Newbridge Bancorp (NBBC) 8-K LSB Bancshares Reports 3rd Quarter Financial Results

EXHIBIT 99.1

LSB Bancshares Reports 3rd Quarter Financial Results

LEXINGTON, N.C., October 17, 2005 — LSB Bancshares, Inc. (Nasdaq: LXBK), parent company of Lexington State Bank, reported net income in the third quarter of 2005 of $2,500,000, or $0.29 per diluted share, compared to $1,777,000, or $0.21 per diluted share, in the third quarter of 2004.

The increase in earnings was primarily due to higher net interest income and a lower provision for loan losses. Net interest income increased 14% to $11,206,000 in the third quarter of 2005 from $9,788,000 in the year-ago period, and benefited both from a recovery in the net interest margin as well as growth in average earning assets. The provision for loan losses was $715,000 in 2005’s third quarter, down 35% from $1,104,000 in the third quarter of 2004. Noninterest income decreased 4% to $3,398,000 in 2005’s third quarter versus $3,540,000 in the year-ago quarter. Noninterest expense increased 4% to $10,087,000 in the third quarter of 2005 from $9,654,000 in the third quarter of 2004.

For the nine months ended September 30, 2005, net income was $7,162,000, or $0.83 per diluted share, compared to $6,166,000, or $0.72 per diluted share, in the first nine months of 2004. Net interest income increased 13% to $32,610,000 in the nine months ended September 30, 2005 from the year-ago period. Noninterest income for the first nine months of the year decreased approximately 6% over this period, although approximately half of that decline was due to the fact that the year-ago period included a nonrecurring gain on the sale of real estate of $292,000. Noninterest expense was up 5%, while the provision for loan losses declined 3% relative to the respective year-ago levels.

The Bank achieved year-over-year balance sheet growth that was generally in the upper single digits and low double digits. As of September 30, 2005, total assets were approximately $992 million, an increase of 9% from the year-ago figure, while deposits grew 12% to $818 million and net loans increased 9% to $755 million from the year-ago level. Nonperforming assets, including nonaccruing loans, accruing loans more than 90 days past due, restructured loans and other real estate owned, were $8.5 million at September 30, 2005, versus $5.7 million at the year-ago date. Included in the $8.5 million was $4.7 million in other real estate owned, most of which related to the previously disclosed acquisition, by means of deed-in-lieu of foreclosure, of coastal property by the Bank during the second quarter of 2005. The reserve for loan losses at the end of 2005’s third quarter was $8,684,000 or 1.14% of loans. Shareholders’ equity totaled $91.5 million, and represented an equity-to-assets ratio of 9.2%.

“We are pleased with the strong growth in earnings, which was due to a number of positive developments,” said LSB Bancshares Chairman, President and CEO Robert F. Lowe. “For example, the net interest margin continued to recover, and growth in average earning assets remained solid relative to year-ago levels. Additionally, annual noninterest expense growth has been contained at approximately 5%, both for the third quarter and year-to-date periods. Lowe concluded, “While the banking environment remains challenging, we remain confident about our long-term opportunities for growth.”

LSB Bancshares recently declared a quarterly dividend of $0.17 per share, which will be paid October 15, 2005 to shareholders of record as of October 1, 2005. This level of dividend represents a 6% increase from the year-ago amount.

LSB The Bank is one of the largest community banks in North Carolina, with 25 offices in Davidson, Forsyth, Guilford, Randolph and Stokes counties and a mortgage origination office in Wake County. Services are also available through 31 ATMs and cash dispensers, “LSB By Net” online banking and 24-hour “LSB By Phone” banking. LSB The Bank 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 Nasdaq National Market and is quoted under the symbol LXBK. Additional information about LSB is available on its web site,www.lsbnc.com.

Market makers include: Davenport & Company LLC; Friedman Billings Ramsey & Co.; FTN Midwest Research Secs.; 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.

Information in this press release contains forward-looking statements. These statements are identified by words such as “expects,” “anticipates,” “should,” or other similar statements about future events. These forward-looking statements involve estimates, assumptions by management, risks, and uncertainties that could cause actual results to differ materially from current projections, including without limitations, the effects of future economic conditions, legislative and regulatory changes, and the effects of competition. Additional factors that could cause actual results to differ materially from those anticipated by forward-looking statements 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 obligations to revise these statements following the date of this news release.

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

Consolidated Balance Sheets
(In thousands)

	September 30
	2005			2004
Assets
Cash and Due from Banks	$	42,069		$	38,581
Interest-Bearing Bank Balances		2,590			1,222
Federal Funds Sold		25,802			20,206
Investment Securities:
Held to Maturity, at Amortized Cost		27,432			28,541
Available for Sale, at Market Value		102,745			99,533
Loans		763,211			701,961
Less, Allowance for Loan Losses		(8,684	)		(8,006	)
Net Loans		754,527			693,955
Premises and Equipment		18,671			17,289
Other Assets		17,989			12,563
Total Assets		991,825			911,890
Liabilities
Deposits:
Demand		127,382			92,255
Savings, N.O.W. and Money Market Accounts		411,668			426,496
Certificates of Deposit of less than $100,000		146,384			118,403
Certificates of Deposit of $100,000 or more		132,288			95,279
Total Deposits		817,722			732,433
Securities Sold Under Agreements to Repurchase		1,474			1,307
Borrowings from the Federal Home Loan Bank		75,000			83,000
Other Liabilities		6,156			4,955
Total Liabilities		900,352			821,695
Shareholders’ Equity
Preferred Stock, Par Value $.01 Per Share:
Authorized 10,000,000 shares; None Issued		—			—
Common Stock, Par Value $5 Per Share:
Authorized 50,000,000 Shares; Issued 8,525,846 Shares in 2005 and 8,579,468 Shares in 2004		42,629			42,897
Paid-In Capital		9,462			10,397
Directors’ Deferred Plan		(1,313	)		(1,186	)
Retained Earnings		41,398			37,754
Accumulated Other Comprehensive Income		(703	)		333
Total Shareholders’ Equity		91,473			90,195
Total Liabilities and Shareholders’ Equity	$	991,825		$	911,890
Memorandum: Standby Letters of Credit	$	5,522		$	6,138

LSB Bancshares Inc.
Consolidated Statements of Income
(In thousands, except share data)

	Three Months Ended				Nine Months Ended
	September 30				September 30
	2005		2004		2005		2004
Interest Income
Interest and Fees on Loans	$	14,261	$	11,068	$	40,060	$	32,510
Interest on Investment Securities:
Taxable		916		853		2,672		2,444
Tax Exempt		366		370		1,080		1,124
Interest-Bearing Bank Balances		92		41		285		127
Federal Funds Sold		145		71		326		156
Total Interest Income		15,780		12,403		44,423		36,361
Interest Expense
Deposits		3,658		1,783		8,980		5,025
Securities Sold Under Agreements to Repurchase and Federal Funds Purchased		4		1		9		6
Borrowings from the Federal Home Loan Bank		912		831		2,824		2,461
Total Interest Expense		4,574		2,615		11,813		7,492
Net Interest Income		11,206		9,788		32,610		28,869
Provision for Loan Losses		715		1,104		2,314		2,396
Net Interest Income After Provision for Loan Losses		10,491		8,684		30,296		26,473
Noninterest Income
Service Charges on Deposit Accounts		1,774		1,875		5,027		5,381
Gains on Sales of Mortgages		105		133		383		390
Other Operating Income		1,519		1,532		4,731		5,014
Total Noninterest Income		3,398		3,540		10,141		10,785
Noninterest Expense
Personnel Expense		5,443		5,026		16,129		15,135
Occupancy Expense		454		437		1,374		1,317
Equipment Depreciation and Maintenance		555		615		1,722		1,708
Other Operating Expense		3,635		3,576		10,433		10,066
Total Noninterest Expense		10,087		9,654		29,658		28,226
Income Before Income Taxes		3,802		2,570		10,779		9,032
Income Taxes		1,302		793		3,617		2,866
Net Income	$	2,500	$	1,777	$	7,162	$	6,166
Earnings Per Share
Basic	$	0.29	$	0.21	$	0.84	$	0.72
Diluted	$	0.29	$	0.21	$	0.83	$	0.72
Weighted Average Shares Outstanding
Basic		8,534,578		8,579,468		8,558,693		8,573,443
Diluted		8,575,859		8,616,515		8,599,251		8,620,923

LSB Bancshares, Inc.
Financial Highlights
(In thousands, except ratios)

	Three Months Ended September 30
	2005			2004			Change
Financial Ratios:
Return on average assets		1.01	%		0.79	%		22	BP
Return on average shareholders’ equity		10.77	%		7.84	%		293
Net Interest Margin (FTE)		4.92	%		4.76	%		16
Average Balances:
Loans	$	764,035		$	692,001			10.4	%
Earning assets		914,606			840,742			8.8
Total assets		983,754			899,907			9.3
Interest-bearing deposits		678,866			638,474			6.3
Total deposits		800,611			727,561			10.0
Allowance for loan losses:
Beginning balance	$	8,466		$	8,112			4.4	%
Provision for loan losses		715			1,104			(35.2	)
Loans charged off		(635	)		(1,297	)		(51.0	)
Recoveries		138			87			58.6
Ending balance		8,684			8,006			8.5

	Nine Months Ended September 30
	2005			2004			Change
Financial Ratios:
Return on average assets		1.00	%		0.93	%		7	BP
Return on average shareholders’ equity		10.45	%		9.13	%		132
Net Interest Margin (FTE)		4.93	%		4.74	%		19
Average Balances:
Loans	$	749,715		$	683,490			9.7	%
Earning assets		896,847			827,497			8.4
Total assets		959,887			884,736			8.5
Interest-bearing deposits		661,687			627,630			5.4
Total deposits		770,823			713,745			8.0
Allowance for loan losses:
Beginning balance	$	7,962		$	7,846			1.5	%
Provision for loan losses		2,314			2,396			(3.4	)
Loans charged off		(1,977	)		(2,861	)		(30.9	)
Recoveries		385			625			(38.4	)
Ending balance		8,684			8,006			8.5
Nonperforming assets
Nonperforming Loans:
Past due 90 days or more	$	2,390		$	1,728			38.3	%
Nonaccrual loans		492			1,825			(73.0	)
Restructured loans		858			588			45.9
Total nonperforming loans		3,740			4,141			(9.7	)
Other real estate		4,713			1,577			198.9
Total nonperforming assets		8,453			5,718			47.8
Asset Quality Ratios
Nonperforming loans to total loans		0.49	%		0.81	%		(32	)BP
Nonperforming loans to total assets		0.38	%		0.63	%		(25	)
Allowance for loan losses to total loans		1.14	%		1.14	%		—
Net charge-offs to average loans		0.21	%		0.33	%		(12	)
Allowance for loan losses to nonperforming loans		2.32	X		1.93	X
BP— Denotes Basis Points