101 Main St.
P.O. Box 1628
Lafayette, IN 47902
(765) 742-1064
www.LSBANK.com
| FOR IMMEDIATE RELEASE: | | FOR FURTHER INFORMATION CONTACT: |
| August 7, 2009 | | Randolph F. Williams President/CEO (765) 742-1064 Fax: (765) 429-5932 |
| | | |
LSB Financial Corp. Announces Profitable Second Quarter and Year-to-Date Results
and Payment of a Cash Dividend
Lafayette, IN - LSB Financial Corp. (NASDAQ:LSBI), the parent company of Lafayette Savings Bank, FSB, today reported second quarter earnings of $312,000 or $0.20 per share compared to $521,000 or $0.34 per share in 2008. Earnings for the first six months of 2009 were $614,000 or $0.40 per share compared to $1,037,000 or $0.67 per share in 2008. Factors causing the decrease in year-to-date net income included a $458,000 increase in the reserve for loan losses and a $270,000 increase in FDIC insurance premiums including a special assessment to help rebuild the FDIC insurance fund.
LSB Financial President & CEO, Randolph F. Williams stated, “We believe our market is showing some signs of improvement, and are encouraged that the County’s year-to-date existing home sales were up by 11.9% over last year. However, previously announced layoffs at some of
our major manufacturers remind us that the national recession is still having an effect on Tippecanoe County as the unemployment rate hit 10.3% in June.”
Williams continued, “Despite the difficult economic times, LSB’s practice of working proactively with borrowers has enabled us to keep loan losses manageable. We continue to monitor all the risks within our portfolio very closely and to systematically deal with problems identified within our loan monitoring process. Non-performing loans as of June 30, 2009 were $10,834,000 or 3.37% of total loans compared to $7,976,000 or 2.41% at December 31, 2008. Prudence dictates that we keep adequate reserves against loan losses and our reserves at June 20, 2009 were at $4,085,000 or 1.27% of total loans, compared to $3,697,000 or 1.12% at December 2008.”
Williams added, “As a community bank we consider it essential to keep the bank well-capitalized. Total assets were up slightly to $375,500,000 at the end of June and equity grew to $34,331,000. The resulting ratio of equity to assets was 9.14%, considered “well-capitalized” by our primary regulator. Capital is widely considered the first line of defense against unforeseen losses of any type.”
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 August 7, 2009 with a payment date of September 4, 2009. Williams stated, “While capital growth is always a primary goal, we are pleased that our income this quarter made it possible to pay this 54th consecutive dividend to our
shareholders representing an annualized dividend rate of 4.3% while still contributing to capital growth.”
Williams stated, “On July 1, 2009, Lafayette Savings Bank celebrated Founders Day at its main office on the banks of the Wabash. Lafayette Savings Bank was founded by John Purdue on July 1, 1869. Noting that this made us the oldest savings bank in the state of Indiana, Williams continued, “The fact that we’ve had the same name for 140 years is yet another testament to our stability.”
The closing market price of LSB stock on August 6, 2009 was $11.50 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 June 30, 2009 | | | Year ended December 31, 2008 | |
| | | | | | | |
| Cash and due from banks | | $ | 1,748 | | | $ | 2,046 | |
| Short-term investments | | | 18,515 | | | | 9,179 | |
| Securities available-for-sale | | | 12,299 | | | | 11,853 | |
| Loans held for sale | | | 2,138 | | | | 1,342 | |
| Net portfolio loans | | | 319,093 | | | | 325,297 | |
| Allowance for loan losses | | | 4,085 | | | | 3,697 | |
| Premises and equipment, net | | | 6,383 | | | | 6,461 | |
| Federal Home Loan Bank stock, at cost | | | 3,997 | | | | 3,997 | |
| Bank owned life insurance | | | 5,404 | | | | 5,841 | |
| Other assets | | | 5,957 | | | | 6,996 | |
| Total assets | | | 375,534 | | | | 373,012 | |
| | | | | | | | | |
| Deposits | | | 280,939 | | | | 258,587 | |
| Advances from Federal Home Loan Bank | | | 57,500 | | | | 78,500 | |
| Other liabilities | | | 2,764 | | | | 1,850 | |
| | | | | | | | | |
| Shareholders’ equity | | | 34,331 | | | | 34,075 | |
| Book value per share | | $ | 22.10 | | | $ | 21.92 | |
| Equity / assets | | | 9.14 | % | | | 9.14 | % |
| Total shares outstanding | | | 1,553,525 | | | | 1,553,525 | |
| | | | | | | | | |
| Asset quality data: | | | | | | | | |
| Non-accruing loans | | $ | 9,687 | | | $ | 7,976 | |
| Loans past due 90 days still on accrual | | | 1,147 | | | | --- | |
| Other real estate / assets owned | | | 1,471 | | | | 1,412 | |
| Total non-performing assets | | | 13,207 | | | | 9,388 | |
| Non-performing loans / total loans | | | 3.37 | % | | | 2.41 | % |
| Non-performing assets / total assets | | | 3.28 | % | | | 2.52 | % |
| Allowance for loan losses / non-performing loans | | | 37.71 | % | | | 46.35 | % |
| Allowance for loan losses / non-performing assets | | | 33.20 | % | | | 39.38 | % |
| Allowance for loan losses / total loans | | | 1.27 | % | | | 1.12 | % |
| Loans charged off (quarter-to-date and year-to-date, respectively) | | $ | 583 | | | $ | 1,183 | |
| Recoveries on loans previously charged off | | | 13 | | | | 77 | |
| | | Three months ended June 30, | | | Six months ended June 30, | |
| | | | | | | | | | | | |
| | $ | 5,059 | | | $ | 5,374 | | | $ | 10,031 | | | $ | 10,795 | |
| Total interest expense | | | 2,545 | | | | 2,774 | | | | 5,109 | | | | 5,652 | |
| Net interest income | | | 2,536 | | | | 2,600 | | | | 4,922 | | | | 5,143 | |
| Provision for loan losses | | | 389 | | | | 250 | | | | 958 | | | | 500 | |
| Net interest income after provision | | | 2,147 | | | | 2,350 | | | | 3,964 | | | | 4,643 | |
| Non-interest income: | | | | | | | | | | | | | | | | |
| Deposit account service charges | | | 370 | | | | 433 | | | | 706 | | | | 829 | |
| Gain on sale of mortgage loans | | | 451 | | | | 8 | | | | 974 | | | | 25 | |
| Gain(loss) on sale of securities and other assets | | | (100 | ) | | | (72 | ) | | | (66 | ) | | | 19 | |
| Other non-interest income | | | 250 | | | | 353 | | | | 494 | | | | 632 | |
| Total non-interest income | | | 971 | | | | 722 | | | | 2,108 | | | | 1,505 | |
| Non-interest expense: | | | | | | | | | | | | | | | | |
| Salaries and benefits | | | 1,380 | | | | 1,145 | | | | 2,732 | | | | 2,372 | |
| Occupancy and equipment, net | | | 317 | | | | 341 | | | | 670 | | | | 686 | |
| Computer service | | | 147 | | | | 135 | | | | 281 | | | | 270 | |
| Advertising | | | 60 | | | | 72 | | | | 117 | | | | 140 | |
| Other | | | 787 | | | | 623 | | | | 1,438 | | | | 1,181 | |
| Total non-interest expense | | | 2,691 | | | | 2,316 | | | | 5,238 | | | | 4,649 | |
| Income before income taxes | | | 427 | | | | 756 | | | | 834 | | | | 1,499 | |
| Income tax expense | | | 115 | | | | 235 | | | | 220 | | | | 462 | |
| Net income | | | 312 | | | | 521 | | | | 614 | | | | 1,037 | |
| | | | | | | | | | | | | | | | | |
| Weighted average number of diluted shares | | | 1,555,084 | | | | 1,556,894 | | | | 1,553,525 | | | | 1,558,960 | |
| Diluted earnings per share | | $ | 0.20 | | | $ | 0.33 | | | $ | 0.40 | | | $ | 0.66 | |
| | | | | | | | | | | | | | | | | |
| Return on average equity | | | 3.63 | % | | | 6.05 | % | | | 3.58 | % | | | 6.04 | % |
| Return on average assets | | | 0.33 | % | | | 0.59 | % | | | 0.32 | % | | | 0.59 | % |
| Average earning assets | | $ | 361,361 | | | $ | 330,981 | | | $ | 359,463 | | | $ | 329,157 | |
| Net interest margin | | | 2.81 | % | | | 3.14 | % | | | 2.74 | % | | | 3.12 | % |
| Efficiency ratio | | | 86.31 | % | | | 75.39 | % | | | 86.25 | % | | | 75.61 | % |
