LSB Financial (LSBI) 8-K Results of Operations and Financial Condition

Exhibit 99.1

101 Main St.

P.O. Box 1628

Lafayette, IN 47902

(765) 742-1064

www.LSBANK.com

lsbmail@LSBANK.com

FOR IMMEDIATE RELEASE:	FOR FURTHER INFORMATION CONTACT:
November 7, 2005	Randolph F. Williams
	President/CEO
	(765) 742-1064
	Fax: (765) 429-5932

LSB Financial Corp. Announces Third Quarter Results up 28%

LSB Financial Corp. (NASDAQ:LSBI), the parent company of Lafayette Savings Bank, FSB, today reported earnings for the quarter ended September 30, 2005. Net income increased $206,000 or 28.30% for the third quarter of 2005 to $934,000 compared to the same quarter in 2004, resulting in diluted earnings per share of $0.60, adjusted to give effect for a 5% stock dividend declared on September 18, 2005. The increase was primarily due to a $277,000 increase in net interest income and a $236,000 increase in non-interest income, offset by a $151,000 increase in non-interest expenses. Net income for the first nine months of 2005 was $2.6 million compared to $2.2 million for the same period in 2004, an increase of 17.86%.

LSB President and CEO Randolph F. Williams stated, “I am extremely pleased with our third quarter results. Despite pressure on the net interest margin due to a flattened yield curve and increased competition for loans, our team has done an outstanding job growing the bottom line. We continue to attract new customers who value the personalized, tailor-made solutions that are provided by Lafayette Savings Bank. The 10.91% return on equity for the first nine months of this year ranks us among the top thrifts in Indiana.”

“We continue, however, to have concerns about our local economy. The Indiana Department of Workforce Development unemployment rate for Tippecanoe County increased from 4.0% in May to 4.5% in August. Our non-performing loans are at $8.2 million or 2.44% of our total loans. While over 99% of our non-performing loans are collateralized by real estate property, unfortunately it is taking a great deal of time for these properties to work through the legal system. We are confident, based on our analysis of the non-performing loans, that our reserve levels are adequate to cover anticipated losses.”

The closing market price of LSB stock on November 6, 2005, was $27.19 per share as reported by the NASDAQ National Market.

LSB FINANCIAL CORP.

SELECTED CONSOLIDATED FINANCIAL INFORMATION

(Dollars in thousands except share and per share amounts)

Selected balance sheet data:	Nine months ended September 30, 2005			Year ended December 31, 2004
Cash and due from banks	$	1,552		$	2,395
Short-term investments		9,686			6,818
Securities available-for-sale		9,979			7,947
Loans held for sale		138			1,050
Net portfolio loans		332,123			317,877
Allowance for loan losses		2,448			3,098
Premises and equipment, net		6,796			6,750
Federal Home Loan Bank stock, at cost		4,197			4,110
Bank owned life insurance		2,693			2,627
Other assets		5,974			5,471
Total assets		373,138			355,045
Deposits		266,070			256,631
Advances from Federal Home Loan Bank		72,008			66,808
Other liabilities		2,364			1,213
Shareholders’ equity		32,696			30,393
Book value per share	$	22.24		$	20.26
Equity / assets		8.76	%		8.57	%
Total shares outstanding		1,480,369			1,437,250
Asset quality data:
Non-accruing loans	$	7,684		$	4,207
Loans past due 90 days still on accrual		468			484
Other real estate / assets owned		1,306			1,231
Total non-performing assets		9,458			5,922
Non-performing loans / total loans		2.44	%		1.46	%
Non-performing assets / total assets		2.53	%		1.67	%
Allowance for loan losses / non-performing loans		30.03	%		66.04	%
Allowance for loan losses / non-performing assets		25.88	%		52.31	%
Allowance for loan losses / total loans		0.73	%		0.96	%
Loans charged off (quarter-to-date and year-to-date, respectively)	$	161		$	1,520
Recoveries on loans previously charged off		40			17

	Three months ended September 30,						Nine months ended September 30,
Selected operating data:	2005			2004			2005			2004
Total interest income	$	5,469		$	4,877		$	15,891		$	14,298
Total interest expense		2,467			2,152			7,061			6,214
Net interest income		3,002			2,725			8,830			8,084
Provision for loan losses		175			125			475			375
Net interest income after provision		2,827			2,600			8,355			7,709
Non-interest income:
Deposit account service charges		468			232			955			667
Gain on sale of mortgage loans		109			104			271			363
Gain on sale of securities		0			0			11			11
Other non-interest income		128			133			560			544
Total non-interest income		705			469			1,797			1,585
Non-interest expense:
Salaries and benefits		1,128			1,099			3,415			3,242
Occupancy and equipment, net		254			262			795			894
Computer service		101			91			327			280
Advertising		114			47			265			228
Other		455			402			1,366			1,176
Total non-interest expense		2,052			1,901			6,168			5,820
Income before income taxes		1,480			1,168			3,984			3,474
Income tax expense		546			440			1,390			1,273
Net income		934			728			2,594			2,201
Weighted average number of diluted shares		1,551,935			1,617,527			1,538,860			1,612,413
Diluted earnings per share	$	0.60		$	0.45		$	1.69		$	1.37
Return on average equity		11.50	%		9.90	%		10.91	%		10.18	%
Return on average assets		1.01	%		0.84	%		0.94	%		0.86	%
Average earning assets	$	354,266		$	332,681		$	350,266		$	323,756
Net interest margin		3.39	%		3.28	%		3.36	%		3.33	%
Efficiency ratio		58.08	%		62.62	%		60.76	%		61.94	%