LSB Financial Corp. Announces Year-end and Fourth Quarter Results

Mar 11, 2011, 13:35 ET from LSB Financial Corp.

LAFAYETTE, Ind., March 11, 2011 /PRNewswire/ -- 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%

www.LSBANK.com

SOURCE LSB Financial Corp.



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