Economic Commentary Highlights...

• Here in 2012, food and energy inflation is less of a concern for consumers.

• Rapidly rising consumer food prices in 2011 were largely due to a surge in prices for agricultural commodities in late 2010. That surge has dissipated, and food inflation is decelerating rapidly.

• Consumer energy prices surged in early 2011, as the “Arab Spring” pushed up oil prices.
  Most geopolitical tensions have eased in 2012. Gasoline prices are under $4 per gallon.

View the entire economic commentary (pdf format)

Lincoln Savings Bank and LSB Financial are pleased to provide the above Economic Commentary for the week of May 21, 2012. The commentary is prepared by LPL FINANCIAL RESEARCH, the broker-dealer partner for Lincoln Savings Bank and LSB Financial. The above commentary and others like it can be found at www.mylsb.com/investments/commentary.aspx

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This information is being provided by Lincoln Savings Bank (LSB) / LSB Financial, an Iowa-based institution devoted to providing complete financial services since 1902. www.mylsb.com

Securities and Insurance products offered through LPL Financial and its affiliates, member FINRA / SIPC.

Not FDIC Insured	No Bank Guarantee	May Lose Value
Not a Deposit	Not Insured by any Federal Government Agency

Lincoln Savings Bank and LSB Financial are not registered broker/dealers, nor are they affiliated with LPL Financial. This site is designed for U.S. residents only. The services offered within this site are available exclusively through our U.S. Investment Representatives. LPL Financials U.S. Investment Representatives may only conduct business with residents of the states for which they are properly registered. Please note that not all of the investments and services mentioned are available in every state.

Market Commentary Highlights...

• Now that the Spring Slide is in full swing, we have to watch out for the big event with the potential to make it as severe as the past two years.

• Looking ahead, the negatives we face in 2012 already include the end of the Federal Reserve’s (Fed) Operation Twist stimulus program, China’s slowdown, the European recession, geopolitical risks, the election uncertainty, and anticipation of the 2013 budget bombshell of tax hikes and spending cuts.

• However, some positives this year may help offset some of the negatives, making for a potential decline that may be less steep than those of the past two years.

View the entire Market Commentary (pdf format)

Lincoln Savings Bank and LSB Financial are pleased to provide the above Market Commentary for the week of May 21, 2012. The commentary is prepared by LPL FINANCIAL RESEARCH, the broker-dealer partner for Lincoln Savings Bank and LSB Financial. The above commentary and others like it can be found here.

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This information is being provided by Lincoln Savings Bank (LSB) / LSB Financial, an Iowa-based institution devoted to providing complete financial services since 1902. www.mylsb.com

Securities and Insurance products offered through LPL Financial and its affiliates, member FINRA / SIPC.

Not FDIC Insured	No Bank Guarantee	May Lose Value
Not a Deposit	Not Insured by any Federal Government Agency

Lincoln Savings Bank and LSB Financial are not registered broker/dealers, nor are they affiliated with LPL Financial. This site is designed for U.S. residents only. The services offered within this site are available exclusively through our U.S. Investment Representatives. LPL Financials U.S. Investment Representatives may only conduct business with residents of the states for which they are properly registered. Please note that not all of the investments and services mentioned are available in every state.

• Over the past week, the LPL Financial Current Conditions Index rebounded modestly to 228. The index has fallen from 249 back in February. However, the path of the CCI remains consistent with continued economic growth in the United States.

• The growth momentum in the index has softened recently with the 13- and 52-week change in the index declining. The fall in the CCI echoes April and May of 2010 and 2011 as the economy softened and stocks began to slide.

View the entire Current Conditions Index (pdf format)

Lincoln Savings Bank and LSB Financial are pleased to provide the above commentary for the week of May 16, 2012. The commentary is prepared by LPL FINANCIAL RESEARCH, the broker-dealer partner for Lincoln Savings Bank and LSB Financial. The above commentary and others like it can be found at www.mylsb.com/investments/commentary.aspx

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The LPL Financial Research Current Conditions Index is a weekly measure of the conditions that underpin our outlook for the markets and economy. The CCI provides real-time context and insight into the trends that shape our recommended actions to manage portfolios. This index has proven to be a useful tool for investment decision making.

This weekly index is not intended to be a leading index or predictive of where conditions are headed, but a coincident measure of where they are right now. We want to track the conditions in real-time to aid in investment decision making. There are thousands of indicators-some lead the economy, some lag, while others merely offer a lot of statistical noise. We chose to create our own index tailored to the current environment to provide the clearest and most useful way to track conditions. The components of the CCI are periodically changed to retune the index to those factors most critical to the markets and economy so it may continue to be a valuable investment decision-making tool.

Securities and Insurance products offered through LPL Financial and its affiliates, member FINRA / SIPC.

Not FDIC Insured	No Bank Guarantee	May Lose Value
Not a Deposit	Not Insured by any Federal Government Agency

Lincoln Savings Bank and LSB Financial are not registered broker/dealers, nor are they affiliated with LPL Financial. This site is designed for U.S. residents only. The services offered within this site are available exclusively through our U.S. Investment Representatives. LPL Financials U.S. Investment Representatives may only conduct business with residents of the states for which they are properly registered. Please note that not all of the investments and services mentioned are available in every state.

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This information is being provided by Lincoln Savings Bank (LSB) / LSB Financial, an Iowa-based institution devoted to providing complete financial services since 1902. http://www.mylsb.com/default.aspx

Economic Commentary Highlights...

• The unemployment rate for younger workers remains elevated.

• The shifting dynamics of the labor market since the mid 2000s means that more skills and more education are required today to land a job.

• Employment opportunities vary by industry, but in general, the more skills and the more education, the better.

View the entire economic commentary (pdf format)

Lincoln Savings Bank and LSB Financial are pleased to provide the above Economic Commentary for the week of May 14, 2012. The commentary is prepared by LPL FINANCIAL RESEARCH, the broker-dealer partner for Lincoln Savings Bank and LSB Financial. The above commentary and others like it can be found at www.mylsb.com/investments/commentary.aspx

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This information is being provided by Lincoln Savings Bank (LSB) / LSB Financial, an Iowa-based institution devoted to providing complete financial services since 1902. www.mylsb.com

Securities and Insurance products offered through LPL Financial and its affiliates, member FINRA / SIPC.

Not FDIC Insured	No Bank Guarantee	May Lose Value
Not a Deposit	Not Insured by any Federal Government Agency

Lincoln Savings Bank and LSB Financial are not registered broker/dealers, nor are they affiliated with LPL Financial. This site is designed for U.S. residents only. The services offered within this site are available exclusively through our U.S. Investment Representatives. LPL Financials U.S. Investment Representatives may only conduct business with residents of the states for which they are properly registered. Please note that not all of the investments and services mentioned are available in every state.

Market Commentary Highlights...

• At the heart of it, all markets come down to buyers and sellers.

• U.S. stocks are being purchased by foreigners and corporations while notable selling is coming
  from individuals and insiders, or top executives of companies.

• We believe the forces of selling will win out over the buying power in the coming months.

View the entire Market Commentary (pdf format)

Lincoln Savings Bank and LSB Financial are pleased to provide the above Market Commentary for the week of May 14, 2012. The commentary is prepared by LPL FINANCIAL RESEARCH, the broker-dealer partner for Lincoln Savings Bank and LSB Financial. The above commentary and others like it can be found here.

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This information is being provided by Lincoln Savings Bank (LSB) / LSB Financial, an Iowa-based institution devoted to providing complete financial services since 1902. www.mylsb.com

Securities and Insurance products offered through LPL Financial and its affiliates, member FINRA / SIPC.

Not FDIC Insured	No Bank Guarantee	May Lose Value
Not a Deposit	Not Insured by any Federal Government Agency

Lincoln Savings Bank and LSB Financial are not registered broker/dealers, nor are they affiliated with LPL Financial. This site is designed for U.S. residents only. The services offered within this site are available exclusively through our U.S. Investment Representatives. LPL Financials U.S. Investment Representatives may only conduct business with residents of the states for which they are properly registered. Please note that not all of the investments and services mentioned are available in every state.

Economic Commentary Highlights...

• Corporate cash flows are at all-time highs.

• We continue to expect solid capital spending in 2012.

• Weather and legislation likely affected businesses’ spending decisions in the early part of the year.

View the entire economic commentary (pdf format)

Lincoln Savings Bank and LSB Financial are pleased to provide the above Economic Commentary for the week of May 7, 2012. The commentary is prepared by LPL FINANCIAL RESEARCH, the broker-dealer partner for Lincoln Savings Bank and LSB Financial. The above commentary and others like it can be found at www.mylsb.com/investments/commentary.aspx

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This information is being provided by Lincoln Savings Bank (LSB) / LSB Financial, an Iowa-based institution devoted to providing complete financial services since 1902. www.mylsb.com

Securities and Insurance products offered through LPL Financial and its affiliates, member FINRA / SIPC.

Not FDIC Insured	No Bank Guarantee	May Lose Value
Not a Deposit	Not Insured by any Federal Government Agency

Lincoln Savings Bank and LSB Financial are not registered broker/dealers, nor are they affiliated with LPL Financial. This site is designed for U.S. residents only. The services offered within this site are available exclusively through our U.S. Investment Representatives. LPL Financials U.S. Investment Representatives may only conduct business with residents of the states for which they are properly registered. Please note that not all of the investments and services mentioned are available in every state.

Market Commentary Highlights...

• The biggest event for investors over the next six months is likely to be the November elections in the United States. The outcome of the elections will define the political context and leadership for the policies that address the looming fiscal imbalances coming to a head in early 2013.

• Based on the relative performance of legislationsensitive industries that may react more favorably to one party, we have created two indexes to help us track the markets’ implied forecast of the election outcome reflected in the performance of these industries.

• While there are other factors that may influence the relative performance of these indexes, as time goes on the election consequences may become paramount as investors increasingly vote with their money.

View the entire Market Commentary (pdf format)

Lincoln Savings Bank and LSB Financial are pleased to provide the above Market Commentary for the week of May 7, 2012. The commentary is prepared by LPL FINANCIAL RESEARCH, the broker-dealer partner for Lincoln Savings Bank and LSB Financial. The above commentary and others like it can be found here.

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This information is being provided by Lincoln Savings Bank (LSB) / LSB Financial, an Iowa-based institution devoted to providing complete financial services since 1902. www.mylsb.com

Securities and Insurance products offered through LPL Financial and its affiliates, member FINRA / SIPC.

Not FDIC Insured	No Bank Guarantee	May Lose Value
Not a Deposit	Not Insured by any Federal Government Agency

Lincoln Savings Bank and LSB Financial are not registered broker/dealers, nor are they affiliated with LPL Financial. This site is designed for U.S. residents only. The services offered within this site are available exclusively through our U.S. Investment Representatives. LPL Financials U.S. Investment Representatives may only conduct business with residents of the states for which they are properly registered. Please note that not all of the investments and services mentioned are available in every state.

We want to give a big thank you to all those who participated in this year’s ICBA community bankers month initiative. Last month was Community Banking Month and we asked customers why they love their community bank.  We could not be happier with the response we received and we thought we would share a few of them.

“All the employees are really nice and they help answer any questions you may have. They are so much better than large scale banks because they haven't charged me for the things I didn't do and I LOVE how they all know us by name instead of a number.” Samantha D., Waterloo

“I started with LSB when I was younger in the TADS KIDS CLUB. It was fun to come into the bank and deposit money and get CD'S and of course the tootsie rolls. Midway through my life I switched to a different bank due to my car loan being there. I came to find that I didn't get the respect and the courtesy of my hometown bank (LSB) I have since returned to them and I am very satisfied with their service. Being from a small town, you feel more comfortable being able to discuss financial options/bank with those who you know at a more personal level. They are always friendly, you can converse freely with them, and I always leave with a smile on my face. :) LSB is AWESOME!”  Jennifer S., Greene

“I love my bank because they know me by name and are always willing to help with any questions I might have. Everyone is pleasant and friendly. All the tellers always have a smile on their face.” Lori V., Greene

“I love my bank because they know who I am, and they understand my account enough to offer helpful suggestions. They make me feel like their friend and not just a business customer. I also love their rewards programs; through their refer-a-fiend program I have earned $150! I have also recently won a $250 gas card for filling out a short survey and I always take advantage of 1% cash back on my debit card. I have had many banks over the years but LSB is the best by far. I love LSB and will not stray from them EVER! Thanks for everything LSB you ROCK!” Heather M., Waterloo

Economic Commentary Highlights...

• The composition of global economic growth has shifted dramatically over the past 40 years.

• Economic growth in emerging markets runs about three times as quickly as growth in the developed world.

• Our forecasts for economic growth in the United States, Europe, and China are unchanged from
  our outlook for 2012, but there have been some shifts in the consensus forecasts.

View the entire economic commentary (pdf format)

Lincoln Savings Bank and LSB Financial are pleased to provide the above Economic Commentary for the week of April 30, 2012. The commentary is prepared by LPL FINANCIAL RESEARCH, the broker-dealer partner for Lincoln Savings Bank and LSB Financial. The above commentary and others like it can be found at www.mylsb.com/investments/commentary.aspx

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This information is being provided by Lincoln Savings Bank (LSB) / LSB Financial, an Iowa-based institution devoted to providing complete financial services since 1902. www.mylsb.com

Securities and Insurance products offered through LPL Financial and its affiliates, member FINRA / SIPC.

Not FDIC Insured	No Bank Guarantee	May Lose Value
Not a Deposit	Not Insured by any Federal Government Agency

Lincoln Savings Bank and LSB Financial are not registered broker/dealers, nor are they affiliated with LPL Financial. This site is designed for U.S. residents only. The services offered within this site are available exclusively through our U.S. Investment Representatives. LPL Financials U.S. Investment Representatives may only conduct business with residents of the states for which they are properly registered. Please note that not all of the investments and services mentioned are available in every state.

Market Commentary Highlights...

• In each of the past two years the stock market began a slide in the spring that lasted well into the summer months.

• This week we update the status of the 10 indicators we identified that foreshadowed the declines in 2010 and 2011.

• So far, about half of the 10 indicators are waving a red flag, while four are yellow for caution, and only one is green. On balance the indicators point to a significant risk of a repeat of the spring slide this year.

View the entire Market Commentary (pdf format)

Lincoln Savings Bank and LSB Financial are pleased to provide the above Market Commentary for the week of April 30, 2012. The commentary is prepared by LPL FINANCIAL RESEARCH, the broker-dealer partner for Lincoln Savings Bank and LSB Financial. The above commentary and others like it can be found here.

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This information is being provided by Lincoln Savings Bank (LSB) / LSB Financial, an Iowa-based institution devoted to providing complete financial services since 1902. www.mylsb.com

Securities and Insurance products offered through LPL Financial and its affiliates, member FINRA / SIPC.

Not FDIC Insured	No Bank Guarantee	May Lose Value
Not a Deposit	Not Insured by any Federal Government Agency

Lincoln Savings Bank and LSB Financial are not registered broker/dealers, nor are they affiliated with LPL Financial. This site is designed for U.S. residents only. The services offered within this site are available exclusively through our U.S. Investment Representatives. LPL Financials U.S. Investment Representatives may only conduct business with residents of the states for which they are properly registered. Please note that not all of the investments and services mentioned are available in every state.