101 Main St.
P.O. Box 1628
Lafayette, IN 47902
(765) 742-1064
www.LSBANK.com
FOR IMMEDIATE RELEASE: FOR FURTHER INFORMATION CONTACT:
November 13, 2009 Randolph F. Williams
President/CEO
(765) 742-1064
Fax: (765) 429-5932
LSB Financial Corp. Announces Slight Profit for Third Quarter and Year-to-Date Results
Lafayette, IN - LSB Financial Corp. (NASDAQ:LSBI), the parent company of Lafayette Savings Bank, FSB, today reported third quarter earnings of $24,000 or $0.02 per share compared to $392,000 or $0.25 per share in 2008. Earnings for the first nine months of 2009 were $639,000 or $0.41 per share compared to $1,429,000 or $0.92 per share in 2008. Factors causing the decrease in year-to-date net income included a $971,000 increase in the provision for loan losses and a $425,000 increase in FDIC insurance premiums including a special assessment to help replenish the FDIC insurance fund.
LSB Financial President & CEO, Randolph F. Williams, stated, “We believe our market is starting to show some signs of improvement. Second quarter national data on house price appreciation recently released by the Federal Housing Finance Administration ranked the Lafayette area 7th best out of 296 markets in the country. Unemployment in Tippecanoe County has fallen three consecutive months ending at 8.5% in September. Unfortunately, there is much
more to be done before things return to normal. In the meantime we continue to do what we can to help negatively impacted borrowers work through the recession to reach the best possible outcome.
“Our non-performing loans as of September 30, 2009 were $11,982,000 or 3.74% of total loans compared to $7,976,000 or 2.41% at December 31, 2008. $1.9 million of September’s non-performing loans were loans that were restructured and are paying as agreed. While we are unhappy at the increase in non-performing loans we are encouraged that the number of borrowers falling behind in their payments for the first time continues to be very small.
“We wrote off $1,863,000 of loan losses in the first nine months of 2009 representing losses on 50 properties either taken into other real estate owned or sold, including three loans totaling $796,000 which we had fully reserved. Through the first nine months of 2009 we allocated additional reserves of $1,823,000 based on an analysis of loans currently in our loan portfolio. We believe this amount will keep our reserves at a level adequate to cover future losses. For the first nine months of 2008 we allocated $852,000 to loan loss reserves. The balance of loan loss reserves at September 30, 2009 was $3,678,000 or 1.14% of total loans, compared to $3,697,000 or 1.12% at December 2008.”
Williams added, “We consider it essential to keep the bank well capitalized, especially as we manage through this recession. Our ratio of equity to assets increased to 9.43% at September 30, 2009 compared to 9.14% at December 31, 2008. We increased equity by continuing to generate earnings even in these challenging economic times. In addition we reduced assets by becoming more selective about increasing our loan portfolio and by using short term investments to pay off some maturing costly deposits. Our September 30, 2009 ratio of equity to assets of
9.43% is well above the 5% level 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 November 6, 2009 with a payment date of December 4, 2009.
The closing market price of LSB stock on November 12, 2009 was $12.66 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: | | September 30, 2009 | | | December 31, 2008 | |
| | | | | | | |
| Cash and due from banks | | $ | 5,424 | | | $ | 2,046 | |
| Short-term investments | | | 2,318 | | | | 9,179 | |
| Securities available-for-sale | | | 13,242 | | | | 11,853 | |
| Loans held for sale | | | 1,063 | | | | 1,342 | |
| Net portfolio loans | | | 318,970 | | | | 325,297 | |
| Allowance for loan losses | | | 3,678 | | | | 3,697 | |
| Premises and equipment, net | | | 6,289 | | | | 6,461 | |
| Federal Home Loan Bank stock, at cost | | | 3,997 | | | | 3,997 | |
| Bank owned life insurance | | | 6,016 | | | | 5,841 | |
| Other assets | | | 6,328 | | | | 6,996 | |
| Total assets | | | 363,647 | | | | 373,012 | |
| | | | | | | | | |
| Deposits | | | 268,485 | | | | 258,587 | |
| Advances from Federal Home Loan Bank | | | 58,000 | | | | 78,500 | |
| Other liabilities | | | 2,877 | | | | 1,850 | |
| | | | | | | | | |
| Shareholders’ equity | | | 34,285 | | | | 34,075 | |
| Book value per share | | $ | 22.07 | | | $ | 21.92 | |
| Equity / assets | | | 9.43 | % | | | 9.14 | % |
| Total shares outstanding | | | 1,553,525 | | | | 1,553,525 | |
| | | | | | | | | |
| Asset quality data: | | | | | | | | |
| Non-accruing loans | | $ | 11,982 | | | $ | 7,976 | |
| Loans past due 90 days still on accrual | | | --- | | | | --- | |
| Other real estate / assets owned | | | 1,116 | | | | 1,412 | |
| Total non-performing assets | | | 13,098 | | | | 9,388 | |
| Non-performing loans / total loans | | | 3.74 | % | | | 2.41 | % |
| Non-performing assets / total assets | | | 3.60 | % | | | 2.52 | % |
| Allowance for loan losses / non-performing loans | | | 30.70 | % | | | 46.35 | % |
| Allowance for loan losses / non-performing assets | | | 28.08 | % | | | 39.38 | % |
| Allowance for loan losses / total loans | | | 1.14 | % | | | 1.12 | % |
| Loans charged off (nine months-to-date and year-to-date, respectively) | | $ | 1,863 | | | $ | 1,183 | |
| Recoveries on loans previously charged off | | | 20 | | | | 77 | |
| | | Three months ended September 30, | | | Nine months ended September 30, | |
| | | | | | | | | | | | |
| | $ | 4,874 | | | $ | 5,295 | | | $ | 14,905 | | | $ | 16,090 | |
| | | 2,262 | | | | 2,855 | | | | 7,371 | | | | 8,507 | |
| | | 2,612 | | | | 2,440 | | | | 7,534 | | | | 7,583 | |
Provision for loan losses | | | 865 | | | | 352 | | | | 1,823 | | | | 852 | |
Net interest income after provision | | | 1,747 | | | | 2,088 | | | | 5,711 | | | | 6,731 | |
| | | | | | | | | | | | | | | | |
Deposit account service charges | | | 387 | | | | 465 | | | | 1,093 | | | | 1,293 | |
Gain on sale of mortgage loans | | | 167 | | | | 34 | | | | 1,141 | | | | 58 | |
Gain(loss) on sale of securities and other assets | | | (40 | ) | | | 11 | | | | (106 | ) | | | 31 | |
Other non-interest income | | | 285 | | | | 288 | | | | 778 | | | | 920 | |
Total non-interest income | | | 799 | | | | 798 | | | | 2,906 | | | | 2,302 | |
| | | | | | | | | | | | | | | | |
| | | 1,245 | | | | 1,095 | | | | 3,977 | | | | 3,467 | |
Occupancy and equipment, net | | | 325 | | | | 361 | | | | 994 | | | | 1,046 | |
| | | 143 | | | | 138 | | | | 424 | | | | 409 | |
| | | 81 | | | | 61 | | | | 198 | | | | 201 | |
FDIC insurance premiums | | | 256 | | | | 100 | | | | 624 | | | | 199 | |
| | | 539 | | | | 589 | | | | 1,609 | | | | 1,670 | |
Total non-interest expense | | | 2,589 | | | | 2,344 | | | | 7,826 | | | | 6,992 | |
Income before income taxes | | | (43 | ) | | | 542 | | | | 791 | | | | 2,041 | |
| | | (67 | ) | | | 150 | | | | 152 | | | | 612 | |
| | | 24 | | | | 392 | | | | 639 | | | | 1,429 | |
| | | | | | | | | | | | | | | | | |
Weighted average number of diluted shares | | | 1,553,586 | | | | 1,554,245 | | | | 1,553,598 | | | | 1,557,381 | |
Diluted earnings per share | | $ | 0.02 | | | $ | 0.25 | | | $ | 0.41 | | | $ | 0.92 | |
| | | | | | | | | | | | | | | | | |
| | | 0.28 | % | | | 5.30 | % | | | 2.48 | % | | | 5.80 | % |
| | | 0.03 | % | | | 0.49 | % | | | 0.23 | % | | | 0.56 | % |
| | $ | 346,774 | | | $ | 344,590 | | | $ | 355,233 | | | $ | 334,301 | |
| | | 3.01 | % | | | 2.83 | % | | | 2.83 | % | | | 3.02 | % |
| | | 101.69 | % | | | 81.22 | % | | | 90.82 | % | | | 77.41 | % |
