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.
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