LSB Financial Corp. Announces Year-end and Fourth Quarter Results

LAFAYETTE, Ind., March 20, 2014 /PRNewswire/ — LSB Financial Corp.
(NASDAQ:LSBI), the parent company of Lafayette Savings Bank, FSB, today reported
net income for 2013 of $2.5 million or $1.62 per share, compared to net income
of $2.7 million or $1.70 per share for 2012. For the fourth quarter, net income
was $518,000 or $0.33 per share in 2013 compared to $676,000 or $0.43 per share
for the same period in 2012. The decrease in income in 2013 was primarily due to
a $1.1 million or 8.7% decrease in net interest income and a $1.2 million or 46%
decrease in gain on sale of loans. This was partially offset by a $1.5 million
decrease in the provision for loan losses resulting from the continued
improvement in asset quality.

LSB President and CEO, Randolph F. Williams, stated, “We continued to focus on
improving credit quality during the year. A major improvement was the 61%
decrease in non-performing assets from $6.7 million at December 31, 2012 to $2.6
million at December 31, 2013, which resulted in a ratio of non-performing assets
to total assets of 0.70% at December 31, 2013 compared to 1.84% in 2012. At
December 31, 2013, our allowance for loan losses was $6.3 million or 2.4 times
the level of non-performing loans. We believe our improved credit quality
positions us well to compete as the economy recovers.”

Mr. Williams continued, “The core profitability of the bank remains strong. Our
net interest margin ended the year at 3.36%, down from 3.87% at the end of 2012.
As a community bank we generate our earnings primarily by gathering deposits and
making loans so this is an important number for us. The net interest margins we
are seeing now are back in the range we were accustomed to before the recession.
Our 81% loan-to-deposit ratio is further evidence that we consider ourselves
first and foremost a community bank. Our balance sheet shows our success in
attracting and maintaining local deposits. Our core deposits increased by $17.4
million in 2013 while we repaid $5.0 million of FHLB advances. We continue to
deleverage, reducing loans by $26.3 million which, along with our strong
earnings, was a factor in increasing our capital ratio from 10.7% to 11.1% at
the end of 2013.”

For the third consecutive year we are proud to have been named to the
Indianapolis Business Journal’s top 25 performing Indiana stocks.

The closing price of LSB stock on March 6, 2014 was $28.76 per share as reported
by the Nasdaq Global Market.

LSB FINANCIAL CORP.

SELECTED CONSOLIDATED FINANCIAL INFORMATION

(Dollars in thousands except share and per share amounts)
——————————————————–

December 31, 2013 December 31, 2012

Selected balance sheet data:
—————————-

Cash and due from banks $21,961 $25,643
———————– ——- ——-

Short-term investments 2,237 5,778
———————- —– —–

Interest bearing time deposits 1,743 1,740
—————————— —– —–

Securities available-for-sale 62,705 28,004
—————————– —— ——

Loans held for sale 657 1,363
——————- — —–

Net portfolio loans 254,703 280,257
——————- ——- ——-

Allowance for loan losses 6,348 5,900
————————- —– —–

Premises and equipment, net 7,933 7,069
————————— —– —–

Federal Home Loan Bank stock, at cost 3,185 3,185
————————————- —– —–

Bank-owned life insurance 6,745 6,595
————————- —– —–

Other assets 5,712 4,976
———— —– —–

Total assets 367,581 364,610
———— ——- ——-

Deposits 314,620 308,637
——– ——- ——-

Federal Home Loan Bank advances 10,000 15,000
——————————- —— ——

Other liabilities 2,234 2,018
—————– —– —–

Total liabilities 326,854 325,655
—————– ——- ——-

Stockholders’ equity 40,727 38,955
——————– —— ——

Book value per share $26.03 $25.04
——————– —— ——

Equity / assets 11.08% 10.68%
————— —– —–

Total shares outstanding 1,564,838 1,555,972
———————— ——— ———

Deposit data:
————-

Core deposits 185,106 167,704
————- ——- ——-

Time deposits 129,514 140,933
————- ——- ——-

Wholesale deposits (included in Time deposits) 13,690 13,690
——————————————— —— ——

FHLB Advances 10,000 15,000
————- —— ——

Asset quality data:
——————-

Non-accruing loans $2,572 $6,443
—————— —— ——

Loans past due 90 days still on accrual — —
————————————— — —

Other real estate / assets owned 18 256
——————————– — —

Total non-performing assets 2,590 6,699
————————— —– —–

Non-performing assets / total assets 0.70% 1.84%
———————————— —- —-

Allowance for loan losses / non-performing loans 246.81% 91.56%
———————————————— —— —–

Allowance for loan losses / non-performing assets 245.13% 88.06%
————————————————- —— —–

Allowance for loan losses / total loans 2.43% 2.06%
————————————— —- —-

Loans charged off $517 $1,710
—————– —- ——

Recoveries on loans previously charged off 315 179
—————————————— — —

Three months ended December 31, Year ended December 31,
——————————- ———————–

Selected operating data: 2013 2012 2013 2012
———————— —- —- —- —-

Total interest income $3,278 $3,675 $13,771 $15,720
——————— —— —— ——- ——-

Total interest expense 545 695 2,363 3,225
———————- — — —– —–

Net interest income 2,733 2,980 11,408 12,495
——————- —– —– —— ——

Provision for loan losses — 500 650 2,100
————————- — — — —–

Net interest income after provision 2,733 2,480 10,758 10,395
———————————– —– —– —— ——

Non-interest income:
——————–

Deposit account service charges 312 353 1,204 1,338
——————————- — — —– —–

Gain on sale of mortgage loans 130 887 1,337 2,489
—————————— — — —– —–

Gain(loss) on sale OREO (51) 18 (53) (97)
———————– — — — —

Other non-interest income 313 244 1,403 1,036
————————- — — —– —–

Total non-interest income 704 1,502 3,891 4,766
————————- — —– —– —–

Non-interest expense:
———————

Salaries and benefits 1,348 1,598 5,833 6,205
——————— —– —– —– —–

Occupancy and equipment, net 358 305 1,326 1,208
—————————- — — —– —–

Computer service 153 150 606 618
—————- — — — —

Advertising 132 128 437 377
———– — — — —

FDIC Insurance Premium 115 120 476 481
———————- — — — —

Other 516 616 1,977 2,081
—– — — —– —–

Total non-interest expense 2,622 2,917 10,655 10,970
————————– —– —– —— ——

Income before income taxes 816 1,065 3,994 4,191
————————– — —– —– —–

Income tax expense 298 389 1,456 1,532
—————— — — —– —–

Net income 518 676 2,538 2,659
———- — — —– —–

Weighted average number of diluted shares 1,575,572 1,562,365 1,565,597 1,561,495
—————————————– ——— ——— ——— ———

Diluted earnings per share $0.33 $0.43 $1.62 $1.70
————————– —– —– —– —–

Return on average equity 5.11% 7.01% 6.37% 7.07%
———————— —- —- —- —-

Return on average assets 0.58% 0.75% 0.70% 0.73%
———————— —- —- —- —-

Average earning assets $337,185 $320,812 $339,607 $322,977
———————- ——– ——– ——– ——–

Net interest margin 3.24% 3.72% 3.36% 3.87%
——————- —- —- —- —-

Efficiency ratio 84.67% 73.10% 72.74% 72.32%
—————- —– —– —– —–

SOURCE LSB Financial Corp

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