LSB Corporation (NASDAQ: LSBX) (the "Company") today announced
third quarter 2010 net income of $1.1 million, or $0.25 per diluted
common share, as compared to $1.3 million, or $0.30 per diluted
common share, for the third quarter of 2009. Net income for the
nine months ended September 30, 2010, totaled $4.3 million, or
$0.95 per diluted share versus $3.0 million, or $0.66 per diluted
share, for the same period of 2009. These quarterly results
correspond to a return on average assets and average equity of
0.57% and 7.05% in the third quarter of 2010, respectively, as
compared to 0.78% and 8.31% in the third quarter of 2009,
respectively. The 2010 year-to-date results correspond to a return
on average assets and average equity of 0.71% and 9.14%,
respectively, as compared to 0.61% and 6.55% in 2009, respectively.
On July 15, 2010, the Company entered into an Agreement and Plan of
Merger with People's United Financial, Inc. (NASDAQ: PBCT)
("People's United") providing for People's United to acquire the
Company in an all-cash transaction valued at $96 million, or $21.00
per share.
President and CEO Gerald T. Mulligan stated, "I am pleased to
report earnings of $0.25 per diluted share for the third quarter of
2010. This is after transaction costs of $475,000 or $0.10 per
share related to our pending acquisition by People's United.
Despite the challenges in the economy, we have been able to sustain
our strong operating results and achieved core deposit growth of
4.1% since December 31, 2009.
"We are excited by the opportunities presented by our pending
merger with People's United. We look forward to offering our retail
customers an expanded array of products and services and our
commercial customers larger loan limits and other ancillary
products.
"Our special shareholders meeting will be held on Wednesday,
October 27, 2010, and we are optimistic that our shareholders will
approve our pending acquisition by People's United. After receipt
of shareholder approval, the final hurdle to the completion of the
transaction is receipt of regulatory approvals which we expect will
be forthcoming this quarter. Investors are encouraged to read
carefully our definitive proxy statement filed with the Securities
and Exchange Commission on September 15, 2010, and all subsequently
filed proxy solicitation materials.
"I am also pleased to announce the opening in early August of
our new branch at 9 Jackson Street in Methuen, MA. The new location
greatly enhances the customer experience with additional services
and nearly doubles the space of our old location. We have seen an
increase in accounts and overall activity and a positive response
in the community."
At September 30, 2010, assets totaled $780.4 million, a decrease
of $36.2 million or 4.4% from December 31, 2009. The decline in
total assets was a measured effort to reduce wholesale funding and
brokered term deposits. The Company experienced modest loan growth
of $2.6 million or 0.5% from December 31, 2009. This loan growth
was funded by $65.0 million of maturities and regular amortization
of collateralized mortgage obligations and mortgage-backed
securities and sales of investments of $40.2 million.
At September 30, 2010, deposits totaled $475.1 million, a
decrease of $17.7 million from December 31, 2009. River Bank's
focus on attracting and retaining core deposits produced favorable
results in the first nine months of 2010. Core deposits, comprised
of savings, money market, NOW and demand deposit accounts,
increased by $10.3 million from December 31, 2009. Savings, NOW and
demand deposit accounts increased $10.3 million, $4.3 million and
$4.1 million, respectively, from December 31, 2009. This growth was
partially offset by a decrease in money market accounts of $8.5
million from December 31, 2009. Certificates of deposit decreased
$27.9 million from December 31, 2009, including matured brokered
certificates of deposit of $14.4 million. Total borrowed funds
decreased by $23.5 million or 9.1% from December 31, 2009 and
totaled $235.6 million at September 30, 2010. During the first nine
months of 2010, $28.0 million in long-term advances matured and the
Company prepaid $5.0 million in long-term advances with a penalty
of $149,000.
Gains on sales of investments totaled $688,000 and $2.1 million
in the third quarter and first nine months of 2010, respectively,
as compared to $572,000 and $1.0 million in the third quarter and
first nine months of 2009, respectively.
The Company's net interest margin increased to 2.83% for the
nine months ended September 30, 2010, from 2.53% for the nine
months ended September 30, 2009, while the third quarter of 2010
saw a net interest margin of 2.90%, an improvement of 31 basis
points over the prior year's comparative quarter. The margin
improvement was partially caused by a shift in the mix of assets as
higher yielding loans replaced maturing investments and lower cost
deposits replaced higher-cost wholesale funding.
At September 30, 2010, non-performing loans totaled $4.3 million
or 0.80% of total loans as compared to $6.0 million and 1.12%,
respectively, as of December 31, 2009, and $6.1 million and 1.12%,
respectively, as of June 30, 2010. Other real estate owned totaled
$2.4 million as of September 30, 2010, and $0 at June 30, 2010. At
September 30, 2010, one non-performing loan for $387,000 is
protected by a guaranty by the SBA. The Company experienced further
strains in its residential mortgage portfolio, with several
additional loans past due as of September 30, 2010. Total loan
delinquencies under 90 days at September 30, 2010 amounted to $3.9
million, as compared to $5.7 million at December 31, 2009 and $4.6
million as of June 30, 2010.
The allowance for loan losses in total and as a proportion of
total loans as of September 30, 2010, equaled $7.1 million and
1.31%, respectively, as compared to $7.2 million and 1.34%,
respectively, as of December 31, 2009. The Company recorded a
provision for loan losses of $2.2 million in the first nine months
of 2010 as compared to $1.1 million in the first nine months of
2009. The increase in the provision for loan losses in 2010 is due
to the higher level of charge-offs. The Company recorded
charge-offs of $1.2 million in the first nine months of 2010 on one
commercial construction loan that is currently included in other
real estate owned at September 30, 2010. Annualized net loan
charge-offs as a percentage of average loans totaled 84 basis
points for the quarter ended September 30, 2010, as compared to 13
basis points in the comparable period in 2009.
The Company also announced today a quarterly cash dividend of
$0.09 per share to be paid on November 18, 2010, to shareholders of
record as of November 4, 2010, if, as LSB expects, the merger
closes after November 4, 2010. Under the terms of the merger
agreement, in addition to the merger consideration of $21.00 per
share, People's United has agreed to pay or cause to be paid any
regular quarterly dividend declared but unpaid as of the closing
date of the merger, with respect to each share of LSB common stock
issued and outstanding on the record date for such dividend, and an
amount per share of LSB common stock equal to the product of $0.001
multiplied by the number of days from but not including the record
date for the most recent regular quarterly dividend declared and
paid prior to the closing date of the merger through and including
such closing date.
Press releases and SEC filings can be viewed on our website
www.RiverBk.com under the "About Us" tab.
LSB Corporation is a Massachusetts corporation that conducts all
of its operations through its sole subsidiary, River Bank (the
"Bank"). The Bank offers a range of commercial and consumer loan
and deposit products and is headquartered at 30 Massachusetts
Avenue, North Andover, Massachusetts, approximately 25 miles north
of Boston. River Bank operates 5 full-service banking offices in
Massachusetts in Andover, Lawrence, Methuen (2) and North Andover
and 2 full-service banking offices in New Hampshire in Derry and
Salem.
The reader is cautioned that this press release may contain
certain statements that are "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934, as amended. Such
forward-looking statements are expressions of management's
expectations as of the date of this press release regarding future
events or trends and which do not relate to historical matters.
Forward-looking statements include, but are not limited to,
statements concerning LSB Corporation's belief, expectations or
intentions concerning LSB Corporation's future performance and the
likelihood that the acquisition of LSB Corporation by People's
United Financial, Inc. (the "Acquisition") will in fact occur in a
timely manner. Such expectations may or may not be realized,
depending on a number of variable factors, including but not
limited to, changes in interest rates, changes in real estate
valuations, general economic conditions (either nationally or
regionally), regulatory considerations, competition, obtaining
regulatory approvals related to the Acquisition in a timely fasion,
obtaining the timely approval of LSB Corporation's shareholders for
the Acquisition, absence of a material adverse effect on LSB
Corporation, satisfaction of other conditions to the Acquisition
and timely closing of the Acquisition by both parties to the
Acquisition. For more information about these factors, please see
our recent Annual Report on Form 10-K and Quarterly Report on Form
10-Q on file with the SEC, including the sections entitled "Risk
Factors" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations." As a result of such risk
factors and uncertainties, the Company's actual results may differ
materially from such forward-looking statements. The Company does
not undertake and specifically disclaims any obligation to publicly
release updates or revisions to any such forward-looking statements
as a result of new information, future events or otherwise.
LSB Corporation
Select Financial Data
(unaudited)
(Dollars in thousands, except per share data)
Three months ended Nine months ended
---------------------------- -----------------
(For the periods ended) 09/30/10 06/30/10 09/30/09 09/30/10 09/30/09
-------- -------- -------- -------- --------
Performance ratios
(annualized):
Efficiency ratio 68.88% 58.38% 58.70% 62.53% 65.02%
Return on average assets 0.57% 0.80% 0.78% 0.71% 0.61%
Return on average
stockholders equity 7.05% 10.26% 8.31% 9.14% 6.55%
Net interest margin 2.90% 2.90% 2.59% 2.83% 2.53%
Interest rate spread (int.
bearing only) 2.66% 2.67% 2.26% 2.59% 2.19%
Dividends paid per share
(not annualized) $ 0.09 $ 0.09 $ 0.05 $ 0.25 $ 0.25
(At) 09/30/10 12/31/09 09/30/09
-------- -------- --------
"Well Capitalized"
Minimums
Capital Ratios:
Stockholders' equity to
total assets N/A 8.20% 7.41% 9.46%
RiverBank Tier 1 leverage
ratio 5.0% 7.42% 6.85% 8.17%
Risk-Based Capital Ratio:
LSB Corporation Tier 1
risk-based 6.0% 10.48% 9.74% 12.64%
RiverBank Tier 1 risk-based 6.0% 10.23% 9.57% 11.54%
RiverBank total risk-based 10.0% 12.53% 11.84% 12.72%
Asset Quality:
Non-performing loans $4,293 $6,003 $3,548
Non-performing assets 6,725 6,003 3,668
Delinquent loans past due
30-89 days 3,930 5,723 5,723
Net charge-offs (quarterly) 1,142 8 163
Allowance for loan losses as a percent of
total loans 1.31% 1.34% 1.28%
Allowance as a percent of non-performing
loans 164.80% 119.41% 187.03%
Non-performing loans as a percent of
total loans 0.80% 1.12% 0.68%
Non-performing assets as a percent of
total assets 0.86% 0.74% 0.45%
Net charge-offs to average loans
(quarterly, annualized) 0.84% 0.01% 0.13%
Net charge-offs to average loans
(year-to-date, annualized) 0.55% 0.10% 0.10%
Per Share Data:
Book value per share (excluding CPP) $14.20 $13.43 $13.64
Tangible book value per share (excluding CPP) $13.27 12.57 12.46
LSB CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands)
(unaudited)
(At) 09/30/10 06/30/10 12/31/09 09/30/09
-------- -------- -------- --------
Retail loans $164,144 $163,865 $159,101 $156,855
Corporate loans 375,106 378,648 377,518 361,587
-------- -------- -------- --------
Total loans 539,250 542,513 536,619 518,442
-------- -------- -------- --------
Allowance for loan
losses (7,075) (7,467) (7,168) (6,636)
-------- -------- -------- --------
Investments available
for sale 170,954 202,270 230,533 240,341
FHLB stock 11,825 11,825 11,825 11,825
-------- -------- -------- --------
Total investments 182,779 214,095 242,358 252,166
-------- -------- -------- --------
Federal funds sold 24,619 10,222 6,597 10,218
Other assets 40,779 37,554 38,192 32,763
-------- -------- -------- --------
Total assets $780,352 $796,917 $816,598 $806,953
======== ======== ======== ========
Core deposits $262,683 $273,805 $252,389 $232,255
Retail term deposits 197,510 198,331 211,061 209,752
Brokered term deposits 14,950 20,411 29,344 29,344
-------- -------- -------- --------
Total deposits 475,143 492,547 492,794 471,351
-------- -------- -------- --------
Borrowed funds 235,577 236,098 259,082 254,815
Other liabilities 5,622 4,185 4,202 4,427
-------- -------- -------- --------
Total liabilities 716,342 732,830 756,078 730,593
-------- -------- -------- --------
Total stockholders'
equity 64,010 64,087 60,520 76,360
-------- -------- -------- --------
Total liabilities and
stockholders' equity $780,352 $796,917 $816,598 $806,953
======== ======== ======== ========
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
(unaudited)
Three months ended Nine months ended
-------------------------------------------------
(For the periods ended) 09/30/10 06/30/10 09/30/09 09/30/10 09/30/09
-------- -------- -------- -------- --------
Interest income $ 9,786 $ 9,979 $ 10,268 $ 29,858 $ 30,400
Interest expense 4,226 4,374 5,226 13,458 16,058
-------- -------- -------- -------- --------
Net interest income 5,560 5,605 5,042 16,400 14,342
Provision for loan losses 750 700 400 2,150 1,100
-------- -------- -------- -------- --------
Net interest income after
provision for loan losses 4,810 4,905 4,642 14,250 13,242
Gain on sales of investments 688 679 572 2,064 1,030
Prepayment penalty on FHLB
advances -- -- -- (149) --
Other non-interest income 574 559 524 1,677 1,571
Salary & employee benefits
expense 2,097 1,929 1,643 5,842 5,013
FDIC deposit insurance
premium 201 200 262 612 1,022
Other non-interest expense 1,927 1,469 1,362 4,850 4,311
-------- -------- -------- -------- --------
Total non-interest
expense 4,225 3,598 3,267 11,304 10,346
-------- -------- -------- -------- --------
Net income before income
taxes 1,847 2,545 2,471 6,538 5,497
Income tax expense 708 946 910 2,254 1,911
-------- -------- -------- -------- --------
Net income before preferred
stock dividends and
accretion 1,139 1,599 1,561 4,284 3,586
Preferred stock dividends
and accretion -- -- (215) -- (588)
-------- -------- -------- -------- --------
Net income available to
common shareholders $ 1,139 $ 1,599 $ 1,346 $ 4,284 $ 2,998
======== ======== ======== ======== ========
Basic earnings per common
share $ 0.25 $ 0.35 $ 0.30 $ 0.95 $ 0.66
Diluted earnings per
common share $ 0.25 $ 0.35 $ 0.30 $ 0.95 $ 0.66
End of period common
shares outstanding 4,506,686 4,506,686 4,499,936 4,506,686 4,499,936
Weighted average common
shares outstanding:
Basic 4,506,686 4,506,686 4,495,356 4,506,686 4,479,316
Diluted 4,548,788 4,510,224 4,496,680 4,522,539 4,480,347
CONTACT: Gerald T. Mulligan President & CEO (978)
725-7555
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