LSB Financial (LSBI) 10-Q 2005 Q2 Quarterly report

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended June 30, 2005
¨	OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from ______ to ________

Commission file number 0-25070
LSB FINANCIAL CORP. (Exact Name of Registrant as Specified in its Charter)
Indiana (State or other jurisdiction of incorporation or organization)	35-1934975 (I.R.S. Employer Identification No.)
101 Main Street, Lafayette, Indiana (Address of principal executive offices)	47902 (Zip Code)
(765) 742-1064 (Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   YES  [X]   ��  NO  [   ]

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).   YES  [   ]      NO  [X]

State the number of shares outstanding of each of the issuer’s classes of common equity,

as of the latest practicable date:

CLASS	OUTSTANDING AT AUGUST 10, 2005
Common stock, par value $.01 per share	1,472,959

LSB FINANCIAL CORP.

INDEX

PART I. FINANCIAL INFORMATION	1
Item 1. Financial Statements (Unaudited)	1
Consolidated Balance Sheets	1
Consolidated Statements of Income	2
Consolidated Statements of Changes in Shareholders’ Equity	3
Consolidated Statements of Cash Flows	4
Notes to Consolidated Financial Statements	5-7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	7-17
Item 3. Quantitative and Qualitative Disclosures About Market Risk	18
Item 4. Controls and Procedures	19
PART II. OTHER INFORMATION	20
Item 1. Legal Proceedings	20
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	20
Item 3. Defaults Upon Senior Securities	20
Item 4. Submission of Matters to a Vote of Security Holders	21
Item 5. Other Information	21
Item 6. Exhibits	21
SIGNATURES	22
EXHIBIT INDEX	23

PART I FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

LSB FINANCIAL CORP.

Consolidated Condensed Balance Sheets

(Dollars in thousands except per share data)

	June 30, 2005 (unaudited)			December 31, 2004
Assets
Cash and due from banks	$	1,782		$	2,395
Short-term investments		7,327			6,818
Cash and cash equivalents		9,109			9,213
Available-for-sale securities		8,715			7,947
Loans held for sale		779			1,050
Total loans		331,738			319,972
Less: Allowance for loan losses		(2,264	)		(2,095	)
Net loans		329,474			317,877
Premises and equipment, net		6,672			6,750
Federal Home Loan Bank stock, at cost		4,197			4,110
Bank owned life insurance		2,671			2,627
Interest receivable and other assets		5,762			5,471
Total Assets	$	367,379		$	355,045
Liabilities and Shareholders’ Equity
Liabilities
Deposits		259,671			256,631
Federal Home Loan Bank advances		74,008			66,808
Interest payable and other liabilities		1,864			1,213
Total liabilities		335,543			324,652
Commitments and Contingencies
Shareholders’ Equity
Common stock, $.01 par value       Authorized - 7,000,000 shares       Issued and outstanding 2005 - 1,466,256 shares, 2004 - 1,437,250 shares		14			14
Additional paid-in-capital		8,455			8,235
Retained earnings		23,500			22,304
Unearned recognition and retention plan (RRP) shares		(36	)		(51	)
Unearned ESOP compensation		(75	)		(103	)
Accumulated other comprehensive loss		(22	)		(6	)
Total shareholders’ equity		31,836			30,393
Total liabilities and shareholders’ equity	$	367,379		$	355,045

See notes to consolidated condensed financial statements.

1

LSB FINANCIAL CORP.

Consolidated Condensed Statements of Income

(Dollars in thousands, except per share data)

(Unaudited)

	Three months Ended June 30,				Six months Ended June 30,
	2005		2004		2005		2004
Interest and Dividend Income
Loans	$	5,157	$	4,608	$	10,151	$	9,100
Securities
Taxable		77		95		155		214
Tax-exempt		40		41		72		83
Other		25		16		43		24
Total interest and dividend income		5,299		4,760		10,421		9,421
Interest Expense
Deposits		1,594		1,303		3,097		2,539
Borrowings		754		766		1,496		1,523
Total interest expense		2,348		2,069		4,593		4,062
Net interest income		2,951		2,691		5,828		5,359
Provision for Loan Losses		125		125		300		250
Net Interest Income After Provision for Loan Losses		2,826		2,566		5,528		5,109
Non-interest income
Deposit account service charges and fees		281		223		487		435
Net gains on loan sales		108		139		173		266
Gain on sale of securities		0		11		0		11
Other		218		229		431		404
Total non-interest income		607		602		1,091		1,116
Non-interest Expense
Salaries and employee benefits		1,096		1,081		2,288		2,142
Net occupancy and equipment expense		265		338		541		631
Computer service		127		94		226		190
Advertising		109		104		150		182
Other		476		440		911		774
Total non-interest expense		2,073		2,057		4,116		3,919
Income Before Income Taxes		1,360		1,111		2,503		2,306
Provision for Income Taxes		467		357		843		832
Net income	$	893	$	754	$	1,660	$	1,474
Basic Earnings Per Share	$	0.61	$	0.53	$	1.15	$	1.05
Diluted Earnings Per Share	$	0.60	$	0.51	$	1.13	$	1.01

See notes to consolidated condensed financial statements.

2

LSB FINANCIAL CORP.

Consolidated Condensed Statements of Changes in Shareholders’ Equity

For the Six Months Ended June 30, 2005 and 2004

(Dollars in thousands)

(Unaudited)

	Common Stock		Additional Paid-In Capital			Retained Earnings			Benefit Plans Compensation			Accumulated Other Comprehensive Income (Loss)			Total
Balance, January 1, 2004	$	14	$	8,020		$	19,841			($239	)	$	91		$	27,727
Comprehensive income
Net income							1,474									1,474
Change in unrealized appreciation (depreciation) on available-for-sale securities, net of taxes													(125	)		(125	)
Total comprehensive income																1,349
Dividends on common stock, $0.29 per share							(388	)								(388	)
Stock options exercised (6,295 shares)				80												80
Amortization of RRP expense										15						15
ESOP shares earned				93						28						121
Balance, June 30, 2004	$	14	$	8,193		$	20,927			($196	)		($34	)	$	28,904
Balance, January 1, 2005	$	14	$	8,235		$	22,304		$	(154	)	$	(6	)	$	30,393
Comprehensive income
Net income							1,660									1,660
Change in unrealized appreciation (depreciation) on available-for-sale securities, net of taxes													(16	)		(16	)
Total comprehensive income																1,644
Dividends on common stock, $0.32 per share							(464	)								(464	)
Purchase and retirement of stock (20,087 shares)				(528	)											(528	)
Stock options exercised (61,529 shares)				249												249
Stock option and RRP tax benefit				405												405
Amortization of RRP expense										15						15
ESOP shares earned				94						28						122
Balance, June 30, 2005	$	14	$	8,455		$	23,500			($111	)		($22	)	$	31,836

See notes to consolidated condensed financial statements.

3

LSB FINANCIAL CORP.

Consolidated Condensed Statements of Cash Flows

(Dollars in thousands)

(Unaudited)

	Six months ended June 30,
	2005			2004
Operating Activities
Net income	$	1,660		$	1,474
Items not requiring (providing) cash
Depreciation		171			286
Provision for loan losses		300			250
Gain on sale of securities		0			(11	)
Amortization of premiums and discounts on securities		18			172
Federal Home Loan Bank stock dividend		(87	)		(94	)
ESOP shares earned		122			121
Gain on sale of loans		81			135
Loans originated for sale		(4,673	)		(17,145	)
Proceeds on loans sold		4,863			16,481
Changes in
Interest receivable and other assets		96			45
Interest payable and other liabilities		650			41
Net cash provided by operating activities		3,201			1,755
Investing Activities
Purchases of available-for-sale securities		(997	)		(1,383	)
Proceeds from maturities of available-for-sale securities		186			2,594
Proceeds from sales of available-for-sale securities		0			1,355
Net change in loans		(11,897	)		(26,728	)
Purchase of premises and equipment		(94	)		(51	)
Net cash from investing activities		(12,802	)		(24,213	)
Financing Activities
Net change in demand deposits, money market, NOW and savings accounts		(4,243	)		111
Net change in certificates of deposit		7,283			16,612
Proceeds from Federal Home Loan Bank advances		27,500			17,500
Repayment of Federal Home Loan Bank advances		(20,300	)		(12,000	)
Proceeds from stock options exercised		249			80
Repurchase of stock		(528	)		0
Dividends paid		(464	)		(388	)
Net cash provided by financing activities		9,497			21,915
Increase (Decrease) in Cash and Cash Equivalents		(104	)		(543	)
Cash and Cash Equivalents, Beginning of Period		9,213			9,397
Cash and Cash Equivalents, End of Period	$	9,109		$	8,854
Supplemental Cash Flows Information
Interest paid		4,499			3,998
Income taxes paid		256			490
Supplemental Non-Cash Disclosures
Capitalization of mortgage servicing rights		92			13
Tax benefit related to stock options and RRP		405			0
See notes to consolidated condensed financial statements

4

LSB FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2005

Note 1 - General

The financial statements were prepared in accordance with the instructions for Form 10-Q and, therefore, do not include all of the disclosures necessary for a complete presentation of financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United States of America. These interim financial statements have been prepared on a basis consistent with the annual financial statements and include, in the opinion of management, all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of the results of operations, cash flows and financial position for and at the end of such interim periods. All outstanding shares and per share figures have been adjusted to reflect a 5% stock dividend payable by LSB Financial Corp. (the “Company” or “LSB Financial”) to shareholders of record on October 8, 2004. The consolidated condensed balance sheet of LSB Financial Corp. as of December 31, 2004 has been derived from the audited consolidated balance sheet of LSB Financial Corp. as of that date.

Certain information and note disclosures normally included in the Company’s annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. These condensed (consolidated) financial statements should be read in conjunction with the (consolidated) financial statements and notes thereto included in the Company’s Form 10-KSB annual report for 2004 filed with the Securities and Exchange Commission. The results of operations for the period are not necessarily indicative of the results to be expected for the full year.

Stock Options: Employee compensation expense under stock options is reported using the intrinsic value method. No stock-based compensation cost for stock options is reflected in net income, as all options granted had an exercise price equal to or greater than the market price of the underlying common stock at date of grant. The following table illustrates the effect on net income and earnings per share if expense was measured using the fair value recognition provisions of Statement of Financial Accounting Standards (“SFAS”) No. 123, Accounting for Stock-Based Compensation.

	Three months ended June 30,						Six months ended June 30,
	2005			2004			2005			2004
Net income as reported	$	893		$	754		$	1,660		$	1,474
Deduct: Stock-based compensation expense determined under fair value based method		(11	)		(5	)		(22	)		(9	)
Pro forma net income	$	882		$	749		$	1,638		$	1,465
Basic earnings per share as reported	$	0.61		$	0.53		$	1.15		$	1.05
Pro forma basic earnings per share		0.61			0.53			1.13			1.05
Diluted earnings per share as reported		0.60			0.51			1.13			1.01
Pro forma diluted earnings per share		0.60			0.51			1.11			1.01

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Note 2 - Principles of Consolidation

The accompanying financial statements include the accounts of LSB Financial Corp., its wholly owned subsidiary Lafayette Savings Bank, FSB (“Lafayette Savings”), and Lafayette Savings’ wholly owned subsidiaries, LSB Service Corporation and Lafayette Insurance and Investments, Inc. All significant intercompany transactions have been eliminated upon consolidation.

Note 3 - Earnings per share

Earnings per share are based upon the weighted average number of shares outstanding during the period. Diluted earnings per share further assume the issuance of any potentially dilutive shares. All shares were included in the diluted earnings per share calculation as their effect would be dilutive. Unearned ESOP shares are not considered to be outstanding for the earnings per share computation. The following table presents information about the number of shares used to compute earnings per share and the results of the computations:

	Three months ended June 30,		Six months ended June 30,
	2005	2004	2005	2004
Weighted average shares outstanding (excluding unearned ESOP shares)	1,454,606	1,405,940	1,449,963	1,402,153
Shares used to compute diluted earnings per share	1,478,163	1,463,180	1,473,243	1,460,799
Earnings per share	$0.61	$0.53	$1.15	$1.05
Diluted earnings per share	$0.60	$0.51	$1.13	$1.01

Note 4 - Future Accounting Pronouncements

In April 2005, the SEC issued an amendment to SFAS 123 (SFAS 123R), which allows companies to implement SFAS 123R at the beginning of their next fiscal year, instead of the next reporting period, that begins after June 15, 2005. The new rule does not change the accounting required by SFAS 123R, it only changes the dates for compliance with the standard. Early adoption is permitted in periods in which financial statements have not yet been issued. The Company expects to adopt SFAS 123R on January 1, 2006.

In June, 2005 the Financial Accounting Standards Board (FASB) Board decided not to provide additional guidance on the meaning of other-than-temporary impairment, but directed the FASB staff to issue a staff position (FSP) which will be retitled FSP 115-1, The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments. The final FSP will supersede EITF Issue 03-1, TheMeaning of Other-Than-Temporary Impairment and Its Application to Certain Investments, and EITF Topic D-44, Recognition of Other-Than-Temporary Impairment upon the Planned Sale of a Security Whose Cost Exceeds Fair Value. FSP 115-1 will replace guidance in EITF Issue 03-1 on loss recognition with references to existing other-than-temporary impairment guidance, such as SFAS No. 115, Accounting for Certain Investments in Debt and Equity Securities. FSP 115-1 will clarify that an investor should recognize an impairment loss no later than when the impairment is deemed other than temporary, even if a decision to sell has not been made.

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FSP 115-1 will be effective for other-than-temporary impairment analysis conducted in periods beginning after September 15, 2005. The Company has consistently followed the loss recognition guidance in SFAS 115, so the adoption of FSP 115-1 will not have any significant impact on the Company's financial condition or results of operation.

Item 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

Executive Summary

LSB Financial Corp. is an Indiana corporation which was organized in 1994 by Lafayette Savings Bank, FSB for the purpose of becoming a thrift institution holding company. Lafayette Savings is a federally chartered stock savings bank headquartered in Lafayette, Indiana. References in this Form 10-Q to "we," "us," and "our" refer to LSB Financial and/or Lafayette Savings as the context requires.

Lafayette Savings has been, and intends to continue to be, a community-oriented financial institution. Our principal business consists of attracting retail deposits from the general public and investing those funds primarily in permanent first mortgage loans secured by owner-occupied, one- to four-family residences, and to a lesser extent, non-owner occupied one- to four-family residential, commercial real estate, multi-family, construction and development, consumer and commercial business loans. Our revenues are derived principally from interest on mortgage and other loans and interest on securities.

Tippecanoe County and the eight surrounding counties comprise Lafayette Savings' primary market area. Lafayette is the county seat of Tippecanoe County, and West Lafayette is the home of Purdue University. The Greater Lafayette area typically shows better growth and lower unemployment rates than Indiana or the national economy because of the diverse employment base. The unemployment rate at December 2004 was 3.7% in the greater Lafayette area and 5.0% for the State of Indiana compared to May 2005, the most recent data, which showed unemployment rates of 4.1% and 4.6%, respectively. The May rates show an improvement over the inflated employment rates in the months following the holiday season.

Our primary source of revenue is interest income primarily on loans and to a much lesser extent, on investments which we hold mainly as a source of liquidity, and on Federal Home Loan Bank stock. In periods of very low interest rates when many borrowers refinance their mortgages, often to fixed rate products, we typically generate income by selling these loans on the secondary market at a gain. While we forego future interest income by selling these mortgages, we also avoid the risk of having a large portfolio of low-rate, fixed-rate loans should interest rates rise and remain high. Our loan portfolio typically consists of about 75% variable-rate products.

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Our primary source of income is net interest income, which is the difference between the interest income earned on our loan and investment portfolios and the interest expense incurred on deposits and borrowings. Our net interest income depends on the balance of our loan and investment portfolios and the size of our net interest margin, which is the difference between the income generated from loans and the cost of the funding. A major area of concern in the growth of net interest income is the continuing flattening of the yield curve. Short-term rates increased steadily over 2004 and are expected to continue to increase in 2005. Long-term rates, however, have remained flat. Because deposits are generally tied to shorter-term market rates, and loans are generally tied to longer-term rates, the shrinking spread between the two has made it more difficult to maintain desired operating income levels. Our expectation is that short-term rates will continue to rise as the Federal Reserve Board responds to inflation concerns and the growing strength of the economy. Long-term rates have remained low because the purchase of U.S. government bonds has driven up the price of long-term bonds and kept their returns low. Until this situation changes we expect the yield curve to remain fairly flat.

Rate changes could be expected to have an impact on interest income. Rising rates generally increase borrower preference for variable-rate products which we typically keep in our portfolio. Additionally, existing adjustable rate loans can be expected to reprice to higher rates, both of which could be expected to have a favorable impact on interest income. Alternatively, continuing low interest rates could have a negative impact on our interest income as new loans are put on the books at comparatively low rates and our existing adjustable rate loans reprice to lower rates. Even if rates do fall, because so many borrowers refinanced their mortgages in the last few years, we do not expect to see a return to a high volume of refinancing. However, low rates may be expected to encourage borrowers to initiate additional real estate related purchases.

Our primary expense is interest on deposits and Federal Home Loan Bank advances which are used to fund loan growth. We offer customers in our market area time deposits for terms ranging from three months to five years, checking accounts and savings accounts. We also purchase brokered deposits and Federal Home Loan Bank advances as needed to provide funding or to improve our interest rate risk position. Generally, when interest rates are low, depositors will choose shorter-term products and conversely when rates are high, depositors will choose longer-term products.

We consider expected changes in interest rates when structuring our interest earning assets and our interest bearing liabilities. If rates are expected to increase we try to book shorter-term assets that will reprice relatively quickly to higher rates over time, and book longer-term liabilities that will remain for a longer time at lower rates. Conversely, if rates are expected to fall, we intend to structure our balance sheet such that loans will reprice more slowly to lower rates and deposits will reprice more quickly. We currently offer a three-year and a five-year certificate of deposit that allows depositors one opportunity to have their rate adjusted to the market rate at a future date to encourage them to choose longer-term deposit products. However, since we are not able to predict market interest rate fluctuations, our asset/liability management strategy may not prevent interest rate changes from having an adverse effect on our results of operations and financial condition.

8

Our results of operations may also be affected by general and local competitive conditions, particularly those with respect to changes in market interest rates, government policies and actions of regulatory authorities.

Critical Accounting Policies

Generally accepted accounting principles are complex and require management to apply significant judgments to various accounting, reporting and disclosure matters. Management of LSB Financial Corp. must use assumptions and estimates to apply these principles where actual measurement is not possible or practical. For a complete discussion of LSB Financial Corp.'s significant accounting policies, see Note 1 to the Consolidated Financial Statements as of December 31, 2004. Certain policies are considered critical because they are highly dependent upon subjective or complex judgments, assumptions and estimates. Changes in such estimates may have a significant impact on the financial statements. Management has reviewed the application of these policies with the Audit Committee of LSB Financial Corp.'s Board of Directors. Those policies include the following:

Allowance for Loan Losses

The allowance for loan losses represents management's estimate of probable losses inherent in Lafayette Savings’ loan portfolios. In determining the appropriate amount of the allowance for loan losses, management makes numerous assumptions, estimates and assessments.

The strategy also emphasizes diversification on an industry and customer level, regular credit quality reviews and quarterly management reviews of large credit exposures and loans experiencing deterioration of credit quality.

Lafayette Savings’ allowance consists of three components: probable losses estimated from individual reviews of specific loans, probable losses estimated from historical loss rates, and probable losses resulting from economic or other deterioration above and beyond what is reflected in the first two components of the allowance.

Larger commercial loans that exhibit probable or observed credit weaknesses are subject to individual review. Where appropriate, reserves are allocated to individual loans based on management's estimate of the borrower's ability to repay the loan given the availability of collateral, other sources of cash flow and legal options available to Lafayette Savings. Included in the review of individual loans are those that are impaired as provided in SFAS No. 114, Accounting by Creditors for Impairment of a Loan. Any allowances for impaired loans are determined by the present value of expected future cash flows discounted at the loan's effective interest rate or fair value of the underlying collateral. Historical loss rates are applied to other commercial loans not subject to specific reserve allocations.

9

Homogenous smaller balance loans, such as consumer installment and residential mortgage loans are not individually risk graded. Reserves are established for each pool of loans based on the expected net charge-offs for one year. Loss rates are based on the average net charge-off history by loan category.

Historical loss rates for commercial and consumer loans may be adjusted for significant factors that, in management's judgment, reflect the impact of any current conditions on loss recognition. Factors which management considers in the analysis include the effects of the national and local economies, trends in the nature and volume of loans (delinquencies, charge-offs and nonaccrual loans), changes in loan mix, asset quality trends, risk management and loan administration, changes in the internal lending policies and credit standards, collection practices and examination results from bank regulatory agencies and Lafayette Savings' internal loan review.

An unallocated reserve is maintained to recognize the imprecision in estimating and measuring loss when evaluating reserves for individual loans or pools of loans. Allowances on individual loans are reviewed quarterly and historical loss rates are reviewed annually and adjusted as necessary based on changing borrower and/or collateral conditions and actual collection and charge-off experience.

Lafayette Savings’ primary market area for lending is Tippecanoe County, Indiana. When evaluating the adequacy of allowance, consideration is given to this regional geographic concentration and the closely associated effect changing economic conditions have on Lafayette Savings’ customers.

Mortgage Servicing Rights

Mortgage servicing rights (MSRs) associated with loans originated and sold, where servicing is retained, are capitalized and included in other intangible assets in the consolidated balance sheet. The value of the capitalized servicing rights represents the present value of the future servicing fees arising from the right to service loans in the portfolio. Critical accounting policies for MSRs relate to the initial valuation and subsequent impairment tests. The methodology used to determine the valuation of MSRs requires the development and use of a number of estimates, including anticipated principal amortization and prepayments of that principal balance. Events that may significantly affect the estimates used are changes in interest rates, mortgage loan prepayment speeds and the payment performance of the underlying loans. The carrying value of the MSRs is periodically reviewed for impairment based on a determination of fair value. For purposes of measuring impairment, the servicing rights are compared to a valuation prepared based on a discounted cash flow methodology, utilizing current prepayment speeds and discount rates. Impairment, if any, is recognized through a valuation allowance and is recorded as amortization of intangible assets.

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Financial Condition

Comparison of Financial Condition at June 30, 2005 and December 31, 2004

Our total assets increased $12.3 million or 3.47% during the six months from December 31, 2004 to June 30, 2005. This increase was primarily due to a $11.6 million increase in total net loans and a $768,000 increase in securities available for sale. Management attributes the increase in loans primarily to continuing relatively low interest rates which encourages investment in the real estate market, and to an increasing preference for lower-rate, adjustable-rate mortgage products which we keep in our portfolio. The increase in assets was funded by a $7.2 million increase in Federal Home Loan Bank advances and a $3.0 million increase in deposits. Most of the deposit increase was due to a $3.6 million increase in brokered funds. We use Federal Home Loan Bank advances and brokered deposits as needed because of their availability, predictability and generally competitive price, or to improve our interest rate risk position. Shareholders’ equity increased from $30.4 million at December 31, 2004 to $31.8 million at June 30, 2005, an increase of $1.4 million, due primarily to net income and the tax benefit from the exercise of stock options, offset in part by the payment of a cash dividend.

Non-performing assets, which include non-accruing loans, accruing loans 90 days past due and foreclosed assets, increased from $5.9 million at December 31, 2004 to $8.5 million at March 31, 2005 and stayed fairly constant at $8.6 million at June 30, 2005. Non-performing loans at June 30, 2005 consisted of $4.8 million of loans on one- to four-family residential real estate which had an average loan-to-appraisal value of 65.43%, $3.0 million of loans on land or commercial property with an average loan-to-appraisal value of 37.39%, $39,000 of commercial business loans and $6,000 of non-accruing consumer loans. Non-performing assets also include $781,000 in foreclosed assets. At June 30, 2005, our allowance for loan losses equaled 0.68% of total loans compared to 0.65% at December 31, 2004. The allowance for loan losses at June 30, 2005 totaled 26.32% of non-performing assets compared to 35.38% at December 31, 2004, and 28.95% of non-performing loans at June 30, 2005 compared to 44.66% at December 31, 2004. Our non-performing assets equaled 2.34% of total assets at June 30, 2005 compared to 1.67% at December 31, 2004. Non-performing assets totaling $161,000 were charged off in the first six months of 2005. These charge-offs were largely covered by existing reserves and there was no need for additional provisions to the allowance for the amounts charged off. Although we believe we use the best information available to determine the adequacy of our allowance for loan losses, future adjustments to the allowance may be necessary, and net income could be significantly affected, if circumstances and/or economic conditions cause substantial changes in the estimates we use in making the determinations about the levels of the allowance for losses. Additionally, various regulatory agencies, as an integral part of their examination process, periodically review our allowance for loan losses. These agencies may require the recognition of additions to the allowance based upon their judgments of information available at the time of their examination.

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 Shareholders’ equity increased $1.4 million, or 4.75%, during the first six months of 2005 primarily as a result of net income of $1.7 million and a $405,000 tax benefit from the exercise of 61,529 stock options, partially offset by our payment of $464,000 in dividends on common stock, and the repurchase of 20,087 shares of our stock as part of a stock repurchase plan. Shareholders’ equity to total assets was 8.67% at June 30, 2005 compared to 8.57% at December 31, 2004.

Results of Operations

Comparison of Operating Results for the Six Months and the Quarter Ended June 30, 2005 and June 30, 2004

General. Net income for the six months ended June 30, 2005 was $1.7 million, an increase of $186,000 or 12.62%, over the six months ended June 30, 2004. Net income for the quarter ended June 30, 2005 was $893,000, an increase of $139,000 or 18.44% over the comparable quarter in 2004. These increases were primarily due to increases in net interest income, partially offset by decreases in the gain on sale of loans due to the decreased originations and refinancings of fixed-rate mortgage loans and the sale of such loans on the secondary market caused by stagnant mortgage rates, increases in non-interest expenses, and a $50,000 increase in the provision for loan losses.

Net Interest Income. Net interest income for the six months ended June 30, 2005 increased $469,000, or 8.75%, over the same period in 2004. The increase in net interest income was primarily due to a $35.9 million increase in average loans receivable. Our net interest margin (net interest income divided by average interest-earning assets) remained virtually unchanged, decreasing by one basis point from 3.36% at June 30, 2004 to 3.35% for the six months ended June 30, 2005. The increase in average loans was funded primarily by a $26.6 million increase in interest-earning liabilities with an increase in average rate from 2.66% to 2.77%, and partially by a $6.9 million decrease in average investment securities as money from maturing investments was reinvested in higher earning loans. Net interest income for the second quarter of 2005 increased $260,000, or 9.67%, compared to the same period in 2004, due to similar reasons as those noted above. Average loans receivable increased by $30.5 million from the second quarter of 2004 to the second quarter of 2005, funded by a $21.5 million increase in interest-earning liabilities with an increase in average rate from 2.64% to 2.81%, and partially from a $5.7 million decrease in investment securities.

Interest income on loans increased $1.1 million or 11.55% for the six months ended June 30, 2005 compared to the same six months in 2004. This increase was the result of a $35.9 million increase in average loans outstanding partially offset by a decrease in the average yield on loans from 6.24% for the first six months of 2004 to 6.20% for the first six months of 2005, due to continuing low long-term interest rates in the economy. The increase in the loan portfolio was due largely to borrowers continuing to take advantage of relatively low market interest rates to refinance existing mortgages and initiate other real estate related purchases. The occasional, slight increase in interest rates triggered borrower interest in lower-rate, adjustable-rate mortgage products which we typically hold in our loan portfolio. Interest income on loans increased $549,000 for the second quarter of 2005 compared to the second quarter of 2004 due primarily to the $30.5 million increase in average loans receivable and the increase in the average yield on loans from 6.15% to 6.25% over the same period.

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Interest earned on other investments and Federal Home Loan Bank stock decreased by $51,000 for the six months ended June 30, 2005 compared to the same period in 2004. This was primarily the result of a $6.9 million decrease in average balances partially offset by an increase in the average yield on the average balance of other investments and Federal Home Loan Bank stock from 2.32% for the first six months of 2004 to 2.59% over the same period in 2005. The decrease in the average balance was generally due to those funds being reinvested into longer-term loans or investments. Interest income on other investments and Federal Home Loan Bank stock decreased $10,000 for the second quarter of 2005 compared to the second quarter of 2004 due to a decrease of $5.7 million in average balances offset by an increase in the average yield on the average balance of other investments and Federal Home Loan Bank stock from 2.25% for the second quarter of 2004 to 2.67% over the same period in 2005, as maturing investments were used for loan funding needs.

Interest expense for the six months ended June 30, 2005 increased $531,000 or 13.07% over the same period in 2004. This increase was due to a $26.7 million increase in average interest-bearing liabilities as well as an increase in the average rate paid on interest-bearing liabilities from 2.66% for the first six months of 2004 to 2.77% for the first six months of 2005. Interest expense increased $279,000 for the second quarter of 2005from the same period in 2004 primarily due to a $21.5 million increase in average interest-bearing liabilities and an increase in the average rate paid on average interest-bearing liabilities from 3.64% for the second quarter of 2004 to 2.81% for the same period in 2005.

Provision for Loan Losses. We establish our provision for loan losses based on a systematic analysis of risk factors in the loan portfolio. The analysis includes consideration of concentrations of credit, past loss experience, current economic conditions, the amount and composition of the loan portfolio, estimated fair value of the underlying collateral, delinquencies and industry standards. On at least a quarterly basis, a formal analysis of the adequacy of the allowance is prepared and reviewed by management and the Board of Directors. This analysis serves as a point in time assessment of the level of the allowance and serves as a basis for provisions for loan losses.

Our analysis of the loan portfolio begins at the time the loan is originated, when each loan is assigned a risk rating. If the loan is a commercial credit, the borrower will also be assigned a similar rating. Loans that continue to perform as agreed will be included in one of ten non-classified loan categories. Portions of the allowance are allocated to loan portfolios in the various risk grades, based upon a variety of factors, including historical loss experience, trends in the type and volume of the loan portfolios, trends in delinquent and non-performing loans, and economic trends affecting our market. Loans no longer performing as agreed are assigned a lower risk rating, eventually resulting in their being regarded as classified loans. A collateral re-evaluation is completed on all classified loans. This process results in the allocation of specific amounts of the allowance to individual problem loans, generally based on an analysis of the collateral securing those loans. These components are added together and compared to the balance of our allowance at the evaluation date.

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Non-classified loan categories include first mortgage loans on the following types of properties: one- to four-family owner occupied, one- to four-family non-owner occupied, multi-family, non-residential, land and land development, and construction. Additional categories include: second mortgage and home equity loans, unsecured commercial business loans, secured commercial business loans, and consumer loans. 

We recorded a $300,000 provision for loan losses for the six months ended June 30, 2005 as a result of our analysis of our current loan portfolios compared to $250,000 for the same period in 2004. The increased provision during 2005 was necessary to maintain the allowance for loan losses at a level considered adequate to absorb losses inherent in the loan portfolio and cover anticipated charge-offs. During the first six months of 2005 we recorded charge-offs of $161,000. The $300,000 provision for loan losses for the first six months of 2005 was considered adequate to cover further charge-offs based on our evaluation and our loan mix.

At June 30, 2005, non-performing assets, consisting of non-accruing loans, accruing loans 90 or more days delinquent and other real estate owned, totaled $8.6 million compared to $5.9 million at December 31, 2004. In addition to our non-performing assets, we identified $5.6 million other loans of concern, down from $9.8 million at December 31, 2004, where known information about possible credit problems of borrowers causes management to have doubts as to the ability of the borrowers to comply with present repayment terms, and that may result in disclosure of such loans as non-performing assets in the future. The vast majority of these loans, as well as our non-performing assets, are well collateralized.

Non-Interest Income. Non-interest income for the six months ended June 30, 2005 decreased by $25,000 or 2.24% compared to the same period in 2004. This was primarily due to a $93,000 decrease in the gain on the sale of mortgage loans in the secondary marketresulting from decreased sales due to the decrease in refinance activity. This decrease was partially offset by a $52,000 increase in fees on deposit accounts due to the introduction of a new product in which we pay any overdrafts of up to $500 made by qualified depositors for a $30 per overdraft fee and by a $27,000 increase in other income, primarily the result of a $20,000 increase in mortgage loan servicing fees. Non-interest income for the second quarter of 2005 increased by $5,000 over the same period in 2004, primarily due to a $58,000 increase in fees on deposit accounts due to the introduction of a new product mentioned above, partially offset by a $31,000 decrease in the gain on the sale of mortgage loans in the secondary marketresulting from decreased sales due to the decrease in refinance activity and by an $11,000 decrease in other income, primarily the result of a decrease in the amortization of mortgage loan servicing fees resulting from a decrease in loan prepayments.

Non-Interest Expense.Non-interest expense for the six months ended June 30, 2005 increased $197,000 over the same period in 2004. The major components of this increase included a $146,000 increase in salaries and employee benefits partly due to increased compliance and health insurance costs, and a $137,000 increase in other non-interest expenses partly due to increased reporting costs and expenses related to foreclosed properties, partially offset by a $90,000 decrease in occupancy expenses due to the write-off of some fixed assets in 2004. Non-interest expense for the second quarter of 2005 increased by $16,000 over the same period in 2004, due largely to factors mentioned above.

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 Income Tax Expense.  Our income tax provision increased by $11,000 for the six months ended June 30, 2005 compared to the six months ended June 30, 2004, primarily as a result of tax savings relating to our Bank Owned Life Insurance program and increased lending in an area in Lafayette designated as an urban enterprise zone, qualifying for enterprise zone tax credits. Our income tax provision increased by $110,000 for the second quarter of 2005 compared to the same periodin2004 primarily due to a $249,000 increase in income before income taxes offset by the same tax changes mentioned above.

Liquidity

Our primary sources of funds are deposits, repayment and prepayment of loans, interest earned on or maturation of investment securities and short-term investments, borrowings and funds provided from operations. While maturities and the scheduled amortization of loans, investments and mortgage-backed securities are a predictable source of funds, deposit flows and mortgage prepayments are greatly influenced by general market interest rates, economic conditions and competition.

We monitor our cash flow carefully and strive to minimize the level of cash held in low-rate overnight accounts or in cash on hand. We also carefully track the scheduled delivery of loans committed for sale to be added to our cash flow calculations. Our current internal policy for liquidity requires minimum liquidity of 4.0% of total assets.

Liquidity management is both a daily and long-term function for our senior management. We adjust our investment strategy, within the limits established by the investment policy, based upon assessments of expected loan demand, expected cash flows, Federal Home Loan Bank advance opportunities, market yields and objectives of our asset/liability management program. Base levels of liquidity have generally been invested in interest-earning overnight and time deposits with the Federal Home Loan Bank of Indianapolis. Funds for which a demand is not foreseen in the near future are invested in investment and other securities for the purpose of yield enhancement and asset/liability management.

Our liquidity ratios at December 31, 2004 and June 30, 2005 were 5.80% and 5.58%, respectively compared to a regulatory liquidity base, and 4.38% and 4.23% compared to total assets at the end of each period.

We anticipate that we will have sufficient funds available to meet current funding commitments. At June 30, 2005, we had outstanding commitments to originate loans and available lines of credit totaling $58.9 million and commitments to provide funds to complete current construction projects in the amount of $5.9 million. In addition we had commitments to sell $2.4 million of fixed-rate residential loans. Certificates of deposit which will mature in one year or less at June 30, 2005 totaled $69.3 million. Based on our experience, our certificates of deposit have been a relatively stable source of long-term funds as such certificates are generally renewed upon maturity since we have established long-term banking relationships with our customers. Therefore, we believe a significant portion of such deposits will remain with us, although this cannot be assured. At June 30, 2005, $59.6 million of our deposits were in brokered deposits, $14.0 million of which will mature in one year or less. These deposits can be expected not to renew at maturity and will have to be replaced with other funding upon maturity. We also have $21.5 million of Federal Home Loan Bank advances maturing in the next twelve months.

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Capital Resources

Shareholders’ equity totaled $31.8 million at June 30, 2005 compared to $30.4 million at December 31, 2004, an increase of $1.4 million or 4.75%, due primarily to net income of $1.7 million and a $405,000 tax benefit from the exercise of options to purchase 61,529 shares of our common stock, partially offset by our payment of dividends on common stock, and the repurchase of 20,087 shares of our stock as part of a stock repurchase plan. Shareholders’ equity to total assets was 8.67% at June 30, 2005 compared to 8.57% at December 31, 2004.

Federal insured savings institutions are required to maintain a minimum level of regulatory capital. If the requirement is not met, regulatory authorities may take legal or administrative actions, including restrictions on growth or operations or, in extreme cases, seizure. As of December 31, 2004 and June 30, 2005, Lafayette Savings was categorized as well capitalized. Our actual and required capital amounts and ratios at December 31, 2004 and June 30, 2005 are presented below:

	Actual					OTS For Capital Adequacy Purposes					FDIC To Be Well Capitalized Under Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(Dollars in thousands)
As of June 30, 2005
Total risk-based capital (to risk-weighted assets)	$	32,866		11.5	%	$	22,840		8.0	%	$	28,550		10.0	%
Tier I capital (to risk-weighted assets)		30,808		10.8	%		11,420		4.0	%		17,130		6.0	%
Tier I capital (to adjusted total assets)		30,808		8.4	%		11,011		3.0	%		18,351		5.0	%
Tier I capital (to adjusted tangible assets)		30,808		8.4	%		7,340		2.0	%		N/A		N/A
Tangible capital (to adjusted tangible assets)		30,808		8.4	%		5,505		1.5	%		N/A		N/A
As of December 31, 2004
Total risk-based capital (to risk-weighted assets)	$	31,657		11.6	%	$	21,812		8.0	%	$	27,265		10.0	%
Tier I capital (to risk-weighted assets)		29,797		10.9	%		10,906		4.0	%		16,359		6.0	%
Tier I capital (to adjusted total assets)		29,797		8.4	%		10,656		3.0	%		17,761		5.0	%
Tier I capital (to adjusted tangible assets)		29,767		8.4	%		7,104		2.0	%		N/A		N/A
Tangible capital (to adjusted tangible assets)		29,797		8.4	%		5,328		1.5	%		N/A		N/A

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Disclosure Regarding Forward-Looking Statements

This document, including information included or incorporated by reference, contains, and future filings by LSB Financial on Form 10-K, Form 10-Q and Form 8-K and future oral and written statements by LSB Financial and our management may contain, forward-looking statements about LSB Financial and its subsidiaries which we believe are within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, without limitation, statements with respect to anticipated future operating and financial performance, growth opportunities, interest rates, cost savings and funding advantages expected or anticipated to be realized by management. Words such as may, could, should, would, believe, anticipate, estimate, expect, intend, plan and similar expressions are intended to identify forward-looking statements. Forward-looking statements by LSB Financial and its management are based on beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions of management and are not guarantees of future performance. We disclaim any obligation to update or revise any forward-looking statements based on the occurrence of future events, the receipt of new information or otherwise. The important factors we discuss below and elsewhere in this document, as well as other factors discussed under the caption Management’s Discussion and Analysis of Financial Condition and Results of Operation in this document and identified in our filings with the SEC and those presented elsewhere by our management from time to time, could cause actual results to differ materially from those indicated by the forward-looking statements made in this document.

The following factors, many of which are subject to change based on various other factors beyond our control, could cause our financial performance to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements:

·   the strength of the United States economy in general and the strength of the local economies in which we conduct our operations;

·   the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Federal Reserve Board;

·   financial market, monetary and interest rate fluctuations, particularly the relative relationship of short-term interest rates to long-term interest rates;

·   the timely development of and acceptance of our new products and services of Lafayette Savings and the perceived overall value of these products and services by users, including the features, pricing and quality compared to competitors’ products and services;

·   the willingness of users to substitute competitors’ products and services for our products and services;

·   the impact of changes in financial services laws and regulations (including laws concerning taxes, accounting standards, banking, securities and insurance);

·   the impact of technological changes;

·   acquisitions;

·   changes in consumer spending and saving habits; and

·   our success at managing the risks involved in the foregoing.

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Item 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We, like other financial institutions, are subject to interest rate risk to the extent that our interest-bearing liabilities reprice on a different basis than our interest-earning assets. The Office of Thrift Supervision (“OTS”), our primary regulator, supports the use of a net portfolio value (“NPV”) approach to the quantification of interest rate risk. In essence, this approach calculates the difference between the present value of expected cash flows from assets and the present value of expected cash flows from liabilities, as well as cash flows from off balance sheet contracts. An NPV ratio, in any interest rate scenario, is defined as the NPV in that rate scenario divided by the market value of assets in the same scenario, essentially a market value adjusted capital ratio.

It has been and continues to be a priority of the Board and management to manage interest rate risk to maintain an acceptable level of potential changes to interest income as a result of interest rate changes. Our asset/liability policy, established by the board of directors, sets forth acceptable limits on the amount of change in net portfolio value given certain changes in interest rates. We have an asset/liability management committee which meets quarterly to review our interest rate position, and an investment committee which reviews the interest rate risk position and other related matters with the Board, and makes recommendations for adjusting this position to the full Board of Directors. In addition, the investment committee of the Board meets semi-annually with our outside investment advisors to review our investment portfolio and strategies relating to interest rate risk. Specific strategies have included the sale of long-term, fixed rate loans to reduce the average maturity of our interest-earning assets and the use of Federal Home Loan Bank advances to lengthen the effective maturity of our interest-bearing liabilities. In the future, our community banking emphasis, including the origination of commercial business loans, is intended to further increase our portfolio of short-term and/or adjustable rate loans.

Presented below, as of December 31, 2004 and 2003, is an analysis of our interest rate risk as measured by the effect on NPV caused by instantaneous and sustained parallel shifts in the yield curve, in 100 basis point increments, up and down 300 basis points, and compared to Board policy limits. The Board Limit column indicates the lowest allowable limits for NPV after each interest rate shock. Assumptions used in calculating the amounts in this table are OTS assumptions. No information is provided for a negative 200 or 300 basis point shift in interest rates, due to a low prevailing interest rate environment making such scenarios unlikely.

Change in		Board Limit		At December 31, 2004				At December 31, 2003
Interest Rate		Post-shock		Post-shock		Change		Post-shock		Change
(Basis Points)		NPV Ratio		NPV Ratio		(Basis Points)		NPV Ratio		(Basis Points)
300	bp	6.00	%	10.55	%	(12	) bp	9.64	%	(35	) bp
200		7.00		10.82		14		9.98		0
100		8.00		10.89		21		10.13		14
0		8.00		10.68		--		9.98		--
-100		8.00		10.16		(52	)	9.40		(59	)

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In evaluating our exposure to interest rate risk, certain shortcomings inherent in the method of analysis presented in the foregoing table must be noted. For example, although certain assets and liabilities may have similar maturities or periods to repricing, they may react in different degrees to changes in market interest rates. Also, the interest rates on certain types of assets and liabilities may fluctuate in advance of changes in market interest rates, while interest rates on other types may lag behind changes in market rates. Further, in the event of a change in interest rates, prepayments and early withdrawal levels may deviate significantly from those assumed in calculating the table. Finally, the ability of many borrowers to service their debt may decrease in the event of an interest rate increase. As a result, the actual effect of changing interest rates may differ from that presented in the foregoing table.

Management believes that at June 30, 2005 there have been no material changes in Lafayette Savings’ interest rate sensitivity which would cause a material change in the market risk exposures that affect the quantitative and qualitative risk disclosures as presented above, from the Company’s Annual Report on Form 10-KSB for the period ended December 31, 2004.

Item 4. CONTROLS AND PROCEDURES.

An evaluation of the Company’s disclosure controls and procedures (as defined in Rule 13(a)-15(e) of the Securities Exchange Act of 1934 (the “Act”)), as of June 30, 2005, was carried out under the supervision and with the participation of the Company’s Chief Executive Officer, Chief Financial Officer and several other members of the Company’s senior management. The Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures currently in effect are effective in ensuring that the information required to be disclosed by the Company in the reports it files or submits under the Act is (i) accumulated and communicated to the Company’s management (including the Chief Executive Officer and Chief Financial Officer) in a timely manner and (ii) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. There have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) of the Act) that occurred during the quarter ended June 30, 2005, that has materially affected, or is reasonably likely to affect, our internal control over the financial reporting.

The Company intends to continually review and evaluate the design and effectiveness of its disclosure controls and procedures and to improve its controls and procedures over time and to correct any deficiencies that it may discover in the future. The goal is to ensure that senior management has timely access to all material financial and non-financial information concerning the Company’s business. While the Company believes the present design of its disclosure controls and procedures is effective to achieve its goal, future events affecting its business may cause the Company to modify its disclosure controls and procedures.

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PART II - OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

The Company, from time to time, is involved as plaintiff or defendant in various legal actions arising in the normal course of business. While the ultimate outcome of these proceedings cannot be predicted with certainty, it is the opinion of management, after consultation with counsel representing the Company in the proceedings, that the resolution of any prior and pending proceedings should not have a material effect on the Company or Lafayette Savings’ financial condition or results of operations.

Item 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table sets forth the number and prices paid for repurchased shares.

Issuer Purchases of Equity Securities
Month of Purchase	Total Number of Shares Purchased1	Average Price Paid per Share	Total Number of Shares Purchased as Part of Publicly Announced Plan2	Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plan
April 1 - April 30, 2005	0	0	0	52,932
May 1 - May 31, 2005	11,000	26.182	11,000	41,932
June 1 - June 30, 2005	0	0	0	41,932
Total	11,000	26.182	11,000	41,932

¹There were no shares repurchased other than through a publicly announced plan or program.

²We have in place a plan, announced September 27, 2004, to repurchase 5% of our common stock.

Item 3.DEFAULTS UPON SENIOR SECURITIES

None to be reported.

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Item 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

On April 20, 2005, LSB Financial Corp. held its Annual Meeting of Stockholders (“Meeting”).

The directors who were elected at the Meeting for a term to expire in 2008, are as follows:

	Votes		Votes
	For		Withheld
Mary Jo David		1,276,612		5,110
Thomas R. McCully		1,257,045		24,677
Peter Neisel		1,272,160		9,562
Jeffrey A. Poxon		1,274,087		7,635

The directors whose terms continued after the Meeting are as follows: James A. Andrew, Kenneth P. Burns, Harry A. Dunwoody, Philip W. Kemmer, Mariellen M. Neudeck and Randolph F. Williams.

Item 5.OTHER INFORMATION

None.

Item 6.EXHIBITS

Exhibits:

The exhibits listed in the Exhibit Index are incorporated herein by reference.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		LSB FINANCIAL CORP. (Registrant)
Date:	August 10, 2005	/s/ Randolph F. Williams
		Randolph F. Williams, President (Principal Executive Officer)
Date:	August 10, 2005	/s/ Mary Jo David
		Mary Jo David, Treasurer (Principal Financial and Accounting Officer)

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INDEX TO EXHIBITS

Regulation S-K Exhibit Number	Document
31.1	Rule 13(a)-14(a) Certification (Chief Executive Officer)
31.2	Rule 13(a)-14(a) Certification (Chief Financial Officer)
32	Section 1350 Certifications

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