LSBI (MM)

LSB Financial Corp. Announces Record Results and Payment of Cash Dividend LAFAYETTE, Ind., Oct. 27 /PRNewswire-FirstCall/ -- LSB Financial Corp. , the parent company of Lafayette Savings Bank, FSB, today reported record earnings for the nine months ended September 30, 2003. Net income for the third quarter of 2003 was $946,000, an increase of $297,000, or 45.76%, over the third quarter of 2002. For the first nine months of 2003 net income was $2.4 million, an increase of $282,000, or 13.60%, from the first nine months of 2002. Diluted earnings per share year-to-date for 2003 were $1.71 per share, up 14.00% over the same period last year. Net interest income increased 6.06% from $7.5 million for the first nine months of 2002 to $7.9 million for the same period in 2003. Non-interest income increased by $1.1 million or 72.13%, primarily as a result of gains of $1.7 million on the sale of mortgage loans for the first nine months of 2003 compared to $530,000 for the same period in 2002. LSB President and CEO Randolph F. Williams stated, "In the face of challenging economic and competitive times, we are very pleased to report record results for the quarter and for the year. The management team has worked diligently to increase our net interest margin and improve our efficiency. For the first nine months of the year our return on assets was 1.00% and our return on equity was 11.88%. True to our community banking roots we were able to accomplish this without sacrificing the highly personalized service and tailor-made products that people associate with Lafayette Savings Bank." Further, the Company announced today that it will pay a quarterly cash dividend of $0.125 per share to shareholders of record as of the close of business on November 7, 2003, with a payment date of December 5, 2003. The closing market price of LSB stock on October 24, 2003, was $26.32 per share as reported by the Nasdaq National Market. LSB FINANCIAL CORP. SELECTED CONSOLIDATED FINANCIAL INFORMATION (Dollars in thousands except share and per share amounts) At September 30, At December 31, Selected Balance Sheet Data: 2003 2002 Cash and due from banks $1,950 $1,627 Short-term investments 12,096 14,357 Securities available-for-sale 15,750 11,779 Loans held for sale 2,471 8,063 Net Portfolio loans 264,131 269,834 Allowance for loan losses 2,772 1,996 Premises and equipment, net 7,132 7,039 FHLB stock, at cost 3,879 3,782 Other assets 6,700 2,615 Total assets 314,109 319,096 Deposits 219,404 221,590 Advances from FHLB 65,473 70,473 Other liabilities 1,990 1,531 Shareholders' Equity 27,241 25,502 Book value per share (Shareholder's Equity) $20.52 $19.20 Equity/Assets 8.67% 7.99% Total shares outstanding 1,356,200 1,364,188 Asset Quality Data: Non-accruing loans $4,167 $3,310 Other real estate/assets owned 365 279 Total non-performing assets 4,532 3,589 Non-performing loans/Total loans 1.56% 1.19% Non-performing assets/Total assets 1.44% 1.12% Allowance for loan losses/Non- performing loans 66.52% 60.30% Allowance for loan losses/Total gross loans 1.04% 0.72% Loans charged off $79 $146 Recoveries on loans previously charged off 4 10 Three months ended: Nine months ended: Selected operating data: September 30, September 30, 2003 2002 2003 2002 Total Interest Income $4,841 $5,095 $14,441 $14,981 Total Interest Expense 2,073 2,462 6,517 7,510 Net Interest Income 2,768 2,633 7,924 7,471 Provision for Loan Losses 150 225 850 375 Net Interest Income after provision 2,618 2,408 7,074 7,096 Non-interest income: Deposit Account Service Charges 185 193 624 542 Gain on Sale of Mortgage Loans 614 103 1,694 530 Gain on Sale of Securities 0 0 0 0 Other Non-interest Income 128 100 245 417 Total Non-Interest Income 927 396 2563 1489 Non-Interest Expense: Salaries and benefits 1,163 969 3,355 2,988 Occupancy and equipment, net 276 268 836 791 Computer service 89 86 256 246 Advertising 88 103 332 302 Other 363 287 969 928 Total non-interest expense 1,979 1,713 5,748 5,255 Income before income taxes 1,566 1,091 3,889 3,330 Income tax expense 620 442 1,533 1,256 Net income 946 649 2,356 2,074 Weighted average number of diluted shares 1,382,632 1,384,120 1,375,801 1,379,575 Diluted Earnings per Share $0.68 $0.47 $1.71 $1.50 Return on average equity 13.95% 10.35% 11.88% 11.32% Return on average assets 1.20% 0.84% 1.00% 0.93% Average earning assets 301,144 294,995 300,649 285,134 Net interest margin 3.68% 3.57% 3.51% 3.49% Efficiency ratio 55.81% 61.07% 59.66% 61.20% DATASOURCE: LSB Financial Corp. CONTACT: Randolph F. Williams of President-CEO of LSB Financial Corp., +1-765-742-1064, or fax, +1-765-429-5932 Web site: http://www.lsbank.com/

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