Exhibit 99.1
![](https://capedge.com/proxy/8-K/0000908834-07-000358/lsb_logo1.jpg)
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: |
August 13, 2007 | Randolph F. Williams |
President/CEO | |
(765) 742-1064 | |
Fax: (765) 429-5932 |
LSB Financial Corp. Announces Year-to-Date and Second Quarter Results
and Payment of a Cash Dividend
Lafayette, IN. - LSB Financial Corp. (NASDAQ:LSBI), the parent company of Lafayette Savings Bank FSB, today reported 2007 second quarter earnings of $451,000 or $0.28 per share, compared to earnings of $828,000 or $0.53 per share for the second quarter of 2006. For the first six months of 2007 earnings were $1,230,000 or $0.77 per share compared $1,736,000 or $1.12 per share during the same period last year.
Second quarter 2007 results were impacted by a $490,000 provision for loan losses compared to $250,000 for the same period in 2006. During the quarter it became clear that a borrower’s newly constructed rental property had developed serious structural problems and would be condemned by the county with the likelihood of a loss to the bank. While there is the potential to recoup some of that loss, we expect the final disposition on this property to take months while the various lawsuits are adjudicated. Because there was no indication that this property was at risk, no reserves had been allocated to it. Consequently an additional reserve was required to cover the potential loss.
LSB president and CEO, Randolph F. Williams stated, “While the struggling local real estate economy is a challenge, it is unforeseen losses that hurt the most. We spend an inordinate amount of time analyzing our borrowers, real estate values and overall economic conditions in order to predict losses.” Williams continued, “While a sluggish economy is not limited to this area as can be seen from our peer data, we continue to work hard to manage the things that are within our control. Our year-to-date return on equity of 7.02% compares favorably to the Keefe, Bruyette & Woods defined peer group that we measure ourselves against. Our expenses are under control and our net interest margin remains at 3.48%, unchanged from year end 2006.”
The Company also announced that it will pay a quarterly cash dividend of $0.25 per share to shareholders of record as of the close of business on August 3, 2007 with a payment date of September 7, 2007. Williams said, “This dividend represents a 25% increase over last quarter’s dividend of $0.20 per share. Until the local economic conditions improve and we are in a position to grow our balance sheet, we are pleased to be able to return this equity to our shareholders which we view as a good way to manage our capital.”
The closing price of LSB stock on August 10, 2006 was $24.20 per share as reported by the NASDAQ National Market.
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LSB FINANCIAL CORP.SELECTED CONSOLIDATED FINANCIAL INFORMATION (Dollars in thousands except share and per share amounts) | ||||||||
Selected balance sheet data: | Six months ended June 30, 2007 | Year ended December 31, 2006 | ||||||
Cash and due from banks | $ | 1,222 | $ | 1,391 | ||||
Short-term investments | 8,368 | 8,336 | ||||||
Securities available-for-sale | 14,429 | 16,316 | ||||||
Loans held for sale | 1,304 | 992 | ||||||
Net portfolio loans | 298,755 | 316,699 | ||||||
Allowance for loan losses | (3,008 | ) | (2,770 | ) | ||||
Premises and equipment, net | 6,926 | 6,600 | ||||||
Federal Home Loan Bank stock, at cost | 3,997 | 3,997 | ||||||
Bank owned life insurance | 5,495 | 5,381 | ||||||
Other assets | 9,512 | 8,688 | ||||||
Total assets | 350,008 | 368,400 | ||||||
Deposits | 247,035 | 255,304 | ||||||
Advances from Federal Home Loan Bank | 66,618 | 76,618 | ||||||
Other liabilities | 1,898 | 1,638 | ||||||
Shareholders’ equity | 34,457 | 34,840 | ||||||
Book value per share | $ | 21.96 | $ | 21.73 | ||||
Equity / assets | 9.84 | % | 9.46 | % | ||||
Total shares outstanding | 1,568,999 | 1,603,209 | ||||||
Asset quality data: | ||||||||
Non-accruing loans | $ | 10,099 | $ | 7,364 | ||||
Loans past due 90 days still on accrual | 2,088 | 147 | ||||||
Other real estate / assets owned | 4,612 | 4,169 | ||||||
Total non-performing assets | 16,799 | 11,680 | ||||||
Non-performing loans / total loans | 4.10 | % | 2.39 | % | ||||
Non-performing assets / total assets | 4.80 | % | 3.17 | % | ||||
Allowance for loan losses / non-performing loans | 24.68 | % | 36.88 | % | ||||
Allowance for loan losses / non-performing assets | 17.91 | % | 23.72 | % | ||||
Allowance for loan losses / total loans | 1.01 | % | 0.88 | % | ||||
Loans charged off (six months-to-date and year-to-date, respectively) | $ | 524 | $ | 1,149 | ||||
Recoveries on loans previously charged off | 25 | 49 |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
Selected operating data: | 2007 | 2006 | 2007 | 2006 | ||||||||||||
Total interest income | $ | 5,728 | $ | 5,724 | $ | 11,598 | $ | 11,510 | ||||||||
Total interest expense | 2,854 | 2,704 | 5,757 | 5,368 | ||||||||||||
Net interest income | 2,874 | 3,020 | 5,841 | 6,142 | ||||||||||||
Provision for loan losses | 490 | 250 | 740 | 400 | ||||||||||||
Net interest income after provision | 2,384 | 2,770 | 5,101 | 5,742 | ||||||||||||
Non-interest income: | ||||||||||||||||
Deposit account service charges | 478 | 449 | 884 | 873 | ||||||||||||
Gain on sale of mortgage loans | 95 | 58 | 137 | 109 | ||||||||||||
Gain(loss) on sale of securities and other assets | (33 | ) | 0 | (33 | ) | 0 | ||||||||||
Other non-interest income | 245 | 195 | 497 | 382 | ||||||||||||
Total non-interest income | 785 | 702 | 1,485 | 1,364 | ||||||||||||
Non-interest expense: | ||||||||||||||||
Salaries and benefits | 1,243 | 1,143 | 2,434 | 2,430 | ||||||||||||
Occupancy and equipment, net | 356 | 291 | 669 | 580 | ||||||||||||
Computer service | 115 | 104 | 237 | 202 | ||||||||||||
Advertising | 111 | 72 | 152 | 129 | ||||||||||||
Other | 644 | 514 | 1,166 | 999 | ||||||||||||
Total non-interest expense | 2,469 | 2,124 | 4,658 | 4,340 | ||||||||||||
Income before income taxes | 700 | 1,348 | 1,928 | 2,766 | ||||||||||||
Income tax expense | 249 | 520 | 698 | 1,030 | ||||||||||||
Net income | 451 | 828 | 1,230 | 1,736 | ||||||||||||
Weighted average number of diluted shares | 1,616,667 | 1,633,341 | 1,604,646 | 1,622,130 | ||||||||||||
Diluted earnings per share | $ | 0.28 | $ | 0.50 | $ | 0.77 | $ | 1.07 | ||||||||
Return on average equity | 5.16 | % | 9.89 | % | 7.02 | % | 10.39 | % | ||||||||
Return on average assets | 0.51 | % | 0.90 | % | 0.69 | % | 0.94 | % | ||||||||
Average earning assets | $ | 329,669 | $ | 347,086 | $ | 335,496 | $ | 350,910 | ||||||||
Net interest margin | 3.49 | % | 3.48 | % | 3.48 | % | 3.50 | % | ||||||||
Efficiency ratio | 77.91 | % | 61.18 | % | 70.73 | % | 61.08 | % |