LSB Corporation (NASDAQ: LSBX) (the "Company") today announced
third quarter 2009 net income available to common shareholders of
$1.3 million, or $0.30 per diluted common share, as compared to a
net loss of $(8.3) million, or $(1.85) per diluted common share,
for the third quarter of 2008. Net income available to common
shareholders for the nine months ended September 30, 2009 totaled
$3.0 million, or $0.66 per diluted common share, versus a net loss
of $(6.4) million, or $(1.42) per diluted common share, for the
same period in 2008. Excluding the impact of the non-cash
impairment charge incurred in 2008, normalized net income available
to common shareholders for the third quarter of 2008 would have
been $1.1 million while the third quarter of 2009 saw improved
results to $1.3 million, an improvement of $213,000 or 18.8%. The
normalized return on average assets for the three months ended
September 30 was 0.78% in 2009 as compared to 0.63% in 2008,
excluding the impact of the 2008 non-cash impairment charge.
Total assets increased by $45.6 million or 6.0% from December
31, 2008 to $807.0 million as of September 30, 2009. The 2009
increase reflected local loan growth of $65.8 million or 14.5% from
December 31, 2008. The corporate loan portfolio increased by $43.0
million or 13.5% in the first nine months of 2009 while the retail
loan portfolio increased by $22.8 million or 17.0% over the same
period. This loan growth was offset by maturities and regular
amortization of collateralized mortgage obligations and
mortgage-backed securities totaling $64.2 million and sales of
investments of $19.3 million.
Deposits totaled $471.4 million at September 30, 2009, an
increase of $62.7 million or 15.3% from December 31, 2008. River
Bank's focus on attracting and retaining core deposits has produced
favorable results in 2009. During the first nine months of 2009,
savings accounts, money market accounts, NOW accounts and demand
deposit accounts increased by $29.5 million, $12.8 million, $2.1
million and $10.2 million, respectively. Certificates of deposit
increased by $8.1 million since December 31, 2008. Total borrowed
funds decreased during the first nine months of 2009 by $21.7
million or 7.8% and totaled $254.8 million as of September 30,
2009.
President and CEO Gerald T. Mulligan stated, "Our attention to
customer service and competitive pricing continues to produce
substantial growth in both credit-worthy, locally-based loans and
attractive, local, core deposits. In spite of the challenging
economic environment, we have been able to maintain modest levels
of non-performing assets while continuing to build our loan loss
reserves. We have been successful in gaining loan and deposit
market share from large multi-national competitors that are
otherwise distracted by economic challenges elsewhere. This
increase in market share improves our long-term franchise value and
permits us to do well in this uncertain economy.
"Additionally, I am pleased to report that on October 20, 2009,
River Bank borrowed $6 million in a subordinated debt transaction
intended to qualify as 'term subordinated debt' within the meaning
of the FDIC's regulatory capital requirements and is, therefore,
eligible as Tier 2 capital within the meaning of those regulations.
We expect all of the $6 million subordinated debt, which will
mature on October 20, 2016, will be included in River Bank's Tier 2
capital as of December 31, 2009. This additional regulatory capital
will afford the Bank an increased ability to pursue strategic
opportunities."
The largest negative factor affecting net income in 2009 is the
increase in FDIC deposit insurance premiums which totaled $262,000
for the third quarter of 2009 as compared to $18,000 in the
comparable quarter in 2008. More than offsetting the impact of the
increased deposit insurance premiums were gains on sales of
investments of $572,000 in the third quarter of 2009 as compared to
none in the third quarter of 2008. Included in the year-to-date
results for 2009 were total FDIC deposit insurance premiums of $1.0
million, which included a charge for the special FDIC deposit
assessment of $370,000. Total deposit insurance expenses were
$47,000 in the comparable period of 2008. Partially offsetting the
significant deposit insurance costs for the nine months ended
September 30, 2009 were gains on sales of investments totaling $1.0
million as compared to none in the comparable period of 2008.
The cause for the net loss in both the quarter and the
year-to-date results in 2008 was the other-than-temporary
impairment write-downs of investments in Fannie Mae and Freddie Mac
preferred stock, the value of which was adversely affected by
events surrounding the September 7, 2008 appointment of a
conservator for Fannie Mae and Freddie Mac. The non-cash charge of
$(9.4) million or $(2.10) per diluted share, pre-tax, reduced
earnings in both the quarter and the year-to-date periods ended
September 30, 2008.
The Company recorded a provision for loan losses of $400,000 in
the third quarter of 2009 as compared to $330,000 for the third
quarter of 2008 and $460,000 in the second quarter of 2009. 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 10 basis points for the first
nine months of 2009 as compared to 4 basis points in the comparable
period in 2008.
The Company's net interest margin remained stable at 2.53% for
the first nine months of 2009 and 2008, respectively. However,
there was an increase in the net interest margin from 2.52% in the
second quarter of 2009 to 2.59% in the third quarter of 2009. The
Company is continually monitoring ways to maintain or improve the
net interest margin as market interest rates continue to decline.
The improvement in the margin is partially caused by a shift in the
mix of assets as higher yielding loans replace maturing
investments.
At September 30, 2009, non-performing loans totaled $3.5 million
and 0.68% of total loans as compared to $4.1 million and 0.82%,
respectively, as of June 30, 2009 and $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 as of September
30, 2009 equaled $6.6 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 $3.7 million at September 30, 2009 for
an increase of $942,000 from December 31, 2008. The increase in
non-performing loans during the nine months of 2009 resulted from
multiple properties, including both commercial and residential real
estate collateral. Total loan delinquencies under 90 days at
September 30, 2009 amounted to $761,000 as compared to $2.1 million
as of June 30, 2009 and $500,000 at December 31, 2008.
The Company also announced today a quarterly cash dividend of
$0.05 per share to be paid on November 19, 2009 to shareholders of
record as of November 5, 2009. This dividend represents a 1.9%
annualized dividend yield based on the closing stock price of
$10.75 on October 21, 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 Nine months ended
------------------ ------------------
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
(For the periods ending) 2009 2008 2009 2008
-------- -------- -------- --------
Performance ratios (annualized):
Efficiency ratio 58.70% 59.96% 65.02% 62.34%
Return on average assets 0.78% (4.57)% 0.61% (1.25)%
Return on average stockholders
equity 8.31% (57.08)% 6.55% (14.30)%
Net interest margin 2.59% 2.54% 2.53% 2.53%
Interest rate spread (int.
bearing only) 2.26% 2.21% 2.19% 2.15%
Dividends paid per share during
period $ 0.05 $ 0.15 $ 0.25 $ 0.43
--------------------------------------
(At) Sept. 30, Dec. 31, Sept. 30,
2009 2008 2008
-------- -------- -------- --------
"Well
Capitalized"
Minimums
Capital Ratios:
Stockholders' equity to total
assets N/A 9.46% 9.48% 7.02%
RiverBank Tier 1 leverage ratio 5.0% 8.17% 8.18% 7.36%
Risk-Based Capital Ratio:
LSB Corporation Tier 1 risk-based 6.0% 12.64% 13.30% 10.62%
RiverBank Tier 1 risk-based 6.0% 11.54% 11.83% 10.47%
RiverBank total risk-based 10.0% 12.72% 12.97% 11.57%
Asset Quality:
Allowance for loan losses as a
percent of total loans 1.28% 1.30% 1.27%
Allowance as a percent of
non-performing loans 187.03% 225.83% 895.63%
Non-performing loans as a percent
of total loans 0.68% 0.58% 0.14%
Non-performing assets as a percent
of total assets 0.45% 0.36% 0.21%
Per Share Data:
Book value per share including CPP $ 16.97 $ 16.14 $ 11.47
Book value per share excluding CPP $ 13.64 $ 12.78 $ 11.47
Tangible book value per share including CPP $ 15.79 $ 15.40 $ 11.37
Tangible book value per share excluding CPP $ 12.46 $ 12.04 $ 11.37
Reconciliation Table - Non-GAAP Financial Information
(Dollars in thousands, except per share data)
(unaudited)
Three months ended Nine months ended
------------------ ------------------
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
(For the periods ended) 2009 2008 2009 2008
-------- -------- -------- --------
Net income (loss) to common
shareholders per GAAP $ 1,346 $ (8,250) $ 2,998 $ (6,391)
Add: Impairment of investments -- 9,383 -- 9,383
-------- -------- -------- --------
Net operating earnings to common
shareholders (non-GAAP) $ 1,346 $ 1,133 $ 2,998 $ 2,992
======== ======== ======== ========
Diluted net operating earnings
per common share $ 0.30 $ 0.25 $ 0.66 $ 0.67
Return on average assets 0.78% 0.63% 0.61% 0.58%
Return on average stockholders'
equity 8.31% 7.84% 6.55% 6.69%
LSB CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands)
(unaudited)
Sept. 30, Dec. 31, Sept. 30,
(At) 2009 2008 2008
---------- ---------- ----------
Retail loans $ 156,855 $ 134,079 $ 130,147
Corporate loans 361,587 318,542 306,645
---------- ---------- ----------
Total loans 518,442 452,621 436,992
---------- ---------- ----------
Allowance for loan losses (6,636) (5,885) (5,535)
---------- ---------- ----------
Investments available for sale 240,341 264,561 242,256
FHLB stock 11,825 11,825 11,787
---------- ---------- ----------
Total investments 252,166 276,386 254,043
---------- ---------- ----------
Federal funds sold 10,218 6,469 13,617
Other assets 32,763 31,733 30,093
---------- ---------- ----------
Total assets $ 806,953 $ 761,324 $ 729,210
========== ========== ==========
Core deposits $ 232,255 $ 177,639 $ 185,482
Term deposits 239,096 231,024 214,879
---------- ---------- ----------
Total deposits 471,351 408,663 400,361
---------- ---------- ----------
Borrowed funds 254,815 276,490 272,803
Other liabilities 4,427 4,029 4,869
---------- ---------- ----------
Total liabilities 730,593 689,182 678,033
---------- ---------- ----------
Total stockholders' equity 76,360 72,142 51,177
---------- ---------- ----------
Total liabilities and stockholders'
equity $ 806,953 $ 761,324 $ 729,210
========== ========== ==========
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data)
(unaudited)
Three months ended Nine months ended
------------------------ ------------------------
(For the period ended) Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2009 2008 2009 2008
----------- ----------- ----------- -----------
Interest income $ 10,268 $ 9,925 $ 30,400 $ 28,768
Interest expense 5,226 5,482 16,058 16,212
----------- ----------- ----------- -----------
Net interest income 5,042 4,443 14,342 12,556
Provision for loan
losses 400 330 1,100 835
----------- ----------- ----------- -----------
Net interest income
after provision
for loan losses 4,642 4,113 13,242 11,721
Impairment of investments -- (9,383) -- (9,383)
Gain on sales of
investments 572 -- 1,030 --
Other non-interest income 524 535 1,571 1,540
Salary & employee
benefits expense 1,643 1,692 5,013 4,963
Other non-interest
expense 1,624 1,293 5,333 3,825
----------- ----------- ----------- -----------
Total non-interest
expense 3,267 2,985 10,346 8,788
----------- ----------- ----------- -----------
Net income (loss) before
income taxes 2,471 (7,720) 5,497 (4,910)
Income tax expense
(benefit) 910 530 1,911 1,481
----------- ----------- ----------- -----------
Net income (loss)
before preferred stock
dividends and accretion 1,561 (8,250) 3,586 (6,391)
Preferred stock
dividends and
accretion (215) -- (588) --
----------- ----------- ----------- -----------
Net income (loss)
available to common
shareholders $ 1,346 $ (8,250) $ 2,998 $ (6,391)
=========== =========== =========== ===========
Basic earnings (loss)
per common share $ 0.30 $ (1.85) $ 0.66 $ (1.43)
Diluted earnings (loss)
per common share $ 0.30 $ (1.85) $ 0.66 $ (1.42)
End of period common
shares outstanding 4,499,936 4,461,441 4,499,936 4,461,441
Weighted average common
shares outstanding:
Basic 4,495,356 4,456,821 4,479,316 4,469,884
Diluted 4,496,680 4,469,482 4,463,995 4,489,765
CONTACT: Gerald T. Mulligan President & CEO (978)
725-7555
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