LSB Corporation (NASDAQ: LSBX) (the "Company") today announced
fourth quarter 2009 net income of $795,000, or $0.18 per diluted
common share, as compared to $3.7 million, or $0.82 per diluted
common share, for the fourth quarter of 2008. Net income for the
twelve months ended December 31, 2009 totaled $3.8 million, or
$0.85 per diluted common share, versus a net loss of $(2.7)
million, or $(0.61) per diluted common share, for the same period
in 2008. Excluding the impact of the non-cash impairment charge and
related tax benefits on the investments in Fannie Mae and Freddie
Mac incurred in 2008, normalized net income for the fourth quarter
of 2008 would have been $848,000 and $3.8 million for the twelve
months ended December 31, 2008.
At December 31, 2009, assets totaled $816.6 million, an increase
of $55.3 million or 7.3% from December 31, 2008. The 2009 increase
reflects local loan growth of $84.0 million or 18.6% from December
31, 2008. The corporate loan portfolio increased by $59.0 million
or 18.5% while the retail loan portfolio increased by $25.0 million
or 18.7%. This loan growth was offset and partially funded by
maturities and regular amortization of collateralized mortgage
obligations and mortgage-backed securities totaling $79.3 million
and sales of investments of $28.0 million.
At December 31, 2009, deposits totaled $492.8 million, an
increase of $84.1 million or 20.6% from December 31, 2008. River
Bank's focus on attracting and retaining core deposits produced
favorable results in 2009. During 2009, core deposits (savings,
money market, NOW and demand deposit accounts) increased by $34.4
million, $30.0 million, $3.5 million and $6.8 million,
respectively. Certificates of deposit increased by $9.4 million.
Total borrowed funds decreased during 2009 by $17.4 million or 6.3%
and totaled $259.1 million as of December 31, 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 the fourth quarter, we
completed several major initiatives. Through the redemption of all
the preferred stock and repurchase of all the warrants issued in
connection with our participation in the U.S. Treasury's Capital
Purchase Plan, the Company is now completely separated from the
TARP program. Through the issuance of $6 million subordinated debt,
regulatory capital was strengthened and, through prepayments of
several high cost Federal Home Loan Bank advances and replacing
much of it with lower cost, longer-term advances, earnings
vulnerability to increased interest rates has been reduced. The
combination of strengthened capital and removal of all TARP
controls permits us to begin restoring our dividends. I am pleased
to announce a dividend increase of 40% to $0.07 per share.
"While delinquencies and non-performing loans increased during
2009, we are working with borrowers in either modifying their loans
as needed or as they pursue various exit strategies. I am
encouraged that our loan charge-offs during 2009 were relatively
low and our coverage of the allowance to non-performing loans at
year-end 2009 remained relatively strong at 119%.
"Lastly, we recently opened our new Lawrence branch which has
been greeted with enthusiasm by the community as evidenced by the
level of new deposit accounts opened during the first two weeks of
business. This represents the second new branch within 12 months.
When other banks are retrenching and retreating from the
communities they serve, we are working to grow the customer base by
improving the customer experience and thereby, increase the value
of our franchise."
The largest negative factors affecting net income in 2009 were
the increase in FDIC deposit insurance premiums, which totaled
$231,000 for the fourth quarter of 2009 as compared to $37,000 in
the comparable quarter in 2008, as well as the preferred stock
dividend and accretion of $656,000 in the fourth quarter of 2009.
Offsetting the impact of the increased deposit insurance premiums
and preferred stock dividends were gains on sales of investments of
$803,000. Included in the year-to-date results for 2009 were total
FDIC deposit insurance premiums of $1.3 million, which included a
special FDIC deposit assessment of $370,000, and preferred stock
dividends and accretion totaling $1.2 million. Total deposit
insurance expenses were $83,000 in 2008. Offsetting the significant
deposit insurance costs and preferred stock dividends for the year
ended December 31, 2009 were gains on sales of investments totaling
$1.8 million versus none in 2008.
The Company's net interest margin increased during 2009 from
2.50% for the twelve months ended December 31, 2008 to 2.56% in
2009. Net interest margin also increased from 2.59% in the third
quarter of 2009 to 2.63% in the fourth quarter of 2009. The
improvement in the margin is partially caused by a shift in the mix
of assets as higher yielding loans replace maturing investments
combined with lower cost deposits.
At December 31, 2009, non-performing loans totaled $6.0 million
and 1.12% of total loans as compared to $3.5 million and 0.68%,
respectively, as of September 30, 2009 and $2.6 million and 0.58%,
respectively, as of December 31, 2008. The increase in
non-performing loans during 2009 resulted from multiple properties,
including loans secured by either commercial or residential real
estate collateral. Non-performing loans at year-end 2009 included
two commercial real estate loans for $3.3 million that were less
than 90 days past due but, because of reduced occupancy, do not
have an earnings stream sufficient to keep the loans current as
well as $415,000 that we expect will be guaranteed by the SBA.
Total loan delinquencies under 90 days at December 31, 2009
amounted to $5.7 million as compared to $486,000 at December 31,
2008 and included three loans for $4.8 million that have
experienced a reduction in the income generating cash flows but are
expected to stay at 30 days past due.
The allowance for loan losses in total and as a proportion of
total loans as of December 31, 2009 equaled $7.2 million and 1.34%,
respectively, as compared to $5.9 million and 1.30%, respectively,
as of December 31, 2008. The Company recorded a provision for loan
losses of $540,000 in the fourth quarter of 2009 as compared to
$450,000 for the fourth quarter of 2008 and $400,000 in the third
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 7 basis points
for the year ended December 31, 2009 as compared to 5 basis points
in the comparable period in 2008.
The Company also announced today a quarterly cash dividend of
$0.07 per share to be paid on February 18, 2010 to shareholders of
record as of February 4, 2010.
Press releases and SEC filings can be viewed on our website
www.RiverBk.com under the "About Us" tab.
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 Twelve months ended
------------------ -------------------
(For the periods ending) Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2009 2008 2009 2008
-------- -------- --------- --------
Performance ratios (annualized):
Efficiency ratio 63.98% 63.08% 64.74% 62.54 %
Return on average assets 0.71% 1.96% 0.64% (0.39)%
Return on average stockholders
equity 8.28% 26.08% 6.97% (4.63)%
Net interest margin 2.63% 2.39% 2.56% 2.50 %
Interest rate spread
(int. bearing only) 2.32% 2.09% 2.23% 2.14 %
Dividends paid per share
during period $ 0.05 $ 0.15 $ 0.30 $ 0.58
------------------ -------------------
(At) Dec. 31, Dec. 31,
2009 2008
--------- --------
"Well Capitalized"
Minimums
Capital Ratios:
Stockholders' equity to total
assets N/A 7.41% 9.48%
RiverBank Tier 1 leverage ratio 5.0% 6.85% 8.18%
Risk-Based Capital Ratio:
LSB Corporation Tier 1 risk-based 6.0% 9.74% 13.30%
RiverBank Tier 1 risk-based 6.0% 9.57% 11.83%
RiverBank total risk-based 10.0% 11.84% 12.97%
Asset Quality:
Allowance for loan losses as a
percent of total loans 1.34% 1.30%
Allowance as a percent of
non-performing loans 119.41% 225.83%
Non-performing loans as a percent
of total loans 1.12% 0.58%
Non-performing assets as a percent
of total assets 0.74% 0.36%
Per Share Data:
Book value per share including CPP $ 13.43 $ 16.14
Book value per share excluding CPP $ 13.43 $ 12.78
Tangible book value per share including CPP $ 12.57 $ 15.40
Tangible book value per share excluding CPP $ 12.57 $ 12.04
Reconciliation Table - Non-GAAP Financial Information
(Dollars in thousands, except per share data)
(unaudited)
Three months ended Twelve months ended
------------------ -------------------
(For the periods ended) Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2009 2008 2009 2008
-------- -------- --------- --------
Net income (loss) attributable
to common shareholders per GAAP $ 795 $ 3,664 $ 3,792 $ (2,727)
Add: Impairment of investments,
net of tax -- (2,816) -- 6,567
-------- -------- --------- --------
Net operating earnings
attributable to common
shareholders (non-GAAP) $ 795 $ 848 $ 3,792 $ 3,840
======== ======== ========= ========
Diluted net operating earnings
per common share $ 0.18 $ 0.19 $ 0.85 $ 0.86
Return on average assets 0.71% 0.45% 0.64% 0.55%
Return on average stockholders'
equity 8.28% 6.03% 6.97% 6.54%
LSB CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands)
(unaudited)
(At) Dec. 31, Dec. 31,
2009 2008
--------- ---------
Retail loans $ 159,101 $ 134,079
Corporate loans 377,518 318,542
--------- ---------
Total loans 536,619 452,621
--------- ---------
Allowance for loan losses (7,168) (5,885)
--------- ---------
Investments available for sale 230,533 264,561
FHLB stock 11,825 11,825
--------- ---------
Total investments 242,358 276,386
--------- ---------
Federal funds sold 6,597 6,469
Other assets 38,192 31,733
--------- ---------
Total assets $ 816,598 $ 761,324
========= =========
Core deposits $ 252,389 $ 177,639
Term deposits 240,405 231,024
--------- ---------
Total deposits 492,794 408,663
--------- ---------
Borrowed funds 259,082 276,490
Other liabilities 4,202 4,029
--------- ---------
Total liabilities 756,078 689,182
--------- ---------
Total stockholders' equity 60,520 72,142
--------- ---------
Total liabilities and stockholders' equity $ 816,598 $ 761,324
========= =========
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data)
(unaudited)
Three months ended Twelve months ended
------------------- -------------------
(For the period ended) Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2009 2008 2009 2008
--------- --------- --------- ---------
Interest income $ 10,441 $ 9,988 $ 40,842 $ 38,755
Interest expense 5,208 5,668 21,267 21,880
--------- --------- --------- ---------
Net interest income 5,233 4,320 19,575 16,875
Provision for loan losses 540 450 1,640 1,285
--------- --------- --------- ---------
Net interest income after
provision for loan losses 4,693 3,870 17,935 15,590
Impairment of investments -- (722) -- (10,105)
Gain on sales of investments 803 -- 1,832 --
Prepayment penalty on FHLB advances (127) -- (127) --
Other non-interest income 519 577 2,091 2,116
Salary & employee benefits expense 2,070 1,744 7,083 6,706
FDIC deposit insurance premiums 231 37 1,253 83
Other non-interest expense 1,379 1,308 5,691 5,087
--------- --------- --------- ---------
Total non-interest expense 3,680 3,089 14,027 11,876
--------- --------- --------- ---------
Net income (loss) before income
taxes 2,208 636 7,704 (4,275)
Income tax expense (benefit) 757 (3,032) 2,667 (1,552)
--------- --------- --------- ---------
Net income (loss) before preferred
stock dividends and accretion 1,451 3,668 5,037 (2,723)
Preferred stock dividends and
accretion (656) (4) (1,245) (4)
--------- --------- --------- ---------
Net income (loss) attributable to
common shareholders $ 795 $ 3,664 $ 3,792 $ (2,727)
========= ========= ========= =========
Basic earnings (loss) per common
share $ 0.18 $ 0.82 $ 0.85 $ (0.61)
Diluted earnings (loss) per
common share $ 0.18 $ 0.82 $ 0.85 $ (0.61)
End of period common shares
outstanding 4,506,686 4,470,941 4,506,686 4,470,941
Weighted average common shares
outstanding:
Basic 4,501,550 4,464,332 4,484,920 4,468,484
Diluted 4,502,948 4,468,708 4,486,044 4,484,550
CONTACT: Gerald T. Mulligan President & CEO (978)
725-7555
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