Exhibit 99.1

101 Main St.

P.O. Box 1628

Lafayette, IN 47902

(765) 742-1064

www.LSBANK.com

lsbmail@LSBANK.com

FOR IMMEDIATE RELEASE	For further information contact:
	Randolph F. Williams
	President/CEO
	(765) 742-1064
	Fax: (765) 429-5932

LSB Financial Corp. Announces First Quarter Results and Payment of a Cash Dividend

 LSB Financial Corp. (NASDAQ:LSBI), the parent company of Lafayette Savings Bank, FSB, today reported earnings for the quarter ended March 31, 2008.  Compared to the first quarter of 2007, net income was $515,000, down 33.9%, resulting in diluted earnings per share of $0.33.  LSB Financial President & CEO, Randolph F. Williams stated, “The current banking environment is extremely challenging, and I am pleased with our recent growth and positive trends.  We are starting to see activity in the real estate market and loans were up $7.1 million, or 2.3%, compared to year-end.  Deposits also increased over $8.5 million, or 3.7%, during the quarter.”

Williams continued, “Largely as a result of the Fed cutting short term interest rates, an unprecedented 3.0% in just six months, the net interest margin for the first quarter of 2008 was down 37 basis points to 3.11% when compared to the previous year.  This translates to a $424,000 decrease in net interest income.  While interest rate changes are out of our control, our managers have done a remarkable job of improving asset quality, growing core deposits, and containing expenses.  At quarter end, non-performing loans totaled $8.3 million or 2.69% of total loans, compared to $10.0 million, or 3.32%, at December 31, 2007 and $12.5 million, or 3.97%, one year ago.”

Williams continued, “Despite the fact that Tippecanoe County’s unemployment rate has been increasing since year end, we are seeing signs of an improving economy.  Our delinquent loans are at a 19-month low, properties are selling at closer to the appraised values and there has been a slowing in the rate of local foreclosures and bankruptcies.  Data from March of this year indicates that Indiana is now 11th in the country in foreclosures, with one out of every 538 households facing foreclosure.  Last year Indiana was ranked in the top three.”

The Company also announced that it will pay a quarterly cash dividend of $0.25 per share to shareholders of record as of the close of business on May 9, 2008 with a payment date of June 6, 2008.  Williams stated, “At slower growth times like this, we are pleased to be able to return equity to our shareholders in the form of a higher dividend.  This is particularly significant based on the current favorable dividend tax rate.”

The closing market price of LSB stock on May 1, 2006 was $18.00 per share as reported by the NASDAQ National Market.

LSB FINANCIAL CORP. SELECTED CONSOLIDATED FINANCIAL INFORMATION (Dollars in thousands except share and per share amounts)
Selected balance sheet data:	Three months ended March 31, 2008			Year ended December 31, 2007
Cash and due from banks	$	1,487		$	1,644
Short-term investments		11,852			4,846
Securities available-for-sale		12,992			13,221
Loans held for sale		247			---
Net portfolio loans		303,766			296,908
Allowance for loan losses		3,277			3,702
Premises and equipment, net		6,736			6,815
Federal Home Loan Bank stock, at cost		3,997			3,997
Bank owned life insurance		5,671			5,613
Other assets		7,593			8,966
Total assets		354,341			342,010
Deposits		240,560			232,030
Advances from Federal Home Loan Bank		77,256			74,256
Other liabilities		2,338			1,792
Shareholders’ equity		34,187			33,932
Book value per share	$	21.92		$	22.07
Equity / assets		9.65	%		9.92	%
Total shares outstanding		1,559,409			1,557,968
Asset quality data:
Non-accruing loans	$	6,592		$	9,935
Loans past due 90 days still on accrual		1,669			59
Other real estate / assets owned		3,291			3,944
Total non-performing assets		11,552			13,938
Non-performing loans / total loans		2.69	%		3.32	%
Non-performing assets / total assets		3.26	%		4.08	%
Allowance for loan losses / non-performing loans		39.67	%		37.04	%
Allowance for loan losses / non-performing assets		28.37	%		26.56	%
Allowance for loan losses / total loans		1.07	%		1.23	%
Loans charged off (quarter-to-date and year-to-date, respectively)	$	676		$	672
Recoveries on loans previously charged off		1			38

	Three months ended March 31,
Selected operating data:	2008			2007
Total interest income	$	5,421		$	5,869
Total interest expense		2,878			2,902
Net interest income		2,543			2,967
Provision for loan losses		250			250
Net interest income after provision for loan losses		2,293			2,717
Non-interest income:
Deposit account service charges		396			406
Gain on sale of mortgage loans		16			42
Gain on sale of securities		0			0
Net gain on sale of real estate owned		91			0
Other non-interest income		279			252
Total non-interest income		782			700
Non-interest expense:
Salaries and benefits		1,227			1,190
Occupancy and equipment, net		344			314
Computer service		135			121
Advertising		69			41
Other		558			523
Total non-interest expense		2,333			2,189
Income before income taxes		742			1,228
Income tax expense		227			449
Net income		515			779
Weighted average number of diluted shares		1,560,997			1,612,091
Diluted earnings per share	$	0.33		$	0.48
Return on average equity		6.03	%		8.87	%
Return on average assets		0.59	%		0.86	%
Average earning assets	$	327,333		$	341,323
Net interest margin		3.11	%		3.48	%
Efficiency ratio		75.87	%		64.06	%