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TheStreet Open House

LSB Financial Corp. Announces Year-end And Fourth Quarter Results And Payment Of A Cash Dividend

LAFAYETTE, Ind., March 5 /PRNewswire-FirstCall/ -- LSB Financial Corp. (Nasdaq: LSBI), the parent company of Lafayette Savings Bank, FSB, today reported unaudited net income for 2009 of $460,000 or $0.30 per share, compared to net income of $1.74 million or $1.12 per share for 2008, a decrease in both earnings and earnings per share of 73.2%.  Net income was significantly impacted by asset-quality related issues, and the effect was primarily seen in our provision for loan losses for the year of $3.2 million compared to $1.1 million in 2008.  $1.4 million of that allocation was made in the fourth quarter due to credit concerns identified in that quarter which resulted in a net loss for the fourth quarter of $178,000 compared to income of $312,000 in the fourth quarter of 2008.  

LSB President and CEO Randolph F. Williams stated, "Although this decrease in earnings is disappointing, I am pleased to end the year in a positive income position. Unfortunately the local economy stubbornly continued to underperform expectations and the resulting loan delinquencies and foreclosures drove the need to make this substantial provision for losses despite our best efforts to work with struggling borrowers.  While our economy continues to show signs of improvement on paper, we believe the prudent step is to proactively set aside dollars to offset losses that might still exist in our loan portfolio."

Mr. Williams continued, "We are pleased to note that our pre-tax, pre-provision income was actually higher in 2009 than the previous year, which is quite an accomplishment since we also absorbed a $489,000 increase in our FDIC premiums in 2009.  Net interest income increased from $10.0 million in 2008 to $10.3 million in 2009 primarily because of a $2.0 million or 17.3% decrease in our interest expense.  This improvement was largely due to lower rates in the economy.  Our deposits were actually up $19.3 million from last year as our branch bankers capitalized on depositors' desire to move to the safety of FDIC insurance protected deposits. Some of the growth in deposits went toward paying off higher rate Federal Home Loan Bank advances and other high rate deposits.  Interest income on loans decreased $1.4 million due to lower rates and the loss in interest income on loans that are no longer performing."

Mr. Williams also reported, "Our non-interest income also increased substantially from $2.9 million in 2008 to $3.8 million in 2009 largely due to $1.4 million in fees from the sale of $68.7 million of residential loans.  Fixed rate loans reached historically low rates in 2009 and many borrowers took advantage of the opportunity to refinance their existing loans. Others tapped into the first-time home buyer tax credit and purchased a first home in 2009.  We offer our residential borrowers the opportunity to choose to have their mortgage loan serviced here or to select from the mortgage products and rates available at other financial institutions for which we make the loan here and then sell the loan to the designated loan servicer."

The Company also announced that it will pay a quarterly dividend of $0.125 per share to shareholders of record as of the close of business on March 19, 2010 with a payment date of March 31, 2010.  Mr. Williams said, "This delayed announcement of the quarterly dividend was tied to the completion of our audit and a review of our loan portfolio.  We needed to complete the external audit before we felt comfortable with the dividend."  Mr. Williams continued, "This will be the fifth consecutive quarter we have paid the $0.125 dividend, which represents a dividend yield of 5%.  Because we continue to maintain capital in excess of regulatory "well-capitalized" minimums and because we believe our core business to be sound, we believe the payment of this dividend is warranted."  

The closing price of LSB stock on March 4, 2010 was $10.05 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)
          ---------------------------------------------------------
                                          Year ended          Year ended
    Selected balance sheet data:      December 31, 2009   December 31, 2008
    ----------------------------      -----------------   -----------------
    Cash and due from banks                      $8.084              $2,046
    -----------------------                      ------              ------
    Short-term investments                        4,817               9,179
    ----------------------                        -----               -----
    Securities available-for-sale                11,345              11,853
    -----------------------------                ------              ------
    Loans held for sale                           3,303               1,342
    -------------------                           -----               -----
    Net portfolio loans                         317,860             325,297
    -------------------                         -------             -------
    Allowance for loan losses                     3,737               3,697
    -------------------------                     -----               -----
    Premises and equipment, net                   6,209               6,461
    ---------------------------                   -----               -----
    Federal Home Loan Bank
     stock, at cost                               3,997               3,997
    ----------------------                        -----               -----
    Bank owned life insurance                     6,071               5,841
    -------------------------                     -----               -----
    Other assets                                  9,364               6,996
    ------------                                  -----               -----
    Total assets                                371,050             373,012
    ------------                                -------             -------
    
    Deposits                                    277,866             258,587
    --------                                    -------             -------
    Advances from Federal Home
     Loan Bank                                   57,000              78,500
    --------------------------                   ------              ------
    Other liabilities                             2,300               1,850
    -----------------                             -----               -----
    
    Shareholders' equity                         33,884              34,075
    --------------------                         ------              ------
    Book value per share                         $21.81              $21.93
    --------------------                         ------              ------
    Equity / assets                               9.13%               9.14%
    ---------------                               -----               -----
    Total shares outstanding                  1,553,525           1,553,525
    ------------------------                  ---------           ---------
    
    Asset quality data:
    -------------------
    Non-accruing loans                          $12,554              $7,976
    ------------------                          -------              ------
    Loans past due 90 days still
     on accrual                                       0                   0
    ----------------------------                    ---                 ---
    Other real estate /assets
     owned                                        1,892               1,412
    -------------------------                     -----               -----
    Total non-performing assets                  14,446               9,388
    ---------------------------                  ------                ----
    Non-performing loans /
     total loans                                  3.91%               2.41%
    ----------------------                        -----               -----
    Non-performing assets /
     total assets                                 3.89%               2.52%
    -----------------------                       -----               -----
    Allowance for loan losses /
     non-performing loans                        29.77%              46.35%
    ---------------------------                  ------              ------
    Allowance for loan losses /
     non-performing assets                       25.87%              39.38%
    ---------------------------                  ------              ------
    Allowance for loan losses /
     total loans                                  1.16%               1.12%
    ---------------------------                   -----                ----
    Loans charged off (year-to-
     date)                                       $3,186              $1,183
    ---------------------------                  ------              ------
    Recoveries on loans
     previously charged off                          28                  77
    -----------------------                         ---                 ---
    
    
    
                             Three months ended
                                December 31,       Year ended December 31,
                             ------------------    -----------------------
    Selected
     operating data:        2009           2008        2009          2008
    ----------------        ----           ----        ----          ----
    Total interest
     income               $4,754         $5,229     $19,659       $21,319
    --------------        ------         ------     -------       -------
    Total interest
     expense               1,964          2,779       9,335        11,286
    --------------         -----          -----       -----        ------
     Net interest
      income               2,790          2,450      10,324        10,033
     ------------          -----          -----      ------        ------
    Provision for
     loan losses           1,375            250       3,197         1,102
    -------------          -----            ---       -----         -----
      Net interest
       income after
       provision           1,415          2,200       7,127         8,931
      -------------        -----          -----       -----         -----
    Non-interest
     income:
    ------------
    Deposit account
     service charges         431            444       1,525         1,736
    ----------------         ---            ---       -----         -----
    Gain on sale of
     mortgage loans          246             58       1,386           117
    ---------------          ---            ---       -----           ---
    Gain on sale of
     securities                -              -           -             -
    ---------------          ---            ---         ---           ---
    Gain(loss) on
     the sale of
     real estate
     owned                   (77)          (186)       (183)         (156)
    -------------            ---           ----        ----          ----
    Other non-
     interest income         281            273       1,059         1,194
    ----------------         ---            ---       -----         -----
      Total non-
       interest income       881            589       3,787         2,891
      ----------------       ---            ---       -----         -----
    Non-interest
     expense:
    ------------
    Salaries and
     benefits              1,159          1,118       5,137         4,585
    ------------           -----          -----       -----         -----
    Occupancy and
     equipment, net          312            336       1,307         1,382
    ---------------          ---            ---       -----         -----
    Computer service         138            140         562           549
    ----------------         ---            ---         ---           ---
    Advertising              104             93         301           294
    -----------              ---            ---         ---           ---
    Other                    963            606       3,196         2,476
    -----                    ---            ---       -----         -----
      Total non-
       interest
       expense             2,676          2,293      10,503         9,286
      ----------           -----          -----      ------         -----
    Income before
     income taxes           (380)           496         411         2,536
    -------------           ----            ---         ---         -----
    Income tax
     expense                (202)           184         (49)          796
    ----------              ----            ---         ---           ---
      Net income            (178)           312         460         1,740
      ----------            ----            ---         ---         -----
    
    Weighted average
     number of
     diluted shares    1,554,723      1,552,986   1,554,707     1,556,169
    ----------------   ---------      ---------   ---------     ---------
    Diluted earnings
     per share            $(0.11)         $0.20       $0.30         $1.12
    ----------------      ------          -----       -----         -----
    
    Return on
     average equity      (2.08)%          3.65%       1.34%         5.08%
    ---------------       ------          -----       -----         -----
    Return on
     average assets      (0.19)%          0.34%       0.12%         0.48%
    ---------------       ------          -----       -----         -----
    Average earning
     assets             $341,428       $347,846    $351,757      $337,686
    ---------------     --------       --------    --------      --------
    Net interest
     margin                3.27%          2.82%       2.94%         2.97%
    ------------           -----          -----       -----         -----
    Efficiency ratio     116.55%         82.22%      96.23%        78.62%
    ----------------     -------         ------      ------        ------

SOURCE LSB Financial Corp.

Copyright 2009 PR Newswire. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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