Exhibit 99.1
101 Main St.
P.O. Box 1628
Lafayette, IN 47902
(765) 742-1064
www.LSBANK.com
| FOR IMMEDIATE RELEASE | For further information contact: |
| March 11, 2011 | Randolph F. Williams |
| | President/CEO |
| | (765) 742-1064 |
| | Fax: (765) 429-5932 |
LSB Financial Corp. Announces Year-end and Fourth Quarter Results
Lafayette, IN - LSB Financial Corp. (NASDAQ:LSBI), the parent company of Lafayette Savings Bank, FSB, today reported net income for 2010 of $2.1 million or $1.36 per share, compared to net income of $460,000 or $0.30 per share for 2009. This represents a 360% improvement in earnings and a 353% increase in earnings per share. The largest factor in this increase was a $2.5 million or 24% increase in net interest income. The provision for loan losses remained high at $2.8 million but compared favorably to last year’s provision of $3.2 million. Our loan loss reserve at December 31, 2010 was $5.3 million, up 43% from $3.7 million at December 31, 2009 which we believe is adequate to cover estimated losses. Fourth quarter income was $602,000 compared to a $178,000 loss in the fourth quarter of 2009.
LSB President and CEO, Randolph F. Williams, stated, “The core profitability of the bank remains strong. As a measure of that, our 2010 pre-tax, pre-provision return on assets was 1.59%, nearing the 2004 pre-recession level. Our net interest margin - net interest income divided by average interest-earning assets - grew 70 basis points to 3.68% in 2010 and through careful management we reduced non-interest expenses by 5.4% compared to 2009 without having to resort to staff layoffs.
“Our balance sheet shows our success in attracting local deposits as well as the tentative nature of the lending market. We increased core deposits by 35% or $38 million and reduced our level of non-local funding by a comparable amount. Total loan volume however remained almost flat during the year, increasing only 0.6% from $321.2 million to $323.1 million. Residential lending was a bright spot as borrowers continued to take advantage of lower mortgage rates by refinancing their existing mortgages. The bank was able to generate and sell $49.4 million in residential loans, generating fees from the sale of these loans of $1.0 million.” Mr. Williams added, “The recent announcement by the Federal Housing Finance Agency which showed the Lafayette Metropolitan Statistical Area (MSA) as the 40th best out of 309 MSAs in year-over-year housing appreciation speaks to the vibrancy of our home ownership market compared to others in the U.S.
“We continue to work with borrowers who have been negatively impacted by the recession. As a result, our non-performing assets were $19.3 million at year-end, up from $14.4 million the previous year. This is a concern to management, although somewhat lessened by the fact that the holders of 25% or $4.9 million of these loans have actually resumed making their payments but will be considered non-performing until they can establish a history of remaining current. As a community bank, we consider working harder with struggling borrowers especially in a recession as part of our mission.
“We continue to be encouraged that the worst of the recession is behind us. January home sales showed an increase of 5.9%, established companies including Subaru and Wabash National and new businesses Nanshan and Sycamore Springs have announced their decision to add local jobs, the county released its ten-year population figures showing a growth rate of 16%, and the county unemployment rate for December fell to 7.9% . While it may take years to get back to the pre-recession levels, the positive signs all indicate the recovery here has started.”
The closing price of LSB stock on March 10, 2011 was $15.40 per share as reported by the Nasdaq Global 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, 2010 | | | Year ended December 31, 2009 | |
| | | | | | | |
| Cash and due from banks | | $ | 10,593 | | | $ | 8,084 | |
| Short-term investments | | | 2,980 | | | | 4,817 | |
| Securities available-for-sale | | | 11,805 | | | | 11,345 | |
| Loans held for sale | | | 2,265 | | | | 3,303 | |
| Net portfolio loans | | | 320,810 | | | | 317,860 | |
| Allowance for loan losses | | | 5,343 | | | | 3,737 | |
| Premises and equipment, net | | | 6,116 | | | | 6,209 | |
| Federal Home Loan Bank stock, at cost | | | 3,583 | | | | 3,997 | |
| Bank owned life insurance | | | 6,264 | | | | 6,071 | |
| Other assets | | | 7,431 | | | | 9,364 | |
| Total assets | | | 371,847 | | | | 371,050 | |
| | | | | | | | | |
| Deposits | | | 311,458 | | | | 277,866 | |
| Advances from Federal Home Loan Bank | | | 22,500 | | | | 57,000 | |
| Other liabilities | | | 2,312 | | | | 2,300 | |
| | | | | | | | | |
| Shareholders’ equity | | | 35,577 | | | | 33,884 | |
| Book value per share | | $ | 22.90 | | | $ | 21.81 | |
| Equity / assets | | | 9.57 | % | | | 9.13 | % |
| Total shares outstanding | | | 1,553,525 | | | | 1,553,525 | |
| | | | | | | | | |
| Asset quality data: | | | | | | | | |
| Non-accruing loans over 90 days past due | | $ | 17,370 | | | $ | 12,554 | |
| Other real estate / assets owned | | | 1,214 | | | | 1,892 | |
| Total non-performing assets | | | 19,260 | | | | 14,446 | |
| Non-performing assets / total assets | | | 5.18 | % | | | 3.91 | % |
| Allowance for loan losses / non-performing loans | | | 29.61 | % | | | 29.65 | % |
| Allowance for loan losses / non-performing assets | | | 27.67 | % | | | 25.87 | % |
| Allowance for loan losses / total loans | | | 1.65 | % | | | 1.16 | % |
| Loans charged off (year-to-date) | | $ | 1,382 | | | $ | 3,185 | |
| Recoveries on loans previously charged off | | | 229 | | | | 28 | |
| | | Three months ended December 31, | | | Year ended December 31, | |
| Selected operating data: | | 2010 | | | 2009 | | | 2010 | | | 2009 | |
| | | | | | | | | | | | | | | | | |
| Total interest income | | $ | 4,626 | | | $ | 4,754 | | | $ | 18,895 | | | $ | 19,659 | |
| Total interest expense | | | 1,331 | | | | 1,964 | | | | 6,115 | | | | 9,335 | |
| Net interest income | | | 3,295 | | | | 2,790 | | | | 12,780 | | | | 10,324 | |
| Provision for loan losses | | | 950 | | | | 1,375 | | | | 2,759 | | | | 3,197 | |
| Net interest income after provision | | | 2,345 | | | | 1,415 | | | | 10,021 | | | | 7,127 | |
| Non-interest income: | | | | | | | | | | | | | | | | |
| Deposit account service charges | | | 365 | | | | 431 | | | | 1,522 | | | | 1,525 | |
| Gain on sale of mortgage loans | | | 477 | | | | 246 | | | | 1,019 | | | | 1,386 | |
| Gain(loss) on the sale of real estate owned | | | 8 | | | | (77 | ) | | | (441 | ) | | | (183 | ) |
| Other non-interest income | | | 174 | | | | 281 | | | | 980 | | | | 1,059 | |
| Total non-interest income | | | 1,024 | | | | 881 | | | | 3,080 | | | | 3,787 | |
| Non-interest expense: | | | | | | | | | | | | | | | | |
| Salaries and benefits | | | 1,275 | | | | 1,159 | | | | 5,288 | | | | 5,137 | |
| Occupancy and equipment, net | | | 317 | | | | 312 | | | | 1,303 | | | | 1,307 | |
| Computer service | | | 147 | | | | 138 | | | | 569 | | | | 562 | |
| Advertising | | | 79 | | | | 104 | | | | 282 | | | | 301 | |
| Other | | | 635 | | | | 963 | | | | 2,490 | | | | 3,196 | |
| Total non-interest expense | | | 2,453 | | | | 2,676 | | | | 9,932 | | | | 10,503 | |
| Income before income taxes | | | 916 | | | | (380 | ) | | | 3,169 | | | | 411 | |
| Income tax expense | | | 314 | | | | (202 | ) | | | 1,052 | | | | (49 | ) |
| Net income | | | 602 | | | | (178 | ) | | | 2,117 | | | | 460 | |
| | | | | | | | | | | | | | | | | |
| Weighted average number of diluted shares | | | 1,554,697 | | | | 1,554,723 | | | | 1,554,720 | | | | 1,554,707 | |
| Diluted earnings per share | | $ | 0.39 | | | $ | (0.11 | ) | | $ | 1.36 | | | $ | 0.30 | |
| | | | | | | | | | | | | | | | | |
| Return on average equity | | | 6.77 | % | | | (2.08 | )% | | | 6.09 | % | | | 1.34 | % |
| Return on average assets | | | 0.64 | % | | | (0.19 | )% | | | 0.56 | % | | | 0.12 | % |
| Average earning assets | | $ | 345,930 | | | $ | 341,428 | | | $ | 347,299 | | | $ | 351,757 | |
| Net interest margin | | | 3.95 | % | | | 3.27 | % | | | 3.68 | % | | | 2.94 | % |
| Efficiency ratio | | | 72.81 | % | | | 116.55 | % | | | 75.81 | % | | | 96.23 | % |
