101 Main St.
P.O. Box 1628
Lafayette, IN 47902
(765) 742-1064
www.LSBANK.com
| FOR IMMEDIATE RELEASE | For further information contact: |
| | Randolph F. Williams |
| | President/CEO |
| | (765) 742-1064 |
| | Fax: (765) 429-5932 |
LSB Financial Corp. Announces Profitable Quarter and Payment of a Cash Dividend
Lafayette, IN, May 11, 2009 - LSB Financial Corp. (NASDAQ:LSBI), the parent company of Lafayette Savings Bank, FSB, today reported quarterly earnings of $302,000 or $0.20 diluted earnings per share compared to $515,000 or $0.33 diluted earnings per share a year earlier. The decrease in net income was primarily due to an increase in the provision for loan losses of $319,000 to $569,000 compared to $250,000 for the prior year. The loan loss reserve now stands at $3.9 million and represents 1.20% of total loans, up from 1.12% at the end of last year. Randolph F. Williams, president and CEO stated “Given that we are operating in the worst economic environment in nearly 60 years, we are pleased to announce that we remain profitable and are taking steps to further strengthen our company. While the local economy is in better shape than much of the country, it is weaker than in previous years.”
Williams continued, “The fundamentals of the bank are strong with the $156,000 or 6.1% decrease in net interest income more than made up by the $507,000 gain on sale of loans. Residential lending activity is brisk, especially refinancings. We sold over $21.5 million of loans in the secondary market in the first three months compared to $1.8 million in the same period last year. We were able to increase total deposits by $17.1 million or 6.6% since year-end, with core deposits growing 15.5% during that time. People are moving their money to banks and into FDIC-insured deposits, products where they know their initial investment will be safe and will only increase in value”.
The bank continues to maintain a strong capital base with a capital ratio at March 31, 2009 of 8.92% which is in excess of well-capitalized which is defined by the regulators as 5.00%. Williams stated, “While the future direction of the economy is unclear, based on the stress tests we have performed on our loan portfolio, we believe that the combination of our continued profitability, a $3.9 million loan loss reserve and $15.0 million in excess capital should be adequate to allow us to work through the issues presented by this struggling economy.” At quarter end, non-performing assets totaled $12.9 million or 3.36% of total assets, compared to $11.6 million or 3.26%, at the same time last year. The bank is working closely with Freddie Mac on the “Affordability & Stability” program announced by the President in order to provide relief to homeowners who are having difficulty making their mortgage payments.
The Company also announced that it will pay a quarterly cash dividend of $0.125 per share to shareholders of record as of the close of business on May 8, 2009 with a payment date of June 5, 2009. Williams stated, “We are pleased to be able to provide this dividend to our shareholders representing 64% of quarterly earnings and a yield of 3.6%. While the need to build equity is paramount in these times, we want to reward shareholder loyalty whenever earnings make that possible.”
The closing market price of LSB stock on May 8, 2009 was $13.75 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: | | Three months ended March 31, 2009 | | | Year ended December 31, 2008 | |
| | | | | | | |
| Cash and due from banks | | $ | 1,528 | | | $ | 2,046 | |
| Short-term investments | | | 24,657 | | | | 9,179 | |
| Securities available-for-sale | | | 12,138 | | | | 11,853 | |
| Loans held for sale | | | 2,962 | | | | 1,342 | |
| Net portfolio loans | | | 319,570 | | | | 325,297 | |
| Allowance for loan losses | | | 3,920 | | | | 3,697 | |
| Premises and equipment, net | | | 6,443 | | | | 6,461 | |
| Federal Home Loan Bank stock, at cost | | | 3,997 | | | | 3,997 | |
| Bank owned life insurance | | | 5,899 | | | | 5,841 | |
| Other assets | | | 6,387 | | | | 6,996 | |
| Total assets | | | 383,581 | | | | 373,012 | |
| | | | | | | | | |
| Deposits | | | 275,683 | | | | 258,587 | |
| Advances from Federal Home Loan Bank | | | 71,500 | | | | 78,500 | |
| Other liabilities | | | 2,200 | | | | 1,850 | |
| | | | | | | | | |
| Shareholders’ equity | | | 34,198 | | | | 34,075 | |
| Book value per share | | $ | 22.01 | | | $ | 21.92 | |
| Equity / assets | | | 8.92 | % | | | 9.14 | % |
| Total shares outstanding | | | 1,553,525 | | | | 1,553,525 | |
| | | | | | | | | |
| Asset quality data: | | | | | | | | |
| Non-accruing loans | | $ | 10,320 | | | $ | 7,976 | |
| Loans past due 90 days still on accrual | | | 656 | | | | --- | |
| Other real estate / assets owned | | | 1,897 | | | | 1,412 | |
| Total non-performing assets | | | 12,873 | | | | 9,388 | |
| Non-performing loans / total loans | | | 3.36 | % | | | 2.41 | % |
| Non-performing assets / total assets | | | 3.36 | % | | | 2.52 | % |
| Allowance for loan losses / non-performing loans | | | 35.71 | % | | | 46.35 | % |
| Allowance for loan losses / non-performing assets | | | 30.45 | % | | | 39.38 | % |
| Allowance for loan losses / total loans | | | 1.20 | % | | | 1.12 | % |
| Loans charged off (quarter-to-date and year-to-date, respectively) | | $ | 351 | | | $ | 1,183 | |
| Recoveries on loans previously charged off | | | 5 | | | | 77 | |
| | | Three months ended March 31, | |
| Selected operating data: | | 2009 | | | 2008 | |
| | | | | | | | | |
| Total interest income | | $ | 4,973 | | | $ | 5,421 | |
| Total interest expense | | | 2,586 | | | | 2,878 | |
| Net interest income | | | 2,387 | | | | 2,543 | |
| Provision for loan losses | | | 569 | | | | 250 | |
| Net interest income after provision for loan losses | | | 1,818 | | | | 2,293 | |
| Non-interest income: | | | | | | | | |
| Deposit account service charges | | | 336 | | | | 396 | |
| Gain on sale of mortgage loans | | | 523 | | | | 16 | |
| Gain on sale of securities | | | 0 | | | | 0 | |
| Net gain on sale of real estate owned | | | 33 | | | | 91 | |
| Other non-interest income | | | 244 | | | | 279 | |
| Total non-interest income | | | 1,136 | | | | 782 | |
| Non-interest expense: | | | | | | | | |
| Salaries and benefits | | | 1,352 | | | | 1,227 | |
| Occupancy and equipment, net | | | 352 | | | | 344 | |
| Computer service | | | 134 | | | | 135 | |
| Advertising | | | 57 | | | | 69 | |
| Other | | | 652 | | | | 558 | |
| Total non-interest expense | | | 2,547 | | | | 2,333 | |
| Income before income taxes | | | 407 | | | | 742 | |
| Income tax expense | | | 105 | | | | 227 | |
| Net income | | | 302 | | | | 515 | |
| | | | | | | | | |
| Weighted average number of diluted shares | | | 1,536,201 | | | | 1,560,997 | |
| Diluted earnings per share | | $ | 0.20 | | | $ | 0.33 | |
| | | | | | | | | |
| Return on average equity | | | 3.52 | % | | | 6.03 | % |
| Return on average assets | | | 0.32 | % | | | 0.59 | % |
| Average earning assets | | $ | 357,610 | | | $ | 327,333 | |
| Net interest margin | | | 2.67 | % | | | 3.11 | % |
| Efficiency ratio | | | 84.56 | % | | | 75.87 | % |
