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: |
March 3, 2006 | | Randolph F. Williams |
| | | President/CEO |
| | | (765) 742-1064 |
| | | Fax: (765) 429-5932 |
LSB Financial Corp. Announces Year-End Results
LSB Financial Corp. (NASDAQ:LSBI), the parent company of Lafayette Savings Bank, FSB, today reported earnings for the year ended December 31, 2005. Net income for 2005 was $3.3 million, up slightly over net income for 2004. Net interest income increased by $964,000 or 8.87%, over 2004, while non-interest income was up $269,000 or 12.01%. The allocation for loan loss reserves at December 31, 2005 was $1.2 million, an increase of $700,000 over December 31, 2004. LSB President and CEO Randolph F. Williams stated, “While the absolute dollar level of earnings - virtually unchanged from 2004 - was below our expectations, we felt that it was important to address some potential losses identified in the fourth quarter.”
“We added an additional $450,000 to our loan loss reserves, bringing the total allocation in the fourth quarter to $725,000. A total of $328,000 was allocated to a single borrower where we have concerns about the borrower’s liquidity.”
“In addition, the new bankruptcy law which went into effect in October 2005 resulted in a 500% increase in the number of bankruptcy filings received by the bank in the fourth quarter as compared to the first nine months of the year. We also received deeds-in-lieu-of-foreclosure on 29 rental properties from a borrower not previously delinquent or identified as being of concern. In response to the above mentioned conditions and our ongoing analysis of non-performing loans, we believed it was prudent to increase our loan loss reserve. The Office of Thrift Supervision, which recently completed an examination of the bank, also concluded that increased reserves are appropriate.”
The Bank continues to capitalize on merger-related fallout in the market. Loans grew 4.1% percent for the year, ending at $331 million. Total deposits grew to $266 million or 3.6% while assets surpassed $372 million. The FDIC reports that Lafayette Savings Bank has moved up to third among Tippecanoe County FDIC insured institutions.
Mr. Williams further stated, “We believe one of the reasons for our success is having a local board of directors, local decision making and local account servicing which in turn makes us more responsive to our customers’ needs. We also believe the time and money we invest in our community shows how seriously we take our responsibility as a community bank. This focus has proved to be successful not just for the bank and the community but for shareholders as well. Total shareholder return in 2005 was 14.14%.”
The closing price of LSB stock on March 2, 2006 was $29.31 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: | Year ended December 31, 2005 | Year ended December 31, 2004 |
| | | |
Cash and due from banks | $1,697 | $2,395 |
Short-term investments | 7,687 | 6,818 |
Securities available-for-sale | 11,611 | 7,947 |
Loans held for sale | --- | 1,050 |
Net portfolio loans | 330,971 | 317,877 |
Allowance for loan losses | 2,852 | 2,095 |
Premises and equipment, net | 6,813 | 6,750 |
Federal Home Loan Bank stock, at cost | 4,197 | 4,110 |
Bank owned life insurance | 2,715 | 2,627 |
Other assets | 6,973 | 5,471 |
Total assets | 372,664 | 355,045 |
| | | |
Deposits | 265,993 | 256,631 |
Advances from Federal Home Loan Bank | 72,033 | 66,808 |
Other liabilities | 1,817 | 1,213 |
| | | |
Shareholders’ equity | 32,821 | 30,393 |
Book value per share | $21.32 | $20.39 |
Equity / assets | 8.81% | 8.56% |
Total shares outstanding | 1,547,806 | 1,509,113 |
| | | |
Asset quality data: | | |
Non-accruing loans | $8,432 | $4,207 |
Loans past due 90 days still on accrual | 127 | 484 |
Other real estate / assets owned | 2,004 | 1,231 |
Total non-performing assets | 10,563 | 5,922 |
Non-performing loans / total loans | 2.56% | 1.46% |
Non-performing assets / total assets | 2.83% | 1.67% |
Allowance for loan losses / non-performing loans | 33.32% | 44.66% |
Allowance for loan losses / non-performing assets | 27.00% | 35.38% |
Allowance for loan losses / total loans | 0.85% | 0.65% |
Loans charged off (quarter-to-date and year-to-date, respectively) | $492 | $1,520 |
Recoveries on loans previously charged off | 49 | 17 |
| | Three months ended December 31, | Year ended December 31, |
Selected operating data: | 2005 | 2004 | 2005 | 2004 |
Total interest income | $5,608 | $4,988 | $21,498 | $19,286 |
Total interest expense | 2,604 | 2,202 | 9,664 | 8,416 |
Net interest income | 3,004 | 2,786 | 11,834 | 10,870 |
Provision for loan losses | 725 | 125 | 1,200 | 500 |
Net interest income after provision | 2,279 | 2,661 | 10,634 | 10,370 |
Non-interest income: | | | | |
Deposit account service charges | 468 | 222 | 1,423 | 889 |
Gain on sale of mortgage loans | 51 | 230 | 322 | 593 |
Gain on sale of securities | 0 | 0 | 11 | 11 |
Other non-interest income | 194 | 202 | 753 | 747 |
Total non-interest income | 713 | 654 | 2,509 | 2,240 |
Non-interest expense: | | | | |
Salaries and benefits | 911 | 948 | 4,325 | 4,190 |
Occupancy and equipment, net | 286 | 242 | 1,081 | 1,136 |
Computer service | 101 | 91 | 428 | 371 |
Advertising | 104 | 51 | 369 | 279 |
Other | 542 | 401 | 1,908 | 1,578 |
Total non-interest expense | 1,944 | 1,733 | 8,111 | 7,554 |
Income before income taxes | 1,048 | 1,582 | 5,032 | 5,056 |
Income tax expense | 374 | 519 | 1,764 | 1,792 |
Net income | 674 | 1,063 | 3,268 | 3,264 |
| | | | | |
Weighted average number of diluted shares | 1,550,948 | 1,545,352 | 1,544,802 | 1,533,601 |
Diluted earnings per share | $0.43 | $0.69 | $2.12 | $2.13 |
| | | | | |
Return on average equity | 8.19% | 9.90% | 10.21% | 11.19% |
Return on average assets | 0.72% | 0.84% | 0.89% | 0.95% |
Average earning assets | $354,368 | $332,681 | $351,291 | $327,094 |
Net interest margin | 3.39% | 3.35% | 3.37% | 3.32% |
Efficiency ratio | 64.99% | 62.62% | 61.72% | 59.90% |
