8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported)   May 6, 2010
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)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ 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))

Item 2.02   Results of Operations and Financial Condition.

On May 6, 2010, LSB Financial Corp. issued a press release reporting its results of operations and financial condition for the quarter ended March 31, 2010.

A copy of the press release is attached as Exhibit 99.1 to this Current Report and is incorporated herein by this reference. The information disclosed under this Item 2.02, including Exhibit 99.1 hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and shall not be deemed incorporated by reference into any filing made under the Securities Act of 1933, except as expressly set forth by specific reference in such filing.

Item 9.01   Financial Statements and Exhibits.

(d)  Exhibits
Exhibit No.	Description
99.1	Press Release issued May 6, 2010

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereto duly authorized.

Date: May 10, 2010	LSB Financial Corp.
	By:	/s/ Mary Jo David
		Mary Jo David, Treasurer (Principal Financial and Accounting Officer)

EXHIBIT INDEX

Exhibit Number	Exhibit Description	Location
99.1	Press Release, dated May 6, 2010	Attached

EX-99.1

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 Up 76% and Payment of a Cash Dividend

May 6, 2010, Lafayette, IN - LSB Financial Corp. (NASDAQ:LSBI), the parent company of Lafayette Savings Bank, FSB, today reported quarterly earnings of $532,000 or $0.34 diluted earnings per share compared to $302,000 or $0.20 diluted earnings per share a year earlier.  Randolph F. Williams, president and CEO stated, “The fundamentals of the bank are strong as seen in the 23.5% increase in net interest income and a 5.3% reduction in non-interest expenses. While interest income for the first quarter of 2010 actually fell $302,000 compared to the same period in 2009, that decrease was more than offset by an $863,000 decrease in interest expense as our net interest margin grew from 2.67% at March 31, 2009 to 3.45% at March 31, 2010.  Our branch bankers have been successful in increasing deposits $13.1 million or 4.71% since the beginning of the year”.

The increase in net income was primarily due to a $561,000 increase in net interest income and a $135,000 decrease in the provision for loan losses from $569,000 to $434,000 compared to the prior year.  Noninterest expenses were also down $134,000 from $2.5 million the first quarter of 2009 to $2.4 million for the first quarter of 2010.  These improvements were offset by a $438,000 decrease in the gain on sale of loans due primarily to a decrease in the number of people refinancing their mortgages and a strategic decision to book a larger share of residential loan originations in the bank’s own portfolio.

The bank continues to maintain a strong capital base with a Tier I capital ratio at March 31, 2010 of 9.21% which is in excess of the 5.00% required to remain categorized as well-capitalized as defined by the regulators.  Williams stated, “While the future direction of the economy is unclear, we believe that the combination of our continued profitability, a $4.1 million loan loss reserve and $15.6 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 $18.9 million or 5.09% of total assets, compared to $14.5 million or 3.91%, at the end of 2009.  Williams continued, “While this increase is a concern and has to be taken seriously, 95% of these loans are secured by local real estate, and the typical loan performed as agreed, for nearly four years before encountering a payment problem.  An improved economy will go a long way toward correcting this trend.  In the meantime we will continue to work with the borrowers in an effort to minimize the impact on our performance.”

As announced earlier, the Company will pay a quarterly cash dividend of $0.125 per share to shareholders of record as of the close of business on May 19, 2010 with a payment date of June 4, 2010.  Williams stated, “We are pleased to be able to provide this dividend to our shareholders representing 36.7% of quarterly earnings and a yield of 4.5%.  While the need to build equity is paramount in these times, we want to reward shareholder loyalty whenever the economic recovery makes that possible.”

The closing market price of LSB stock on May 5, 2010 was $11.10 per share as reported by the Nasdaq Global 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, 2010			Year ended December 31, 2009
Cash and due from banks	$	8,345		$	8,084
Short-term investments		5,397			4,817
Securities available-for-sale		10,978			11,345
Loans held for sale		611			3,303
Net portfolio loans		321,053			317,860
Allowance for loan losses		4,121			3,737
Premises and equipment, net		6,167			6,209
Federal Home Loan Bank stock, at cost		3,997			3,997
Bank owned life insurance		6,122			6,071
Other assets		9,037			9,364
Total assets		371,707			371,050
Deposits		290,959			277,866
Advances from Federal Home Loan Bank		44,000			57,000
Other liabilities		2,528			2,300
Shareholders’ equity		34,220			33,884
Book value per share	$	22.03		$	21.81
Equity / assets		9.21	%		9.13	%
Total shares outstanding		1,553,525			1,553,525
Asset quality data:
Non-accruing loans	$	15,226		$	12,604
Loans past due 90 days still on accrual		1,927			---
Other real estate / assets owned		1,785			1,892
Total non-performing assets		18,938			14,496
Non-performing loans / total loans		5.33	%		3.92	%
Non-performing assets / total assets		5.09	%		3.91	%
Allowance for loan losses / non-performing loans		24.02	%		29.65	%
Allowance for loan losses / non-performing assets		21.76	%		25.78	%
Allowance for loan losses / total loans		1.26	%		1.16	%
Loans charged off (quarter-to-date and year-to-date, respectively)	$	50		$	3,186
Recoveries on loans previously charged off		0			28

	Three months ended March 31,
Selected operating data:	2010			2009
Total interest income	$	4,671		$	4,973
Total interest expense		1,723			2,586
Net interest income		2,948			2,387
Provision for loan losses		434			569
Net interest income after provision for loan losses		2,514			1,818
Non-interest income:
Deposit account service charges		367			336
Gain on sale of mortgage loans		85			523
Gain on sale of securities		0			0
Net gain(loss) on sale of real estate owned		(33	)		33
Other non-interest income		275			244
Total non-interest income		694			1,136
Non-interest expense:
Salaries and benefits		1,292			1,352
Occupancy and equipment, net		339			352
Computer service		127			134
Advertising		56			57
Other		599			652
Total non-interest expense		2,413			2,547
Income before income taxes		795			407
Income tax expense		263			105
Net income		532			302
Weighted average number of diluted shares		1,553,535			1,553,525
Diluted earnings per share	$	0.34		$	0.20
Return on average equity		6.23	%		3.52	%
Return on average assets		0.57	%		0.32	%
Average earning assets	$	341,481		$	357,610
Net interest margin		3.45	%		2.67	%
Efficiency ratio		75.22	%		84.56	%