

$
(44
)Unrealized gain on securities available for sale


(2,243
)


(1,342
)FHLB stock dividends


(254
)


(254
)Intangible asset amortization


(586
)


(448
)Accretion


(181
)


(119
)Deferred charges


(597
)


(338
)Prepaid pension


(353
)


(435
)Other deferred tax liabilities


(303
)


(297
)Total deferred Federal tax liabilities


(4,623
)


(3,277
)Net deferred Federal tax assets

$
4,545


$
2,889  58




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##### Table of Contents



(14)
    Shareholders
    Equity  Preferred
    Stock
      360-day 30-day
      Common
    Stock
    Common
    Shares Repurchase Plan and Treasury Shares
   59




---



##### Table of Contents



Shareholder
    Rights Plan
      LNBB
    Direct Stock Purchase and Dividend Reinvestment Plan
    Dividend
    Restrictions
     60




---



##### Table of Contents



(15)
    Regulatory
    Capital          December 31, 2009

December 31, 2008Amount

Ratio

Amount

Ratio(Dollars in thousands)Total capital (risk weighted)Consolidated

$
117,824



13.64
%

$
114,750



13.44
%Bank


107,539



12.46



87,844



10.30Tier 1 capital (risk weighted)Consolidated


87,625



10.14



78,846



9.24Bank


92,752



10.75



71,171



8.35Tier 1 capital (average assets)Consolidated


87,625



7.70



78,846



7.20Bank


92,752



8.14



71,171



6.44 61




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##### Table of Contents



December 31, 2009

December 31, 2008Amount

Ratio

Amount

Ratio(Dollars in thousands)Well Capitalized:Total capital (risk weighted)Consolidated

$
86,381



10.00
%

$
85,379



10.00
%Bank


86,307



10.00



85,285



10.00Tier 1 capital (risk weighted)Consolidated


51,849



6.00



51,199



6.00Bank


51,769



6.00



51,141



6.00Tier 1 capital (average assets)Consolidated


56,899



5.00



54,754



5.00Bank


56,973



5.00



55,257



5.00Minimum Required:Total capital (risk weighted)Consolidated

$
69,105



8.00
%

$
68,304



8.00
%Bank


69,046



8.00



68,228



8.00Tier 1 capital (risk weighted)Consolidated


34,566



4.00



34,132



4.00Bank


34,512



4.00



34,094



4.00Tier 1 capital (average assets)Consolidated


45,519



4.00



43,803



4.00Bank


45,578



4.00



44,206



4.00   (16)
    Parent
    Company Financial Information    Year Ended December 31,Condensed Balance Sheets

2009


2008(Dollars in thousands)Assets:Cash

$
2,106


$
25,925Investment in The Lorain National Bank


118,053



94,820Other investments


7



7Note receivable  The Lorain National Bank


4,000



6,000Other assets


864



1,010Total Assets

$
125,030


$
127,762Liabilities and Shareholders EquityJunior subordinated debentures

$
20,620


$
20,620Other liabilities


269



83Shareholders equity


104,141



107,059Total Liabilities and Shareholders Equity

$
125,030


$
127,762   62




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##### Table of Contents



Year Ended December 31,Condensed Statements of Income

2009


2008


2007(Dollars in thousands)IncomeInterest income

$
363


$
390


$
368Cash dividend from The Lorain National Bank


2,190



3,900



5,160Other income


145



62



2Total Income


2,698



4,352



5,530ExpensesInterest expense


941



1,176



914Other expenses


202



272



245Total Expense


1,143



1,448



1,159Income before income taxes and equity in undistributed net
    income of subsidiary


1,555



2,904



4,371Income tax (benefit) expense


(221
)


(335
)


6Equity in undistributed net income (loss) of subsidiary


(3,777
)


157



1,147Net Income (Loss)

$
(2,001
)

$
3,396


$
5,512   Year Ended December 31,Condensed Statements of Cash Flows

2009


2008


2007(Dollars in thousands)Net Income (Loss)

$
(2,001
)

$
3,396


$
5,512Adjustments to reconcile net income (loss) to net cash provided
    by operating activities:Equity in undistributed net income (loss) of subsidiary


3,777



(157
)


(1,147
)Share-based compensation expense, net of tax


79



71



58Net change in other assets and liabilities


174



(1,082
)


180Net cash provided by operating activities


2,029



2,228



4,603Cash Flows from Investing Activities:Payments for investments in subsidiaries










(15,740
)Payments for advances to The Lorain National Bank


(25,223
)






Payments to The Lorain National Bank for subordinated debt
    instrument










(4,000
)Payments from The Lorain National Bank for subordinated debt
    instrument


2,000



2,000



Net cash provided by (used in) investing activities


(23,223
)


2,000



(19,740
)Cash Flows from Financing Activities:Proceeds from issuance of junior subordinated debentures










20,620Proceeds from issuance of preferred stock






25,223



Dividends paid


(2,625
)


(3,940
)


(5,097
)Net cash provided by (used in) financing activities


(2,625
)


21,283



15,523Net increase (decrease) in cash equivalents


(23,819
)


25,511



386Cash and cash equivalents at beginning of year


25,925



414



28Cash and cash equivalents at end of year

$
2,106


$
25,925


$
414  63




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##### Table of Contents



(17)
    Retirement
    Pension Plan      Year Ended December 31,2009


2008


2007(Dollars in thousands)Change in projected benefit obligationProjected benefit obligation at the beginning of the year

$
(5,723
)

$
(5,559
)

$
(5,534
)Interest Cost


(324
)


(324
)


(308
)Actuarial gain (loss)


(218
)


(363
)


(284
)Settlement loss










(92
)Benefits paid


549



523



659Projected benefit obligation at the end of the year

$
(5,716
)

$
(5,723
)

$
(5,559
)Change in plan assetsFair value of plan assets at beginning of year

$
3,969


$
5,430


$
5,374Actual gain on plan assets


401



(968
)


465Employer contributions


400







250Gain/(Loss)






30



Benefits paid


(549
)


(523
)


(659
)Fair value of plan assets at end of year

$
4,221


$
3,969


$
5,430Funded status (included in accrued liabilities)

$
(1,495
)

$
(1,754
)

$
(129
)Unrecognized actuarial loss in accumulated other
    comprehensive income

$
2,619


$
2,677


$
1,037     Year Ended December 31,2009


2008


2007(Dollars in thousands)Net Periodic Pension Cost (Benefit)Interest cost on projected benefit obligation

$
324


$
324


$
307Expected return on plan benefits


(275
)


(388
)


(389
)Amortization of Loss


150



48



19Loss recognized due to settlement










48Net Periodic Pension Cost (Benefit)

$
199


$
(16
)

$
(15
)  64




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##### Table of Contents



Year Ended December 31,2009


2008


2007(Dollars in thousands)Amortization of unrecognized actuarial loss

$
150


$
48


$
19Current deferral of gains (losses)


(92
)


(1,688
)


(256
)Pension liability adjustments recognizedin comprehensive income


58



(1,640
)


(237
)Tax effect


(20
)


557



82Net pension liability adjustments

$
38


$
(1,083
)

$
(155
)     2009


2008


2007Weighted average discount rate


5.75
%


5.75
%


5.75
%Expected long-term rate of return on plan assets


7.50
%


7.50
%


7.50
%Assumed rate of future compensation increases


0.00
%


0.00
%


0.00
%     Plan
    Assets
    Plan Assets at December 31,2009


2008


2007Asset Category:Equity securities


57.48
%


47.53
%


59.90
%Debt securities


41.82



52.25



35.30Cash and cash equivalents


0.70



0.22



4.80Total


100.00
%


100.00
%


100.00
%LNB Bancorp, Inc. common stock to total plan assets


3.08
%


4.25
%


8.50
%      65




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##### Table of Contents



Amount(Dollars in thousands)2010

$
2992011


3122012


3442013


3742014


3732015-2019


1,942   (18)
    Stock
    Options and Stock Appreciation Rights      Year Issued2005


2005


2006


2007


2007


2008


2008


2009


2006Type

Option


Option


Option


Option


Option


Option


Option


Option


SARsNumber of Options


2,500



30,000



30,000



30,000



20,000



50,000



33,000



2,500



14,500Strike Price

$
16.50


$
19.17


$
19.10


$
16.00


$
15.35


$
14.47


$
14.47


$
5.46


$
19.00Number of Options Vested


2,500



30,000



30,000



20,000



13,334



16,666



10,165







14,500Assumptions:Risk free interest rate


4.50
%


3.92
%


3.66
%


4.73
%


4.72
%


2.94
%


2.94
%


2.27
%


1.42
%Dividend yield


4.36
%


3.76
%


3.77
%


4.50
%


4.69
%


4.98
%


4.98
%


6.68
%


6.86
%Volatility


18.48
%


17.30
%


17.66
%


16.52
%


15.33
%


15.68
%


15.68
%


22.97
%


25.19
%Expected Life  years


5



6



6



7



6



6



6



6



4    66




---



##### Table of Contents



2009


2008


2007Weighted Average





Weighted Average





Weighted AverageExercise





Exercise





ExerciseOptions


Price Per Share


Options


Price Per Share


Options


Price Per ShareOutstanding at beginning of year


203,500


$
16.18



112,500


$
17.57



62,500


$
19.03Granted


2,500



5.46



99,500



14.47



50,000



15.74Forfeited or expired


(8,000
)


14.47



(8,500
)


14.47







Exercised






















Stock dividend or split






















Outstanding at end of year


198,000


$
16.12



203,500


$
16.18



112,500


$
17.57Exerciseable at end of year


122,665


$
17.14



69,167


$
18.23



32,500


$
18.94     Weighted AverageExercise PriceNonvested Shares

Per ShareNonvested at January 1, 2009


134,333


$
15.13Granted


2,500



5.46Vested


53,498



15.73Forfeited


8,000



14.47Nonvested at December 31, 2009


75,335



14.45     (19)
    Benefit
    Plans         67




---



##### Table of Contents



(20)
    Commitments
    and Contingencies      case-by-case
    2009


2008(Dollars in thousands)Commitments to extend credit

$
68,770


$
76,199Home equity lines of credit


75,791



81,416Standby letters of credit


8,616



9,313Total

$
153,177


$
166,928     (21)
    Estimated
    Fair Value of Financial Instruments      
    The carrying value of Cash and due from banks, Federal funds
    sold, short-term investments, interest bearing deposits in other
    banks and accrued interest receivable and other financial assets
    is a reasonable estimate of fair value due to the short-term
    nature of the asset.
    The fair value of investment securities is based on quoted
    market prices, where available. If quoted market prices are not
    available, fair value is estimated using the quoted market
    prices of comparable instruments.
    For variable rate loans with interest rates that may be adjusted
    on a quarterly, or more frequent basis, the carrying amount is a
    reasonable estimate of fair value. The fair value of other types
    of loans is estimated by discounting future cash flows using the
    current rates at which similar loans would be made to borrowers
    with similar credit ratings and for the same remaining
    maturities.
    The carrying value approximates the fair value for bank owned
    life insurance. 68




---



##### Table of Contents




    The fair value of deposits with no stated maturity, such as
    noninterest-bearing demand deposits, savings, money market,
    checking and interest-bearing checking, is equal to the amount
    payable on demand as of December 31, for each year
    presented. The fair value of fixed-maturity certificates of
    deposit is estimated using the rates currently offered for
    deposits of similar remaining maturities. For variable rate
    certificates of deposit, the carrying amount is a reasonable
    estimate of fair value.
    Securities sold under repurchase agreements, other short-term
    borrowings, accrued interest payable and other financial
    liabilities approximate fair value due to the short-term nature
    of the liability.
    The fair value of Federal Home Loan Bank advances is estimated
    by discounting future cash flows using current FHLB rates for
    the remaining term to maturity.
    The fair value of junior subordinated debentures is based on the
    discounted value of contractual cash flows using rates currently
    offered for similar maturities.
    The fair value of commitments to extend credit approximates the
    fees charged to make these commitments; since rates and fees of
    the commitment contracts approximates those currently charged to
    originate similar commitments. The carrying amount and fair
    value of off-balance sheet instruments is not significant as of
    December 31, 2009 and 2008.  Limitations
    on-and-off
  At December 31,2009


2008Carrying


Estimated Fair


Carrying


Estimated FairValue


Value


Value


Value(Dollars in thousands)Financial assetsCash and due from banks, Federal funds sold, short-term
    investments and interest bearing deposits in other banks

$
27,292


$
27,292


$
37,275


$
37,275Securities


255,482



255,482



234,313



234,313Portfolio loans, net


784,405



786,154



791,899



821,200Loans held for sale


3,783



3,783



3,580



3,580Accrued interest receivable


4,072



4,072



4,290



4,290 69




---



##### Table of Contents



At December 31,2009


2008Carrying


Estimated Fair


Carrying


Estimated FairValue


Value


Value


Value(Dollars in thousands)Financial liabilitiesDeposits:Demand, savings and money market

$
423,550


$
423,550


$
386,673


$
386,673Certificates of deposit


547,883



555,302



534,502



546,497Total deposits


971,433



978,852



921,175



933,170Short-term borrowings


1,457



1,457



22,928



22,928Federal Home Loan Bank advances


42,505



43,708



53,357



54,647Junior subordinated debentures


20,620



18,489



20,620



21,492Accrued interest payable


2,074



2,074



3,813



3,813     
    Level 1  Valuations based on quoted prices in
    active markets, such as the New York Stock Exchange. Valuations
    are obtained from readily available pricing sources for market
    transactions involving identical assets or liabilities.
    Level 2  Valuations of assets and liabilities
    traded in less active dealer or broker markets. Valuations
    include quoted prices for similar assets and liabilities traded
    in the same market; quoted prices for identical or similar
    instruments in markets that are not active; and model-derived
    valuations whose inputs are observable or whose significant
    value drivers are observable. Valuations may be obtained from,
    or corroborated by, third-party pricing services.
    Level 3  Assets and liabilities with valuations
    that include methodologies and assumptions that may not be
    readily observable, including option pricing models, discounted
    cash flow models, yield curves and similar techniques.
    Level 3 valuations incorporate certain assumptions and
    projections in determining the fair value assigned to such
    assets or liabilities, but in all cases are corroborated by
    external data, which may include third-party pricing services.    Fair Value as of


Quoted Prices in Active


Significant Other


SignificantDecember 31,


Markets for Identical Assets


Observable Inputs


Unobservable InputsDescription

2009


(Level 1)


(Level 2)


(Level 3)(Dollars in thousands)Trading Securities

$
8,445


$



$
8,445


$
Available for Sale Securities


247,037







247,037



Total

$
255,482


$



$
255,482


$
   Fair Value as of


Quoted Prices in Active


Significant Other


SignificantDecember 31,


Markets for Identical Assets


Observable Inputs


Unobservable InputsDescription

2008


(Level 1)


(Level 2)


(Level 3)(Dollars in thousands)Trading Securities

$
11,261


$



$
11,261


$
Available for Sale Securities


223,052







223,052



Total

$
234,313


$



$
234,313


$
    70




---



##### Table of Contents



310-10-45
  (22)
    Quarterly
    Financial Data (Unaudited)    First

Second

Third

Fourth

Full Year(Dollars in thousands, except per share amount)2009Total interest income

$
14,523


$
14,356


$
14,523


$
14,245


$
57,647Total interest expense


5,625



5,222



4,945



4,133



19,925Net Interest income


8,898



9,134



9,578



10,112



37,722Provision for loan losses


1,809



2,484



11,067



3,657



19,017Net interest income after provision for loan losses


7,089



6,650



(1,489
)


6,455



18,705Noninterest income


2,857



3,244



3,124



2,731



11,956Noninterest expense


8,360



9,480



8,737



8,753



35,330Income tax expense (benefit)


269



(102
)


(2,726
)


(109
)


(2,668
)Net Income (Loss)


1,317



516



(4,376
)


542



(2,001
)Preferred Stock Dividend and Accretion


299



319



319



319



1,256Net Income (Loss) Available to Common Shareholders


1,018



197



(4,695
)


223



(3,257
)Basic earnings (loss) per common share


0.14



0.03



(0.64
)


0.03



(0.45
)Diluted earnings (loss) per common share


0.14



0.03



(0.64
)


0.03



(0.45
)Dividends declared per common share


0.09



0.09



0.01



0.01



0.20   71




---



##### Table of Contents



First

Second

Third

Fourth

Full Year(Dollars in thousands, except per share amount)2008Total interest income

$
15,114


$
14,443


$
14,385


$
14,386


$
58,328Total interest expense


7,594



6,304



6,156



6,135



26,189Net Interest income


7,520



8,139



8,229



8,251



32,139Provision for loan losses


474



4,664



471



1,200



6,809Net interest income after provision for loan losses


7,046



3,475



7,758



7,051



25,330Noninterest income


3,334



3,154



3,158



2,813



12,459Noninterest expense


8,522



8,840



8,498



8,421



34,281Income tax expense (benefit)


411



(1,076
)


595



182



112Net Income (Loss)


1,447



(1,135
)


1,823



1,261



3,396Preferred Stock Dividend and Accretion














91



91Net Income (Loss) Available to Common Shareholders


1,447



(1,135
)


1,823



1,170



3,305Basic earnings (loss) per common share


0.20



(0.16
)


0.25



0.16



0.45Diluted earnings (loss) per common share


0.20



(0.16
)


0.25



0.16



0.45Dividends declared per common share


0.18



0.18



0.09



0.09



0.54  72




---



##### Table of Contents



Item 9.
    Changes
    in and Disagreements With Accountants on Accounting and
    Financial Disclosures    Item 9A.
    Controls
    and Procedures  1.
    Disclosure
    Controls and Procedures    Rules 13a-15(e) 15d-15(e) Rule 13a-15
  Form 10-K
  2.
    Internal
    Control over Financial Reporting        3.
    Changes
    in Internal Control over Financial Reporting    Item 9B.
    Other
    Information   73




---



##### Table of Contents



PART III  Item 10.
    Directors,
    Executive Officers, Promoters and Control Persons of the
    Registrant  Form 10-K.
  Item 11.
    Executive
    Compensation    Item 12.
    Security
    Ownership of Certain Beneficial Owners and
    Management    Equity
    Compensation Plan Table
  Number ofSecuritiesNumber of



Remaining AvailableSecurities to be

Weighted-

for Future IssuanceIssued Upon

Average Exercise

under EquityExercise of

Price of

Compensation PlansOutstanding

Outstanding

Excluding SecuritiesOptions, Warrants

Options, Warrants

Reflected in ColumnPlan Category

and Rights(1)

and Rights

(a)(a)

(b)

(c)Equity compensation plans approved by security holders


105,500


$
14.42



494,500
(2)Equity compensation plans not approved by security holders(3)


92,500


$
18.05Total


198,000


$
16.11



494,500     (1)
    
    Consists of common shares of the Corporation issuable upon
    outstanding options.(2)
    
    Represents shares available for grant under the LNB Bancorp,
    Inc. 2006 Stock Incentive Plan. The LNB Bancorp, Inc. 2006 Stock
    Incentive Plan allows for the granting of an aggregate of
    600,000 common shares in the form of awards under the plan, no
    more than 400,000 of which may be granted in the form of stock
    options and no more than 200,000 of which may be granted in the
    form of restricted shares.(3)
    
    All common shares included in equity compensation plans not
    approved by shareholders are covered by outstanding options
    awarded to two current officers under agreements having the same
    material terms. Each of these options is a nonqualified option,
    meaning a stock option that does not qualify under
    Section 422 of the Internal Revenue Code for the special
    tax treatment available for qualified, or incentive,
    stock options. Daniel E. Klimas was granted stock options on
    February 1, 2005, February 1, 2006, and
    February 1, 2007 each to purchase 30,000 shares which
    vest in 10,000 share increments on the first, second and
    third anniversaries of the 74




---



##### Table of Contents



date of grant. Frank A. Soltis was granted an option to purchase
    2,500 shares on June 27, 2005 which vested on the
    first year anniversary of the date of grant. Each option may be
    exercised for a term of 10 years from the date the option
    vests, subject to earlier termination in the event of death,
    disability or other termination of the employment of the option
    holder. The option holder has up to 12 months following
    termination of employment due to death or disability to exercise
    the options. The options terminate three months after
    termination of employment for reasons other than death,
    disability or termination for cause, and immediately upon
    termination of employment if for cause. The exercise price and
    number of shares covered by the option are to be adjusted to
    reflect any share dividend, share split, merger or other
    recapitalization of the common shares of the Corporation. The
    options are not transferable other than by will or state
    inheritance laws. Exercise prices for these options are equal to
    fair market value of the common shares at the date of grant. The
    stock option for 30,000 shares awarded to Mr. Klimas
    on February 1, 2005 has an exercise price of $19.17 per
    share, the stock option for 30,000 shares awarded to
    Mr. Klimas on February 1, 2006 has an exercise price
    of $19.10 per share, the stock option for 30,000 shares
    awarded to Mr. Klimas on February 1, 2007 has an
    exercise price of $16.00 per share and the stock option for
    2,500 shares awarded to Mr. Soltis has an exercise
    price of $16.50 per share. The options expire 10 years from
    the date of grant.  Item 13.
    Certain
    Relationships and Related Transactions    Item 14.
    Principal
    Accounting Fees and Services   75




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##### 



PART IV  Item 15.
    Exhibits,
    Financial Statement Schedules  , Form 10-K:
     
 Report of Independent Registered Public
    Accounting Firm


40Consolidated Balance Sheets December 31,
    2009 and 2008


41Consolidated Statements of Income for the Years
    Ended December 31, 2009, 2008 and 2007


42Consolidated Statements of Shareholders
    Equity for the Years Ended December 31, 2009, 2008 and
    2007


43Consolidated Statements of Cash Flows for the
    Years Ended December 31, 2009, 2008 and 2007


44Notes to Consolidated Financial Statements for
    the Years Ended December 31, 2009, 2008 and 2007


45          Form 10-K.
   76




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##### Table of Contents



Exhibit Index  S-KReferenceNumber

Exhibit3(a)

LNB Bancorp, Inc. Second Amended Articles of Incorporation.
    Incorporated by reference herein from Exhibit 3(a) of the
    Corporations
    Form 10-K
    for the fiscal year ended December 31, 2005.3(b)

Certificate of Amendment to the Amended Articles of
    Incorporation, filed with the Ohio Secretary of State on
    December 11, 2008. Incorporated by reference herein from
    Exhibit 3.1 of the Corporations
    Form 8-K
    filed on December 17, 2008.3(c)

LNB Bancorp, Inc. Amended Code of Regulations. Incorporated by
    reference herein from Appendix A to the Corporations
    Definitive Proxy Statement on Schedule 14A filed
    March 16, 2007.4(a)

Rights Agreement between LNB Bancorp, Inc. and Registrar and
    Transfer Corporation dated October 24, 2000. Incorporated
    by reference herein from Exhibit 10(r) of the
    Corporations
    Form 10-K
    for the fiscal year ended December 31, 2005.4(b)

Indenture, dated as of May 9, 2007, by and between LNB
    Bancorp, Inc. and Wells Fargo Bank, National Association, as
    Trustee, relating to floating rate Junior Subordinated Debt
    Securities Due June 15, 2037. Incorporated by reference
    herein from Exhibit 4.1 of the Corporations
    Form 10-Q
    for the fiscal quarter ended June 30, 2007.4(c)

Indenture, dated as of May 9, 2007, by and between LNB
    Bancorp, Inc. and Wells Fargo Bank, National Association, as
    Trustee, relating to fixed rate Junior Subordinated Debt
    Securities Due June 15, 2037. Incorporated by reference
    herein from Exhibit 4.2 of the Corporations
    Form 10-Q
    for the fiscal quarter ended June 30, 2007.4(d)

Amended and Restated Declaration of Trust of LNB Trust I,
    dated as of May 9, 2007. Incorporated by reference herein
    from Exhibit 4.3 of the Corporations
    Form 10-Q
    for the fiscal quarter ended June 30, 2007.4(e)

Amended and Restated Declaration of Trust of LNB Trust II,
    dated as of May 9, 2007. Incorporated by reference herein
    from Exhibit 4.4 of the Corporations
    Form 10-Q
    for the fiscal quarter ended June 30, 2007.4(f)

Form of Warrant for Purchase of Shares of Common Stock.
    Incorporated by reference herein from Exhibit 4.1 of the
    Corporations
    Form 8-K
    filed on December 17, 2008.10(a)*

Form of Stock Appreciation Rights Agreement. Incorporated by
    reference herein from Exhibit 10.1 to the
    Corporations
    Form 8-K
    filed January 25, 2006.10(b)*

LNB Bancorp, Inc. Stock Appreciation Rights Plan, as restated.
    Incorporated by reference herein from Exhibit 10.2 of the
    Corporations
    Form 8-K
    filed on December 18, 2009.10(c)*

Stock Option Agreement, effective as of June 27, 2005,
    between the Corporation and Frank A. Soltis. Incorporated by
    reference herein from Exhibit 10.2 to the
    Corporations quarterly report on
    Form 10-Q
    for the quarter ended September 30, 2005.10(d)*

Employment Agreement by and between Daniel E. Klimas and LNB
    Bancorp, Inc. dated January 28, 2005. Incorporated by
    reference herein from Exhibit 10(a) to the
    Corporations
    Form 10-K
    for the fiscal year ended December 31, 2004.10(e)*

Amendment to Employment Agreement by and between Daniel E.
    Klimas and LNB Bancorp, Inc, dated as of July 16, 2008.
    Incorporated by reference herein from Exhibit 10.1 of the
    Corporations
    Form 8-K
    filed on July 18, 2008.10(f)*

Amendment to Employment Agreement by and between Daniel E.
    Klimas and LNB Bancorp, Inc, dated as of December 12, 2008.
    Incorporated by reference herein from Exhibit 10(f) to the
    Corporations
    Form 10-K
    for the fiscal year ended December 31, 2008.10(g)*

Amendment to Employment Agreement by and between Daniel E.
    Klimas and LNB Bancorp, Inc, dated as of December 15, 2009.
    Incorporated by reference herein from Exhibit 10.3 of the
    Corporations
    Form 8-K
    filed on December 18, 2009.10(h)

Amendment to Supplemental Retirement Benefits Agreement by and
    between Gary C. Smith and LNB Bancorp, Inc., and The Lorain
    National Bank dated October 6, 2003. Incorporated by
    reference herein from Exhibit (10a) to the Corporations
    Form 10-K
    for the year ended December 31, 2003. 77




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##### Table of Contents



S-KReferenceNumber

Exhibit10(i)*

The Lorain National Bank Retirement Pension Plan amended and
    restated effective December 31, 2002, dated
    November 19, 2002. Incorporated by reference herein from
    Exhibit 10 to the Corporations annual report on
    Form 10-K
    for the year ended December 31, 2002.10(j)

Lorain National Bank Group Term Carve Out Plan dated
    August 7, 2002. Incorporated by reference herein from
    Exhibit 10(a) to the Corporations quarterly report on
    Form 10-Q
    for the quarter ended September 30, 2002.10(k)

Restated and Amended Employment Agreement by and between Gary C.
    Smith and LNB Bancorp, Inc, and The Lorain National Bank dated
    December 22, 2000. Incorporated by reference herein from
    Exhibit 10(a) to the Corporations
    Form 10-K
    for the year ended December 31, 2001.10(l)

Supplemental Retirement Benefits Agreement by and between Gary
    C. Smith and LNB Bancorp, Inc, and The Lorain National Bank
    dated December 22, 2000. Incorporated by reference herein
    from Exhibit 10(n) of the Corporations
    Form 10-K
    for the fiscal year ended December 31, 2005.10(m)

Amended Supplemental Retirement Agreement by and between Thomas
    P. Ryan and LNB Bancorp, Inc. and The Lorain National Bank dated
    December 23, 2000. Incorporated by reference herein from
    Exhibit 10(o) of the Corporations
    Form 10-K
    for the fiscal year ended December 31, 2005.10(n)

Amended Supplemental Retirement Agreement by and between Gregory
    D. Friedman and LNB Bancorp, Inc. and The Lorain National Bank
    dated December 23, 2000. Incorporated by reference herein
    from Exhibit 10(p) of the Corporations
    Form 10-K
    for the fiscal year ended December 31, 2005.10(o)*

Amended Supplemental Retirement Agreement by and between James
    F. Kidd and The Lorain National Bank dated June 15, 1999.
    Incorporated by reference herein from Exhibit 10(q) of the
    Corporations
    Form 10-K
    for the fiscal year ended December 31, 2005.10(p)*

Supplemental Retirement Agreement by and between James F. Kidd
    and The Lorain National Bank dated July 30, 1996.
    Incorporated by reference herein from Exhibit 10(t) of the
    Corporations
    Form 10-K
    for the fiscal year ended December 31, 2005.10(q)

Supplemental Retirement Agreement by and between Thomas P. Ryan
    and The Lorain National Bank dated July 30, 1996.
    Incorporated by reference herein from Exhibit 10(u) of the
    Corporations
    Form 10-K
    for the fiscal year ended December 31, 2005.10(r)

Supplemental Retirement Agreement by and between Gregory D.
    Friedman and The Lorain National Bank dated July 30, 1996.
    Incorporated by reference herein from Exhibit 10(v) of the
    Corporations
    Form 10-K
    for the fiscal year ended December 31, 2005.10(s)

Agreement To Join In The Filing of Consolidated Federal Income
    Tax Returns between LNB Bancorp, Inc. and The Lorain National
    Bank dated February 27, 2004. Incorporated by reference
    herein from Exhibit 10(w) of the Corporations
    Form 10-K
    for the fiscal year ended December 31, 2005.10(t)*

LNB Bancorp, Inc. 2006 Stock Incentive Plan, as restated.
    Incorporated by reference herein from Exhibit 10.1 of the
    Corporations
    Form 8-K
    filed on December 18, 2009.10(u)*

2008 Management Incentive Plan for Key Executives, as restated.
    Incorporated by reference herein from Exhibit 10(ee) of the
    Corporations
    Form 10-K
    for the fiscal year ended December 31, 2008.10(v)

Guarantee Agreement, dated as of May 9, 2007, by and
    between LNB Bancorp, Inc. and Wells Fargo Bank, National
    Association, as Trustee, relating to securities of LNB
    Trust I. Incorporated by reference herein from
    Exhibit 10. 1 of the Corporations Form 1
    0-Q for the
    fiscal quarter ended June 30, 2007.10(w)

Guarantee Agreement, dated as of May 9, 2007, by and
    between LNB Bancorp, Inc. and Wells Fargo Bank, National
    Association, as Trustee, relating to securities of LNB
    Trust II. Incorporated by reference herein from
    Exhibit 10.2 of the Corporations
    Form 10-Q
    for the fiscal quarter ended June 30, 2007.10(x)*

Change in Control Supplemental Executive Compensation Agreement
    between LNB Bancorp, Inc. and David S. Harnett, dated
    August 8, 2007. Incorporated by reference herein from
    Exhibit 10.1 of the Corporations
    Form 10-Q
    for the fiscal quarter ended September 30, 2007.10(y)*

LNB Bancorp, Inc. 2007 Chief Executive Officer Long Term
    Incentive Plan. Incorporated by reference herein from
    Exhibit 10.1 of the Corporations
    Form 8-K
    filed January 15, 2008. 78




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##### Table of Contents



S-KReferenceNumber

Exhibit10(z)*

Form of Nonqualified Stock Option Agreement under the LNB
    Bancorp, Inc. 2006 Stock Incentive Plan. Incorporated by
    reference herein from Exhibit 10.1 of the
    Corporations
    Form 8-K
    filed February 6, 2008.10(aa)

Letter Agreement, dated December 12, 2008, between the
    Corporation and the U.S. Treasury, which includes the Securities
    Purchase Agreement  Standard Terms attached thereto,
    with respect to the issuance and sale of the Series B
    Preferred Stock and Warrant. Incorporated by reference herein
    from Exhibit 10.1 of the Corporations
    Form 8-K
    filed on December 17, 2008.10(bb)*

2009 Management Incentive Plan for Key Executives, as restated.
    Incorporated by reference herein from Exhibit 10.1 of the
    Corporations
    Form 8-K
    filed on November 10, 2009.10(cc)*

Form of Restricted Stock Agreement under the LNB Bancorp, Inc.
    2006 Stock Incentive Plan. Incorporated by reference herein from
    Exhibit 10.1 of the Corporations
    Form 8-K
    filed February 25, 2010.21.1

Subsidiaries of LNB Bancorp, Inc.23.1

Consent of Plante & Moran, PLLC.31.1

Certification of the Chief Executive Officer Pursuant to
    Rule 13a-14(a)/15-d-14(a),
    dated March 12, 2010 for LNB Bancorp, Inc.s annual
    report on
    Form 10-K
    for the year ended December 31, 2009.31.2

Certification of the Chief Financial Officer Pursuant to
    Rule 13a-14(a)/15-d-14(a),
    dated March 12, 2010 for LNB Bancorp, Inc.s annual
    report on
    Form 10-K
    for the year ended December 31, 2009.32.1

Certification of the Chief Executive Officer Pursuant to
    18 U.S.C. Section 1350, as Enacted Pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002, dated
    March 12, 2010 for LNB Bancorp, Inc.s annual report
    on
    Form 10-K
    for the year ended December 31, 2009.32.2

Certification of the Chief Financial Officer Pursuant to
    18 U.S.C. Section 1350, as Enacted Pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002, dated
    March 12, 2010 for LNB Bancorp, Inc.s annual report
    on
    Form 10-K
    for the year ended December 31, 2009.99.1

Certification of the Chief Executive Officer Pursuant to
    Sections 101(a)(1), 101(c)(5), and 111 of the Emergency
    Economic Stabilization Act of 2008, as Amended by the American
    Recovery and Reinvestment Act of 2009, dated March 12, 2010.99.2

Certification of the Chief Financial Officer Pursuant to
    Sections 101(a)(1), 101(c)(5), and 111 of the Emergency
    Economic Stabilization Act of 2008, as Amended by the American
    Recovery and Reinvestment Act of 2009, dated March 12,
    2010.     *
    
    Management contract, compensatory plan or arrangement 79




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##### Table of Contents



SIGNATURES        By:
    /s/  Gary
    J. Elek   Chief Financial Officer
    Daniel
    P. Batista

Director/s/  Robert
    M. CampanaRobert
    M. Campana

Director

March 12, 2010/s/  Terry
    D. GoodeTerry
    D. Goode

Director

March 12, 2010/s/  James
    F. KiddJames
    F. Kidd

Vice Chairman and Director

March 12, 2010/s/  J.
    Martin ErbaughJ.
    Martin Erbaugh

Director

March 12, 2010Benjamin
    G. Norton

Director/s/  Jeffrey
    F. RiddellJeffrey
    F. Riddell

Director

March 12, 2010/s/  John
    W. Schaeffer, M.D.John
    W. Schaeffer, M.D.

Director

March 12, 2010/s/  Lee
    C. HowleyLee
    C. Howley

Director

March 12, 2010/s/  Donald
    F. ZwillingDonald
    F. Zwilling

Director

March 12, 2010/s/  James
    R. HerrickJames
    R. Herrick

Chairman and Director

March 12, 2010/s/  Thomas
    P. PerciakThomas
    P. Perciak

Director

March 12, 2010 80




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##### Table of Contents



/s/  Daniel
    G. MerkelDaniel
    G. Merkel

Director

March 12, 2010/s/  Daniel
    E. KlimasDaniel
    E. Klimas

President and Chief Executive Officer and Director
    (Principal Executive Officer)

March 12, 2010/s/  Gary
    J. ElekGary
    J. Elek

Chief Financial Officer
    (Principal Financial and Accounting Officer)

March 12, 2010  81