##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the quarter ended June 30, 2009
 o
    
    Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 Commission file number 000-51264
 WESTERN RESERVE BANCORP, INC.
  Ohio
    
    31-1566623(State or other jurisdiction of
    
    (IRS Employerincorporation or organization)
    
    Identification No.)
 4015 Medina Road, Suite 100, P.O. Box 585, Medina, Ohio 44256
 (330) 764-3131
 þ o
 Yes þ No o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ
 o þ




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##### 



WESTERN RESERVE BANCORP, INC.
FORM 10-Q
Quarter ended June 30, 2009
 PagePART IFinancial InformationITEM 1 FINANCIAL STATEMENTSConsolidated Balance Sheets as of June 30, 2009
and December 31, 2008
    
    
    3Consolidated Statements of Income for the three and six month
periods ended June 30, 2009 and 2008
    
    
    4Consolidated Statements of Comprehensive Income for the three
and six month periods ended June 30, 2009 and 2008
    
    
    5Consolidated Statements of Cash Flows for the six months ended
June 30, 2009 and 2008
    
    
    6Notes to Consolidated Financial Statements
    
    
    7ITEM 2 MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    
    
    21ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK
    
    
    N/AITEM 4T CONTROLS AND PROCEDURES
    
    
    38PART IIOther Information
    
    
    39SIGNATURES
    
    
    43Exhibit 10.19Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




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##### Table of Contents



WESTERN RESERVE BANCORP, INC.
 
 CONSOLIDATED BALANCE SHEETS
 June 30,
    
    
    Dec. 31,2009
    
    
    2008(Unaudited)ASSETSCash and due from financial institutions
    
    $
    2,341,091
    
    
    $
    2,302,786Interest-bearing deposits in other financial institutions
    
    
    16,592,663
    
    
    
    18,908,677Federal funds sold and other short-term funds
    
    
    100,000
    
    
    
    91,000Cash and cash equivalents
    
    
    19,033,754
    
    
    
    21,302,463Time deposits in other banks
    
    
    2,000,000
    
    
    
    Securities available for sale
    
    
    11,130,822
    
    
    
    10,214,322Restricted stock
    
    
    781,900
    
    
    
    728,400Loans
    
    
    156,584,161
    
    
    
    143,625,431Allowance for loan losses
    
    
    (2,088,569
    )
    
    
    (1,743,470
    )Loans, net
    
    
    154,495,592
    
    
    
    141,881,961Premises and equipment, net
    
    
    981,956
    
    
    
    1,006,081Bank owned life insurance
    
    
    2,282,759
    
    
    
    2,231,665Other real estate owned
    
    
    290,000
    
    
    
    290,000Accrued interest receivable and other assets
    
    
    1,669,563
    
    
    
    1,457,347$
    192,666,346
    
    
    $
    179,112,239LIABILITIES AND SHAREHOLDERS EQUITYDepositsNoninterest-bearing
    
    $
    18,405,865
    
    
    $
    16,942,194Interest-bearing
    
    
    150,688,235
    
    
    
    139,775,662Total deposits
    
    
    169,094,100
    
    
    
    156,717,856Other borrowings
    
    
    
    
    
    
    500,000Federal Home Loan Bank advances
    
    
    3,400,000
    
    
    
    6,500,000Accrued interest payable and other liabilities
    
    
    872,530
    
    
    
    683,663Total Liabilities
    
    
    173,366,630
    
    
    
    164,401,519Shareholders EquityFixed rate cumulative preferred stock, no par value, $1,000 liquidaton value:Series A, 4,700 and 0 shares issued at June 30, 2009 and
December 31, 2008
    
    
    4,700,000
    
    
    
    Discount on Series A preferred stock
    
    
    (257,929
    )
    
    
    Series B, 235 and 0 shares issued at June 30, 2009 and
December 31, 2008
    
    
    235,000
    
    
    
    Premium on Series B preferred stock
    
    
    28,804
    
    
    
    Common stock, no par value, $1 stated value, 1,500,000 shares authorized,
584,257 and 583,330 shares issued and outstanding as of
June 30, 2009
and December 31, 2008
    
    
    584,257
    
    
    
    583,330Additional paid-in capital
    
    
    9,888,228
    
    
    
    9,912,293Retained earnings
    
    
    3,945,901
    
    
    
    4,041,215Accumulated other comprehensive income
    
    
    175,455
    
    
    
    173,882Total Shareholders Equity
    
    
    19,299,716
    
    
    
    14,710,720$
    192,666,346
    
    
    $
    179,112,239
   3




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##### Table of Contents



WESTERN RESERVE BANCORP, INC.
 
 CONSOLIDATED STATEMENTS OF INCOME
  Three months ended June 30,
    
    
    Six months ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Interest and dividend incomeLoans, including fees
    
    $
    1,995,809
    
    
    $
    2,204,118
    
    
    $
    3,937,563
    
    
    $
    4,483,201Securities:Taxable
    
    
    69,108
    
    
    
    88,029
    
    
    
    139,845
    
    
    
    168,540Tax exempt
    
    
    41,629
    
    
    
    43,489
    
    
    
    83,174
    
    
    
    86,939Dividends on restricted stock
    
    
    9,277
    
    
    
    8,260
    
    
    
    18,404
    
    
    
    16,257Federal funds sold and short-term investments
    
    
    16,983
    
    
    
    59,019
    
    
    
    36,294
    
    
    
    194,3082,132,806
    
    
    
    2,402,915
    
    
    
    4,215,280
    
    
    
    4,949,245Interest expenseDeposits
    
    
    682,505
    
    
    
    824,673
    
    
    
    1,400,664
    
    
    
    1,931,441Borrowings
    
    
    34,024
    
    
    
    51,371
    
    
    
    89,191
    
    
    
    84,074716,529
    
    
    
    876,044
    
    
    
    1,489,855
    
    
    
    2,015,515Net interest income
    
    
    1,416,277
    
    
    
    1,526,871
    
    
    
    2,725,425
    
    
    
    2,933,730Provision for loan losses
    
    
    344,000
    
    
    
    42,400
    
    
    
    482,000
    
    
    
    140,300Net interest income after
provision for loan losses
    
    
    1,072,277
    
    
    
    1,484,471
    
    
    
    2,243,425
    
    
    
    2,793,430Noninterest incomeService charges on deposit accounts
    
    
    50,370
    
    
    
    43,483
    
    
    
    99,451
    
    
    
    83,594Net gains on sales of loans
    
    
    853
    
    
    
    1,446
    
    
    
    9,896
    
    
    
    1,446Increase in cash surrender value life insurance
    
    
    25,113
    
    
    
    25,382
    
    
    
    51,094
    
    
    
    38,110Other
    
    
    38,638
    
    
    
    36,034
    
    
    
    70,983
    
    
    
    62,336114,974
    
    
    
    106,345
    
    
    
    231,424
    
    
    
    185,486Noninterest expenseSalaries and employee benefits
    
    
    643,146
    
    
    
    589,977
    
    
    
    1,259,817
    
    
    
    1,200,975Premises and equipment, net
    
    
    227,857
    
    
    
    230,815
    
    
    
    452,321
    
    
    
    463,135FDIC insurance
    
    
    155,083
    
    
    
    25,155
    
    
    
    214,017
    
    
    
    52,041Data processing
    
    
    90,593
    
    
    
    91,688
    
    
    
    184,500
    
    
    
    184,261Professional fees
    
    
    49,307
    
    
    
    46,648
    
    
    
    105,963
    
    
    
    102,489Taxes other than income and payroll
    
    
    46,760
    
    
    
    37,088
    
    
    
    95,254
    
    
    
    76,292Directors fees
    
    
    38,250
    
    
    
    36,600
    
    
    
    72,050
    
    
    
    74,075Collection and other real estate owned
    
    
    17,585
    
    
    
    17,158
    
    
    
    50,672
    
    
    
    47,886Marketing and advertising
    
    
    18,752
    
    
    
    23,525
    
    
    
    46,389
    
    
    
    46,624Community relations and contributions
    
    
    28,341
    
    
    
    29,497
    
    
    
    40,879
    
    
    
    53,675Other
    
    
    83,751
    
    
    
    99,048
    
    
    
    150,140
    
    
    
    159,0261,399,425
    
    
    
    1,227,199
    
    
    
    2,672,002
    
    
    
    2,460,479Income (loss) before income taxes
    
    
    (212,174
    )
    
    
    363,617
    
    
    
    (197,153
    )
    
    
    518,437Income tax expense (benefit)
    
    
    (92,072
    )
    
    
    102,492
    
    
    
    (107,714
    )
    
    
    139,750Net income (loss)
    
    $
    (120,102
    )
    
    $
    261,125
    
    
    $
    (89,439
    )
    
    $
    378,687Amortization on preferred stock
    
    
    5,875
    
    
    
    
    
    
    
    5,875
    
    
    
    Net income (loss) available to
common shareholders
    
    $
    (125,977
    )
    
    $
    261,125
    
    
    $
    (95,314
    )
    
    $
    378,687Earnings (loss) per common share:Basic
    
    $
    (0.22
    )
    
    $
    0.45
    
    
    $
    (0.16
    )
    
    $
    0.65Diluted
    
    $
    (0.22
    )
    
    $
    0.44
    
    
    $
    (0.16
    )
    
    $
    0.64
   4




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##### Table of Contents



WESTERN RESERVE BANCORP, INC.
 
 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
  Three Months Ended June 30,
    
    
    Six months ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Net income (loss)
    
    $
    (120,102
    )
    
    $
    261,125
    
    
    $
    (89,439
    )
    
    $
    378,687Other comprehensive income, net of tax:Unrealized gains (losses) on securities
arising during the period
    
    
    (49,447
    )
    
    
    (213,414
    )
    
    
    1,573
    
    
    
    (120,428
    )Other comprehensive income (loss)
    
    $
    (169,549
    )
    
    $
    47,711
    
    
    $
    (87,866
    )
    
    $
    258,259
   5




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##### Table of Contents



WESTERN RESERVE BANCORP, INC.
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
  Six Months Ended June 30,2009
    
    
    2008Cash flows from operating activitiesNet income (loss)
    
    $
    (89,439
    )
    
    $
    378,687Adjustments to reconcile net income to net cash
from operating activities:Provision for loan losses
    
    
    482,000
    
    
    
    140,300Depreciation
    
    
    93,291
    
    
    
    94,753Net amortization (accretion) of securities
    
    
    (7,664
    )
    
    
    (6,900
    )Stock-based compensation
    
    
    1,201
    
    
    
    1,649Loans originated for sale
    
    
    (574,300
    )
    
    
    (97,500
    )Proceeds from sales of loan originations
    
    
    584,196
    
    
    
    98,946Gains on sales of loans
    
    
    (9,896
    )
    
    
    (1,446
    )Federal Home Loan Bank stock dividends
    
    
    
    
    
    
    (9,400
    )Increase in cash surrender value of bank owned
life insurance
    
    
    (51,094
    )
    
    
    (38,110
    )Net change in other assets and other liabilities
    
    
    (24,158
    )
    
    
    (274,691
    )Net cash from operating activities
    
    
    404,137
    
    
    
    286,288Cash flows from investing activitiesAvailable for sale securities:Purchases
    
    
    (1,540,746
    )
    
    
    (2,020,806
    )Maturities, repayments and calls
    
    
    634,292
    
    
    
    1,842,056Purchase of restricted stock
    
    
    (53,500
    )
    
    
    (31,900
    )Net (increase) decrease in interest-bearing deposits in other banks
    
    
    (2,000,000
    )
    
    
    (3,000,000
    )Net (increase) decrease in loans
    
    
    (13,095,631
    )
    
    
    (9,082,269
    )Purchase of auto loan portfolio
    
    
    
    
    
    
    (4,693,630
    )Purchases of Bank Owned Life Insurance
    
    
    
    
    
    
    (1,000,000
    )Purchases of premises and equipment
    
    
    (69,166
    )
    
    
    (44,147
    )Net cash from investing activities
    
    
    (16,124,751
    )
    
    
    (18,030,696
    )Cash flows from financing activitiesNet increase in deposits
    
    
    12,376,244
    
    
    
    2,918,810Proceeds (repayments) on line of credit
    
    
    (500,000
    )
    
    
    Proceeds from FHLB advances
    
    
    
    
    
    
    3,000,000Repayments of FHLB advances
    
    
    (3,100,000
    )
    
    
    Net proceeds from issuance of preferred stock
    
    
    4,661,756
    
    
    
    Proceeds from issuance of common stock under ESPP
    
    
    13,905
    
    
    
    10,060Proceeds and income tax benefit from exercise of stock options
    
    
    
    
    
    
    57,418Net cash from financing activities
    
    
    13,451,905
    
    
    
    5,986,288Change in cash and cash equivalents
    
    
    (2,268,709
    )
    
    
    (11,758,120
    )Cash and cash equivalents at beginning of period
    
    
    21,302,463
    
    
    
    23,818,528Cash and cash equivalents at end of period
    
    $
    19,033,754
    
    
    $
    12,060,408Supplemental cash flow information:Interest paid
    
    $
    1,492,521
    
    
    $
    2,022,890Income taxes paid
    
    
    
    
    
    
    197,461
   6




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##### Table of Contents



WESTERN RESERVE BANCORP, INC.
 
 NOTES TO FINANCIAL STATEMENTS
 June 30, 2009
 NOTE 1  ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Organization :
  Nature of Business :
 Principles of Consolidation :
 Use of Estimates :
 Basis of Presentation :
  7




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##### Table of Contents



WESTERN RESERVE BANCORP, INC.
NOTES TO FINANCIAL STATEMENTS
June 30, 2009
 NOTE 1  ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Earnings per Common Share :
 Three months ended
    
    
    Six months endedJune 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Numerator:Net income (loss)
    
    $
    (120,102
    )
    
    $
    261,125
    
    
    $
    (89,439
    )
    
    $
    378,687Amortization on preferred stock
    
    
    5,875
    
    
    
    
    
    
    
    5,875
    
    
    
    Net income (loss) available to common shareholders
    
    $
    (125,977
    )
    
    $
    261,125
    
    
    $
    (95,314
    )
    
    $
    378,687Demoninator:Denominator for basic earnings per share available
to common
shareholders-weighted
average shares
    
    
    583,950
    
    
    
    582,400
    
    
    
    583,645
    
    
    
    581,646Effect of dilutive shares:Nonqualified stock options
    
    
    
    
    
    
    11,776
    
    
    
    
    
    
    
    14,516Denominator for diluted earnings per share available
to common shareholders
    
    
    583,950
    
    
    
    594,176
    
    
    
    583,645
    
    
    
    596,162Basic earnings (loss) per common share
    
    $
    (0.22
    )
    
    $
    0.45
    
    
    $
    (0.16
    )
    
    $
    0.65Diluted earnings (loss) per common share
    
    $
    (0.22
    )
    
    $
    0.44
    
    
    $
    (0.16
    )
    
    $
    0.64
  Income Taxes:
 Reclassifications :
  8




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##### Table of Contents



WESTERN RESERVE BANCORP, INC.
NOTES TO FINANCIAL STATEMENTS
June 30, 2009
 NOTE 1  ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Adoption of New Accounting Standards:
      9




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WESTERN RESERVE BANCORP, INC.
NOTES TO FINANCIAL STATEMENTS
June 30, 2009
 NOTE 1  ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
     10




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WESTERN RESERVE BANCORP, INC.
NOTES TO FINANCIAL STATEMENTS
June 30, 2009
 NOTE 1  ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Recently Issued but not yet effective Accounting Pronouncements:
   11




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WESTERN RESERVE BANCORP, INC.
NOTES TO FINANCIAL STATEMENTS
June 30, 2009
 NOTE 2  SECURITIES
  Gross
    
    
    GrossAmortized
    
    
    Unrealized
    
    
    UnrealizedCost
    
    
    Gains
    
    
    Losses
    
    
    Fair ValueJune 30, 2009U.S.
Government-sponsored
entities
    
    $
    500,000
    
    
    $
    9,388
    
    
    $
    
    
    
    $
    509,388Mortgage-backed
    
    
    5,749,940
    
    
    
    172,504
    
    
    
    (1,249
    )
    
    
    5,921,195Municipal
    
    
    4,615,042
    
    
    
    94,058
    
    
    
    (8,861
    )
    
    
    4,700,239$
    10,864,982
    
    
    $
    275,950
    
    
    $
    (10,110
    )
    
    $
    11,130,822December 31, 2008U.S.
Government-sponsored
entities
    
    $
    500,000
    
    
    $
    16,032
    
    
    $
    
    
    
    $
    516,032Mortgage-backed
    
    
    5,188,992
    
    
    
    191,220
    
    
    
    (1,884
    )
    
    
    5,378,328Municipal
    
    
    4,261,872
    
    
    
    75,183
    
    
    
    (17,093
    )
    
    
    4,319,962$
    9,950,864
    
    
    $
    282,435
    
    
    $
    (18,977
    )
    
    $
    10,214,322
  Due in one year or less
    
    $
    Due from one to five years
    
    
    497,648Due from five to ten years
    
    
    3,103,762Due from ten to fifteen years
    
    
    1,608,217Mortgage-backed
    
    
    5,921,195$
    11,130,822
  12




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##### Table of Contents



WESTERN RESERVE BANCORP, INC.
NOTES TO FINANCIAL STATEMENTS
June 30, 2009
 NOTE 2  SECURITIES
  Less than 12 Months
    
    
    12 Months or more
    
    
    TotalFair
    
    
    Unrealized
    
    
    Fair
    
    
    Unrealized
    
    
    Fair
    
    
    UnrealizedValue
    
    
    Loss
    
    
    Value
    
    
    Loss
    
    
    Value
    
    
    LossJune 30, 2009Mortgage-backed
    
    $
    
    
    
    $
    
    
    
    $
    76,898
    
    
    $
    (1,249
    )
    
    $
    76,898
    
    
    $
    (1,249
    )Municipal
    
    
    
    
    
    
    
    
    
    
    846,911
    
    
    
    (8,861
    )
    
    
    846,911
    
    
    
    (8,861
    )Total
    
    $
    
    
    
    $
    
    
    
    $
    923,809
    
    
    $
    (10,110
    )
    
    $
    923,809
    
    
    $
    (10,110
    )December 31, 2008Mortgage-backed
    
    $
    
    
    
    $
    
    
    
    $
    96,270
    
    
    $
    (1,884
    )
    
    $
    96,270
    
    
    $
    (1,884
    )Municipal
    
    
    208,969
    
    
    
    (15,114
    )
    
    
    629,768
    
    
    
    (1,979
    )
    
    
    838,737
    
    
    
    (17,093
    )Total
    
    $
    208,969
    
    
    $
    (15,114
    )
    
    $
    726,038
    
    
    $
    (3,863
    )
    
    $
    935,007
    
    
    $
    (18,977
    )
  NOTE 3  LOANS
  Three Months Ended June 30,
    
    
    Six Months Ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Beginning balance
    
    $
    1,824,551
    
    
    $
    1,705,091
    
    
    $
    1,743,470
    
    
    $
    1,605,766Loans charged off
    
    
    (82,391
    )
    
    
    (327,852
    )
    
    
    (140,330
    )
    
    
    (328,633
    )Recoveries
    
    
    2,409
    
    
    
    
    
    
    
    3,429
    
    
    
    2,206Provision for loan
losses
    
    
    344,000
    
    
    
    42,400
    
    
    
    482,000
    
    
    
    140,300$
    2,088,569
    
    
    $
    1,419,639
    
    
    $
    2,088,569
    
    
    $
    1,419,639
   13




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##### Table of Contents



WESTERN RESERVE BANCORP, INC.
NOTES TO FINANCIAL STATEMENTS
June 30, 2009
 NOTE 3  LOANS
  June 30,
    
    
    December 31,2009
    
    
    2008With no allocated allowance for loan losses
    
    $
    1,274,443
    
    
    $
    1,108,795With an allocated allowance for loan losses
    
    
    2,101,467
    
    
    
    393,835$
    3,376,410
    
    
    $
    1,502,630Allowance for loan losses allocated
    
    $
    257,000
    
    
    $
    69,766
 NOTE 4  DEPOSITS
  NOTE
5  FEDERAL HOME LOAN BANK ADVANCES AND OTHER BORROWINGS
    14




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##### Table of Contents



WESTERN RESERVE BANCORP, INC.
NOTES TO FINANCIAL STATEMENTS
June 30, 2009
 NOTE
5  FEDERAL HOME LOAN BANK ADVANCES AND OTHER BORROWINGS
  NOTE 6  STOCK COMPENSATION PLAN
  Six Months EndedJune 30, 2009Weighted AverageShares
    
    
    Exercise PriceOptions outstanding, beginning of period
    
    
    106,136
    
    
    $
    18.70Forfeited
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    Granted
    
    
    
    
    
    
    Options outstanding, end of period
    
    
    106,136
    
    
    $
    18.70Options exercisable, end of period
    
    
    104,511
    
    
    $
    18.57
   15




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##### Table of Contents



WESTERN RESERVE BANCORP, INC.
NOTES TO FINANCIAL STATEMENTS
June 30, 2009
 NOTE 7  FAIR VALUE
      Investment Securities
 Impaired loans
  16




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##### Table of Contents



WESTERN RESERVE BANCORP, INC.
NOTES TO FINANCIAL STATEMENTS
June 30, 2009
 NOTE 7  FAIR VALUE
  Fair Value Measurements UsingQuoted Prices in
    
    
    SignificantActive Markets
    
    
    Other
    
    
    Significantfor Identical
    
    
    Observable
    
    
    UnobservableAssets
    
    
    Inputs
    
    
    Inputs(Level One)
    
    
    (Level Two)
    
    
    (Level Three)June 30, 2009Assets and liabilities measured at fair value
on a recurring basis:Investment securities available for saleU.S. Government-sponsored entities
    
    $
    
    
    
    $
    509,388
    
    
    $
    Mortgage-backed
    
    
    
    
    
    
    5,921,195
    
    
    
    Municipal
    
    
    
    
    
    
    4,700,239
    
    
    
    Assets and liabilities measured at fair value
on a nonrecurring basis:Impaired loans
    
    
    
    
    
    
    
    
    
    
    1,844,467December 31, 2008Assets and liabilities measured at fair value
on a recurring basis:Investment securities available for saleU.S. Government-sponsored entities
    
    $
    
    
    
    $
    516,032
    
    
    $
    Mortgage-backed
    
    
    
    
    
    
    5,378,328
    
    
    
    Municipal
    
    
    
    
    
    
    4,319,962
    
    
    
    Assets and liabilities measured at fair value
on a nonrecurring basis:Impaired loans
    
    
    
    
    
    
    
    
    
    
    324,069
   17




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##### Table of Contents



WESTERN RESERVE BANCORP, INC.
NOTES TO FINANCIAL STATEMENTS
June 30, 2009
 NOTE 8  PARTICIPATION IN THE TREASURY CAPITAL PURCHASE PROGRAM
      18




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##### Table of Contents



WESTERN RESERVE BANCORP, INC.
NOTES TO FINANCIAL STATEMENTS
June 30, 2009
 NOTE 9  FEDERAL DEPOSIT INSURANCE
     19




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##### Table of Contents



WESTERN RESERVE BANCORP, INC.
NOTES TO FINANCIAL STATEMENTS
June 30, 2009
 NOTE 10  FAIR VALUES OF FINANCIAL INSTRUMENTS
  June 30, 2009
    
    
    December 31, 2008Carrying
    
    
    Estimated
    
    
    Carrying
    
    
    EstimatedAmount
    
    
    Fair Value
    
    
    Amount
    
    
    Fair ValueCash and cash equivalents
    
    $
    19,033,754
    
    
    $
    19,034,000
    
    
    $
    21,302,463
    
    
    $
    21,302,000Interest-bearing deposits in
other banks
    
    
    2,000,000
    
    
    
    2,000,000
    
    
    
    
    
    
    
    Securities available for sale
    
    
    11,130,822
    
    
    
    11,131,000
    
    
    
    10,214,322
    
    
    
    10,214,000Loans, net of allowance
    
    
    154,495,592
    
    
    
    153,947,000
    
    
    
    141,881,961
    
    
    
    141,702,000Accrued interest receivable
    
    
    477,824
    
    
    
    478,000
    
    
    
    490,783
    
    
    
    491,000Demand and savings deposits
    
    
    95,133,116
    
    
    
    95,133,000
    
    
    
    90,783,194
    
    
    
    90,783,000Time deposits
    
    
    73,960,984
    
    
    
    73,944,000
    
    
    
    65,934,662
    
    
    
    66,530,000Federal Home Loan Bank advances
    
    
    3,400,000
    
    
    
    3,398,000
    
    
    
    6,500,000
    
    
    
    6,632,000Other borrowings
    
    
    
    
    
    
    
    
    
    
    500,000
    
    
    
    500,000Accrued interest payable
    
    
    154,017
    
    
    
    154,000
    
    
    
    156,683
    
    
    
    157,000
    20




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##### Table of Contents



WESTERN RESERVE BANCORP, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
June 30, 2009
 OVERVIEW
    FINANCIAL CONDITION
 Assets
    21




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##### Table of Contents



WESTERN RESERVE BANCORP, INC
 
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
 June 30, 2009
 FINANCIAL CONDITION
   June 30,
    
    
    December 31,2009
    
    
    2008Commercial real estate
    
    $
    92,535,608
    
    
    $
    83,252,004Commercial business
    
    
    43,240,117
    
    
    
    40,538,308Commercial construction
    
    
    3,535,938
    
    
    
    3,917,279Home equity lines of credit (HELOC)
    
    
    10,202,596
    
    
    
    7,734,516Residential mortgage and construction
    
    
    999,334
    
    
    
    1,277,501Consumer installment
    
    
    2,947,542
    
    
    
    3,298,283Purchased auto loans
    
    
    3,097,111
    
    
    
    3,577,953Other
    
    
    25,915
    
    
    
    29,587$
    156,584,161
    
    
    $
    143,625,431
      22




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##### Table of Contents



WESTERN RESERVE BANCORP, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
June 30, 2009
 FINANCIAL CONDITION
  Liabilities
  June 30,
    
    
    December 31,2009
    
    
    2008Noninterest-bearing demand
    
    $
    18,405,865
    
    
    $
    16,942,194Interest-bearing demand
    
    
    8,239,522
    
    
    
    6,958,911Savings
    
    
    40,106,149
    
    
    
    41,734,003Money market
    
    
    28,381,580
    
    
    
    25,148,086Time under $100,000
    
    
    38,140,818
    
    
    
    35,433,397Time $100,000 or more
    
    
    35,820,166
    
    
    
    30,501,265$
    169,094,100
    
    
    $
    156,717,856
  ®
  23




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##### Table of Contents



WESTERN RESERVE BANCORP, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
June 30, 2009
 FINANCIAL CONDITION
    Shareholders Equity
   RESULTS OF OPERATIONS  FOR THE SIX MONTHS ENDED JUNE 30, 2009
 Overview
   24




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##### Table of Contents



WESTERN RESERVE BANCORP, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
 June 30, 2009
 RESULTS OF OPERATIONS  FOR THE SIX MONTHS ENDED JUNE 30, 2009
 Net Interest Income
   25




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##### Table of Contents



WESTERN RESERVE BANCORP, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
June 30, 2009
 RESULTS OF OPERATIONS  FOR THE SIX MONTHS ENDED JUNE 30, 2009
  Six Months Ended
    
    
    Six Months EndedJune 30, 2009
    
    
    June 30, 2008Average
    
    
    
    
    
    
    Average
    
    
    Average
    
    
    
    
    
    
    Average($ in thousands)
    
    Balance
    
    
    Interest
    
    
    Rate
    
    
    Balance
    
    
    Interest
    
    
    RateInterest-earning assets:Loans (1)
    
    $
    149,605
    
    
    $
    3,938
    
    
    
    5.31
    %
    
    $
    130,426
    
    
    $
    4,483
    
    
    
    6.91
    %Securities:Taxable
    
    
    5,754
    
    
    
    140
    
    
    
    5.09
    %
    
    
    6,713
    
    
    
    169
    
    
    
    5.12
    %Tax exempt
    
    
    4,417
    
    
    
    119
    
    
    
    5.64
    %
    
    
    4,590
    
    
    
    120
    
    
    
    5.36
    %Restricted stock
    
    
    761
    
    
    
    18
    
    
    
    4.88
    %
    
    
    617
    
    
    
    16
    
    
    
    5.30
    %Federal funds sold and
other short-term funds
    
    
    19,026
    
    
    
    36
    
    
    
    0.38
    %
    
    
    12,251
    
    
    
    194
    
    
    
    3.18
    %Total interest-earning assets
    
    
    179,563
    
    
    
    4,251
    
    
    
    4.77
    %
    
    
    154,597
    
    
    
    4,982
    
    
    
    6.49
    %Noninterest-earning assets
    
    
    5,778
    
    
    
    
    
    
    
    
    
    
    
    5,315Total assets
    
    $
    185,341
    
    
    
    
    
    
    
    
    
    
    $
    159,912Interest-bearing liabilities:Transaction accounts
    
    $
    7,889
    
    
    
    25
    
    
    
    0.63
    %
    
    $
    6,900
    
    
    
    34
    
    
    
    1.00
    %Market rate savings accounts
    
    
    69,151
    
    
    
    342
    
    
    
    1.00
    %
    
    
    79,880
    
    
    
    1,139
    
    
    
    2.87
    %Time deposits
    
    
    69,195
    
    
    
    1,034
    
    
    
    3.01
    %
    
    
    37,599
    
    
    
    758
    
    
    
    4.04
    %Borrowings
    
    
    5,004
    
    
    
    89
    
    
    
    3.59
    %
    
    
    4,868
    
    
    
    84
    
    
    
    3.46
    %Total interest-bearing liabilities
    
    
    151,239
    
    
    
    1,490
    
    
    
    1.99
    %
    
    
    129,247
    
    
    
    2,015
    
    
    
    3.14
    %Noninterest-bearing liabilities
    
    
    18,154
    
    
    
    
    
    
    
    
    
    
    
    16,447Shareholders equity
    
    
    15,948
    
    
    
    
    
    
    
    
    
    
    
    14,218Total liabilities and
shareholders equity
    
    $
    185,341
    
    
    
    
    
    
    
    
    
    
    $
    159,912Net interest income
    
    
    
    
    
    
    2,761
    
    
    
    
    
    
    
    
    
    
    
    2,967Tax equivalent adjustment
    
    
    
    
    
    
    (36
    )
    
    
    
    
    
    
    
    
    
    
    (33
    )Net interest income per
financial statements
    
    
    
    
    
    $
    2,725
    
    
    
    
    
    
    
    
    
    
    $
    2,934Net interest margin (Net yield on
average interest-earning assets)
    
    
    
    
    
    
    
    
    
    
    3.10
    %
    
    
    
    
    
    
    
    
    
    
    3.85
    %
 (1)
    
    Average balance includes loans on nonaccrual status.  26




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##### Table of Contents



WESTERN RESERVE BANCORP, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
June 30, 2009
 RESULTS OF OPERATIONS  FOR THE SIX MONTHS ENDED JUNE 30, 2009
   Summary of Changes inNet Interest Income for theSix Months EndedJune 30, 2009 vs. 2008Increase (Decrease) Due to($ in thousands)
    
    Volume
    
    
    Rate
    
    
    NetInterest income:Loans
    
    $
    573
    
    
    $
    (1,118
    )
    
    $
    (545
    )Securities:Taxable
    
    
    (28
    )
    
    
    (1
    )
    
    
    (29
    )Tax exempt
    
    
    (7
    )
    
    
    6
    
    
    
    (1
    )Restricted stock
    
    
    3
    
    
    
    (1
    )
    
    
    2Federal funds sold and
other short-term funds
    
    
    42
    
    
    
    (200
    )
    
    
    (158
    )Total interest-earning assets
    
    
    583
    
    
    
    (1,314
    )
    
    
    (731
    )Interest expense:Transaction accounts
    
    
    (5
    )
    
    
    14
    
    
    
    9Market rate savings accounts
    
    
    136
    
    
    
    661
    
    
    
    797Time deposits
    
    
    (502
    )
    
    
    226
    
    
    
    (276
    )Federal Home Loan Bank
advances and other borrowings
    
    
    (3
    )
    
    
    (2
    )
    
    
    (5
    )Total interest-bearing liabilities
    
    
    (374
    )
    
    
    899
    
    
    
    525Change in net interest income
    
    $
    209
    
    
    $
    (415
    )
    
    $
    (206
    )
 Interest Income
   27




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##### Table of Contents



WESTERN RESERVE BANCORP, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
June 30, 2009
 RESULTS OF OPERATIONS  FOR THE SIX MONTHS ENDED JUNE 30, 2009
  Interest Expense
  Net Interest Margin
    Provision for Loan Losses
   28




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##### Table of Contents



WESTERN RESERVE BANCORP, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
June 30, 2009
 RESULTS OF OPERATIONS  FOR THE SIX MONTHS ENDED JUNE 30, 2009
  Noninterest Income
    29




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##### Table of Contents



WESTERN RESERVE BANCORP, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
June 30, 2009
 RESULTS OF OPERATIONS  FOR THE SIX MONTHS ENDED JUNE 30, 2009
 Noninterest Expenses
   Six months endedJune 30,2009
    
    
    2008Supplies
    
    $
    39,000
    
    
    $
    37,000Loan expenses
    
    
    21,000
    
    
    
    17,000Travel and entertainment
    
    
    20,000
    
    
    
    22,000Insurance
    
    
    16,000
    
    
    
    14,000CDARS fees
    
    
    15,000
    
    
    
    2,000Telephone
    
    
    13,000
    
    
    
    13,000Dues and subscriptions
    
    
    12,000
    
    
    
    13,000Other
    
    
    14,000
    
    
    
    8,000Reversal of prior year interest
income on a nonaccrual loan
    
    
    
    
    
    
    33,000$
    150,000
    
    
    $
    159,000
   30




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##### Table of Contents



WESTERN RESERVE BANCORP, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
June 30, 2009
 RESULTS
OF OPERATIONS  FOR THE THREE MONTHS ENDED JUNE 30, 2009
  Net Interest Income
   Provision for Loan Losses
  Noninterest Income
   31




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##### Table of Contents



WESTERN RESERVE BANCORP, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
June 30, 2009
 RESULTS
OF OPERATIONS  FOR THE THREE MONTHS ENDED JUNE 30, 2009
 Noninterest Expense
   Three months endedJune 30,2009
    
    
    2008Supplies
    
    $
    18,000
    
    
    $
    17,000Loan expenses
    
    
    12,000
    
    
    
    8,000Travel and entertainment
    
    
    13,000
    
    
    
    10,000Insurance
    
    
    9,000
    
    
    
    9,000CDARS fees
    
    
    9,000
    
    
    
    2,000Telephone
    
    
    6,000
    
    
    
    6,000Dues and subscriptions
    
    
    6,000
    
    
    
    7,000Other
    
    
    10,000
    
    
    
    7,000Reversal of prior year interest
income on a nonaccrual loan
    
    
    
    
    
    
    33,000$
    83,000
    
    
    $
    99,000
 LIQUIDITY AND CAPITAL RESOURCES
   32




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##### Table of Contents



WESTERN RESERVE BANCORP, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
June 30, 2009
 LIQUIDITY AND CAPITAL RESOURCES
     Minimum to be
    
    
    Minimum requiredWestern Reserve Bank
    
    
    considered
    
    
    for capitalJune 30,
    
    
    December 31,
    
    
    well-
    
    
    Adequacy2009
    
    
    2008
    
    
    capitalized
    
    
    purposesTier 1 core capital to
risk-weighted assets
    
    
    9.1
    %
    
    
    9.9
    %
    
    
    6.0
    %
    
    
    4.0
    %Total capital to
risk-weighted assets
    
    
    10.3
    %
    
    
    11.0
    %
    
    
    10.0
    %
    
    
    8.0
    %Tier 1 leverage ratio
    
    
    7.8
    %
    
    
    8.5
    %
    
    
    5.0
    %
    
    
    4.0
    %
   33




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##### Table of Contents



WESTERN RESERVE BANCORP, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
June 30, 2009
 LIQUIDITY AND CAPITAL RESOURCES
       34




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##### Table of Contents



WESTERN RESERVE BANCORP, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
June 30, 2009
 LIQUIDITY AND CAPITAL RESOURCES
   
    
    incentive compensation for Senior Executive Officers must not encourage unnecessary and
excessive risks that threaten the value of the financial institution;
 
    
    any bonus, retention award or incentive compensation paid (or under a legally binding
obligation to be paid) to the Companys Senior Executive Officers and certain other
employees based on statements of earnings, revenues, gains, or other criteria that are
later proven to be materially inaccurate must be subject to recovery or clawback by the
Company;
 
    
    the Company is prohibited from paying or accruing any bonus, retention award or
incentive compensation with respect to its most highly-compensated employee except for
grants of restricted stock that do not fully vest during the covered period and do not
have a value which exceeds one-third of an employees total annual compensation;
 
    
    severance payments to the Companys Senior Executive Officers and the five next most
highly compensated employees, generally referred to as golden parachute payments, are
prohibited, except for payments for services performed or benefits accrued;
 
    
    compensation plans that encourage manipulation of reported earnings are prohibited;
 
    
    the US Treasury may retroactively review bonuses, retention awards and other
compensation previously paid to Senior Executive Officers that the US Treasury finds to be
inconsistent with the purposes of TARP or otherwise contrary to the public interest;
 
    
    the Companys Board of Directors must establish a company-wide policy regarding
excessive or luxury expenditures;
 
    
    the Companys proxy statements for annual shareholder meetings must permit a nonbinding
say on pay shareholder vote on the compensation of executives;
 
    
    compensation in excess of $500,000 for each Senior Executive Officer must not be
deducted for federal income tax purposes; and
 
    
    compliance with the executive compensation reporting and recordkeeping requirements
established by the US Treasury.
  35




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WESTERN RESERVE BANCORP, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
June 30, 2009
 INTEREST RATE RISK
       36




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##### Table of Contents



WESTERN RESERVE BANCORP, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
June 30, 2009
 CRITICAL ACCOUNTING POLICIES
   37




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WESTERN RESERVE BANCORP, INC.
 
 CONTROLS AND PROCEDURES
 June 30, 2009
    38




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##### Table of Contents



WESTERN RESERVE BANCORP, INC.
FORM 10-Q
June 30, 2009
 
 PART
II  OTHER INFORMATION
 Item 1.

    Legal Proceedings
  Item 1a.
    Risk Factors
  Item 2.
    Unregistered Sales of Equity Securities and Use of Proceeds
  Item 3.
    Defaults Upon Senior Securities
  Item 4.
    Submission of Matters to a Vote of Security Holders
  For
    
    
    Against
    
    
    AbstainMichael R. Rose
    
    
    428,245
    
    
    
    9,967
    
    
    
    0Glenn M. Smith
    
    
    429,832
    
    
    
    8,380
    
    
    
    0Thomas A. Tubbs
    
    
    429,395
    
    
    
    8,817
    
    
    
    0
   For
    
    
    Against
    
    
    Abstain364,535
    
    
    
    28,349
    
    
    
    1,396
  For
    
    
    Against
    
    
    Abstain415,968
    
    
    
    14,013
    
    
    
    6,018
 Item 5.

    Other Information
   39




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##### Table of Contents



Item 6

     Exhibits
 WESTERN RESERVE BANCORP, INC.  FORM 10-Q
June 30, 2009
 Exhibit No.
    
    Description of Exhibits3.1
    
    
    Amended and Restated Articles of
Incorporation of Western Reserve
Bancorp, Inc. (incorporated by
reference to the Companys Report
on Form 10-QSB filed with the
Commission on August 14, 2008 and
Form 8-K filed with the
Commission on May 21, 2009)
    
    *3.2
    
    
    Code of Regulations of Western
Reserve Bancorp, Inc.
(incorporated by reference to the
Companys Report on Form SB-2
filed with the Commission on
December 29, 1997)
    
    *4
    
    
    Legend Placed on Certificates
Representing Shares Issued
pursuant to an exemption from
registration under Section
3(a)(11) of the Securities Act
and Rule 147 thereunder
(incorporated by reference to the
Companys Report on Form 10-KSB
filed with the Commission on June
28, 2008)
    
    *10.1
    
    
    Employment Agreement of Edward J.
McKeon Dated December 15, 2005.
(incorporated by reference to the
Companys Report on Form 8-K
filed with the Commission on
December 19, 2005)
    
    *10.2
    
    
    Lease Agreement by and between
Michael Rose DBA Washington
Properties and Western Reserve
Bancorp, Inc. (incorporated by
reference to the Companys Report
on Form 10-KSB filed with the
Commission on June 30, 1999)
    
    *10.3
    
    
    Western Reserve Bancorp, Inc.
1998 Stock Option Plan, Amended
and Restated as of August 21,
2008 (incorporated by reference
to the Companys Report on Form
8-K filed with the Commission on
August 26, 2008)
    
    *10.4
    
    
    Agreement by and between Western
Reserve Bancorp, Inc. and Brian
K. Harr, dated June 18, 2001, as
amended February 20, 2002
(incorporated by reference to the
Companys Report on Form 10-KSB
filed with the Commission on June
28, 2003)
    
    *10.5
    
    
    Agreement by and between Western
Reserve Bancorp, Inc. and Cynthia
A. Mahl, dated June 18, 2001, as
amended February 20, 2002
(incorporated by reference to the
Companys Report on Form 10-KSB
filed with the Commission on June
28, 2003)
    
    *10.6
    
    
    Loan Agreement between Western
Reserve Bancorp, Inc. and TCF
National Bank, dated May 5, 2003
(incorporated by reference to the
Companys Report on Form 10-QSB
filed with the Commission on
August 14, 2003)
    
    *10.7
    
    
    Western Reserve Bank Supplemental
Executive Retirement Plan, dated
May 15, 2003 (incorporated by
reference to the Companys Report
on Form 10-QSB filed with the
Commission on August 14, 2003)
    
    *10.8
    
    
    Western Reserve Bancorp, Inc.
Employee Stock Purchase Plan
(incorporated by reference to the
Companys Report on Form 10-QSB
filed with the Commission on
November 14, 2003)
    
    *
 *
    
    Previously filed and incorporated herein by reference.  40




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##### Table of Contents



WESTERN RESERVE BANCORP, INC.
FORM 10-Q
June 30, 2009
 Exhibit No.
    
    Description of Exhibits10.9
    
    
    Lease Agreement by and between
Western Reserve of Brecksville,
LLC and Western Reserve Bank
(incorporated by reference to the
Companys Report on Form 10-KSB
filed with the Commission on June
30, 2005)
    
    *10.10
    
    
    First amendment to the Loan
Agreement by and between Western
Reserve Bancorp, Inc. and TCF
National Bank, dated June 30,
2005 (incorporated by reference
to the Companys Report on Form
10-QSB filed with the Commission
on May 16, 2005)
    
    *10.11
    
    
    Second amendment to the Loan
Agreement by and between Western
Reserve Bancorp, Inc. and TCF
National Bank, dated June 30,
2005 (incorporated by reference
to the Companys Report on Form
10-QSB filed with the Commission
on August 15, 2005)
    
    *10.12
    
    
    Western Reserve Bancorp, Inc. and
Western Reserve Bank Incentive
Compensation Plan, Amended and
Restated as of May 1, 2008
(incorporated by reference to the
Companys Report on Form 8-K
filed with the Commission on May
7, 2008)
    
    *10.13
    
    
    Third amendment to the Loan
Agreement by and between Western
Reserve Bancorp, Inc. and TCF
National Bank, dated July 20,
2006 (incorporated by reference
to the Companys Report on Form
10-QSB filed with the Commission
on November 14, 2006)
    
    *10.14
    
    
    Fourth Amendment to the Loan
Agreement by and between Western
Reserve Bancorp, Inc. and TCF
National Bank, dated February 6,
2007 (incorporated by reference
to the Companys Report on Form
10-QSB filed with the Commission
on August 14, 2007)
    
    *10.15
    
    
    Fifth Amendment to the Loan
Agreement and Waiver by and
between Western Reserve Bancorp,
Inc. and TCF National Bank, dated
June 21, 2007 (incorporated by
reference to the Companys Report
on Form 10-QSB filed with the
Commission on August 14, 2007)
    
    *10.16
    
    
    Sixth Amendment to the Loan
Agreement by and between Western
Reserve Bancorp, Inc. and TCF
National Bank, dated September
28, 2007 (incorporated by
reference to the Companys Report
on Form 10-QSB filed with the
Commission on November 14, 2007)
    
    *10.17
    
    
    Seventh Amendment to the Loan
Agreement by and between Western
Reserve Bancorp, Inc. and TCF
National Bank, dated July 1, 2008
(incorporated by reference to the
Companys Report on Form 10-Q
filed with the Commission on
November 14, 2008)
    
    *10.18
    
    
    Form of Amendment to the Western
Reserve Bancorp, Inc. Stock
Option Grant Agreement as of
October 16, 2008 (incorporated by
reference to the Companys Report
on Form 8-K filed with the
Commission on October 2, 2008)
    
    *10.19
    
    
    Eighth Amendment to the Loan
Agreement by and between Western
Reserve Bancorp, Inc. and TCF
National Bank, dated July 1, 200911
    
    
    Statement re: Computation of Per
Share Earnings (incorporated by
reference to the Companys Report
on Form 10-Q filed with the
Commission on May 14, 2008)
    
    *
 *
    
    Previously filed and incorporated herein by reference.  41




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##### Table of Contents



WESTERN RESERVE BANCORP, INC.  FORM 10-Q
June 30, 2009
 Exhibit No.
    
    Description of Exhibits14
    
    
    Western Reserve Bancorp, Inc.
Code of Ethics and Business
Conduct (incorporated by
reference to the Companys Report
on Form 10-KSB filed with the
Commission on June 30, 2004)
    
    *31.1
    
    
    Certification under Section 302
of the Sarbanes-Oxley Act by
Edward J. McKeon, President and
Chief Executive Officer31.2
    
    
    Certification under Section 302
of the Sarbanes-Oxley Act by
Cynthia A. Mahl, Senior Vice
President and Chief Financial
Officer32.1
    
    
    Certification under Section 906
of the Sarbanes-Oxley Act by
Edward J. McKeon, President and
Chief Executive Officer32.2
    
    
    Certification under Section 906
of the Sarbanes-Oxley Act by
Cynthia A. Mahl, Senior Vice
President and Chief Financial
Officer
 *
    
    Previously filed and incorporated herein by reference.  42




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##### Table of Contents



WESTERN RESERVE BANCORP, INC.
FORM 10-Q
Quarter ended June 30, 2009
 
 SIGNATURES
  Western Reserve Bancorp, Inc.Date: August 14, 2009
    By:

/s/
Edward J. McKeonEdward J. McKeonPresident and Chief Executive Officer
(Principal Executive Officer)/s/
Cynthia A. MahlCynthia A. MahlExecutive Vice President/Chief Financial Officer

(Principal Financial Officer)  43




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##### Table of Contents



EXHIBIT INDEX
 WESTERN RESERVE BANCORP, INC.  FORM 10-Q
June 30, 2009
 Exhibit No.
    
    Description of Exhibits10.19
    
    
    Eighth Amendment to the Loan Agreement by and between
Western Reserve Bancorp, Inc. and TCF National Bank,
dated July 1, 200931.1
    
    
    Certification under Section 302 of the Sarbanes-Oxley Act
by Edward J. McKeon, President and Chief Executive
Officer31.2
    
    
    Certification under Section 302 of the Sarbanes-Oxley Act
by Cynthia A. Mahl, Senior Vice President and Chief
Financial Officer32.1
    
    
    Certification under Section 906 of the Sarbanes-Oxley Act
by Edward J. McKeon, President and Chief Executive
Officer32.2
    
    
    Certification under Section 906 of the Sarbanes-Oxley Act
by Cynthia A. Mahl, Senior Vice President and Chief
Financial Officer
  44