LSB Financial Corp. (LSBI, Financial) filed Quarterly Report for the period ended 2011-09-30.
Lsb Financial Corp. has a market cap of $20.2 million; its shares were traded at around $13 with a P/E ratio of 11.61 and P/S ratio of 0.92.
Non-performing assets, which include non-accruing loans, loans 90 or more days past due but still accruing, and foreclosed assets, decreased from $19.3 million at December 31, 2010 to $16.4 million at September 30, 2011. Non-performing loans at September 30, 2011 were comprised of $7.5 million, or 50.40%, of one- to four-family or multi-family residential real estate loans, $7.1 million, or 47.93%, of loans on land or commercial property, and $240,000, or 1.67%, of non real estate loans. Non-performing assets at September 30, 2011 also include $1.5 million of foreclosed assets compared to $1.2 million at December 30, 2010. At September 30, 2011, our allowance for loan losses equaled 1.69% of total loans compared to 1.65% at December 31, 2010. The allowance for loan losses at September 30, 2011 totaled 32.79% of non-performing assets compared to 27.74% at December 31, 2010, and 36.05% of non-performing loans at September 30, 2011 compared to 29.61% at December 31, 2010. Our non-performing assets equaled 4.50% of total assets at September 30, 2011 compared to 5.18% at December 31, 2010. Non-performing loans totaling $2.8 million were charged off in the first nine months of 2011, offset by $55,000 of recoveries. These significant improvements were due to the Bank charging off $1.8 million of non-performing loans, taking $1.5 million into other real estate owned (“OREO”), accepting short sales on $3.8 million and restoring $462,000 to accrual status. In addition, we received principal reductions or payoffs of $749,000 on four loans and $102,000 of principal payments.
Net Interest Income. Net interest income for the nine months ended September 30, 2011 increased $551,000 or 5.81%, over the same period in 2011. This increase was due to a 33 basis point increase in our net interest margin (net interest income divided by average interest-earning assets) from 3.64% for the nine months ended September 30, 2010 to 3.97% for the nine months ended September 30, 2011 offset by a $3.3 million decrease in average net interest-earning assets. The increase in net interest margin is primarily due to the 56 basis point decrease in the average rate on interest-bearing liabilities from 1.87% for the nine months ended September 30, 2010 to 1.31% for the nine months ended September 30, 2011. The average rate on interest-earning assets decreased 19 basis points from 5.47% to 5.28% for the same respective periods.
Net interest income for the three months ended September 30, 2011 decreased $29,000, or 0.86% over the same period in 2010 due primarily to a $6.9 million decrease in net earning assets partially offset by a 25 basis point increase in our net interest margin from 3.83% for the third quarter of 2010 to 4.08% for the third quarter of 2011. Interest income on loans decreased $475,000 for the third quarter of 2011 compared to the third quarter of 2010 primarily due to a 17 basis point decrease in the average yield on loans from 5.70% for the third quarter of 2010 to 5.53% for the third quarter of 2011 and a $23.9 million decrease in average outstanding balances. Interest income on other investments and Federal Home Loan Bank stock decreased $2,000 for the third quarter of 2011 compared to the third quarter of 2010 due to primarily to an $810,000 decrease in the average balance offset by a 6 basis point increase in the average yield on other investments and Federal Home Loan Bank stock. Interest expense decreased $448,000, or 30.09%, for the third quarter of 2011 from the same period in 2010 primarily due to a 44 basis point decrease in the average rate paid on interest-earning liabilities from 1.72% for the third quarter of 2010 to 1.28% for the same period in 2011 and a $22.7 million decrease in average interest-earning liabilities for the same periods.
The $3.2 million decrease in non-performing loans at September 30, 2011 compared to December 31, 2010 was primarily due to the Bank charging off $1.8 million of non-performing loans, taking $1.5 million into OREO, accepting short sales on $3.8 million and restoring $462,000 to accrual status. In addition we received principal reductions or payoffs of $749,000 on four loans and $102,000 of principal payments. Over this period we also had $5.3 million in new loans become non-performing of which $2.1 million were residential properties and $3.2 million were nonresidential or land loans. We intend to set up troubled debt restructures on $3.0 million of these new loans as the borrowers have shown a capacity to repay.
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Lsb Financial Corp. has a market cap of $20.2 million; its shares were traded at around $13 with a P/E ratio of 11.61 and P/S ratio of 0.92.
Highlight of Business Operations:
In these extraordinary economic times, we find ourselves in a community that to some extent has been sheltered from the worst effects of the slowdown. The Greater Lafayette area enjoys diverse employment including major manufacturers such as Subaru/Toyota, Caterpillar, and Wabash National; a strong education sector with Purdue University and a large local campus of Ivy Tech Community College; government offices of Lafayette, West Lafayette and Tippecanoe County; a growing high-tech presence with the Purdue Research Park; and the growth of a new medical corridor spurred by the building of two new hospitals. The area s diversity did not make us immune to the effects of the recession, but we were spared its worst effects. Current signs of recovery, based on a report from Greater Lafayette Commerce, include increasing manufacturing employment, a continuing commitment to new facilities and renovations at Purdue University and signs of renewed activity in residential development projects. There were capital investments of $305 million in the Greater Lafayette area for the first four months of 2011 compared to $640 million in all of 2010. Wabash National, the area s second largest industrial employer, is hiring 400 to 500 people for increased trailer production and will add a new line for production of bulk liquid storage containers which will employ another 200. Subaru, the area s largest industrial employer and producer of the Subaru Legacy, Outback and Tribeca, announced the addition of 100 full-time production positions. Nanshan America will be opening a plant in Lafayette in 2011 employing 200 people. Growth in the medical corridor has continued with numerous clinics and specialized care facilities under way which along with the two new hospitals makes Greater Lafayette a regional healthcare hub. In the education sector, Purdue s West Lafayette 2011-2012 enrollment is just under 40,000, down just slightly from last year and Ivy Tech s 2011 enrollment is expected to exceed last year s record level of 8,200 students. The Purdue Research Park now includes 110 high-tech and life science businesses, has more than 3,700 employees earning an average annual wage of $54,000 and has about 364,000 square feet of incubation space, making it the largest business incubator complex in the state. The Tippecanoe County unemployment rate peaked at 10.6% in July 2009 and by April 2011 had improved to 6.3%. The rate climbed to 8.1% in July, an expected rise typically caused by teachers summer layoffs, and by September had dropped back to 7.3%.Non-performing assets, which include non-accruing loans, loans 90 or more days past due but still accruing, and foreclosed assets, decreased from $19.3 million at December 31, 2010 to $16.4 million at September 30, 2011. Non-performing loans at September 30, 2011 were comprised of $7.5 million, or 50.40%, of one- to four-family or multi-family residential real estate loans, $7.1 million, or 47.93%, of loans on land or commercial property, and $240,000, or 1.67%, of non real estate loans. Non-performing assets at September 30, 2011 also include $1.5 million of foreclosed assets compared to $1.2 million at December 30, 2010. At September 30, 2011, our allowance for loan losses equaled 1.69% of total loans compared to 1.65% at December 31, 2010. The allowance for loan losses at September 30, 2011 totaled 32.79% of non-performing assets compared to 27.74% at December 31, 2010, and 36.05% of non-performing loans at September 30, 2011 compared to 29.61% at December 31, 2010. Our non-performing assets equaled 4.50% of total assets at September 30, 2011 compared to 5.18% at December 31, 2010. Non-performing loans totaling $2.8 million were charged off in the first nine months of 2011, offset by $55,000 of recoveries. These significant improvements were due to the Bank charging off $1.8 million of non-performing loans, taking $1.5 million into other real estate owned (“OREO”), accepting short sales on $3.8 million and restoring $462,000 to accrual status. In addition, we received principal reductions or payoffs of $749,000 on four loans and $102,000 of principal payments.
Net Interest Income. Net interest income for the nine months ended September 30, 2011 increased $551,000 or 5.81%, over the same period in 2011. This increase was due to a 33 basis point increase in our net interest margin (net interest income divided by average interest-earning assets) from 3.64% for the nine months ended September 30, 2010 to 3.97% for the nine months ended September 30, 2011 offset by a $3.3 million decrease in average net interest-earning assets. The increase in net interest margin is primarily due to the 56 basis point decrease in the average rate on interest-bearing liabilities from 1.87% for the nine months ended September 30, 2010 to 1.31% for the nine months ended September 30, 2011. The average rate on interest-earning assets decreased 19 basis points from 5.47% to 5.28% for the same respective periods.
Net interest income for the three months ended September 30, 2011 decreased $29,000, or 0.86% over the same period in 2010 due primarily to a $6.9 million decrease in net earning assets partially offset by a 25 basis point increase in our net interest margin from 3.83% for the third quarter of 2010 to 4.08% for the third quarter of 2011. Interest income on loans decreased $475,000 for the third quarter of 2011 compared to the third quarter of 2010 primarily due to a 17 basis point decrease in the average yield on loans from 5.70% for the third quarter of 2010 to 5.53% for the third quarter of 2011 and a $23.9 million decrease in average outstanding balances. Interest income on other investments and Federal Home Loan Bank stock decreased $2,000 for the third quarter of 2011 compared to the third quarter of 2010 due to primarily to an $810,000 decrease in the average balance offset by a 6 basis point increase in the average yield on other investments and Federal Home Loan Bank stock. Interest expense decreased $448,000, or 30.09%, for the third quarter of 2011 from the same period in 2010 primarily due to a 44 basis point decrease in the average rate paid on interest-earning liabilities from 1.72% for the third quarter of 2010 to 1.28% for the same period in 2011 and a $22.7 million decrease in average interest-earning liabilities for the same periods.
The $3.2 million decrease in non-performing loans at September 30, 2011 compared to December 31, 2010 was primarily due to the Bank charging off $1.8 million of non-performing loans, taking $1.5 million into OREO, accepting short sales on $3.8 million and restoring $462,000 to accrual status. In addition we received principal reductions or payoffs of $749,000 on four loans and $102,000 of principal payments. Over this period we also had $5.3 million in new loans become non-performing of which $2.1 million were residential properties and $3.2 million were nonresidential or land loans. We intend to set up troubled debt restructures on $3.0 million of these new loans as the borrowers have shown a capacity to repay.
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