EXHIBIT 99.1
 | New Release LSBTheBank • P.O. Box 867 Lexington, NC 27293-0867 • www.lsbnc.com |
LSB Bancshares Reports 1st Quarter Financial Results
LEXINGTON, N.C., April 17, 2007 — LSB Bancshares, Inc. (Nasdaq: LXBK), parent company of Lexington State Bank, reported net income in the first quarter of 2007 of $1,770,000, or $0.21 per diluted share, compared to $1,741,000, or $0.20 per diluted share, in the first quarter of 2006. The increase in earnings was primarily attributable to higher noninterest income, expense reductions and a lower provision for loan losses in the first quarter of 2007 relative to the first quarter of 2006.
Net interest income decreased 6% to $10,249,000 in the first quarter of 2007 from $10,955,000 in the year-ago period. All of the decrease in net interest income was attributable to the pressure on the net interest margin, which was 4.53% in 2007’s first quarter, versus 4.92% in the year-ago quarter. Modest growth in average earning assets partially offset the negative effect of the margin compression.
The provision for loan losses was $957,000 in 2007’s first quarter, down from $1,407,000 in 2006’s first quarter. Noninterest income increased 6% to $3,383,000 in 2007’s first quarter from $3,199,000 in the year-ago quarter, excluding a one-time gain of $193,000 from a partnership investment in 2007’s first quarter. Noninterest expense was $10,065,000, down 2% from $10,282,000 in the first quarter of 2006.
Most major areas of the balance sheet were essentially unchanged from year-ago figures. Assets at March 31, 2007 were $985 million, while net loans totaled $763 million and deposits were $850 million. Shareholders’ equity, which represented 9.1% of assets, increased to $89.6 million, or $10.65 per share.
Nonperforming assets, including nonaccruing loans, accruing loans more than 90 days past due, restructured loans and other real estate owned, were $10.0 million at March 31, 2007, up from $7.6 million at the year-ago date and modestly higher than the $9.9 million in nonperforming assets at December 31, 2006. Included in the $10.0 million was $3.8 million in other real estate owned, $2.5 million 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 allowance for loan losses at the end of 2007’s first quarter was $9.7 million, or 1.26% of loans, versus $8.4 million, or 1.11% of loans, at the end of 2006’s first quarter.
According to LSB Bancshares Chairman, President and CEO Robert F. Lowe, “We are pleased to report higher earnings in what has continued to be a very challenging banking environment. Much of our recent progress in profitability has been due to initiatives to grow noninterest income and to contain costs. Longer term, we believe there will be additional opportunities to improve efficiency and boost profitability levels, particularly once we complete the merger with FNB Financial Services Corporation, which is currently expected to close in the third quarter of 2007.”
LSB Bancshares recently declared a quarterly cash dividend of $0.17 per share of common stock, payable on April 15, 2007, to shareholders of record on April 1, 2007. This is the same amount as the period one year ago.
LSB Bancshares, Inc. is the parent company of Lexington State Bank. Lexington State Bank, which
opened on July 5, 1949, is a community bank based in the Piedmont region of North Carolina. 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 LSB Bancshares, Inc. is traded on the Nasdaq Stock Market under the symbol “LXBK.” The LSB website, which links online banking users to LSB by internet, 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.; SunTrust Robinson Humphrey; 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.
CONTACT: Monty J. Oliver, EVP & CFO; 336-242-6207 or 336-248-6500 or 1-800-876-6505, ext 207.
LSB Bancshares Inc.
Consolidated Balance Sheets
(In thousands)
Consolidated Balance Sheets
(In thousands)
| March 31 | ||||||||
| 2007 | 2006 | |||||||
Assets | ||||||||
| Cash and Due from Banks | $ | 27,963 | $ | 40,998 | ||||
| Interest-Bearing Bank Balances | 2,965 | 999 | ||||||
| Federal Funds Sold | 8,473 | 22,327 | ||||||
| Investment Securities: | ||||||||
| Held to Maturity, at Amortized Cost | 29,887 | 29,873 | ||||||
| Available for Sale, at Market Value | 116,097 | 107,019 | ||||||
| Loans | 772,848 | 754,976 | ||||||
| Less, Allowance for Loan Losses | (9,722 | ) | (8,392 | ) | ||||
| Net Loans | 763,126 | 746,584 | ||||||
| Premises and Equipment | 19,902 | 19,238 | ||||||
| Other Assets | 17,070 | 18,713 | ||||||
| Total Assets | 985,483 | 985,751 | ||||||
Liabilities | ||||||||
| Deposits: | ||||||||
| Demand | 163,101 | 140,526 | ||||||
| Savings, N.O.W. and Money Market Accounts | 387,263 | 418,174 | ||||||
| Certificates of Deposit of less than $100,000 | 144,695 | 143,988 | ||||||
| Certificates of Deposit of $100,000 or more | 155,327 | 139,939 | ||||||
| Total Deposits | 850,386 | 842,627 | ||||||
| Securities Sold Under Agreements to Repurchase | 784 | 837 | ||||||
| Borrowings from the Federal Home Loan Bank | 37,000 | 43,000 | ||||||
| Unfunded Projected Pension and Other Postretirement Benefit Obligation | 1,154 | — | ||||||
| Other Liabilities | 6,551 | 7,337 | ||||||
| Total Liabilities | 895,875 | 893,801 | ||||||
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 8,412,567 Shares in 2007 and 8,528,017 Shares in 2006 | 42,063 | 42,640 | ||||||
| Paid-In Capital | 8,091 | 9,472 | ||||||
| Directors’ Deferred Plan | (1,468 | ) | (1,348 | ) | ||||
| Retained Earnings | 43,000 | 42,715 | ||||||
| Accumulated Other Comprehensive Loss | (2,078 | ) | (1,529 | ) | ||||
| Total Shareholders’ Equity | 89,608 | 91,950 | ||||||
| Total Liabilities and Shareholders’ Equity | $ | 985,483 | $ | 985,751 | ||||
| Memorandum: Standby Letters of Credit | $ | 3,947 | $ | 5,365 | ||||
LSB Bancshares Inc.
Consolidated Statements of Income
(In thousands, except share data)
Consolidated Statements of Income
(In thousands, except share data)
| Three Months Ended | ||||||||
| March 31 | ||||||||
| 2007 | 2006 | |||||||
Interest Income | ||||||||
| Interest and Fees on Loans | $ | 15,338 | $ | 14,489 | ||||
| Interest on Investment Securities: | ||||||||
| Taxable | 1,235 | 978 | ||||||
| Tax Exempt | 318 | 319 | ||||||
| Interest-Bearing Bank Balances | 101 | 82 | ||||||
| Federal Funds Sold | 102 | 249 | ||||||
| Total Interest Income | 17,094 | 16,117 | ||||||
Interest Expense | ||||||||
| Deposits | 6,016 | 4,549 | ||||||
| Securities Sold Under Agreements to Repurchase | 2 | 5 | ||||||
| Borrowings from the Federal Home Loan Bank | 827 | 608 | ||||||
| Total Interest Expense | 6,845 | 5,162 | ||||||
Net Interest Income | 10,249 | 10,955 | ||||||
| Provision for Loan Losses | 957 | 1,407 | ||||||
| Net Interest Income After Provision for Loan Losses | 9,292 | 9,548 | ||||||
Noninterest Income | ||||||||
| Service Charges on Deposit Accounts | 1,483 | 1,592 | ||||||
| Gains on Sales of Mortgages | 76 | 78 | ||||||
| Other Operating Income | 1,824 | 1,529 | ||||||
| Total Noninterest Income | 3,383 | 3,199 | ||||||
Noninterest Expense | ||||||||
| Personnel Expense | 5,318 | 5,723 | ||||||
| Occupancy Expense | 503 | 479 | ||||||
| Equipment Depreciation and Maintenance | 599 | 530 | ||||||
| Other Operating Expense | 3,645 | 3,550 | ||||||
| Total Noninterest Expense | 10,065 | 10,282 | ||||||
| Income Before Income Taxes | 2,610 | 2,465 | ||||||
| Income Taxes | 840 | 724 | ||||||
Net Income | $ | 1,770 | $ | 1,741 | ||||
Earnings Per Share | ||||||||
| Basic | $ | 0.21 | $ | 0.20 | ||||
| Diluted | $ | 0.21 | $ | 0.20 | ||||
Weighted Average Shares Outstanding | ||||||||
| Basic | 8,415,078 | 8,528,327 | ||||||
| Diluted | 8,426,763 | 8,573,069 | ||||||
LSB Bancshares, Inc.
Financial Highlights
(In thousands, except ratios)
Financial Highlights
(In thousands, except ratios)
| Three Months Ended March 31 | ||||||||||||
| 2007 | 2006 | Change | ||||||||||
| Financial Ratios: | ||||||||||||
| Return on average assets | 0.73 | % | 0.72 | % | 1 | BP | ||||||
| Return on average shareholders’ equity | 7.96 | % | 7.59 | % | 37 | |||||||
| Net Interest Margin (FTE) | 4.53 | % | 4.92 | % | (39 | ) | ||||||
| Average Balances: | ||||||||||||
| Loans | $ | 770,366 | $ | 754,682 | 2.1 | % | ||||||
| Earning assets | 927,251 | 913,339 | 1.5 | |||||||||
| Total assets | 983,492 | 979,251 | 0.4 | |||||||||
| Interest-bearing deposits | 672,771 | 702,253 | (4.2 | ) | ||||||||
| Total deposits | 825,287 | 829,024 | (0.5 | ) | ||||||||
| Allowance for loan losses: | ||||||||||||
| Beginning balance | $ | 9,564 | $ | 8,440 | 13.3 | % | ||||||
| Provision for loan losses | 957 | 1,407 | (32.0 | ) | ||||||||
| Loans charged-off | (1,080 | ) | (1,545 | ) | (30.1 | ) | ||||||
| Recoveries | 281 | 90 | 212.2 | |||||||||
| Ending balance | 9,722 | 8,392 | 15.8 | |||||||||
| Nonperforming assets | ||||||||||||
| Nonperforming Loans: | ||||||||||||
| Past due 90 days or more | $ | 1,878 | $ | 2,038 | (7.9 | )% | ||||||
| Nonaccrual loans | 4,231 | 242 | 1,648.3 | |||||||||
| Restructured loans | 97 | 617 | (84.3 | ) | ||||||||
| Total nonperforming loans | 6,206 | 2,897 | 114.2 | |||||||||
| Other real estate | 3,803 | 4,689 | (18.9 | ) | ||||||||
| Total nonperforming assets | 10,009 | 7,586 | 31.9 | |||||||||
| Asset Quality Ratios | ||||||||||||
| Nonperforming loans to total loans | 0.80 | % | 0.38 | % | 42 | BP | ||||||
| Nonperforming loans to total assets | 0.63 | % | 0.29 | % | 34 | |||||||
| Allowance for loan losses to total loans | 1.26 | % | 1.11 | % | 15 | |||||||
| Net charge-offs to average loans | 0.10 | % | 0.19 | % | (9 | ) | ||||||
| Allowance for loan losses to nonperforming loans | 1.57 | X | 2.90 | X | ||||||||
| BP— Denotes Basis Points | ||||||||||||
(END)