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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.

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