lsb_8k0511.htm

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 Profitable Quarter and Payment of a Cash Dividend

Lafayette, IN, May 11, 2009 - LSB Financial Corp. (NASDAQ:LSBI), the parent company of Lafayette Savings Bank, FSB, today reported quarterly earnings of $302,000 or $0.20 diluted earnings per share compared to $515,000 or $0.33 diluted earnings per share a year earlier. The decrease in net income was primarily due to an increase in the provision for loan losses of $319,000 to $569,000 compared to $250,000 for the prior year. The loan loss reserve now stands at $3.9 million and represents 1.20% of total loans, up from 1.12% at the end of last year. Randolph F. Williams, president and CEO stated “Given that we are operating in the worst economic environment in nearly 60 years, we are pleased to announce that we remain profitable and are taking steps to further strengthen our company. While the local economy is in better shape than much of the country, it is weaker than in previous years.”

Williams continued, “The fundamentals of the bank are strong with the $156,000 or 6.1% decrease in net interest income more than made up by the $507,000 gain on sale of loans. Residential lending activity is brisk, especially refinancings. We sold over $21.5 million of loans in the secondary market in the first three months compared to $1.8 million in the same period last year. We were able to increase total deposits by $17.1 million or 6.6% since year-end, with core deposits growing 15.5% during that time. People are moving their money to banks and into FDIC-insured deposits, products where they know their initial investment will be safe and will only increase in value”.

The bank continues to maintain a strong capital base with a capital ratio at March 31, 2009 of 8.92% which is in excess of well-capitalized which is defined by the regulators as 5.00%. Williams stated, “While the future direction of the economy is unclear, based on the stress tests we have performed on our loan portfolio, we believe that the combination of our continued profitability, a $3.9 million loan loss reserve and $15.0 million in excess capital should be adequate to allow us to work through the issues presented by this struggling economy.” At quarter end, non-performing assets totaled $12.9 million or 3.36% of total assets, compared to $11.6 million or 3.26%, at the same time last year. The bank is working closely with Freddie Mac on the “Affordability & Stability” program announced by the President in order to provide relief to homeowners who are having difficulty making their mortgage payments.

The Company also announced that it will pay a quarterly cash dividend of $0.125 per share to shareholders of record as of the close of business on May 8, 2009 with a payment date of June 5, 2009. Williams stated, “We are pleased to be able to provide this dividend to our shareholders representing 64% of quarterly earnings and a yield of 3.6%. While the need to build equity is paramount in these times, we want to reward shareholder loyalty whenever earnings make that possible.”

The closing market price of LSB stock on May 8, 2009 was $13.75 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, 2009			Year ended December 31, 2008

Cash and due from banks	$	1,528		$	2,046
Short-term investments		24,657			9,179
Securities available-for-sale		12,138			11,853
Loans held for sale		2,962			1,342
Net portfolio loans		319,570			325,297
Allowance for loan losses		3,920			3,697
Premises and equipment, net		6,443			6,461
Federal Home Loan Bank stock, at cost		3,997			3,997
Bank owned life insurance		5,899			5,841
Other assets		6,387			6,996
Total assets		383,581			373,012

Deposits		275,683			258,587
Advances from Federal Home Loan Bank		71,500			78,500
Other liabilities		2,200			1,850

Shareholders’ equity		34,198			34,075
Book value per share	$	22.01		$	21.92
Equity / assets		8.92	%		9.14	%
Total shares outstanding		1,553,525			1,553,525

Asset quality data:
Non-accruing loans	$	10,320		$	7,976
Loans past due 90 days still on accrual		656			---
Other real estate / assets owned		1,897			1,412
Total non-performing assets		12,873			9,388
Non-performing loans / total loans		3.36	%		2.41	%
Non-performing assets / total assets		3.36	%		2.52	%
Allowance for loan losses / non-performing loans		35.71	%		46.35	%
Allowance for loan losses / non-performing assets		30.45	%		39.38	%
Allowance for loan losses / total loans		1.20	%		1.12	%
Loans charged off (quarter-to-date and year-to-date, respectively)	$	351		$	1,183
Recoveries on loans previously charged off		5			77

	Three months ended March 31,
Selected operating data:	2009			2008

Total interest income	$	4,973		$	5,421
Total interest expense		2,586			2,878
Net interest income		2,387			2,543
Provision for loan losses		569			250
Net interest income after provision for loan losses		1,818			2,293
Non-interest income:
Deposit account service charges		336			396
Gain on sale of mortgage loans		523			16
Gain on sale of securities		0			0
Net gain on sale of real estate owned		33			91
Other non-interest income		244			279
Total non-interest income		1,136			782
Non-interest expense:
Salaries and benefits		1,352			1,227
Occupancy and equipment, net		352			344
Computer service		134			135
Advertising		57			69
Other		652			558
Total non-interest expense		2,547			2,333
Income before income taxes		407			742
Income tax expense		105			227
Net income		302			515

Weighted average number of diluted shares		1,536,201			1,560,997
Diluted earnings per share	$	0.20		$	0.33

Return on average equity		3.52	%		6.03	%
Return on average assets		0.32	%		0.59	%
Average earning assets	$	357,610		$	327,333
Net interest margin		2.67	%		3.11	%
Efficiency ratio		84.56	%		75.87	%

Date of report (Date of earliest event reported) May 11, 2009
LSB Financial Corp.
(Exact Name of Registrant as Specified in Its Charter)


Indiana	0-25070	35-1934975
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)


101 Main Street, Lafayette, Indiana		47901
(Address of Principal Executive Offices)		(Zip Code)


(765) 742-1064
(Registrant’s Telephone Number, Including Area Code)



(Former Name or Former Address, if Changed Since Last Report)

	¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

	¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

	¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

	¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

	(d) Exhibits

	Exhibit No.		Description
	99.1		Press Release issued May 11, 2009

Date: May 13, 2009	LSB Financial Corp.

	By:	/s/ Mary Jo David
		Mary Jo David, Treasurer (Principal Financial and Accounting Officer)