LXBK Lsb Bancshares (MM)

LEXINGTON, N.C., April 17 /PRNewswire-FirstCall/ -- LSB Bancshares, Inc. (NASDAQ:LXBK), parent company of Lexington State Bank, reported net income in the first quarter of 2007 of $1,770,000, or $0.21 per diluted share, compared to $1,741,000, or $0.20 per diluted share, in the first quarter of 2006. The increase in earnings was primarily attributable to higher noninterest income, expense reductions and a lower provision for loan losses in the first quarter of 2007 relative to the first quarter of 2006. Net interest income decreased 6% to $10,249,000 in the first quarter of 2007 from $10,955,000 in the year-ago period. All of the decrease in net interest income was attributable to the pressure on the net interest margin, which was 4.53% in 2007's first quarter, versus 4.92% in the year-ago quarter. Modest growth in average earning assets partially offset the negative effect of the margin compression. The provision for loan losses was $957,000 in 2007's first quarter, down from $1,407,000 in 2006's first quarter. Noninterest income increased 6% to $3,383,000 in 2007's first quarter from $3,199,000 in the year-ago quarter, excluding a one-time gain of $193,000 from a partnership investment in 2007's first quarter. Noninterest expense was $10,065,000, down 2% from $10,282,000 in the first quarter of 2006. Most major areas of the balance sheet were essentially unchanged from year-ago figures. Assets at March 31, 2007 were $985 million, while net loans totaled $763 million and deposits were $850 million. Shareholders' equity, which represented 9.1% of assets, increased to $89.6 million, or $10.65 per share. Nonperforming assets, including nonaccruing loans, accruing loans more than 90 days past due, restructured loans and other real estate owned, were $10.0 million at March 31, 2007, up from $7.6 million at the year-ago. date and modestly higher than the $9.9 million in nonperforming assets at December 31, 2006. Included in the $10.0 million was $3.8 million in other real estate owned, $2.5 million 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 allowance for loan losses at the end of 2007's first quarter was $9.7 million, or 1.26% of loans, versus $8.4 million, or 1.11% of loans, at the end of 2006's first quarter. According to LSB Bancshares Chairman, President and CEO Robert F. Lowe, "We are pleased to report higher earnings in what has continued to be a very challenging banking environment. Much of our recent progress in profitability has been due to initiatives to grow noninterest income and to contain costs. Longer term, we believe there will be additional opportunities to improve efficiency and boost profitability levels, particularly once we complete the merger with FNB Financial Services Corporation, which is currently expected to close in the third quarter of 2007." LSB Bancshares recently declared a quarterly cash dividend of $0.17 per share of common stock, payable on April 15, 2007, to shareholders of record on April 1, 2007. This is the same amount as the period one year ago. LSB Bancshares, Inc. is the parent company of Lexington State Bank. Lexington State Bank, which opened on July 5, 1949, is a community bank based in the Piedmont region of North Carolina. 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 LSB Bancshares, Inc. is traded on the Nasdaq Stock Market under the symbol "LXBK." The LSB website, which links online banking users to LSB by internet, is http://www.lsbnc.com/. Market makers include: Davenport & Company LLC; Friedman Billings Ramsey & Co.; FTN Financial Securities Corp.; Goldman Sachs & Co.; Keefe, Bruyette & Woods, Inc.; Morgan Keegan & Co., Inc.; Morgan Stanley & Co., Inc.; Moors & Cabot, Inc.; SunTrust Robinson Humphrey; 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. CONTACT: Monty J. Oliver, EVP & CFO; 336-242-6207 or 336-248-6500 or 1- 800-876-6505, ext 207. LSB Bancshares Inc. Consolidated Balance Sheets (In thousands) March 31 2007 2006 Assets Cash and Due from Banks $27,963 $40,998 Interest-Bearing Bank Balances 2,965 999 Federal Funds Sold 8,473 22,327 Investment Securities: Held to Maturity, at Amortized Cost 29,887 29,873 Available for Sale, at Market Value 116,097 107,019 Loans 772,848 754,976 Less, Allowance for Loan Losses (9,722) (8,392) Net Loans 763,126 746,584 Premises and Equipment 19,902 19,238 Other Assets 17,070 18,713 Total Assets 985,483 985,751 Liabilities Deposits: Demand 163,101 140,526 Savings, N.O.W. and Money Market Accounts 387,263 418,174 Certificates of Deposit of less than $100,000 144,695 143,988 Certificates of Deposit of $100,000 or more 155,327 139,939 Total Deposits 850,386 842,627 Securities Sold Under Agreements to Repurchase 784 837 Borrowings from the Federal Home Loan Bank 37,000 43,000 Unfunded Projected Pension and Other Postretirement Benefit Obligation 1,154 - Other Liabilities 6,551 7,337 Total Liabilities 895,875 893,801 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 8,412,567 Shares in 2007 and 8,528,017 Shares in 2006 42,063 42,640 Paid-In Capital 8,091 9,472 Directors' Deferred Plan (1,468) (1,348) Retained Earnings 43,000 42,715 Accumulated Other Comprehensive Loss (2,078) (1,529) Total Shareholders' Equity 89,608 91,950 Total Liabilities and Shareholders' Equity $985,483 $985,751 Memorandum: Standby Letters of Credit $3,947 $5,365 LSB Bancshares Inc. Consolidated Statements of Income (In thousands, except share data) Three Months Ended March 31 2007 2006 Interest Income Interest and Fees on Loans $15,338 $14,489 Interest on Investment Securities: Taxable 1,235 978 Tax Exempt 318 319 Interest-Bearing Bank Balances 101 82 Federal Funds Sold 102 249 Total Interest Income 17,094 16,117 Interest Expense Deposits 6,016 4,549 Securities Sold Under Agreements to Repurchase 2 5 Borrowings from the Federal Home Loan Bank 827 608 Total Interest Expense 6,845 5,162 Net Interest Income 10,249 10,955 Provision for Loan Losses 957 1,407 Net Interest Income After Provision for Loan Losses 9,292 9,548 Noninterest Income Service Charges on Deposit Accounts 1,483 1,592 Gains on Sales of Mortgages 76 78 Other Operating Income 1,824 1,529 Total Noninterest Income 3,383 3,199 Noninterest Expense Personnel Expense 5,318 5,723 Occupancy Expense 503 479 Equipment Depreciation and Maintenance 599 530 Other Operating Expense 3,645 3,550 Total Noninterest Expense 10,065 10,282 Income Before Income Taxes 2,610 2,465 Income Taxes 840 724 Net Income $1,770 $1,741 Earnings Per Share Basic $0.21 $0.20 Diluted $0.21 $0.20 Weighted Average Shares Outstanding Basic 8,415,078 8,528,327 Diluted 8,426,763 8,573,069 LSB Bancshares, Inc. Financial Highlights (In thousands, except ratios) Three Months Ended March 31 2006 2007 Change Financial Ratios: Return on average assets 0.73% 0.72% 1 BP Return on average shareholders' equity 7.96% 7.59% 37 Net Interest Margin (FTE) 4.53% 4.92% (39) Average Balances: Loans $770,366 $754,682 2.1 % Earning assets 927,251 913,339 1.5 Total assets 983,492 979,251 0.4 Interest-bearing deposits 672,771 702,253 (4.2) Total deposits 825,287 829,024 (0.5) Allowance for loan losses: Beginning balance $9,564 $8,440 13.3 % Provision for loan losses 957 1,407 (32.0) Loans charged-off (1,080) (1,545) (30.1) Recoveries 281 90 212.2 Ending balance 9,722 8,392 15.8 Nonperforming assets Nonperforming Loans: Past due 90 days or more $1,878 $2,038 (7.9) % Nonaccrual loans 4,231 242 1,648.3 Restructured loans 97 617 (84.3) Total nonperforming loans 6,206 2,897 114.2 Other real estate 3,803 4,689 (18.9) Total nonperforming assets 10,009 7,586 31.9 Asset Quality Ratios Nonperforming loans to total loans 0.80% 0.38% 42 BP Nonperforming loans to total assets 0.63% 0.29% 34 Allowance for loan losses to total loans 1.26% 1.11% 15 Net charge-offs to average loans 0.10% 0.19% (9) Allowance for loan losses to nonperforming loans 1.57 X 2.90 X BP-- Denotes Basis Points DATASOURCE: LSB Bancshares, Inc. Contact: Monty J. Oliver, EVP & CFO of LSB Bancshares, Inc., +1-336-242-6207, +1-336-248-6500, +1-800-876-6505, ext 207 Web site: http://www.lsbnc.com/

Copyright