Exhibit 99.1 | ||
FOR IMMEDIATE RELEASE | CONTACT: Gerald T. Mulligan | |
President & CEO (978) 725-7555 |
LSB Corporation Announces First Quarter 2010 Financial Results of $1.5 Million,
Up 92% from Previous Year;
2010 Core Deposit Growth of 10.1%;
Dividend Increase of 29% to $0.09 per share
Up 92% from Previous Year;
2010 Core Deposit Growth of 10.1%;
Dividend Increase of 29% to $0.09 per share
NORTH ANDOVER, MA, — (MARKET WIRE) — April 21, 2010 — LSB Corporation (NASDAQ-LSBX) (the “Company”) today announced first quarter 2010 net income of $1.5 million, or $0.34 per diluted share, as compared to $805,000, or $0.18 per diluted common share, for the first quarter of 2009 and $795,000, or $0.18 per share, in the fourth quarter of 2009. This corresponds to a return on average assets and average equity of 0.77% and 10.22% in the first quarter of 2010, respectively, as compared to 0.51% and 5.45% in the first quarter of 2009, respectively.
At March 31, 2010, assets totaled $806.6 million, a decrease of $10.0 million or 1.2% from December 31, 2009. The decline in total assets was a measured effort to reduce wholesale funding amid continued deposit growth. The Company experienced local loan growth of $7.9 million or 1.5% from December 31, 2009. The corporate loan portfolio increased by $4.7 million or 1.2% while the retail loan portfolio increased by $3.2 million or 2.0%. This loan growth was offset and partially funded by maturities and regular amortization of collateralized mortgage obligations and mortgage-backed securities totaling $25.6 million and sales of investments of $15.6 million.
At March 31, 2010, deposits totaled $504.3 million, an increase of $11.5 million or 2.3% from December 31, 2009. River Bank’s focus on attracting and retaining core deposits produced favorable results in the quarter. Core deposits (savings, money market, NOW and demand deposit accounts) increased by $10.4 million, $12.7 million, and $2.2 million, respectively, for a total of $25.4 million or 10% from December 31, 2009. Certificates of deposit decreased $13.9 million including matured brokered certificates of deposit of $8.9 million. Total borrowed funds decreased by $23.1 million or 8.9% from December 31, 2009 and totaled $236.0 million at March 31, 2010. During the first quarter of 2010, $23.0 million in long-term advances matured and the Company prepaid $5.0 million in long-term advances with a penalty of $149,000.
President and CEO Gerald T. Mulligan stated, “In spite of continuing economic challenges, I am pleased to report earnings of $0.34 per diluted share for the first quarter of 2010. We continue to reduce our higher-cost wholesale funding and we expect that replacement of higher-cost wholesale funding with lower cost core deposits will have a positive impact on our net interest margin in future quarters.
“Especially gratifying is the improvement in our delinquencies and non-performing loans. Several larger credits were able to bring their loans fully current and we have confidence in the collectibility of the principal balances. There are two other relationships that have required a debt modification or rate reduction that will continue to negatively impact the Bank. Unfortunately, as long as the unemployment level remains high, we will continue to see payment stress in our residential portfolio and are working with these borrowers as needed.
“Our continued success in generating locally-based deposits, which grew by 2.3% during the quarter and almost 9% on an annualized basis, is encouraging.”
Gains on sales of investments totaled $697,000 in the first quarter of 2010 as compared to $803,000 and $227,000 in the fourth and first quarters of 2009, respectively.
The Company’s net interest margin increased from 2.48% for the three months ended March 31, 2009, to 2.69% in the first quarter of 2010. The margin improvement was partially caused by a shift in the mix of assets as higher yielding loans replaced maturing investments and were funded with lower cost deposits. Continued improvement in the net interest margin in the second quarter of 2010 is expected due to the reduction of the higher-cost liabilities in the latter part of March 2010.
At March 31, 2010, non-performing loans totaled $4.8 million and 0.88% of total loans as compared to $6.0 million and 1.12%, respectively, as of December 31, 2009, and $2.6 million and 0.54%, respectively, as of March 31, 2009. The decrease in non-performing loans during 2010 resulted from one loan for $1.1 million paying all arrearages up
to date. In addition, another loan for $415,000 is protected by a guaranty by the SBA. Total loan delinquencies under 90 days at March 31, 2010, amounted to $4.2 million as compared to $5.7 million at December 31, 2009 and included two loans for $2.9 million that have experienced a reduction in the income generating cash flows but are not expected to deteriorate beyond 30 days past due.
The allowance for loan losses in total and as a proportion of total loans as of March 31, 2010 equaled $7.3 million and 1.34%, respectively, as compared to $7.2 million and 1.34%, respectively, as of December 31, 2009. The Company recorded a provision for loan losses of $700,000 in the first quarter of 2010 as compared to $540,000 for the fourth quarter of 2009 and $240,000 in the first quarter of 2009. The increase in the provision for loan losses in 2010 is due to the high level of charge-offs coupled with continued loan growth. Annualized net loan charge-offs as a percentage of average loans totaled 43 basis points for the three months ended March 31, 2010 as compared to 3 basis points in the comparable period in 2009.
The Company also announced today an increase of 28.6% in the quarterly cash dividend from $0.07 to $0.09 per share to be paid on May 20, 2010 to shareholders of record as of May 6, 2010.
Press releases and SEC filings can be viewed on our websitewww.RiverBk.com under the “About Us” tab.
LSB Corporation is a Massachusetts corporation that conducts all of its operations through its sole subsidiary, River Bank (the “Bank”). The Bank offers a range of commercial and consumer loan and deposit products and is headquartered at 30 Massachusetts Avenue, North Andover, Massachusetts, approximately 25 miles north of Boston. River Bank operates 5 full-service banking offices in Massachusetts in Andover, Lawrence, Methuen (2) and North Andover and 2 full-service banking offices in New Hampshire in Derry and Salem.
The reader is cautioned that this press release may contain certain statements that are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements are expressions of management’s expectations as of the date of this press release regarding future events or trends and which do not relate to historical matters. Such expectations may or may not be realized, depending on a number of variable factors, including but not limited to, changes in interest rates, changes in real estate valuations, general economic conditions (either nationally or regionally), regulatory considerations and competition. For more information about these factors, please see our recent Annual Report onForm 10-K and Quarterly Report onForm 10-Q on file with the SEC, including the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” As a result of such risk factors and uncertainties, the Company’s actual results may differ materially from such forward-looking statements. The Company does not undertake and specifically disclaims any obligation to publicly release updates or revisions to any such forward-looking statements as a result of new information, future events or otherwise.
LSB Corporation
Select Financial Data
(unaudited)
(Dollars in thousands, except per share data)
(unaudited)
(Dollars in thousands, except per share data)
Three months ended | ||||||||||||
(For the periods ending) | March 31, 2010 | Dec. 31, 2009 | March 31, 2009 | |||||||||
Performance ratios (annualized): | ||||||||||||
Efficiency ratio | 60.23 | % | 63.98 | % | 71.38 | % | ||||||
Return on average assets | 0.77 | % | 0.71 | % | 0.51 | % | ||||||
Return on average stockholders’ equity | 10.22 | % | 8.28 | % | 5.45 | % | ||||||
Net interest margin | 2.69 | % | 2.63 | % | 2.48 | % | ||||||
Interest rate spread (int. bearing only) | 2.44 | % | 2.32 | % | 2.14 | % | ||||||
Dividends paid per share | $ | 0.07 | $ | 0.05 | $ | 0.15 | ||||||
(At) | March 31, 2010 | Dec. 31, 2009 | March 31, 2009 | |||||||||||||
“Well Capitalized” | ||||||||||||||||
Minimums | ||||||||||||||||
Capital Ratios: | ||||||||||||||||
Stockholders’ equity to total assets | N/A | 7.69 | % | 7.41 | % | 9.40 | % | |||||||||
RiverBank Tier 1 leverage ratio | 5.0 | % | 7.03 | % | 6.85 | % | 8.00 | % | ||||||||
Risk-Based Capital Ratio: | ||||||||||||||||
LSB Corporation Tier 1 risk-based | 6.0 | % | 10.02 | % | 9.74 | % | 12.87 | % | ||||||||
RiverBank Tier 1 risk-based | 6.0 | % | 9.91 | % | 9.57 | % | 11.59 | % | ||||||||
RiverBank total risk-based | 10.0 | % | 12.20 | % | 11.84 | % | 12.73 | % | ||||||||
Asset Quality: | ||||||||||||||||
Non-performing loans | $ | 4,767 | $ | 6,003 | $ | 2,576 | ||||||||||
Non-performing assets | $ | 4,767 | $ | 6,003 | $ | 2,696 | ||||||||||
Delinquent loans past due 30-89 days | $ | 4,206 | $ | 5,723 | $ | 963 | ||||||||||
Net charge-offs (quarterly) | $ | 591 | $ | 8 | $ | 36 | ||||||||||
Allowance for loan losses as a percent of total loans | 1.34 | % | 1.34 | % | 1.27 | % | ||||||||||
Allowance as a percent of non-performing loans | 152.65 | % | 119.41 | % | 236.37 | % | ||||||||||
Non-performing loans as a percent of total loans | 0.88 | % | 1.12 | % | 0.54 | % | ||||||||||
Non-performing assets as a percent of total assets | 0.59 | % | 0.74 | % | 0.36 | % | ||||||||||
Net charge-offs to average loans (annualized) | 0.43 | % | 0.01 | % | 0.03 | % | ||||||||||
Per Share Data: | ||||||||||||||||
Book value per share (excluding CPP) | $ | 13.77 | $ | 13.43 | $ | 13.02 | ||||||||||
Tangible book value per share (excluding CPP) | $ | 12.84 | $ | 12.57 | $ | 12.08 | ||||||||||
LSB CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands)
(unaudited)
(In thousands)
(unaudited)
(At) | March 31, 2010 | Dec. 31, 2009 | March 31, 2009 | |||||||||
Retail loans | $ | 162,257 | $ | 159,101 | $ | 144,010 | ||||||
Corporate loans | 382,196 | 377,518 | 335,936 | |||||||||
Total loans | 544,453 | 536,619 | 479,946 | |||||||||
Allowance for loan losses | (7,277 | ) | (7,168 | ) | (6,089 | ) | ||||||
Investments available for sale | 206,450 | 230,533 | 249,945 | |||||||||
FHLB stock | 11,825 | 11,825 | 11,825 | |||||||||
Total investments | 218,275 | 242,358 | 261,770 | |||||||||
Federal funds sold | 13,423 | 6,597 | 11,041 | |||||||||
Other assets | 37,693 | 38,192 | 31,804 | |||||||||
Total assets | $ | 806,567 | $ | 816,598 | $ | 778,472 | ||||||
Core deposits | $ | 277,762 | $ | 252,389 | $ | 189,033 | ||||||
Term deposits | 226,556 | 240,405 | 244,654 | |||||||||
Total deposits | 504,318 | 492,794 | 433,687 | |||||||||
Borrowed funds | 236,025 | 259,082 | 267,085 | |||||||||
Other liabilities | 4,185 | 4,202 | 4,494 | |||||||||
Total liabilities | 744,528 | 756,078 | 705,266 | |||||||||
Total stockholders’ equity | 62,039 | 60,520 | 73,206 | |||||||||
Total liabilities and stockholders’ equity | $ | 806,567 | $ | 816,598 | $ | 778,472 | ||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data)
(unaudited)
(unaudited)
Three months ended | ||||||||||||
(For the period ended) | March 31, 2010 | Dec. 31, 2009 | March 31, 2009 | |||||||||
Interest income | $ | 10,093 | $ | 10,441 | $ | 10,045 | ||||||
Interest expense | 4,858 | 5,208 | 5,473 | |||||||||
Net interest income | 5,235 | 5,233 | 4,572 | |||||||||
Provision for loan losses | 700 | 540 | 240 | |||||||||
Net interest income after provision for loan losses | 4,535 | 4,693 | 4,332 | |||||||||
Gain on sales of investments | 697 | 803 | 227 | |||||||||
Prepayment penalty on FHLB advances | (149 | ) | (127 | ) | — | |||||||
Other non-interest income | 543 | 519 | 504 | |||||||||
Salary & employee benefits expense | 1,816 | 2,070 | 1,743 | |||||||||
FDIC deposit insurance premium | 211 | 231 | 391 | |||||||||
Other non-interest expense | 1,453 | 1,379 | 1,489 | |||||||||
Total non-interest expense | 3,480 | 3,680 | 3,623 | |||||||||
Net income before income tax expense | 2,146 | 2,208 | 1,440 | |||||||||
Income tax expense | 600 | 757 | 476 | |||||||||
Net income before preferred stock dividends and accretion | 1,546 | 1,451 | 964 | |||||||||
Preferred stock dividends and accretion | — | (656 | ) | (159 | ) | |||||||
Net income attributable to common shareholders | $ | 1,546 | $ | 795 | $ | 805 | ||||||
Basic earnings per common share | $ | 0.34 | $ | 0.18 | $ | 0.18 | ||||||
Diluted earnings per common share | $ | 0.34 | $ | 0.18 | $ | 0.18 | ||||||
End of period common shares outstanding | 4,506,686 | 4,506,686 | 4,470,941 | |||||||||
Weighted average common shares outstanding: | ||||||||||||
Basic | 4,506,686 | 4,501,550 | 4,470,941 | |||||||||
Diluted | 4,509,011 | 4,502,948 | 4,471,014 |