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LSB Financial Corp announces profitable Q1, cash dividend

LAFAYETTE, Ind. — LSB Financial Corp. (Nasdaq: LSBI), the parent company of Lafayette Savings Bank, FSB, today reported quarterly earnings of $302,000 or $0.20 diluted earnings per share compared to $515,000 or $0.33 diluted earnings per share a year earlier. The decrease in net income was primarily due to an increase in the provision for loan losses of $319,000 to $569,000 compared to $250,000 for the prior year. The loan loss reserve now stands at $3.9 million and represents 1.20% of total loans, up from 1.12% at the end of last year.

LSB Financial Corp. (Nasdaq: LSBI), the parent company of Lafayette Savings Bank, FSB, today reported quarterly earnings of $302,000 or $0.20 diluted earnings per share compared to $515,000 or $0.33 diluted earnings per share a year earlier.

LSB Financial Corp. (Nasdaq: LSBI), the parent company of Lafayette Savings Bank, FSB, today reported quarterly earnings of $302,000 or $0.20 diluted earnings per share compared to $515,000 or $0.33 diluted earnings per share a year earlier.

Randolph F. Williams, president and CEO said, “Given that we are operating in the worst economic environment in nearly 60 years, we are pleased to announce that we remain profitable and are taking steps to further strengthen our company. While the local economy is in better shape than much of the country, it is weaker than in previous years.”

Williams continued, “The fundamentals of the bank are strong with the $156,000 or 6.1% decrease in net interest income more than made up by the $507,000 gain on sale of loans. Residential lending activity is brisk, especially refinancings. We sold over $21.5 million of loans in the secondary market in the first three months compared to $1.8 million in the same period last year. We were able to increase total deposits by $17.1 million or 6.6% since year-end, with core deposits growing 15.5% during that time. People are moving their money to banks and into FDIC-insured deposits, products where they know their initial investment will be safe and will only increase in value.”

The bank continues to maintain a strong capital base with a capital ratio at March 31, 2009 of 8.92% which is in excess of well-capitalized which is defined by the regulators as 5.00%. Williams stated, “While the future direction of the economy is unclear, based on the stress tests we have performed on our loan portfolio, we believe that the combination of our continued profitability, a $3.9 million loan loss reserve and $15.0 million in excess capital should be adequate to allow us to work through the issues presented by this struggling economy.” At quarter end, non-performing assets totaled $12.9 million or 3.36% of total assets, compared to $11.6 million or 3.26%, at the same time last year. The bank is working closely with Freddie Mac on the “Affordability & Stability” program announced by the President in order to provide relief to homeowners who are having difficulty making their mortgage payments.

The Company also announced that it will pay a quarterly cash dividend of $0.125 per share to shareholders of record as of the close of business on May 8, 2009 with a payment date of June 5, 2009.

“We are pleased to be able to provide this dividend to our shareholders representing 64% of quarterly earnings and a yield of 3.6%. While the need to build equity is paramount in these times, we want to reward shareholder loyalty whenever earnings make that possible,” Williams said.

The closing market price of LSB stock on May 8, 2009 was $13.75 per share as reported by the NASDAQ National Market.
 

                                 LSB FINANCIAL CORP.
                     SELECTED CONSOLIDATED FINANCIAL INFORMATION
              (Dollars in thousands except share and per share amounts)

                                        Three months ended      Year ended
    Selected balance sheet data:           March 31, 2009   December 31, 2008

    Cash and due from banks                    $1,528              $2,046
    Short-term investments                     24,657               9,179
    Securities available-for-sale              12,138              11,853
    Loans held for sale                         2,962               1,342
    Net portfolio loans                       319,570             325,297
    Allowance for loan losses                   3,920               3,697
    Premises and equipment, net                 6,443               6,461
    Federal Home Loan Bank stock, at cost       3,997               3,997
    Bank owned life insurance                   5,899               5,841
    Other assets                                6,387               6,996
    Total assets                              383,581             373,012

    Deposits                                  275,683             258,587
    Advances from Federal Home Loan Bank       71,500              78,500
    Other liabilities                           2,200               1,850

    Shareholders’ equity                       34,198              34,075
    Book value per share                       $22.01              $21.92
    Equity / assets                              8.92%               9.14%
    Total shares outstanding                1,553,525           1,553,525

    Asset quality data:
    Non-accruing loans                        $10,320              $7,976
    Loans past due 90 days still on
     accrual                                      656                 ---
    Other real estate / assets owned            1,897               1,412
    Total non-performing assets                12,873               9,388
    Non-performing loans / total loans           3.36%               2.41%
    Non-performing assets / total assets         3.36%               2.52%
    Allowance for loan losses /
     non-performing loans                       35.71%              46.35%
    Allowance for loan losses /
     non-performing assets                      30.45%              39.38%
    Allowance for loan losses / total loans      1.20%               1.12%
    Loans charged off
     (quarter-to-date and
     year-to-date, respectively)                 $351              $1,183
    Recoveries on loans previously
     charged off                                    5                  77

                                              Three months ended March 31,
    Selected operating data:                     2009                2008

    Total interest income                      $4,973              $5,421
    Total interest expense                      2,586               2,878
     Net interest income                        2,387               2,543
    Provision for loan losses                     569                 250
     Net interest income after
      provision for loan losses                 1,818               2,293
    Non-interest income:
    Deposit account service charges               336                 396
    Gain on sale of mortgage loans                523                  16
    Gain on sale of securities                      0                   0
    Net gain on sale of real estate owned          33                  91
    Other non-interest income                     244                 279
     Total non-interest income                  1,136                 782
    Non-interest expense:
    Salaries and benefits                       1,352               1,227
    Occupancy and equipment, net                  352                 344
    Computer service                              134                 135
    Advertising                                    57                  69
    Other                                         652                 558
     Total non-interest expense                 2,547               2,333
    Income before income taxes                    407                 742
    Income tax expense                            105                 227
     Net income                                   302                 515

    Weighted average number of
     diluted shares                         1,536,201           1,560,997
    Diluted earnings per share                  $0.20               $0.33

    Return on average equity                     3.52%               6.03%
    Return on average assets                     0.32%               0.59%
    Average earning assets                   $357,610            $327,333
    Net interest margin                          2.67%               3.11%
    Efficiency ratio                            84.56%              75.87%

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