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LNB Bancorp, Inc. Agrees To Exchange Of Up To $4.25 Million Of Trust Preferred Securities For Common Shares

LNB Bancorp, Inc. (NASDAQ: LNBB) announced today that it has entered into an agreement with certain holders of its currently outstanding non-pooled trust preferred securities where it may exchange up to $2.125 million of the securities issued by LNB Trust I and up to $2.125 million of the securities issued by LNB Trust II for newly issued LNB common shares.

Subject to certain terms and conditions, the exchanges may be completed at such times and in such amounts of trust preferred securities as the holders may specify for a purchase price of 48% of the face amount of the trust preferred securities to be paid for in an amount of LNB common shares determined based on the greater of the average of the dollar volume-weighted average prices per share of LNB’s common shares on Nasdaq for each of the five consecutive trading days ending on and including the second trading day preceding the exchange and 90% of the market price of LNB’s common shares on Nasdaq on the trading day immediately preceding the exchange.

“Our Board of Directors believes that we should continue to seek attractive opportunities to further strengthen the Company’s already well capitalized position,” said Daniel E. Klimas, president and chief executive officer of LNB Bancorp. “This agreement provides us with an opportunity to strengthen our tangible common equity.

“This agreement represents another important step to further improve our equity capital base. By continuing to build our capital base, we will be better-positioned to emerge from this challenging economy as a stronger, more viable financial leader in the communities we serve," said Klimas.

If all $4.25 million of the trust preferred securities covered under the agreement are exchanged, the Company expects to record a net after-tax gain of approximately $1.46 million or approximately $0.20 per common share. Including the value of the common shares issuable upon the exchange of the trust preferred securities and the net after-tax gain, the ultimate effect of the transactions, if completed with respect to all $4.25 million of the trust preferred securities, will be to increase tangible common equity of the Company by approximately $3.5 million.

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