LAFAYETTE, Ind., Aug. 13 /PRNewswire-FirstCall/ -- LSB Financial Corp. , the parent company of Lafayette Savings Bank FSB, today reported 2007 second quarter earnings of $451,000 or $0.28 per share, compared to earnings of $828,000 or $0.53 per share for the second quarter of 2006. For the first six months of 2007 earnings were $1,230,000 or $0.77 per share compared $1,736,000 or $1.12 per share during the same period last year.
Second quarter 2007 results were impacted by a $490,000 provision for loan losses compared to $250,000 for the same period in 2006. During the quarter it became clear that a borrower's newly constructed rental property had developed serious structural problems and would be condemned by the county with the likelihood of a loss to the bank. While there is the potential to recoup some of that loss, we expect the final disposition on this property to take months while the various lawsuits are adjudicated. Because there was no indication that this property was at risk, no reserves had been allocated to it. Consequently an additional reserve was required to cover the potential loss.
LSB president and CEO, Randolph F. Williams stated, "While the struggling local real estate economy is a challenge, it is unforeseen losses that hurt the most. We spend an inordinate amount of time analyzing our borrowers, real estate values and overall economic conditions in order to predict losses." Williams continued, "While a sluggish economy is not limited to this area as can be seen from our peer data, we continue to work hard to manage the things that are within our control. Our year-to-date return on equity of 7.02% compares favorably to the Keefe, Bruyette & Woods defined peer group that we measure ourselves against. Our expenses are under control and our net interest margin remains at 3.48%, unchanged from year end 2006."
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 August 3, 2007 with a payment date of September 7, 2007. Williams said, "This dividend represents a 25% increase over last quarter's dividend of $0.20 per share. Until the local economic conditions improve and we are in a position to grow our balance sheet, we are pleased to be able to return this equity to our shareholders which we view as a good way to manage our capital."
The closing price of LSB stock on August 10, 2006 was $24.20 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)
Selected balance sheet data: Six months ended Year ended
June 30, 2007 December 31, 2006
Cash and due from banks $1,222 $1,391
Short-term investments 8,368 8,336
Securities available-for-sale 14,429 16,316
Loans held for sale 1,304 992
Net portfolio loans 298,755 316,699
Allowance for loan losses (3,008) (2,770)
Premises and equipment, net 6,926 6,600
Federal Home Loan Bank stock, at cost 3,997 3,997
Bank owned life insurance 5,495 5,381
Other assets 9,512 8,688
Total assets 350,008 368,400
Deposits 247,035 255,304
Advances from Federal Home Loan Bank 66,618 76,618
Other liabilities 1,898 1,638
Shareholders' equity 34,457 34,840
Book value per share $21.96 $21.73
Equity / assets 9.84% 9.46%
Total shares outstanding 1,568,999 1,603,209
Asset quality data:
Non-accruing loans $10,099 $7,364
Loans past due 90 days still on accrual 2,088 147
Other real estate / assets owned 4,612 4,169
Total non-performing assets 16,799 11,680
Non-performing loans / total loans 4.10% 2.39%
Non-performing assets / total assets 4.80% 3.17%
Allowance for loan losses / non-performing
loans 24.68% 36.88%
Allowance for loan losses / non-performing
assets 17.91% 23.72%
Allowance for loan losses / total loans 1.01% 0.88%
Loans charged off (six months-to-date and
year-to-date, respectively) $524 $1,149
Recoveries on loans previously charged off 25 49
Three months Six months
ended June 30, ended June 30,
Selected operating data: 2007 2006 2007 2006
Total interest income $5,728 $5,724 $11,598 $11,510
Total interest expense 2,854 2,704 5,757 5,368
Net interest income 2,874 3,020 5,841 6,142
Provision for loan losses 490 250 740 400
Net interest income after
provision 2,384 2,770 5,101 5,742
Non-interest income:
Deposit account service
charges 478 449 884 873
Gain on sale of mortgage
loans 95 58 137 109
Gain(loss) on sale of
securities and other assets (33) 0 (33) 0
Other non-interest income 245 195 497 382
Total non-interest income 785 702 1,485 1,364
Non-interest expense:
Salaries and benefits 1,243 1,143 2,434 2,430
Occupancy and equipment, net 356 291 669 580
Computer service 115 104 237 202
Advertising 111 72 152 129
Other 644 514 1,166 999
Total non-interest expense 2,469 2,124 4,658 4,340
Income before income taxes 700 1,348 1,928 2,766
Income tax expense 249 520 698 1,030
Net income 451 828 1,230 1,736
Weighted average number
of diluted shares 1,616,667 1,633,341 1,604,646 1,622,130
Diluted earnings per share $0.28 $0.50 $0.77 $1.07
Return on average equity 5.16% 9.89% 7.02% 10.39%
Return on average assets 0.51% 0.90% 0.69% 0.94%
Average earning assets $329,669 $347,086 $335,496 $350,910
Net interest margin 3.49% 3.48% 3.48% 3.50%
Efficiency ratio 77.91% 61.18% 70.73% 61.08%
