LNB Bancorp buys back $6.3 million cumulative perpetual preferreds

By Susanna Moon

Chicago, Dec. 27 - LNB Bancorp, Inc. said it repurchased $6.3 million par value, or about 25%, of its outstanding fixed-rate cumulative perpetual preferred stock, series B, $1,000 per share liquidation preference in exchange for cash at a price representing a discount to par value.

The series B preferreds were originally issued by LNB in December 2008 as part of the U.S. Department of the Treasury's capital purchase program. The Treasury sold all of the preferreds to private investors through a modified Dutch auction that was completed in June, according to a press release.

"This transaction is the first step in our intention to eventually repurchase or redeem all of the series B preferred stock that was originally issued to the Treasury," Daniel E. Klimas, president and chief executive officer of LNB, said in the release.

"We are pleased that we were able to fund this initial repurchase using cash from accumulated earnings and excess capital. This approach is consistent with our previously stated intention to carefully balance our need to maintain a strong capital position with our objectives of building shareholder value and protecting the interests of our shareholders."

The bank holding company is based in Lorain, Ohio.

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