FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended March 31, 1996
Commission File Number 0-11448
LSB BANCSHARES, INC.
One LSB Plaza
Lexington, North Carolina 27292
(704) 246-6500
Incorporated in the State of North Carolina
IRS Employer Identification No. 56-1348147
Securities Registered Pursuant to Section 12(b) of the Act:
None
Securities Registered Pursuant to Section 12(g) of the Act:
Common Stock, Par Value $5.00 Per Share
LSB Bancshares, Inc., has filed all reports required to be filed by Section 13
or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was required to file such
reports) and has been subject to such filing requirements for the past 90 days.
The number of shares outstanding as of March 31, 1996 was 5,382,760.
<PAGE>
LSB BANCSHARES, INC.
FORM 10-Q
INDEX
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets
March 31, 1996 and December 31, 1995
Consolidated Statements of Income
Three Months Ended March 31, 1996 and 1995
Consolidated Statements of Cash Flows
Three Months Ended March 31, 1996 and 1995.
Notes to Consolidated Financial Statements
Three Months Ended March 31, 1996 and 1995.
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Part II. Other Information
Item 4. Submission of Matters to a Vote of Security Holders.
Item 6. Exhibits and Reports on Form 8-K
Signatures
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
LSB Bancshares, Inc.
Consolidated Balance Sheets
<CAPTION>
(In Thousands) March 31 December 31
1996 1995
<S>
Assets <C> <C>
Cash and Due from Banks $ 16,421 $ 17,581
Federal Funds Sold 3,575 10,025
Investment Securities:
Held to Maturity, Market value 77,789 and 84,679 76,704 82,922
Available for Sale, at Market Value 29,708 26,046
Loans:
Commercial 77,655 74,980
Installment 49,055 48,972
Mortgage 105,377 102,715
Total Loans 232,087 226,667
Less, Reserve for Loan Losses (2,735) (2,730)
Net Loans 229,352 223,937
Premises and Equipment 8,881 8,733
Other Assets 6,115 5,782
Total Assets $ 370,756 $ 375,026
Liabilities
Deposits:
Demand $ 41,317 $ 42,660
Savings, N.O.W. and Money Market Accounts 155,662 159,894
Certificates of Deposit of less than $100,000 99,720 97,757
Certificates of Deposit of $100,000 or more 21,516 22,978
Total Deposits 318,215 323,289
Securities Sold Under Agreements to Repurchase 1,427 1,494
Other Liabilities 2,678 2,133
Total Liabilities 322,320 326,916
Shareholders' Equity
Capital Stock: Common, authorized 10,000,000 shares, Par Value $5,
issued 5,382,760 shares in 1996 and 5,353,981 shares in 1995......... 26,914 21,495
Paid-In Capital 11,286 11,255
Retained Earnings 10,191 15,048
Net Unrealized Loss on Securities Available for Sale 45 312
Total Shareholders' Equity 48,436 48,110
Total Liabilities and Shareholders' Equity $ 370,756 $ 375,026
</TABLE>
<PAGE>
<TABLE>
LSB Bancshares, Inc.
Consolidated Statements of Income
<CAPTION>
(In Thousands Except Share Data) Three Months Ended
March 31
1996 1995
<S>
Interest Income <C> <C>
Interest and Fees on Loans $ 5,345 $ 4,726
Interest on Investment Securities:
Taxable 1,162 1,225
Tax Exempt 486 494
Federal Funds Sold 148 193
Total Interest Income 7,141 6,638
Interest Expense
Deposits 2,835 2,638
Securities Sold Under Agreements to Repurchase 16 13
Total Interest Expense 2,851 2,651
Net Interest Income 4,290 3,987
Provision for Loan Losses 73 63
Net Interest Income After Provision
for Loan Losses 4,217 3,924
Noninterest Income
Service Charges on Deposit Accounts 493 447
Gains/Losses on Sales of Mortgages (7) 6
Other Operating Income 469 283
Total Noninterest Income 955 736
Noninterest Expense
Personnel Expense 1,942 1,853
Occupancy Expense 192 208
Equipment Depreciation and Maintenance 167 164
Other Operating Expense 935 1,069
Restructuring Charges 517 0
Total Noninterest Expense 3,753 3,294
Income Before Income Taxes 1,419 1,366
Income Taxes 345 328
Net Income $ 1,074 $ 1,038
Net Income Per Share $ 0.20 $ 0.19
Weighted Average Shares Outstanding 5,382,760 5,350,250
</TABLE>
<PAGE>
<TABLE>
LSB Bancshares, Inc
Consolidated Statements of Cash Flows
<CAPTION>
(In Thousands) Three Months Ended March 31
1996 1995
<S>
Cash Flow From Operating Activities <C> <C>
Net income $ 1,074 $ 1,038
Adjustments to reconcile net income to net cash:
Depreciation and amortization 161 173
Securities premium amortization and
discount accretion, net 10 (160)
(Increase) decrease in loans held for sale 28 600
Deferred income taxes 131 183
Income taxes payable 240 155
(Increase) decrease in income earned
but not received (255) (240)
Increase (decrease)in interest accrued
but not paid (22) 159
Provision for loan losses 73 63
Gain on sale of investment securities 0 0
Gain on sale of premise and equipment 0 0
Net cash provided by operating activities 1,440 1,971
Cash Flow From Investing Activites
Purchases of securities held to maturity 0 (482)
Proceeds from maturities of securities held to maturity 6,209 6,000
Proceeds from sales of securities held to maturity 0 0
Purchases of securities available for sale (4,067) (3,912)
Proceeds from maturities of securities available for sale 0 0
Proceeds from sales of securities available for sale 0 0
Net (increase) decrease in loans made to customers (5,515) (4,000)
Purchases of premises and equipment (309) (105)
Proceeds from sale of premises and equipment 0 12
Net (increase)decrease in Federal Funds sold 6,450 2,075
(Increase) decrease in other assets (74) (236)
Net cash used by investing activities 2,694 (648)
Cash Flow From Financing Activities
Net increase (decrease) in demand deposits,
NOW, money market and savings accounts (5,576) (5,817)
Net increase (decrease) in time deposits 502 5,084
Net increase (decrease) in securities
sold under agreements to repurchase (68) 139
Dividends paid (550) (513)
Net increase (decrease) in other liabilities 328 (163)
Common stock Issued 69 98
Net cash provided by financing activities (5,295) (1,172)
Increase (decrease) in cash (1,161) 151
Cash at the beginning of the period 17,581 17,326
Cash at end of period $ 16,420 $ 17,477
Supplemental Disclosures Of Cash Flow Information
Cash paid during the years for:
Interest $ 2,872 $ 2,491
Income Taxes 0 0
Supplemental Disclosures
Transfer of loans to other real estate owned $ 91 $ 163
Unrealized losses on securities available for sale:
Increase (decrease) in securities available for sale $ (405) $ 487
Increase (decrease) in deferred taxes (138) 166
Increase (decrease) in shareholders' equity (267) 321
</TABLE>
<PAGE>
LSB Bancshares, Inc.
Notes to Consolidated Finacial Statements
Three Months Ended March 31, 1996 and 1995
Note 1. Basis of Presentation
The accompanying unaudited Consolidated Financial Statements have
been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions to
Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do
not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the
opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been
included. Operating results for the three-month period ended March
31, 1996 are not necessarily indicative of the results that may be
expected for the year ending December 31, 1996.
The accompanying unaudited Consolidated Financial Statements include
the accounts of LSB Bancshares, Inc. (the Corporation) and its wholly-
owned subsidiary Lexington State Bank (the Bank) and the Bank's
wholly-owned subsidiaries Peoples Finance Company of Lexington,
Inc. and LSB Financial Services, Inc.
For further information, refer to the Consolidated Financial Statements
and footnotes thereto included in the Corporation's Annual Report on
Form 10-K for the year ended December 31, 1995.
Note 2. Investment Securities
Investment securities totaling $48,173,000 and $48,000,000 as of
March 31, 1996 and 1995, were pledged to secure public deposits as
required by law.
Note 3. Loans (Table In Thousands)
A summary of consolidated loans follows:
March 31
1996 1995
Commercial $ 77,655 $ 62,165
Installment 46,541 45,872
Mortgage 105,377 98,272
Credit Cards 2,514 2,296
Total $ 232,087 $ 208,605
Bancshares' policy under SFAS 114 for impaired loan accounting
subjects all loans to impairment recognition except for large groups of
smaller-balance homogeneous loans such as credit card, residental
mortgage and consumer loans. Bancshares generally considers most
loans 90 days or more past due and all nonaccrual loans to be
impaired.
<PAGE>
LSB Bancshares, Inc.
Notes to Consolidated Financial Statements (cont.)
Three Months Ended March 31, 1996 and 1995
Interest income on impaired loans is recognized consistent with
Bancshares' income recognition policies. For all impaired loans other
than nonaccrual loans, interest income is recorded on an accrual basis.
Interest income on nonaccrual loans is recognized on a cash basis. The
adoption of SFAS 114 and SFAS 118 did not have a material effect on
Bancshares' financial position or results of operations and required no
increase to the reserve for loan losses.
At March 31, 1996, the total investment in loans that are considered
impaired under SFAS 114 was $3,778,354 (of which $1,041,395 were
nonaccrual loans). A related valuation allowance of $554,822 was
determined for the total amount of impaired loans. The average
recorded investment in impaired loans for the quarter ended March 31,
1996, was approximately $3,802,102. .
Note 4. Reserve for Loan Losses
(In Thousands)
The following sets forth the analysis of the consolidated reserve for
loan losses:
Three Months Ended
March 31
1996 1995
Balances at beginning of periods $ 2,730 $ 2,641
Provision for loan losses 73 63
Recoveries of amounts previously
charged off 18 19
Loan losses (86) (66)
Balances at end of periods $ 2,735 $ 2,657
Note 5. Restructuring Charges
In January 1996, the Board of Directors of Bancshares approved a
strategic plan to improve operating efficiencies. The major element of
the plan was the reduction in staff through an offer of early retirement
to all employees 55 years of age or older with ten years or more of
service. Of the employees offered this opportunity, 68% opted for
early retirement, which was effective March 31, 1996. The costs
associated with increases in the actuarially determined pension and
postretirement medical expenses totaled $485,000, severance costs
associated with the early retirement package totaled $27,000 and
professional fees for administration of the early retirement totaled
$5,000.
<PAGE>
LSB Bancshares, Inc.
Notes to Consolidated Financial Statements (cont.)
Three Months Ended March 31, 1996 and 1995
Note 6. Stock Split
In January of 1996, the Board of Directors of Bancshares declared a
five-for-four stock split payable February 15, 1996. All previously
reported per share amounts have been restated to reflect this stock split.
Note 7. Other Accounting Changes
As of January, 1996, Bancshares adopted Financial Accounting
Standards No. 122 (SFAS 122), "Accounting for Mortgage Servicing
Rights". SFAS 122 requires that an entity recognize as separate assets
rights to service mortgage loans for others however those rights are
acquired. This statement amends certain provisions of SFAS 65 to
eliminate the distinction between rights to service mortgage loans for
others that are acquired through loan origination activities and rights to
service mortgage loans for others that are acquired through purchase
transactions. All of Bancshares' mortgage servicing rights were
acquired through loan origination activities.
Under SFAS 122, servicing rights are to be calculated based on the
present value of the fair market value of the servicing fees at the time
the loan is sold, with consideration given to any prepayment
assumptions. The value of the servicing rights are then amortized over
the life of the loan. SFAS 122 also requires that all capitalized
servicing rights be evaluated periodically for impairment based on the
excess of the carrying amount of such rights over their fair value. For
purposes of measuring impairment, capitalized mortgage serving rights
are stratified on the basis of one or more of the predominant risk
characteristics of the underlying loans. The application of SFAS 122
to originated mortgage servicing rights acquired through loan
origination activities for the three months ended March 31, 1996, was
not material and resulted in no impairment adjustments.
Disclosure requirements of Financial Accounting Standards No. 123
(SFAS 123) "Accounting for Stock-Based Compensation" are applicable
for financial statements for fiscal years beginning after December 15,
1995. SFAS 123 establishes a fair value based method of accounting
for stock options and other equity instruments used in employee
compensation plans. SFAS 123 also requires significantly expanded
disclosures, including disclosure of the pro forma amount of net
income and earnings per share as if the fair value based method were
used to account for stock-based compensation, if the intrinsic value
method of APB -25 is retained. Bancshares intends to retain APB-25
in its pro forma disclosure for fiscal year 1996.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
Three Months Ended March 31, 1996 Compared to Three Months
Ended March 31. 1995
Net Interest Income
The primary source of earnings for the Corporation is net interest
income, which represents the dollar amount by which interest
generated by earning assets exceeds the cost of funds. Earning assets
consist primarily of loans and investment securities and cost of funds
is the interest paid on interest-bearing deposits.
Net interest income of $7,141,000 for the first quarter of 1996 was up
$503,000 or 7.6% compared to $6,638,000 for the first quarter of
1995. The moderately declining interest rate environment of 1995
continued into 1996 with a 25 basis point drop in the prime interest
rate on February 1, 1996. This placed the prime interest rate at
8.25%. The prime interest rate is used as an interest rate indicator by
banks. Relatively stable interest rates, coupled with good growth in
the bank's loan portfolio, contributed to the gain in net interest income
experienced in the first quarter of 1996. The total loan portfolio at
March 31, 1996 was up $5,420,000 or 2.4% compared to December
31, 1995 and $23,482,000 or 11.3% compared to March 31, 1995.
The majority of this growth was in the commercial loan portfolio.
During the first quarter of 1996, the Bank's interest sensitivity position
improved, enhancing the ability to appropriately reprice earning assets
and interest-bearing liabilities, thereby maximizing net interest income.
Noninterest Income and Expense
Noninterest income for the first quarter of 1996 was up $219,000 or
29.8% compared to the first quarter of 1995. Fee income from service
charges on deposit accounts for the first quarter of 1996 was up
$46,000 or 10.3% compared to the first quarter of 1995. The Bank
announced an increase in service charge fees in September 1995 which
became effective November 1, 1995. Management believes this
adjustment in service charge fees will significantly benefit noninterest
income for 1996. Other operating income for the first quarter of 1996
was up $186,000 or 29.8% compared to the first quarter of 1995. The
majority of this increase is short-term lease income from Other Real
Estate property while awaiting final disposition, related new loan fees
and dividend income from the Federal Home Loan Bank, which the
Bank joined in the third quarter of 1995.
<PAGE>
Noninterest expense for the first quarter of 1996 increased $459,000 or
13.9% compared to the first quarter of 1995. Restructuring charges of
$517,000 were incurred in the first quarter of 1996 as a part of the
Bank's strategic plan for improving operating efficiencies. The
restructure plan included an offer for early retirement to all employees
55 years of age with ten years of service. Of this group, 68% opted
for early retirement, which was effective March 31, 1996. Following
restructuring, the Bank's full time equivalent staff was 238. Personnel
expense, comprised of salaries and fringe benefits, increased $89,000
or 4.8% in the first quarter of 1996 compared to the first quarter of
1995. Occupancy expense for the first quarter of 1996 decreased
$16,000 or 7.7% compared to the first quarter of 1995. Equipment
depreciation and maintenance expense remained relatively unchanged for
the periods being compared. Other Operating Expense for the first
quarter of 1996 was down $134,000 or 12.5% compared to the first
quarter of 1995. The contributing factor to this decrease was a
reduction in the Federal Deposit Insurance Corporation (FDIC)
insurance premium. This line item expense for the first quarter of
1996 was down $171,000 from the corresponding period in 1995. An
increase in other miscellaneous expense items of $37,000 for the first
quarter of 1996 produced the net increase in Other Operating Expense
noted above.
Asset Quality and Provision for Loan Losses
The reserve for loan losses was $2,735,000 or 1.18% of loans
outstanding at March 31, 1996 compared to $2,730,000 or 1.20% of
loans outstanding at December 31, 1995 and $2,657,000 or 1.27% at
March 31, 1995. Nonperforming loans totaled $3,124,000 or 1.35%
of loans outstanding at March 31, 1996 compared to $1,979,000 or
.95% of loans outstanding at March 31, 1995. Nonperforming loans
include nonaccrual loans, restructured loans, other real estate acquired
through foreclosed properties and accruing loans ninety days or more
past due. At March 31, 1996, the Bank had $287,000 in restructured
loans, $1,388,000 in nonaccrual loans and $1,078,000 in other real
estate. Accruing loans past due 90 days or more were $370,000 at
March 31, 1996 compared to $868,000 at March 31, 1995. The
accrual of interest generally discontinues on any loan that becomes 90
days past due as to principal or interest unless collection of both
principal and interest is assured by way of collateralization, guarantees
or other security and the loan is considered to be in the process of
collection. At March 31, 1996, the reserve for loan losses was .88
times the nonperforming loans, compared to 1.08 times at December
31, 1995 and 1.34 times nonperforming loans at March 31, 1995.
Loans classified for regulatory purposes as loss, doubtful, substandard
or special mention that have not been disclosed as nonperforming do
not represent or result from trends or uncertainties which management
reasonably expects will materially impact future operating results,
liquidity, or capital resources, or represent material credits about which
management is aware of any information which causes management to
have serious doubts as to the ability of such borrowers to comply with
the loan repayment terms.
<PAGE>
Income Taxes
Accrued taxes applicable to income for the three-month period ended
March 31, 1996 was up $17,000 compared to the three-month period
ended March 31, 1995. Pretax income for the first three months of
1996 was $1,419,000, an increase of $53,000 compared to $1,366,000
for the first three months of 1995. The increase in accrued taxes for
the first three months of 1996 is attributable to this modest increase in
income.
Capital Resources and Shareholders' Equity
Regulatory guidelines require minimum levels of capital, based on a
risk weighting of each asset category and off-balance sheet
contingencies. At March 31, 1996, based on these measures, the
Bank's ratio for Tier 1 capital was 21.21% compared to the regulatory
minimum risk-based capital ratio requirement of 4%. The Bank's Tier
2 capital ratio at this date was 22.41% compared to the regulatory
requirement of 8%. Tier 1 or core capital, as defined by federal bank
regulators, equals common shareholders' equity capital less goodwill
and other disallowed intangible assets. Tier 2 capital is the allowable
portion, as defined by the federal regulators, of the allowance for loan
losses and 100% of Tier 1 capital. Federal banking guidelines for risk-
based capital limit the amount of the allowance for loan losses
allowable in Tier 2 or total capital to 1.25% of risk-weighted assets.
In January of 1996, the Board of Directors of Bancshares announced
a five-for-four stock split payable February 15, 1996. This increased
the outstanding shares of capital stock to 5,382,760. In addition, the
cash dividend was increased 4.4% to $ .10 per share for the quarterly
dividend payable April 15, 1996.
Interest Rate Sensitivity and Liquidity
Asset/liability management is the process used to monitor exposure to
interest rate risk, balance sheet trends, pricing policies and the Bank's
liquidity position. The goals of asset/liability management are to
ensure profitability and performance, minimize risk, adhere to proper
liquidity and maintain sound capital.
Profitability and performance are affected by balance sheet composition
and interest rate movements. Market conditions, interest rate trends
and the economic environment are all evaluated in the asset/liability
management decision-making process. As core deposits are the
primary funding sources for assets, proportionate balances are
maintained within earning assets and interest-bearing liabilities.
To minimize risk of interest rate movements, the asset/liability
management process seeks to match maturities and repricing
opportunities of interest-sensitive assets and liabilities. This interest
rate risk is monitored by way of an interest sensitivity analysis, which
is presented in Table 1 as of March 31, 1996. On that date, the gap
between interest-sensitive assets and interest-sensitive liabilities was a
negative $51,877,000 or .79. Management believes that is an
acceptable level under current economic conditions.
<PAGE>
Asset/liability management also addresses proper liquidity positioning
and sound capital. To a great extent, adequate liquidity and a strong
capital base are by-products of profitability and performance. The
Bank requires liquidity in order to fund current and future extensions
of credit, meet deposit withdrawals and otherwise sustain operations.
As an integral part of the asset/liability management process, the
liquidity position is closely monitored and evaluated regularly.
Accounting and Regulatory Issues
As of January 1996, Bancshares adopted Financial Accounting
Standards No. 121 (SFAS 121), "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed of".
SFAS 121 requires long-lived assets and certain identifiable intangibles
to be separated into two categories for purposes of accounting for an
impairment of assets. Assets to be held and used are to be reviewed
whenever events or changes in circumstances indicate that the carrying
value may not be recoverable. Long-lived assets to be disposed of
that are not subject to APB-30 requirements are to be accounted for at
the lower of carrying amount or fair value less cost to sell when
management has committed to a plan to dispose of the assets.
Bancshares' policy is to review all assets to be held and used and long-
lived assets to be disposed of in accordance to SFAS 121 and to recognize
any impairment loss at the time of occurrence. As of March 31, 1996,
Bancshares had no assets to be held and used requiring impairment
recognition and no long-lived assets to be disposed of.
As of January 1996, Bancshares adopted Financial Accounting
Standards No. 122 (SFAS 122), "Accounting for Mortgage Servicing
Rights". SFAS 122 requires that an entity recognize as separate assets
rights to service mortgage loans for others however those rights are
acquired. This statement amends certain provisions of SFAS 65 to
eliminate the distinction between rights to service mortgage loans for
others that are acquired through loan origination activities and rights to
service mortgage loans for others that are acquired through purchase
transactions. While Bancshares has originated mortgage servicing
rights acquired through loan origination activities, it does not have
purchased mortgage servicing rights acquired through purchase
transactions.
Under SFAS 122, servicing rights are to be calculated based on the
present value of the fair market value of the servicing fees, with
consideration given to any prepayment assumptions and amortization
over the life of the loan. SFAS 122 also requires that all capitalized
servicing rights be evaluated for impairment based on the excess of the
carrying amount of such rights over their fair value. For purposes of
measuring impairment, capitalized mortgage serving rights are stratified
on the basis of one or more of the predominant risk characteristics of
the underlying loans. The application of SFAS 122 to originated
mortgage servicing rights acquired through loan origination activities
for the three months ended March 31, 1996 was not material and
resulted in no impairment adjustments to capitalized mortgage servicing
rights.
<PAGE>
Disclosure requirements of Financial Accounting Standards No. 123
(SFAS 123) "Accounting for Stock-Based Compensation" are applicable
for financial statements for fiscal years beginning after December 15,
1995. SFAS 123 establishes a fair-value based method of accounting
for stock options and other equity instruments used in employee
compensation plans. SFAS 123 also requires significantly expanded
disclosures, including disclosure of the pro forma amount of net
income and earnings per share as if the fair value based method were
used to account for stock-based compensation, if the intrinsic value
method of APB -25 is retained. Bancshares intends to retain APB-25
in its pro forma disclosure for fiscal year 1996.
Item 4. Submission of Matters to Vote of Security Holders
The Company held its Annual Meeting of Shareholders on April 17,
1996. Proxies were solicited in connection with the Annual Meeting
in accordance with Regulation 14 under the Securities Exchange Act of
1934, as amended, pursuant to a Proxy Statement dated March 13,
1996, in the form as filed by the Company with the Securities and
Exchange Commission on March 13, 1996.
At the Annual Meeting, the shareholders of the Company: (i) elected
five members to the Company's Board of Directors, (ii) ratified the
appointment of Turlington and Company LLP to conduct the
independent audit for the year 1996 and (iii) voted to approve the LSB
Bancshares, Inc. 1996 Omnibus Stock Incentive Plan; (iv) voted against
a shareholder proposal relating to minimum share ownership
requirements for members of the Board of Directors of the Company,
each as more fully described in the Proxy Statement. Of the 5,382,760
shares of the Company's common stock represented and entitled to vote
at the Annual Meeting, the number of shares cast for, against and
withheld, and the number of abstentions and broker nonvotes, as to
each proposal are set forth below:
1. Elections of Directors.
For (Proxy) Withheld
Leonard H Beck 3,649,080 38,115
Samual R Harris 3,631,561 55,634
David A Smith 3,633,021 54,174
Burr W Sullivan 3,648,305 38,890
Peggy B Barnhardt 3,647,890 39,305
2. Ratification of appointment of Turlington and Company LLP,
CPA's, to conduct the independent audit for the year 1996.
For Against Abstaining
3,650,738 30,382 6,075
3. Proposal to approve the LSB Bancshares, Inc. 1996 Omnibus Stock
Incentive Plan.
For Against Abstaining
3,278,551 289,381 119,263
4. Shareholder proposal by W. Robert Koontz relating to minimum
share ownership requirements for Directors.
For Against Abstaining
611,800 2,661,302 47,878
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits. None filed.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
Date May 10,1996 LSB BANCSHARES, INC.
(Registrant)
Monty J. Oliver
Monty J. Oliver
Chief Financial Officer
Principal Accounting Officer
<TABLE> <S> <C>
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<NAME> LSB BANCHSARES INC /NC/
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<ALLOWANCE-FOREIGN> 0
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</TABLE>
