LXBK Lsb Bancshares (MM)

LEXINGTON, N.C., Oct. 17 /PRNewswire-FirstCall/ -- LSB Bancshares, Inc. (NASDAQ:LXBK), parent company of Lexington State Bank, reported net income in the third quarter of 2005 of $2,500,000, or $0.29 per diluted share, compared to $1,777,000, or $0.21 per diluted share, in the third quarter of 2004. The increase in earnings was primarily due to higher net interest income and a lower provision for loan losses. Net interest income increased 14% to $11,206,000 in the third quarter of 2005 from $9,788,000 in the year-ago period, and benefited both from a recovery in the net interest margin as well as growth in average earning assets. The provision for loan losses was $715,000 in 2005's third quarter, down 35% from $1,104,000 in the third quarter of 2004. Noninterest income decreased 4% to $3,398,000 in 2005's third quarter versus $3,540,000 in the year-ago quarter. Noninterest expense increased 4% to $10,087,000 in the third quarter of 2005 from $9,654,000 in the third quarter of 2004. For the nine months ended September 30, 2005, net income was $7,162,000, or $0.83 per diluted share, compared to $6,166,000, or $0.72 per diluted share, in the first nine months of 2004. Net interest income increased 13% to $32,610,000 in the nine months ended September 30, 2005 from the year-ago period. Noninterest income for the first nine months of the year decreased approximately 6% over this period, although approximately half of that decline was due to the fact that the year-ago period included a nonrecurring gain on the sale of real estate of $292,000. Noninterest expense was up 5%, while the provision for loan losses declined 3% relative to the respective year-ago levels. The Bank achieved year-over-year balance sheet growth that was generally in the upper single digits and low double digits. As of September 30, 2005, total assets were approximately $992 million, an increase of 9% from the year- ago figure, while deposits grew 12% to $818 million and net loans increased 9% to $755 million from the year-ago level. Nonperforming assets, including nonaccruing loans, accruing loans more than 90 days past due, restructured loans and other real estate owned, were $8.5 million at September 30, 2005, versus $5.7 million at the year-ago date. Included in the $8.5 million was $4.7 million in other real estate owned, most of which related to the previously disclosed acquisition, by means of deed-in-lieu of foreclosure, of coastal property by the Bank during the second quarter of 2005. The reserve for loan losses at the end of 2005's third quarter was $8,684,000 or 1.14% of loans. Shareholders' equity totaled $91.5 million, and represented an equity- to-assets ratio of 9.2%. "We are pleased with the strong growth in earnings, which was due to a number of positive developments," said LSB Bancshares Chairman, President and CEO Robert F. Lowe. "For example, the net interest margin continued to recover, and growth in average earning assets remained solid relative to year- ago levels. Additionally, annual noninterest expense growth has been contained at approximately 5%, both for the third quarter and year-to-date periods. Lowe concluded, "While the banking environment remains challenging, we remain confident about our long-term opportunities for growth." LSB Bancshares recently declared a quarterly dividend of $0.17 per share, which will be paid October 15, 2005 to shareholders of record as of October 1, 2005. This level of dividend represents a 6% increase from the year-ago amount. LSB The Bank is one of the largest community banks in North Carolina, with 25 offices in Davidson, Forsyth, Guilford, Randolph and Stokes counties and a mortgage origination office in Wake County. Services are also available through 31 ATMs and cash dispensers, "LSB By Net" online banking and 24-hour "LSB By Phone" banking. LSB The Bank owns two subsidiaries: LSB Investment Services, Inc., which offers non-deposit, non-insured investment alternatives such as mutual funds and annuities; and Peoples Finance Co. of Lexington, Inc., which offers small loans and dealer financing. Common stock of the bank's parent company, LSB Bancshares, Inc., is traded on the Nasdaq National Market and is quoted under the symbol LXBK. Additional information about LSB is available on its web site, http://www.lsbnc.com/. Market makers include: Davenport & Company LLC; Friedman Billings Ramsey & Co.; FTN Midwest Research Secs.; Goldman, Sachs & Co.; Keefe, Bruyette & Woods, Inc.; Morgan Keegan & Co., Inc.; Morgan Stanley & Co., Inc.; Moors & Cabot, Inc.; The Robinson Humphrey Co.; Sandler O'Neill & Partners, and Schwab Capital Markets. Information in this press release contains forward-looking statements. These statements are identified by words such as "expects," "anticipates," "should," or other similar statements about future events. These forward- looking statements involve estimates, assumptions by management, risks, and uncertainties that could cause actual results to differ materially from current projections, including without limitations, the effects of future economic conditions, legislative and regulatory changes, and the effects of competition. Additional factors that could cause actual results to differ materially from those anticipated by forward-looking statements are discussed in LSB's filings with the Securities and Exchange Commission, including without limitation, its annual report on Form 10-K, its Quarterly Reports on Form 10-Q and its Current Reports on Form 8-K. LSB undertakes no obligations to revise these statements following the date of this news release. NOTE: For more information, please contact Monty J. Oliver, EVP & Chief Financial Officer @ 336-242-6207 or 336-248-6500 or 1-800-876-6505, ext. 207 LSB Bancshares Inc. Consolidated Balance Sheets (In thousands) September 30 2005 2004 Assets Cash and Due from Banks $42,069 $38,581 Interest-Bearing Bank Balances 2,590 1,222 Federal Funds Sold 25,802 20,206 Investment Securities: Held to Maturity, at Amortized Cost 27,432 28,541 Available for Sale, at Market Value 102,745 99,533 Loans 763,211 701,961 Less, Allowance for Loan Losses (8,684) (8,006) Net Loans 754,527 693,955 Premises and Equipment 18,671 17,289 Other Assets 17,989 12,563 Total Assets 991,825 911,890 Liabilities Deposits: Demand 127,382 92,255 Savings, N.O.W. and Money Market Accounts 411,668 426,496 Certificates of Deposit of less than $100,000 146,384 118,403 Certificates of Deposit of $100,000 or more 132,288 95,279 Total Deposits 817,722 732,433 Securities Sold Under Agreements to Repurchase 1,474 1,307 Borrowings from the Federal Home Loan Bank 75,000 83,000 Other Liabilities 6,156 4,955 Total Liabilities 900,352 821,695 Shareholders' Equity Preferred Stock, Par Value $.01 Per Share: Authorized 10,000,000 shares; None Issued - - Common Stock, Par Value $5 Per Share: Authorized 50,000,000 Shares; Issued 8,525,846 Shares in 2005 and 8,579,468 Shares in 2004 42,629 42,897 Paid-In Capital 9,462 10,397 Directors' Deferred Plan (1,313) (1,186) Retained Earnings 41,398 37,754 Accumulated Other Comprehensive Income (703) 333 Total Shareholders' Equity 91,473 90,195 Total Liabilities and Shareholders' Equity $991,825 $911,890 Memorandum: Standby Letters of Credit $5,522 $6,138 LSB Bancshares Inc. Consolidated Statements of Income (In thousands, except share data) Three Months Ended Nine Months Ended September 30 September 30 2005 2004 2005 2004 Interest Income Interest and Fees on Loans $14,261 $11,068 $40,060 $32,510 Interest on Investment Securities: Taxable 916 853 2,672 2,444 Tax Exempt 366 370 1,080 1,124 Interest-Bearing Bank Balances 92 41 285 127 Federal Funds Sold 145 71 326 156 Total Interest Income 15,780 12,403 44,423 36,361 Interest Expense Deposits 3,658 1,783 8,980 5,025 Securities Sold Under Agreements to Repurchase and Federal Funds Purchased 4 1 9 6 Borrowings from the Federal Home Loan Bank 912 831 2,824 2,461 Total Interest Expense 4,574 2,615 11,813 7,492 Net Interest Income 11,206 9,788 32,610 28,869 Provision for Loan Losses 715 1,104 2,314 2,396 Net Interest Income After Provision for Loan Losses 10,491 8,684 30,296 26,473 Noninterest Income Service Charges on Deposit Accounts 1,774 1,875 5,027 5,381 Gains on Sales of Mortgages 105 133 383 390 Other Operating Income 1,519 1,532 4,731 5,014 Total Noninterest Income 3,398 3,540 10,141 10,785 Noninterest Expense Personnel Expense 5,443 5,026 16,129 15,135 Occupancy Expense 454 437 1,374 1,317 Equipment Depreciation and Maintenance 555 615 1,722 1,708 Other Operating Expense 3,635 3,576 10,433 10,066 Total Noninterest Expense 10,087 9,654 29,658 28,226 Income Before Income Taxes 3,802 2,570 10,779 9,032 Income Taxes 1,302 793 3,617 2,866 Net Income $2,500 $1,777 $7,162 $6,166 Earnings Per Share Basic $0.29 $0.21 $0.84 $0.72 Diluted $0.29 $0.21 $0.83 $0.72 Weighted Average Shares Outstanding Basic 8,534,578 8,579,468 8,558,693 8,573,443 Diluted 8,575,859 8,616,515 8,599,251 8,620,923 LSB Bancshares, Inc. Financial Highlights (In thousands, except ratios) Three Months Ended September 30 2005 2004 Change Financial Ratios: Return on average assets 1.01% 0.79% 22 BP Return on average shareholders' equity 10.77% 7.84% 293 Net Interest Margin (FTE) 4.92% 4.76% 16 Average Balances: Loans $764,035 $692,001 10.4 % Earning assets 914,606 840,742 8.8 Total assets 983,754 899,907 9.3 Interest-bearing deposits 678,866 638,474 6.3 Total deposits 800,611 727,561 10.0 Allowance for loan losses: Beginning balance $8,466 $8,112 4.4 % Provision for loan losses 715 1,104 (35.2) Loans charged off (635) (1,297) (51.0) Recoveries 138 87 58.6 Ending balance 8,684 8,006 8.5 Nine Months Ended September 30 2005 2004 Change Financial Ratios: Return on average assets 1.00% 0.93% 7 BP Return on average shareholders' equity 10.45% 9.13% 132 Net Interest Margin (FTE) 4.93% 4.74% 19 Average Balances: Loans $749,715 $683,490 9.7 % Earning assets 896,847 827,497 8.4 Total assets 959,887 884,736 8.5 Interest-bearing deposits 661,687 627,630 5.4 Total deposits 770,823 713,745 8.0 Allowance for loan losses: Beginning balance $7,962 $7,846 1.5 % Provision for loan losses 2,314 2,396 (3.4) Loans charged off (1,977) (2,861) (30.9) Recoveries 385 625 (38.4) Ending balance 8,684 8,006 8.5 Nonperforming assets Nonperforming Loans: Past due 90 days or more $2,390 $1,728 38.3 % Nonaccrual loans 492 1,825 (73.0) Restructured loans 858 588 45.9 Total nonperforming loans 3,740 4,141 (9.7) Other real estate 4,713 1,577 198.9 Total nonperforming assets 8,453 5,718 47.8 Asset Quality Ratios Nonperforming loans to total loans 0.49% 0.81% (32)BP Nonperforming loans to total assets 0.38% 0.63% (25) Allowance for loan losses to total loans 1.14% 1.14% - Net charge-offs to average loans 0.21% 0.33% (12) Allowance for loan losses to nonperforming loans 2.32 X 1.93 X BP-- Denotes Basis Points DATASOURCE: LSB Bancshares, Inc. Contact: Monty J. Oliver, EVP & Chief Financial Officer of LSB Bancshares, Inc., +1-336-242-6207, or +1-336-248-6500, or +1-800-876-6505, ext. 207 Web site: http://www.lsbnc.com/

Copyright