LSB Corporation (NASDAQ: LSBX) (the "Company") today announced
first quarter 2010 net income of $1.5 million, or $0.34 per diluted
share, as compared to $805,000, or $0.18 per diluted common share,
for the first quarter of 2009 and $795,000, or $0.18 per share, in
the fourth quarter of 2009. This corresponds to a return on average
assets and average equity of 0.77% and 10.22% in the first quarter
of 2010, respectively, as compared to 0.51% and 5.45% in the first
quarter of 2009, respectively.
At March 31, 2010, assets totaled $806.6 million, a decrease of
$10.0 million or 1.2% from December 31, 2009. The decline in total
assets was a measured effort to reduce wholesale funding amid
continued deposit growth. The Company experienced local loan growth
of $7.9 million or 1.5% from December 31, 2009. The corporate loan
portfolio increased by $4.7 million or 1.2% while the retail loan
portfolio increased by $3.2 million or 2.0%. This loan growth was
offset and partially funded by maturities and regular amortization
of collateralized mortgage obligations and mortgage-backed
securities totaling $25.6 million and sales of investments of $15.6
million.
At March 31, 2010, deposits totaled $504.3 million, an increase
of $11.5 million or 2.3% from December 31, 2009. River Bank's focus
on attracting and retaining core deposits produced favorable
results in the quarter. Core deposits (savings, money market, NOW
and demand deposit accounts) increased by $10.4 million, $12.7
million, and $2.2 million, respectively, for a total of $25.4
million or 10% from December 31, 2009. Certificates of deposit
decreased $13.9 million including matured brokered certificates of
deposit of $8.9 million. Total borrowed funds decreased by $23.1
million or 8.9% from December 31, 2009 and totaled $236.0 million
at March 31, 2010. During the first quarter of 2010, $23.0 million
in long-term advances matured and the Company prepaid $5.0 million
in long-term advances with a penalty of $149,000.
President and CEO Gerald T. Mulligan stated, "In spite of
continuing economic challenges, I am pleased to report earnings of
$0.34 per diluted share for the first quarter of 2010. We continue
to reduce our higher-cost wholesale funding and we expect that
replacement of higher-cost wholesale funding with lower cost core
deposits will have a positive impact on our net interest margin in
future quarters.
"Especially gratifying is the improvement in our delinquencies
and non-performing loans. Several larger credits were able to bring
their loans fully current and we have confidence in the
collectibility of the principal balances. There are two other
relationships that have required a debt modification or rate
reduction that will continue to negatively impact the Bank.
Unfortunately, as long as the unemployment level remains high, we
will continue to see payment stress in our residential portfolio
and are working with these borrowers as needed.
"Our continued success in generating locally-based deposits,
which grew by 2.3% during the quarter and almost 9% on an
annualized basis, is encouraging."
Gains on sales of investments totaled $697,000 in the first
quarter of 2010 as compared to $803,000 and $227,000 in the fourth
and first quarters of 2009, respectively.
The Company's net interest margin increased from 2.48% for the
three months ended March 31, 2009, to 2.69% in the first quarter of
2010. The margin improvement was partially caused by a shift in the
mix of assets as higher yielding loans replaced maturing
investments and were funded with lower cost deposits. Continued
improvement in the net interest margin in the second quarter of
2010 is expected due to the reduction of the higher-cost
liabilities in the latter part of March 2010.
At March 31, 2010, non-performing loans totaled $4.8 million and
0.88% of total loans as compared to $6.0 million and 1.12%,
respectively, as of December 31, 2009, and $2.6 million and 0.54%,
respectively, as of March 31, 2009. The decrease in non-performing
loans during 2010 resulted from one loan for $1.1 million paying
all arrearages up to date. In addition, another loan for $415,000
is protected by a guaranty by the SBA. Total loan delinquencies
under 90 days at March 31, 2010, amounted to $4.2 million as
compared to $5.7 million at December 31, 2009 and included two
loans for $2.9 million that have experienced a reduction in the
income generating cash flows but are not expected to deteriorate
beyond 30 days past due.
The allowance for loan losses in total and as a proportion of
total loans as of March 31, 2010 equaled $7.3 million and 1.34%,
respectively, as compared to $7.2 million and 1.34%, respectively,
as of December 31, 2009. The Company recorded a provision for loan
losses of $700,000 in the first quarter of 2010 as compared to
$540,000 for the fourth quarter of 2009 and $240,000 in the first
quarter of 2009. The increase in the provision for loan losses in
2010 is due to the high level of charge-offs coupled with continued
loan growth. Annualized net loan charge-offs as a percentage of
average loans totaled 43 basis points for the three months ended
March 31, 2010 as compared to 3 basis points in the comparable
period in 2009.
The Company also announced today an increase of 28.6% in the
quarterly cash dividend from $0.07 to $0.09 per share to be paid on
May 20, 2010 to shareholders of record as of May 6, 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)
(Dollars in thousands, except per share data)
Three months ended
----------------------------
(For the periods ending) March 31, Dec. 31, March 31,
2010 2009 2009
-------- -------- --------
Performance ratios (annualized):
Efficiency ratio 60.23% 63.98% 71.38%
Return on average assets 0.77% 0.71% 0.51%
Return on average stockholders' equity 10.22% 8.28% 5.45%
Net interest margin 2.69% 2.63% 2.48%
Interest rate spread (int. bearing only) 2.44% 2.32% 2.14%
Dividends paid per share $ 0.07 $ 0.05 $ 0.15
-------- -------- --------
(At) March 31, Dec. 31, March 31,
2010 2009 2009
-------- -------- --------
"Well Capitalized"
Minimums
Capital Ratios:
Stockholders' equity to total assets N/A 7.69% 7.41% 9.40%
RiverBank Tier 1 leverage ratio 5.0% 7.03% 6.85% 8.00%
Risk-Based Capital Ratio:
LSB Corporation Tier 1 risk-based 6.0% 10.02% 9.74% 12.87%
RiverBank Tier 1 risk-based 6.0% 9.91% 9.57% 11.59%
RiverBank total risk-based 10.0% 12.20% 11.84% 12.73%
Asset Quality:
Non-performing loans $ 4,767 $ 6,003 $ 2,576
Non-performing assets $ 4,767 $ 6,003 $ 2,696
Delinquent loans past due 30-89 days $ 4,206 $ 5,723 $ 963
Net charge-offs (quarterly) $ 591 $ 8 $ 36
Allowance for loan losses as a percent
of total loans 1.34% 1.34% 1.27%
Allowance as a percent of non-performing
loans 152.65% 119.41% 236.37%
Non-performing loans as a percent of total
loans 0.88% 1.12% 0.54%
Non-performing assets as a percent of total
assets 0.59% 0.74% 0.36%
Net charge-offs to average loans (annualized) 0.43% 0.01% 0.03%
Per Share Data:
Book value per share (excluding CPP) $ 13.77 $ 13.43 $ 13.02
Tangible book value per share (excluding CPP) $ 12.84 $ 12.57 $ 12.08
LSB CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands)
(unaudited)
(At) March 31, Dec. 31, March 31,
2010 2009 2009
-------- -------- --------
Retail loans $162,257 $159,101 $144,010
Corporate loans 382,196 377,518 335,936
-------- -------- --------
Total loans 544.453 536,619 479,946
-------- -------- --------
Allowance for loan losses (7,277) (7,168) (6,089)
-------- -------- --------
Investments available for sale 206,450 230,533 249,945
FHLB stock 11,825 11,825 11,825
-------- -------- --------
Total investments 218,275 242,358 261,770
-------- -------- --------
Federal funds sold 13,423 6,597 11,041
Other assets 37,693 38,192 31,804
-------- -------- --------
Total assets $806,567 $816,598 $778,472
======== ======== ========
Core deposits $277,762 $252,389 $189,033
Term deposits 226,556 240,405 244,654
-------- -------- --------
Total deposits 504,318 492,794 433,687
-------- -------- --------
Borrowed funds 236,025 259,082 267,085
Other liabilities 4,185 4,202 4,494
-------- -------- --------
Total liabilities 744,528 756,078 705,266
-------- -------- --------
Total stockholders' equity 62,039 60,520 73,206
-------- -------- --------
Total liabilities and stockholders' equity $806,567 $816,598 $778,472
======== ======== ========
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data)
(unaudited)
Three months ended
-------------------------------
(For the periods ended) March 31, Dec. 31, March 31,
2010 2009 2009
--------- --------- ---------
Interest income $ 10,093 $ 10,441 $ 10,045
Interest expense 4,858 5,208 5,473
--------- --------- ---------
Net interest income 5,235 5,233 4,572
Provision for loan losses 700 540 240
--------- --------- ---------
Net interest income after provision for
loan losses 4,535 4,693 4,332
Gain on sales of investments 697 803 227
Prepayment penalty on FHLB advances (149) (127) --
Other non-interest income 543 519 504
Salary & employee benefits expense 1,816 2,070 1,743
FDIC deposit insurance premium 211 231 391
Other non-interest expense 1,453 1,379 1,489
--------- --------- ---------
Total non-interest expense 3,480 3,680 3,623
--------- --------- ---------
Net income before income tax expense 2,146 2,208 1,440
Income tax expense 600 757 476
--------- --------- ---------
Net income before preferred stock dividends
and accretion 1,546 1,451 964
Preferred stock dividends and accretion -- (656) (159)
--------- --------- ---------
Net income attributable to
common shareholders $ 1,546 $ 795 $ 805
========= ========= =========
Basic earnings per common share $ 0.34 $ 0.18 $ 0.18
Diluted earnings per common share $ 0.34 $ 0.18 $ 0.18
End of period common shares outstanding 4,506,686 4,506,686 4,470,941
Weighted average common shares outstanding:
Basic 4,506,686 4,501,550 4,470,941
Diluted 4,509,011 4,502,948 4,471,014
CONTACT: Gerald T. Mulligan President & CEO (978)
725-7555
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