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.
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%