LSB Corporation (NASDAQ: LSBX) (the "Company") today announced
second quarter 2009 net income available to common shareholders of
$846,000, or $0.19 per diluted common share, as compared to net
income of $943,000, or $0.21 per diluted common share, for the
second quarter of 2008. Net income available to common shareholders
for the six months ended June 30, 2009 totaled $1.7 million, or
$0.36 per diluted common share, versus $1.9 million, or $0.41 per
diluted common share, for the same period in 2008.
Total assets increased by $26.8 million or 3.5% from December
31, 2008 to $788.2 million as of June 30, 2009. The 2009 increase
reflected local loan growth of $49.1 million from December 31,
2008. The corporate loan portfolio increased by $33.0 million in
the first six months of 2009 while the retail loan portfolio
increased by $16.1 million over the same period. This loan growth
was offset by payments on collateralized mortgage obligations and
mortgage-backed securities totaling $45.8 million and sales of
investments of $8.3 million.
Deposits totaled $448.7 million as of June 30, 2009, an increase
of $40.1 million from December 31, 2008. River Bank's focus on
attracting and retaining core deposits has produced favorable
results in 2009. Savings accounts, NOW accounts and demand deposit
accounts increased by $16.6 million, $1.0 million and $3.6 million,
respectively, during the first six months of 2009. Certificates of
deposit increased by $15.7 million since December 31, 2008.
Especially encouraging is the $8.6 million in deposits after only
five months of operation in the new Derry, New Hampshire branch.
Total borrowed funds decreased during the first six months of 2009
by $15.3 million or 5.5% and totaled $261.2 million as of June 30,
2009.
President and CEO Gerald T. Mulligan stated, "Our continued
success in generating locally-based loans and deposits is a
testament to the community banking model whereby a quality customer
experience brings opportunities to increase deposits and loans. In
addition, I am pleased with our operating results especially when
considering the burden of the special FDIC assessments which
negatively impacted our results by $0.08 (pre-tax) for the
year-to-date results.
"The difficult economy is increasing stress on our borrowers,
and we have experienced an increase in total non-performing loans.
Non-performing loans as a percentage of total loans represented
0.82% of total loans as of June 30, 2009. The coverage of the
allowance to non-performing loans is a strong 155%. While
delinquencies have increased during 2009, we are working with
borrowers to modify their loans as needed. The strong credit
culture of River Bank has, so far, resulted in low levels of actual
or expected charge-offs on the problem loan resolutions.
"The Board of Directors and I are pleased with the progress of
the new Derry, New Hampshire branch, and we have acquired a site
for the relocation of our branch in Lawrence, Massachusetts. We
hope to open the new Lawrence branch in the latter part of 2009.
The new location will offer our Lawrence customers multiple
drive-up lanes and 24-hour ATM capabilities, two services
unavailable at the existing location."
The largest factor in the decline in net income is the increase
in FDIC deposit insurance premiums that included a special deposit
assessment, which totaled $370,000 for the second quarter of 2009
as compared to $14,000 in the comparable quarter in 2008. Partially
offsetting the impact of the increased deposit insurance premium
were gains on sales of investments of $232,000 in the second
quarter of 2009 as compared to none in the second quarter of 2008.
The decline in the year-to-date results for 2009 was attributable
to the increase in FDIC deposit insurance premiums to $760,000,
which includes $370,000 in special deposit assessments for the
first six months of 2009 compared to $28,000 in the comparable
period of 2008. Partially offsetting the significant deposit
insurance costs were gains on sales of investments totaling
$458,000 for the six months ending June 30, 2009 as compared to
none in the comparable period of 2008.
The Company recorded a provision for loan losses of $460,000 in
the second quarter of 2009 as compared to $400,000 recorded for the
second quarter of 2008. The increase in the provision for loan
losses in 2009 is due to continued corporate and retail loan growth
coupled with an increase in non-performing loans. Annualized net
loan charge-offs as a percentage of average loans totaled 8 basis
points for the first six months of 2009 as compared to 4 basis
points in the comparable period in 2008.
The Company's net interest margin decreased to 2.50% for the
first six months of 2009 from 2.53% for the first six months of
2008. The decrease in the net interest margin is caused by assets
repricing lower more quickly than liabilities as the general level
of interest rates fall. The downward pressure on the net interest
margin has been partially offset by a shift in the mix of assets as
higher yielding loans replace maturing investments.
At June 30, 2009, non-performing loans totaled $4.1 million and
0.82% of total loans as compared to $2.6 million and 0.58%,
respectively, as of December 31, 2008. The allowance for loan
losses in total and as a proportion of total loans, equaled $6.4
million and 1.28%, respectively, as compared to $5.9 million and
1.30%, respectively, as of December 31, 2008. Non-performing
assets, which include non-performing loans and other real estate
owned, totaled $4.3 million at June 30, 2009 for an increase of
$1.5 million from December 31, 2008. Most of the $1.5 million
increase resulted from one loan collateralized by real estate that
was previously used as a new automobile dealership and has since
ceased operation. As the property is no longer an income generating
property, the Bank placed the loan on non-performing status even
though it was not past due more than 90 days. Total loan
delinquencies under 90 days at June 30, 2009 totaled $2.1 million,
compared to $500,000 at December 31, 2008.
The Company also announced today a quarterly cash dividend of
$0.05 per share to be paid on August 20, 2009 to shareholders of
record as of August 6, 2009. This dividend represents a 2.0%
annualized dividend yield based on the closing stock price of $9.98
on July 22, 2009.
Press releases and SEC filings can be viewed on the internet at
our website www.RiverBk.com/press-main.html or
www.RiverBk.com/stockholder-info.html, respectively.
LSB Corporation is a Massachusetts corporation that conducts all
of its operations through its sole subsidiary, River Bank (the
"Bank"). The Bank offers a range of commercial and consumer loan
and deposit products and is headquartered at 30 Massachusetts
Avenue, North Andover, Massachusetts, approximately 25 miles north
of Boston. River Bank operates 5 full-service banking offices in
Massachusetts in Andover, Lawrence, Methuen (2) and North Andover
and 2 full-service banking offices in New Hampshire in Derry and
Salem.
The reader is cautioned that this press release may contain
certain statements that are "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934, as amended. Such
forward-looking statements are expressions of management's
expectations as of the date of this press release regarding future
events or trends and which do not relate to historical matters.
Such expectations may or may not be realized, depending on a number
of variable factors, including but not limited to, changes in
interest rates, changes in real estate valuations, general economic
conditions (either nationally or regionally), regulatory
considerations and competition. For more information about these
factors, please see our recent Annual Report on Form 10-K and
Quarterly Report on Form 10-Q on file with the SEC, including the
sections entitled "Risk Factors" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations." As a
result of such risk factors and uncertainties, the Company's actual
results may differ materially from such forward-looking statements.
The Company does not undertake and specifically disclaims any
obligation to publicly release updates or revisions to any such
forward-looking statements as a result of new information, future
events or otherwise.
LSB Corporation
Select Financial Data
(unaudited)
Three months ended Six months ended
------------------- -------------------
(For the periods ending) June 30, June 30, June 30, June 30,
2009 2008 2009 2008
-------- -------- -------- --------
Performance ratios (annualized):
Efficiency ratio 65.60% 62.98% 68.42% 63.65%
Return on average assets 0.55% 0.55% 0.53% 0.56%
Return on average stockholders
equity 5.81% 6.26% 5.64% 6.15%
Net interest margin 2.52% 2.54% 2.50% 2.53%
Interest rate spread (int.
bearing only) 2.17% 2.16% 2.15% 2.11%
Dividends paid per share during
period $ 0.05 $ 0.14 $ 0.20 $ 0.28
-------- -------- -------- --------
(At) June 30, Dec. 31, June 30,
2009 2008 2008
-------- -------- --------
"Well
Capitalized"
Minimums
Capital Ratios:
Stockholders' equity to total
assets N/A 9.37% 9.48% 8.29%
RiverBank Tier 1 leverage
ratio 5.0% 8.14% 8.18% 8.62%
Risk-Based Capital Ratio:
LSB Corporation Tier 1
risk-based 6.0% 12.72% 13.30% 12.20%
RiverBank Tier 1 risk-based 6.0% 11.55% 11.83% 12.19%
RiverBank total risk-based 10.0% 12.73% 12.97% 13.27%
Asset Quality:
Allowance for loan losses as a
percent of total loans 1.28% 1.30% 1.28%
Allowance as a percent of
non-performing loans 154.60% 225.83% 360.00%
Non-performing loans as a
percent of total loans 0.82% 0.58% 0.36%
Non-performing assets as a
percent of total assets 0.54% 0.36% 0.30%
Per Share Data:
Book value per share including
CPP $ 16.50 $ 16.14 $ 13.26
Book value per share excluding
CPP $ 13.15 $ 12.78 $ 13.26
Tangible book value per share
including CPP $ 15.57 $ 15.40 $ 13.36
Tangible book value per share
excluding CPP $ 12.22 $ 12.04 $ 13.36
LSB CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands)
(unaudited)
(At) June 30, 2009 Dec. 31, 2008 June 30, 2008
------------- ------------- -------------
Retail loans $ 150,194 $ 134,079 $ 123,787
Corporate loans 351,552 318,542 285,832
------------- ------------- -------------
Total loans 501,746 452,621 409,619
------------- ------------- -------------
Allowance for loan losses (6,399) (5,885) (5,238)
------------- ------------- -------------
Investments available for
sale 228,920 264,561 255,401
FHLB stock 11,825 11,825 11,683
------------- ------------- -------------
Total investments 240,745 276,386 267,084
Federal funds sold 17,916 6,469 13,067
Other assets 34,146 31,733 28,267
------------- ------------- -------------
Total assets $ 788,154 $ 761,324 $ 712,799
============= ============= =============
Core deposits $ 202,029 $ 177,639 $ 177,634
Term deposits 246,702 231,024 194,646
------------- ------------- -------------
Total deposits 448,731 408,663 372,280
Borrowed funds 261,194 276,490 277,463
Other liabilities 4,385 4,029 3,995
------------- ------------- -------------
Total liabilities 714,310 689,182 653,738
------------- ------------- -------------
Total stockholders'
equity 73,844 72,142 59,061
------------- ------------- -------------
Total liabilities
and stockholders' equity $ 788,154 $ 761,324 $ 712,799
============= ============= =============
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data)
(unaudited)
Three months ended Six months ended
---------------------- ----------------------
(For the period ended) June 30, June 30, June 30, June 30,
2009 2008 2009 2008
---------- ---------- ---------- ----------
Interest income $ 10,087 $ 9,560 $ 20,132 $ 18,843
Interest expense 5,359 5,335 10,832 10,730
---------- ---------- ---------- ----------
Net interest income 4,728 4,225 9,300 8,113
Provision for loan losses 460 400 700 505
---------- ---------- ---------- ----------
Net interest income after
provision for loan losses 4,268 3,825 8,600 7,608
Gain on sales of investments 232 -- 458 --
Other non-interest income 542 510 1,047 1,004
Salary & employee benefits
expense 1,627 1,631 3,370 3,270
Other non-interest expense 1,830 1,351 3,709 2,533
---------- ---------- ---------- ----------
Total non-interest expense 3,457 2,982 7,079 5,803
---------- ---------- ---------- ----------
Net income before income taxes 1,585 1,353 3,026 2,809
Income tax expense 524 410 1,001 950
---------- ---------- ---------- ----------
Net income before preferred
stock dividends and accretion 1,061 943 2,025 1,859
Preferred stock dividends and
accretion (215) -- (374) --
---------- ---------- ---------- ----------
Net income available to
common shareholders $ 846 $ 943 $ 1,651 $ 1,859
========== ========== ========== ==========
Basic earnings per common
share $ 0.19 $ 0.21 $ 0.36 $ 0.41
Diluted earnings per common
share $ 0.19 $ 0.21 $ 0.36 $ 0.41
End of period common shares
outstanding 4,474,286 4,454,941 4,474,286 4,454,941
Weighted average common
shares outstanding:
Basic 4,471,382 4,459,710 4,471,163 4,476,523
Diluted 4,473,065 4,481,803 4,472,045 4,500,074
CONTACT: Gerald T. Mulligan President & CEO (978)
725-7555
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