LAFAYETTE, Ind. — Downtown Lafayette will be transformed into a winter wonderland this Saturday (Oct 31) when volunteers install holiday lights, banners and decorations.

Nearly one hundred volunteers from the IBEW Local 668 (International Brotherhood of Electrical Workers) and the NECA (National Electrical Contractors Association) will install special lighting on the Tippecanoe County courthouse dome, Riehle Plaza, the community tree, and other places throughout downtown. Holiday banners and lighted snowflakes will be installed on light poles as well.

The lighting effort, organized by Greater Lafayette Commerce and sponsored by Lafayette Savings Bank, Cook Medical and Landis + Gyr, will take place Saturday, October 31 beginning at 8:00 am.

The decorations will remain unlit until the official Holiday Lighting Celebration and Community Sing on Saturday, December 5th. The lighting ceremony will follow the last scene from A Christmas Carol at the conclusion of Dickens of a Christmas between 5:25-6:00 pm.

The holiday decorations will remain lit through the first of the new year.

Dickens of a Christmas will be in Downtown Lafayette-West Lafayette from 10:00 am – 9:00 pm on December 5.

Other upcoming holiday events include Merchant Holiday Open House on November 13 and 14 and the Christmas Parade on December 6. For more information, please contact Jane Ness or Erin Nelson at GLC, 765/742-4044.

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%

LAFAYETTE, Ind. — LSB Financial Corp. (Nasdaq: LSBI), the parent company of Lafayette Savings Bank, FSB, today reported unaudited net income for 2008 of $1.74 million or $1.12 per share, compared to net income of $1.57 million or $0.99 per share for 2007, an increase in earnings of 10.6% and an increase in earnings per share of 13.1%. Quarterly earnings were $312,000 in the fourth quarter of 2008 compared to a $373,000 loss for the fourth quarter in 2007. Total loans increased by $29.7 million or 10.0% in 2008, although net interest income actually declined by $1.1 million as the Fed’s interest rate cuts in 2008 caused the prime rate to fall by 400 basis points. These rate decreases immediately affected loan rates, while deposit rates resisted the cuts as banks continued to offer higher interest rates to attract more deposits and improve their liquidity.

LSB President and CEO Randolph F. Williams stated, “We approached 2008 with some trepidation about the recession’s effect on the local economy but with great determination to improve the bank’s credit quality. In 2007 we allocated $1.6 million to loan loss reserves anticipating that many of our foreclosed properties that had been working through the foreclosure process would be sold at sheriff’s sales in 2008. We acquired and moved $3.0 million of foreclosed properties in 2008 and wrote off additional losses on approved short sales where properties were sold by borrowers for less than the amount of their loan, charging off a total of $1.2 million to loan loss reserves in 2008. We were able to decrease our non-performing loans from $10.0 million at December 31, 2007 to $8.0 million at December 31, 2008. This is our lowest level for non-performing loans since December 2006. The adjustments we made to OREO property values in 2007 put us in a good position for 2008 as we sold over $4.6 million of OREO properties and recognized additional losses of only $156,000. Our OREO properties at December 31, 2008 totaled $1.4 million, our lowest balance since mid-2005, and compared to $3.9 million at December 31, 2007. Non-performing loans compared to total loans dropped from 3.32% at December 31, 2007 to 2.41% at December 31, 2008.”

Mr. Williams continued, “As you may know, in October 2008, the Treasury announced its Troubled Asset Reduction Program (TARP) under emergency legislation to address the tremendous challenges facing the financial industry. Regulators were encouraging their banks to apply for capital infusions through the plan’s Capital Purchase Program as a way to increase capital. The Treasury was encouraging banks to apply for the money to help unfreeze lending. Applications were due in less than a month which made it difficult to carefully evaluate the program. Because of the limited time allowed for banks to submit their applications and because of concern about the economy, many banks, including us, applied for the funds as a way to secure time to consider their position. With a tier 1 capital to assets ratio of 9.14% at December 31, 2008, Lafayette Savings Bank is considered well-capitalized compared to the regulatory well-capitalized tier 1 to assets ratio of 5.0%. Nonetheless, we applied various stress tests to determine whether our capital was sufficient to keep us well-capitalized should the national economic downturn severely affect the local economy. We evaluated the likelihood of a severe downturn occurring in our area in light of the diverse local economy, the presence of Purdue University and its thriving Research Park and the reported $600 million of capital invested in Greater Lafayette in 2008. We took into account that our business plan has resulted in a balance sheet not troubled by a sub-prime loans, with no derivative investment products purchased to obtain high returns and no preferred stock from Freddie Mac or Fannie Mae. On January 6, 2009 we received preliminary approval from the Treasury to receive $8.6 million of TARP CPP money. While we feel privileged to have been approved to receive TARP money, our strong capitalization level, improving loan quality, generally stable loc! al econo my, and the continuing lack of clarity about the final government-mandated stipulations for those who accept this money has led our board of directors to respectfully decline to participate. Our community oriented approach to banking has served us well for the past 140 years and we believe it will continue to provide us with sufficient capital to continue into the future.”

The Company also announced that it will pay a reduced quarterly dividend of $0.125 per share to shareholders of record as of the close of business on March 13, 2009 with a payment date of March 20, 2009. Mr. Williams said, “This delayed announcement of the quarterly dividend is tied directly to the TARP decision above, as one of the requirements of banks accepting TARP money is that they give greater control over the dividend to the federal government. Until we made a decision on the TARP, we could not address the payment of a dividend.” Mr. Williams continued, “We chose to lower the dividend payment for several reasons. We have always indicated that we would continue paying a higher dividend until we were in a position to grow our balance sheet. Despite the troubled national economy, locally we continue to see substantial numbers of well-qualified borrowers applying for loans and we believe that using our equity to fund loans and thus grow the balance sheet is a prudent way to manage our capital. Also, the reduced dividend will give us the flexibility to make strategic repurchases of our own stock which, like most bank stock, is selling at below book value. Further, any capital we are able to retain because of this lower dividend will result in increased capital, increasing capital levels internally rather than taking it from the government.”

The closing price of LSB stock on February 25, 2009 was $11.75 per share as reported by the Nasdaq National Market.

LAFAYETTE, Ind. — LSB Financial Corp. (Nasdaq: LSBI), the parent company of Lafayette Savings Bank, FSB, today reported earnings for the quarter ended March 31, 2008. Compared to the first quarter of 2007, net income was $515,000, down 33.9%, resulting in diluted earnings per share of $0.33. LSB Financial President & CEO, Randolph F. Williams stated, “The current banking environment is extremely challenging, and I am pleased with our recent growth and positive trends. We are starting to see activity in the real estate market and loans were up $7.1 million, or 2.3%, compared to year-end. Deposits also increased over $8.5 million, or 3.7%, during the quarter.”

Williams continued, “Largely as a result of the Fed cutting short term interest rates, an unprecedented 3.0% in just six months, the net interest margin for the first quarter of 2008 was down 37 basis points to 3.11% when compared to the previous year. This translates to a $424,000 decrease in net interest income. While interest rate changes are out of our control, our managers have done a remarkable job of improving asset quality, growing core deposits, and containing expenses. At quarter end, non-performing loans totaled $8.3 million or 2.69% of total loans, compared to $10.0 million, or 3.32%, at December 31, 2007 and $12.5 million, or 3.97%, one year ago.”

Williams continued, “Despite the fact that Tippecanoe County’s unemployment rate has been increasing since year end, we are seeing signs of an improving economy. Our delinquent loans are at a 19-month low, properties are selling at closer to the appraised values and there has been a slowing in the rate of local foreclosures and bankruptcies. Data from March of this year indicates that Indiana is now 11th in the country in foreclosures, with one out of every 538 households facing foreclosure. Last year Indiana was ranked in the top three.”

The Company also announced that it will pay a quarterly cash dividend of $0.25 per share to shareholders of record as of the close of business on May 9, 2008 with a payment date of June 6, 2008. Williams stated, “At slower growth times like this, we are pleased to be able to return equity to our shareholders in the form of a higher dividend. This is particularly significant based on the current favorable dividend tax rate.”

The closing market price of LSB stock on May 1, 2006 was $18.00 per share as reported by the NASDAQ National Market.