LEXINGTON, N.C. - LSB Bancshares, which has twice the federally required capital, said Monday that it may use the excess for a small acquisition, branch expansions, or a stock buyback.
LSB's capital ratio of 13% to out-does its peers in North Carolina, many of which maintain capital levels of 9% relative to assets, according to John A. Howard, an analyst who follows LSB for Equity Research Services Inc. of Raleigh, N.C. State and federal banking authorities require a capital ratio of at least 6%, Mr. Lowe said.
The strong capital base puts LSB in a position to take over weaker community banks or to open more branches in the counties it serves, he said. The bank currently operates 12 offices in towns located between the cities of Charlotte, Winston-Salem, and Greensboro.
Robert F. Lowe, who is chairman, chief executive, and president, said that about half of the $343 million-asset bank's lending portfolio consists of residential mortgages, which the company often sells on the secondary market. LSB's earnings have been flat throughout the first half of 1994 as rising interest rates have sapped the value of fixed-income assets.
Mr. Lowe said the bank has reduced its vulnerability by producing more variable-rate loans and making greater efforts to use forward markets, which let it pre-sell its loans at guaranteed prices. But he added that it is too early to tell how the bank will fare in the second half of the year.
A stock buyback would produce better earnings per share for stockholders, but Mr. Lowe said the board has yet to make a decision on such a move.
In March the bank split its stock 5 for 4, increasing the number of outstanding share to about 4.3 million.
