Newbridge Bancorp (NBBC) 8-K LSB BANCSHARES REPORTS 4th QUARTER AND FULL YEAR FINANCIAL RESULTS

	News Release
	LSBTheBank —P.O. Box 867
	Lexington, NC 27293-0867 — www.lsbnc.com

LSB BANCSHARES REPORTS 4th QUARTER AND FULL YEAR FINANCIAL RESULTS

     LEXINGTON, N.C. — January 15, 2004 — LSB Bancshares, Inc. (NASDAQ: LXBK), parent company of Lexington State Bank, reported net income in the fourth quarter of 2003 of $802,000, or $0.09 per diluted share, compared to $2,441,000, or $0.29 per diluted share, in the fourth quarter of 2002. The decline in earnings was primarily due to the previously announced fourth quarter pretax charge of $2.9 million ($1.8 million after tax) related to the write down of two problem credits. This charge also led to a reduction in annual earnings, which declined to $8,578,000, or $1.00 per diluted share, for 2003, compared to $10,214,000, or $1.20 per diluted share, for 2002.

     Net interest income in the fourth quarter of 2003 declined 3% compared with the year-ago quarter, while noninterest income increased 15% and noninterest expense increased 6% over the same respective periods. The provision for loan losses, reflecting the above mentioned write down, increased to $3,302,000 in the fourth quarter of 2003 from $886,000 in the year-ago period.

     For the full year 2003, net interest income increased 5% relative to 2002, while noninterest income increased 21% and noninterest expense grew 14%. The provision for loan losses was $5,215,000 for 2003, versus $2,480,000 in 2002. Year-over-year balance sheet growth was generally in the low single digits.

     Due to the higher provisions, the allowance for loan losses strengthened on an aggregate as well as percentage of gross loans basis. Specifically, the allowance for loan losses was $7,846,000, or 1.18% of gross loans, at December 31, 2003, versus $7,284,000, or 1.13% of gross loans, at December 31, 2002. Nonperforming assets, including nonaccrual loans, accruing loans more than 90 days past due, renegotiated troubled debt and other real estate owned, totaled $5,815,000 at December 31, 2003, down from $6,997,000 at December 31, 2002.

     “While we are disappointed to report this temporary setback to earnings, there were several positives in the quarter and year. The Bank’s level of nonperforming assets at

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1/15/04 News Release, “LSB Bancshares Reports 4th Quarter and Full Year Financial Results”, cont.

year-end 2003 was down 17% from the level at year-end 2002, and we have strengthened our reserve position. While margins remain tight, we are taking the steps necessary to grow earning assets by expanding our branch network, the most recent example being our continued expansion into Guilford County, which will be achieved through the opening of a Jamestown office in the Spring of 2004 subject to regulatory approval,” said Robert F. Lowe Chairman/CEO.

     “We also remain well capitalized, which contributes to high ratings from various rating organizations,” Lowe added. “For example, LSB has received a 5-Star Superior rating from Bauer Financial, Inc. (the nation’s leading independent bank rating firm) for 57 consecutive quarters, which puts the Bank in a group that Bauer designates as Exceptional Performance Banks.”

     Lexington State Bank, which opened on July 5, 1949, is the 10th largest bank in North Carolina and the largest community bank based in the Piedmont Triad. LSB owns two subsidiaries: LSB Investment Services, Inc., which offers non-deposit, non-insured investment alternatives such as mutual funds and annuities; and Peoples Finance Co. of Lexington, Inc., which offers small loans and dealer financing.

     Common stock of the bank’s parent company, LSB Bancshares, Inc., is traded on the National Market and is quoted electronically under the NASDAQ symbolLXBK. The LSB website, which links online banking users to LSB By Net, is www.lsbnc.com.

     Market makers include: Davenport & Company LLC; Friedman Billings Ramsey & Co.; FTN Financial Securities Corp.; Goldman, Sachs & Co.; Keefe, Bruyette & Woods, Inc.; Morgan Keegan & Co., Inc.; Morgan Stanley & Co., Inc.; Moors & Cabot, Inc.; The Robinson Humphrey Co.; Sandler O’Neill & Partners, and; Schwab Capital Markets.

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NOTE: For more information, please contact Monty J. Oliver, EVP & Chief Financial Officer @ 336-242-6207 or 336-248-6500
or 1-800-876-6505, ext. 207

This press release contains forward-looking statements. These statements involve estimates and assumptions of management of LSB Bancshares, Inc. (“LSB”), and risks and uncertainties, that could cause the actual results of

LSB’s performance to differ materially from current projections, including without limitation, the effects of future economic conditions, regulatory approval of the opening of the Jamestown office, governmental fiscal and monetary policies. Legislative and regulatory changes, changes to interest rates, the effects of competition, and the final determinations of LSB’s financial results for the fourth quarter of 2003. Additional factors that could cause the actual results of LSB’s performance to differ materially from current projections are discussed in LSB’s filings with the Securities and Exchange Commission, including without limitation, its Annual Report on Form 10-K, its quarterly Reports on Form 10-Q and its Current Reports on Form 8-K. LSB undertakes no obligation to revise these statements following the date of the news release.

LSB Bancshares, Inc.
Consolidated Balance Sheets
(In Thousands)

			December 31
			2003			2002
Assets
Cash and Due from Banks			$	36,418		$	41,522
Interest-Bearing Bank Balances				2,267			5,550
Federal Funds Sold				25,886			13,384
Investment Securities:
	Held to Maturity, at Amortized Cost			29,078			44,030
	Available for Sale, at Market Value			92,013			84,372
Loans				663,446			645,548
Less, Reserve for Loan Losses				(7,846	)		(7,284	)
		Net Loans		655,600			638,264
Premises and Equipment				14,951			13,490
Other Assets				11,693			11,181
		Total Assets	$	867,906		$	851,793
Liabilities
Deposits:
	Demand		$	82,588		$	94,612
	Savings, N.O.W. and Money Market Accounts			411,322			385,981
	Certificates of Deposit of less than $100,000			126,343			145,669
	Certificates of Deposit of $100,000 or more			82,249			70,219
		Total Deposits		702,502			696,481
Securities Sold Under Agreements to Repurchase				2,032			1,529
Borrowings from the Federal Home Loan Bank				70,000			63,000
Other Liabilities				4,812			5,276
		Total Liabilities		779,346			766,286
Shareholders’ Equity
Preferred Stock, Par Value $.01 Per Share:
	Authorized 10,000,000 shares; none issued			0			0
Common Stock, Par Value $5 Per Share:
	Authorized 50,000,000 Shares; Issued 8,548,942 Shares in 2003 and 8,472,518 Shares in 2002			42,745			42,363
Paid-In Capital				10,205			9,729
Directors’ Deferred Plan				(1,101	)		(995	)
Retained Earnings				35,702			32,578
Accumulated Other Comprehensive Income				1,009			1,832
		Total Shareholders’ Equity		88,560			85,507
		Total Liabilities and Shareholders’ Equity	$	867,906		$	851,793
Memorandum: Standby Letters of Credit			$	4,098		$	4,138

LSB Bancshares, Inc.
Consolidated Statements of Income
(In Thousands Except Share Data and Note)

			Three Months Ended				Twelve Months Ended
			December 31				December 31
			2003		2002		2003		2002
Interest Income
	Interest and Fees on Loans		$	10,686	$	11,584	$	44,837	$	45,137
	Interest on Investment Securities:
		Taxable		934		1,149		3,960		5,385
		Tax Exempt		352		406		1,581		1,652
	Interest-Bearing Bank Balances			26		56		159		258
	Fed Funds Sold			46		109		253		500
		Total Interest Income		12,044		13,304		50,790		52,932
Interest Expense
	Deposits			1,729		2,665		8,048		11,973
	Securities Sold Under Agreements to Repurchase			3		5		13		42
	Borrowings for the Federal Home Loan Bank			786		797		3,116		3,170
		Total Interest Expense		2,518		3,467		11,177		15,185
Net Interest Income				9,526		9,837		39,613		37,747
	Provision for Loan Losses			3,302		886		5,215		2,480
	Net Interest Income After Provision for Loan Losses			6,224		8,951		34,398		35,267
Noninterest Income
	Service Charges on Deposit Accounts			1,834		1,725		6,981		6,525
	Gains on Sales of Mortgages			206		276		1,346		737
	Other Operating Income			1,575		1,153		6,190		4,738
		Total Noninterest Income		3,615		3,154		14,517		12,000
Noninterest Expense
	Personnel Expense			4,952		4,779		20,643		17,903
	Occupancy Expense			436		400		1,654		1,480
	Equipment Depreciation and Maintenance			546		443		2,069		1,797
	Other Operating Expense			3,074		2,853		12,068		10,860
		Total Noninterest Expense		9,008		8,475		36,434		32,040
	Income Before Income Taxes			831		3,630		12,481		15,227
	Income Taxes			29		1,189		3,903		5,013
Net Income			$	802	$	2,441	$	8,578	$	10,214
Earnings Per Share
	Basic		$	0.09	$	0.29	$	1.01	$	1.21
	Diluted		$	0.09	$	0.29	$	1.00	$	1.20
Weighted Average Shares Outstanding
	Basic			8,543,172		8,468,205		8,515,711		8,461,818
	Diluted			8,626,434		8,538,839		8,587,787		8,543,319

LSB Bancshares, Inc.
Financial Highlights
(In Thousands Except Ratios)

		Three Months Ended December 31
		2003			2002			Change
Financial Ratios
	Return On Average Assets		0.37			1.13			(76	)BP
	Return On Average Shareholders’ Equity		3.55			11.40			(785	)
	Net Interest Margin (FTE):		4.92			4.86			6
Average Balances
	Loans	$	667,801		$	632,657			5.6	%
	Earning Assets		815,576			799,320			2.0
	Total Assets		873,877			864,486			1.1
	Interest-Bearing Deposits		630,355			622,530			1.3
	Total Deposits		715,035			708,621			0.9
Allowance For Loan Losses
	Beginning Balance	$	7,795		$	7,155			8.9	%
	Provision For Loan Losses		3,302			886			272.7
	Loans Charged Off		(3,296	)		(864	)		281.5
	Recoveries		45			107			(57.9	)
	Ending Balance		7,846			7,284			7.7

LSB Bancshares, Inc.
Financial Highlights
(In Thousands Except Ratios)

				Twelve Months Ended December 31
				2003			2002			Change
Financial Ratios
	Return On Average Assets				0.98			1.21			(23	)BP
	Return On Average Shareholders’ Equity				9.66			12.28			(262	)
	Net Interest Margin (FTE):
		Quarterly			4.92			4.86			6
		Year To Date			4.89			4.86			3
Average Balances
	Loans				664,155			607,620			9.3	%
	Earning Assets				824,236			790,360			4.3
	Total Assets				878,519			843,284			4.2
	Interest-Bearing Deposits				635,502			610,428			4.1
	Total Deposits				721,723			690,208			4.6
Allowance For Loan Losses
	Beginning Balance				7,282			6,440			13.1	%
	Provision For Loan Losses				5,215			2,480			110.3
	Loans Charged Off				(5,011	)		(1,934	)		159.1
	Recoveries				360			298			20.8
	Ending Balance				7,846			7,284			7.7
Nonperforming Assets
	Nonperforming Loans:
		Past Due 90 Days Or More			1,184			2,354			(49.7	)%
		Nonaccrual Loans			1,754			272			544.9
		Restructured Loans			1,135			2,259			(49.8	)
			Total Nonperforming Loans		4,073			4,885			(16.6	)
		Other Real Estate			1,742			2,112			(17.5	)
			Total Nonperforming Assets		5,815			6,997			(16.9	)
Asset Quality Ratios
	Nonperforming Loans To Total Loans				0.88			1.08			(0.21	)BP
	Nonperforming Loans To Total Assets				0.67			0.82			(0.15	)
	Allowance For Loan Losses To Total Loans				1.18			1.13			0.05
	Net Charge-offs To Average Loans				0.70			0.27			0.43
	Allowance For Loan Losses To Nonperforming Loans				1.93	x		1.49	x