Exhibit 99.1
FOR IMMEDIATE RELEASE COMPANY CONTACT: Gerald T. Mulligan
(978) 725-7555
LSB CORPORATION ANNOUNCES FIRST QUARTER 2006 FINANCIAL RESULTS
AND QUARTERLY DIVIDEND
NORTH ANDOVER, MA, -- (MARKET WIRE) -- April 28, 2006 -- LSB Corporation, (the
"Corporation" or the "Company") (NASDAQ-LSBX), today announced first quarter
2006 financial results of $260,000, or $0.06 per diluted share, as compared to
$859,000, or $0.19 per diluted share, for the first quarter of 2005.
The decline in net income for the period ending March 31, 2006 was primarily due
to severance payments in the amount of $373,000 incurred with the resignation of
two former executive officers and to a continued compression of the Company's
net interest margin from 2.78% in the first quarter of 2005 to 2.61% in the
first quarter of 2006.
The most significant challenge the Company faces in the current flattened
interest rate yield curve environment is to increase interest income while also
maintaining competitive deposit interest rates. The Company anticipates that the
squeeze on its net interest margin, which declined by 17 basis points from March
31, 2005 to March 31, 2006, will continue throughout 2006. While the entire
banking industry is experiencing pressure on the net interest margin, that
pressure is especially acute at LSB Corporation as it is so dependent on
borrowings to fund growth.
President Gerald T. Mulligan stated, "We are pleased by the growth in our loan
portfolios which indicates that we are meeting our customers' expectations in
this competitive and challenging environment. In spite of industry reports that
loan demand has diminished with increasing interest rates and credit quality has
worsened, I am happy to report that our non-performing assets are minimal".
As of March 31, 2006, non-performing loans remained low at 0.01% of total loans
while the allowance for loan losses as a proportion of total loans equaled
1.72%.
Total assets increased $24.0 million from December 31, 2005 to $545.8 million as
of March 31, 2006. The increase reflected growth in both residential and
commercial loans as well as in the investment portfolio.
Additionally, the Company transferred approximately $205.8 million of
investments held to maturity into investments available for sale during the
first quarter of 2006. The impact of this change requires the unrealized loss to
be reflected on the balance sheet in the "accumulated other comprehensive loss"
portion of stockholders' equity and totaled $4.0 million. Total accumulated
other comprehensive loss was $5.0 million as of March 31, 2006. Notwithstanding
the change into investments available for sale, the Company and the Bank
continue to maintain strong capital at levels considered "well-capitalized"
under regulatory capital guidelines.
Total deposits decreased slightly from December 31, 2005 and totaled $302.9
million as of March 31, 2006. Asset growth during the first quarter was funded
by advances from the Federal Home Loan Bank. Total borrowed funds increased
during the first quarter of 2006 by $28.4 million or 18.5% and totaled $181.7
million as of March 31, 2006.
The Company also announced a quarterly dividend of $0.14 to be paid on May 25,
2006 to shareholders of record as of May 11, 2006. This dividend represents a
3.12% annualized dividend yield based on the closing stock price of $17.95 on
March 31, 2006.
Press releases and SEC filings can be viewed on the internet at our website
www.LawrenceSavings.com/press-main.asp or
www.LawrenceSavings.com/stockholder-info.asp, respectively.
LSB Corporation is a Massachusetts corporation that conducts all of its
operations through its subsidiary, Lawrence Savings Bank (the "Bank"), a
Massachusetts-chartered savings bank organized in 1868. The Bank offers a range
of commercial and consumer loan and deposit products and is headquartered at 30
Massachusetts Avenue, North Andover, Massachusetts, approximately 25 miles north
of Boston. Lawrence Savings Bank operates 5 full service banking offices in
Massachusetts in Andover, Lawrence, Methuen (2) and North Andover and 1 full
service banking office in Salem, New Hampshire.
The reader is cautioned that this press release may contain certain statements
that are "forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934,
as amended. Such forward-looking statements are expressions of management's
expectations as of the date of this press release regarding future events or
trends and which do not relate to historical matters. Such expectations may or
may not be realized, depending on a number of variable factors, including but
not limited to, changes in interest rates, general economic conditions,
regulatory considerations and competition. For more information about these
factors, please see our recent Annual Report on Form 10-K on file with the SEC,
including the sections entitled "Risk Factors" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations". As a result of such
risk factors and uncertainties, the Company's actual results may differ
materially from such forward-looking statements. The Company does not undertake
and specifically disclaims any obligation to publicly release updates or
revisions to any such forward-looking statements as a result of new information,
future events or otherwise.
LSB CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands)
(unaudited)
(At) March 31, 2006 December 31, 2005 March 31, 2005
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Retail loans $ 75,069 $ 73,539 $ 69,386
Corporate loans 167,347 161,072 165,066
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Total loans 242,416 234,611 234,452
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Allowance for loan losses (4,160) (4,126) (4,139)
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Investments available for sale 271,812 46,363 60,448
Investments held to maturity -- 213,683 238,659
FHLB stock 10,097 10,097 9,681
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Total investments 281,909 270,143 308,788
Federal funds sold 3,372 198 3,427
Other assets 22,310 20,974 18,085
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Total assets $ 545,847 $ 521,800 $ 560,613
=======================================================================================================
Deposits $ 302,931 $ 303,087 $ 301,873
Borrowed funds 181,734 153,380 196,889
Other liabilities 5,229 5,411 3,847
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Total liabilities 489,894 461,878 502,609
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Common stock 453 446 439
Additional paid-in capital 60,556 59,856 59,606
Retained earnings (loss) (42) 326 (1,101)
Accumulated other comprehensive loss (5,014) (706) (940)
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Total stockholders' equity 55,953 59,922 58,004
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Total liabilities and stockholders' equity $ 545,847 $ 521,800 $ 560,613
=======================================================================================================
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)
Three months ended
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(For the period ending) March 31, 2006 December 31, 2005 March 31, 2005
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Interest income $ 6,535 $ 6,487 $ 6,109
Interest expense 3,241 3,107 2,555
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Net interest income 3,294 3,380 3,554
Provision (credit) for loan losses -- -- --
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Net interest income after provision (credit
for loan losses) 3,294 3,380 3,554
Non-interest income 330 432 365
Lawsuit judgment collected -- 2,223 --
Salary & employee expense 2,067 2,191 1,576
Other non-interest expense 1,156 1,105 1,005
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Total non-interest expense 3,223 3,296 2,581
Net income before income taxes 401 2,739 1,338
Income tax expense 141 1,056 479
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Net income $ 260 $ 1,683 $ 859
=============================================================================================================
Basic earnings per share $ 0.06 $ 0.38 $ 0.20
Diluted earnings per share $ 0.06 $ 0.37 $ 0.19
End of period shares outstanding 4,527,617 4,464,033 4,385,726
Average shares outstanding:
Basic 4,496,013 4,464,033 4,365,559
Diluted 4,555,725 4,528,193 4,532,751
SELECT FINANCIAL DATA:
Three months ended
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(At or for the periods ending) March 31, 2006 December 31, 2005 March 31, 2005
- -------------------------------------------------------------------------------------------------------------
(unaudited)
Performance ratios (annualized):
Return on average assets 0.20% 1.27% 0.65%
Return on average stockholders equity 1.85% 11.41% 6.02%
Net interest margin 2.61% 2.62% 2.78%
Interest rate spread 2.22% 2.25% 2.49%
Dividends paid per share during period $ 0.14 $ 0.14 $ 0.14
(At) March 31, 2006 December 31, 2005 March 31, 2005
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(unaudited)
CAPITAL RATIO:
Stockholders equity to total assets 10.25% 11.48% 10.35%
Leverage ratio 11.52% 11.34% 10.91%
RISK BASED CAPITAL RATIO:
Tier one 18.24% 19.09% 18.19%
Total risk based 19.49% 20.34% 19.44%
ASSET QUALITY:
Allowance for loan losses as a percent of total loans 1.72% 1.76% 1.77%
Non-performing loans as a percent of total loans 0.01% 0.01% 0.01%
PER SHARE DATA:
Book value per share $ 12.36 $ 13.42 $ 13.23
Tangible book value per share (excludes accumulated other
comp. loss) 13.47 13.58 13.44
Market value per share 17.95 17.35 17.99