Attached files
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| 8-K - LSB FINANCIAL CORP | lsb_8k0804.htm |
Exhibit 99.1
101 Main St.
P.O. Box 1628
Lafayette, IN 47902
(765) 742-1064
www.LSBANK.com
lsbmail@LSBANK.com
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FOR IMMEDIATE RELEASE
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For further information contact:
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Randolph F. Williams
President/CEO
(765) 742-1064
Fax: (765) 429-5932
LSB Financial Corp. Announces Second Quarter and Year-to-Date Results
August 4, 2011, Lafayette, IN - LSB Financial Corp. (NASDAQ:LSBI), the parent company of Lafayette Savings Bank, FSB, today reported quarterly earnings of $477,000 or $0.31 diluted earnings per share compared to $457,000 or $0.29 diluted earnings per share a year earlier. Year-to-date earnings were $681,000 or $0.44 diluted earnings per share compared to $989,000 or $0.64 per share for the comparable period in 2010. We believe the fundamentals of the bank are strong. The largest positive impact on our income comes from low market interest rates which translated into a $579, 000 increase in our net interest margin year-to-date and a $163,000 increase for the quarter, primarily because of lower interest rates on deposits and borrowings. The largest negative impact continues to come from the provision for loan losses which was $952,000 over last year for the first six months and $210,000 higher for the quarter.
Randolph F. Williams, president and CEO stated, “Despite additional credit related expenses, including the increased loan loss provision, OREO write downs and appraisal driven value adjustments on non-performing loans, this quarter represents our sixth straight profitable quarter. Additionally, we increased capital, improved our net interest margin, and further built up our loan loss reserves.
Williams noted, “The bank continues to benefit from lower interest rates in the economy which have resulted in an increase in our net interest margin from 3.54% for the six months ended June 30, 2010 to 3.96% for the same period in 2011. Additionally, we have kept expenses virtually unchanged for the first six months of 2011, increasing only $27,000 over the first six months of 2010. Expenses for the second quarter were $149,000 lower than the first quarter of 2010. We have done this through targeted expense control rather than the reductions in staff that we so frequently see in the mega banks. Our people are critical to attracting and maintaining customer relationships that are at the heart of the traditional community bank model.”
Williams continued, “An area that continues to plague nearly all banks to some extent is problem loans. At June 30, 2011, our non-performing assets (loans and OREO properties) totaled $21.3 million or 5.92% of total assets, up from the $19.3 million or 5.18% at the end of 2010. We are encouraged by our success in selling bank properties during the quarter. We have reduced our level of OREO to $130,000 compared $1.2 million at the start of this year. While we continually work to reduce problem loan balances, as a community bank we believe that there is little to be gained from routinely putting borrowers on a track to foreclosure at the first sign of delinquency. Of the $21.2 million of problem loans we held on our books at June 30, 2011, nearly 50% of these borrowers continued to make payments and $3.6 million of those are actually paid current. In the meantime we will continue to work with our borrowers to bring about the best possible outcome. To recognize potential losses in our loan portfolio, we have added $1.9 million to our reserve for loan losses in the first six months of 2011, compared to $899,000 for the first six months of 2010. The contribution to this reserve for the quarter was $675,000 compared to $465,000 last year in the second quarter. This brings our reserve to $7.0 million or 2.20% of total loans compared to $5.3 million and 1.65% at December 31, 2010. This equates to 33.2% of our non-performing loans, up from 29.0% last year at the same time. We believe this amount will be adequate to cover losses based on our quarterly evaluation and loan mix.”
The bank continues to maintain a strong capital base with a Tier I capital ratio of 10.09% at June 30, 2011 compared to 9.57% at December 31, 2010. Mr. Williams stated, “There is considerable uncertainty about where the economy is headed, both nationally and to a lesser extent here in Greater Lafayette. We believe that the combination of our continued profitability, a $7.0 million loan loss reserve and over 10.00% capital should be adequate to allow us to work through the issues presented by this struggling economy.”
“The Company will refrain from paying a quarterly cash dividend again this quarter,” Williams stated. “Because the new banking regulations are expected to address and likely revise capital levels for banks, we believe it is prudent to use our earnings to build our capital levels to make sure the bank continues on a firm capital foundation.”
The closing market price of LSB stock on August 3, 2011 was $15.40 per share as reported by the Nasdaq Global Market.
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LSB FINANCIAL CORP.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(Dollars in thousands except share and per share amounts)
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Selected balance sheet data:
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Six months ended
June 30, 2011
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Year ended
December 31, 2010
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Cash and due from banks
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$ | 10,061 | $ | 10,593 | ||||
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Interest bearing deposits
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3,283 | 2,980 | ||||||
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Securities available-for-sale
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12,024 | 11,805 | ||||||
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Loans held for sale
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1,342 | 2,265 | ||||||
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Net portfolio loans
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311,644 | 320,810 | ||||||
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Allowance for loan losses
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7,028 | 5,343 | ||||||
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Premises and equipment, net
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6,192 | 6,116 | ||||||
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Federal Home Loan Bank stock, at cost
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3,185 | 3,583 | ||||||
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Bank owned life insurance
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6,348 | 6,264 | ||||||
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Other assets
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5,782 | 7,431 | ||||||
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Total assets
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359,861 | 371,847 | ||||||
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Deposits
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303,779 | 311,458 | ||||||
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Advances from Federal Home Loan Bank
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18,000 | 22,500 | ||||||
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Other liabilities
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1,756 | 2,312 | ||||||
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Shareholders’ equity
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36,326 | 35,577 | ||||||
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Book value per share
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$ | 23.37 | $ | 22.90 | ||||
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Equity / assets
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10.09 | % | 9.57 | % | ||||
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Total shares outstanding
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1,554,275 | 1,553,525 | ||||||
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Asset quality data:
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Non-accruing loans
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$ | 20,366 | $ | 17,370 | ||||
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Loans past due 90 days still on accrual
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790 | 676 | ||||||
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Other real estate / assets owned
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130 | 1,214 | ||||||
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Total non-performing assets
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21,286 | 19,260 | ||||||
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Non-performing assets / total assets
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5.92 | % | 5.18 | % | ||||
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Allowance for loan losses / non-performing loans
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33.22 | % | 29.61 | % | ||||
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Allowance for loan losses / non-performing assets
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33.02 | % | 27.74 | % | ||||
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Allowance for loan losses / total loans
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2.20 | % | 1.65 | % | ||||
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Loans charged off (quarter-to-date and year-to-date, respectively)
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$ | 204 | $ | 1,382 | ||||
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Recoveries on loans previously charged off
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38 | 229 | ||||||
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Three months ended June 30,
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Six months ended June 30,
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Selected operating data:
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2011
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2010
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2011
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2010
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Total interest income
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$ | 4,358 | $ | 4,721 | $ | 8,834 | $ | 9,393 | ||||||||
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Total interest expense
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1,046 | 1,572 | 2,157 | 3,295 | ||||||||||||
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Net interest income
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3,312 | 3,149 | 6,677 | 6,098 | ||||||||||||
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Provision for loan losses
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675 | 465 | 1,851 | 899 | ||||||||||||
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Net interest income after provision
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2,637 | 2,684 | 4,826 | 5,199 | ||||||||||||
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Non-interest income:
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Deposit account service charges
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319 | 397 | 611 | 764 | ||||||||||||
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Gain on sale of mortgage loans
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226 | 92 | 390 | 177 | ||||||||||||
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Gain(loss) on sale of available-for-sale securities
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2 | 0 | 2 | 0 | ||||||||||||
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Gain(loss) on sale OREO
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(311 | ) | (228 | ) | (336 | ) | (261 | ) | ||||||||
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Other non-interest income
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278 | 283 | 538 | 558 | ||||||||||||
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Total non-interest income
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514 | 544 | 1,205 | 1,238 | ||||||||||||
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Non-interest expense:
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Salaries and benefits
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1,372 | 1,349 | 2,782 | 2,641 | ||||||||||||
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Occupancy and equipment, net
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268 | 326 | 596 | 665 | ||||||||||||
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Computer service
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147 | 148 | 289 | 275 | ||||||||||||
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Advertising
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57 | 78 | 115 | 134 | ||||||||||||
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FDIC Insurance Premium
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134 | 164 | 318 | 323 | ||||||||||||
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Other
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432 | 494 | 900 | 935 | ||||||||||||
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Total non-interest expense
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2,410 | 2,559 | 5,000 | 4,973 | ||||||||||||
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Income before income taxes
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741 | 669 | 1,031 | 1,464 | ||||||||||||
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Income tax expense
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264 | 212 | 350 | 475 | ||||||||||||
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Net income
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477 | 457 | 681 | 989 | ||||||||||||
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Weighted average number of diluted shares
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1,556,146 | 1,553,538 | 1,556,525 | 1,553,525 | ||||||||||||
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Diluted earnings per share
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$ | 0.31 | $ | 0.29 | $ | 0.44 | $ | 0.64 | ||||||||
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Return on average equity
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5.27 | % | 5.31 | % | 3.78 | % | 5.77 | % | ||||||||
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Return on average assets
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0.53 | % | 0.48 | % | 0.35 | % | 0.53 | % | ||||||||
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Average earning assets
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$ | 333,808 | $ | 347,658 | $ | 336,854 | $ | 344,570 | ||||||||
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Net interest margin
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3.97 | % | 3.62 | % | 3.96 | % | 3.54 | % | ||||||||
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Efficiency ratio
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76.48 | % | 79.28 | % | 82.90 | % | 77.26 | % | ||||||||