GS Financial Corp. (NASDAQ Global Market: GSLA) (the �Company�),
the holding company for Guaranty Savings Bank (the �Bank�),
announced earnings for the quarter ended December 31, 2007 of
$299,000, or $.24 per share, compared to net income of $85,000, or
$.07 per share, for the quarter ended December 31, 2006. For the
year ended December 31, 2007, earnings were $757,000, or $.61 per
share, compared to $2.1 million, or $1.74 per share, for the year
ended December 31, 2006. �In general, 2007 was a challenging year
for the banking industry. But, our strong fourth quarter concluded
the year on a positive note for GS Financial and Guaranty Savings
Bank,� noted President Stephen Wessel. �We made progress in the
fulfillment of many of our strategic objectives in the past year
with regards to increased loan growth, enhanced product offerings,
new banking locations and improved technology. Both planned expense
growth due to the addition of new banking locations and a
challenging interest rate environment hampered profitability during
the year. However, in the fourth quarter of 2007 our expenses
leveled off while our revenue and loan production continued to
increase resulting in improved operating performance. We have
continued to implement all of our main strategic objectives and our
much improved fourth quarter results reflect the progress we have
made. As we continue to evolve as an institution, we are
positioning ourselves for long-term growth and financial success.�
Net interest income for the quarter ended December 31, 2007 was
$1.5 million compared to $1.4 million for the same period in 2006.
For the year ended December 31, 2007 net interest income, excluding
loan loss provisions, was $5.7 million compared to $6.1 million for
calendar 2006, a decline of 6.5%. The Company�s net interest margin
increased to 3.52% for the fourth quarter of 2007 from 3.37% for
the year earlier quarter and declined to 3.42% for the year ended
December 31, 2007 compared to 3.58% for calendar 2006. Our results
for 2007 include a $300,000 reversal of the provision for loans
losses compared to a $2.0 million reversal in 2006. Total assets of
the Company at December 31, 2007 amounted to $185.7 million, up
10.3% from $168.4 million at December 31, 2006. There was
significant growth in the Company�s loan portfolio during 2007,
which occurred in both the commercial real estate and residential
mortgage segments. Net loans at December 31, 2007 were $118.4
million compared to $94.0 million at December 31, 2006, an increase
of 26.1%. Loan quality continued to be sound in 2007 as the local
economy in South Louisiana continues to rebound from the impact of
Hurricane Katrina. The Bank�s level of non-performing assets
increased to $1.0 million at December 31, 2007 compared to $191,000
at December 31, 2006 due to two loan relationships that were place
on non-accrual status, both secured by properties impacted by
Hurricane Katrina. We made significant provisions to our allowance
for loan losses in 2005 after Hurricane Katrina specifically for
situations such as these, and management believes the current
reserve levels to be adequate. The Bank is continuing to expand its
secondary marketing efforts. In the fourth quarter, the Bank
recognized $85,000 in gains on loans sold which is included in
non-interest income. The Bank has also been approved in the fourth
quarter by two additional secondary market loan investors which
assisted in the expansion of residential mortgage product
offerings. �We think 2008 will be a good year for Guaranty Savings
Bank because we have a good management team, talented lenders, a
healthy capital position, adequate loan loss reserves, diversified
revenue streams and a good mix of products coupled with service
differentiation in our market which has been disrupted by big bank
consolidation activity,� stated President Wessel. �We are excited
about our opportunities to continue to grow revenue and
profitability on a consistent basis in 2008.� Highlights of 2007
include: Gross loans grew by $24.7 million during 2007 (25.3%) to
$121.9 million at December 31, 2007, with the growth almost
entirely in real-estate secured loans, both residential and
non-residential. The Bank sold $15.1 million of residential loans
in 2007, including $6.6 million of loans in the fourth quarter,
resulting in gains on loan sales of $189,000 for the year and
$85,000 for the fourth quarter. Deposits grew in 2007 by $6.9
million (5.6%) to $129.9 million at December 31, 2007, including
$2.3 million of growth in non-interest bearing deposits.
Stockholders� equity at December 31, 2007 was $28.2 million, up
$945,000 from December 31, 2006. Stockholders� equity as a
percentage of total assets at December 31, 2007 was 15.21%, down
from 16.16% at December 31, 2006. Non-interest expense for the
fourth quarter of 2007 totaled $1.3 million, relatively unchanged
from the year earlier period. Non-interest expense for all of 2007
totaled $5.4 million, up approximately 9.2% from 2006. Non-interest
income for the fourth quarter of 2007 totaled $244,000, up from
$65,000 in the fourth quarter of 2006, due primarily to gains
recognized on sales of mortgage loans in the secondary market, an
activity in which the Bank did not engage in until the latter part
of the fourth quarter of 2006, and a $110,000 non-recurring item.
During 2007, the Bank re-opened its newly renovated Mid-City New
Orleans office, which was flooded as a result of Hurricane Katrina,
converted its loan production office in Ponchatoula, LA to a
full-service branch and opened a new location on the Westbank of
Jefferson Parish in Harvey, LA. FORWARD-LOOKING INFORMATION
Statements contained in this news release which are not historical
facts may be forward-looking statements as that term is defined in
the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements are subject to risks and uncertainties
which could cause actual results to differ materially from those
currently anticipated due to a number of factors. Factors which
could result in material variations include, but are not limited
to, changes in interest rates which could affect net interest
margins and net interest income, competitive factors which could
affect net interest income and noninterest income, changes in
demand for loans, deposits and other financial services in the
Company's market area; changes in asset quality, general economic
conditions as well as other factors discussed in documents filed by
the Company with the Securities and Exchange Commission from time
to time. In addition to risks and uncertainties described by the
Company in prior filings with the SEC, other risks and
uncertainties potentially impacting the Company are those related
to the Company in its primary market area impacted by Hurricane
Katrina, including the continuing effect of the storm and its
aftermath on the Company's operating expenses and on the Company's
borrowers and other customers. The Company undertakes no obligation
to update these forward-looking statements to reflect events or
circumstances that occur after the date on which such statements
were made. GS Financial Corp. Condensed Consolidated Statements of
Financial Condition (Unaudited) � � � � ($ in thousands) Dec. 31,
2007 � Dec. 31, 2006 ASSETS � Cash & Due from Banks $ 2,480 $
1,892 Interest Bearing Deposits 6,008 6,544 Federal Funds Sold 970
2,680 Securities Available-for-Sale, at Fair Value 47,748 55,090
Loans, Net 118,477 93,987 Accrued Interest Receivable 1,828 2,004
Premises & Equipment, Net 5,845 3,578 Stock in Federal Home
Loan Bank, at Cost 1,220 982 Real Estate Held-for-Investment, Net
450 464 Other Assets � 645 � � � 1,161 � Total Assets $ 185,671 � �
$ 168,382 � � LIABILITIES Interest Bearing Deposits 124,160 119,599
Non-Interest Bearing Deposits 5,680 3,390 FHLB Advances 26,986
17,042 Other Liabilities � 613 � � � 1,064 � Total Liabilities $
157,439 � � $ 141,095 � � STOCKHOLDERS' EQUITY Common Stock &
Additional Paid in Capital 34,682 34,785 Unearned RRP Trust Stock
(159 ) (573 ) Treasury Stock (32,166 ) (32,493 ) Retained Earnings
25,990 25,887 Accumulated Other Comprehensive Loss � (115 ) � �
(319 ) Total Stockholders' Equity $ 28,232 � � $ 27,287 � Total
Liabilities & Stockholders' Equity $ 185,671 � � $ 168,382 � �
Selected Asset Quality Data Total Non Performing Assets 1,070 191
Non Performing Assets to Total Assets 0.58 % 0.11 % Allowance for
Loan Losses to Total Loans 2.82 % 3.82 % Allowance for Loan Losses
to Total Non-performing loans � 320.75 % � � 1,953.93 % GS
Financial Corp. Condensed Consolidated Statements of Income
(Unaudited) � � For the three months ended December 31, For the
year ended December 31, ($ in thousands, except per share data) �
2007 � � 2006 � � 2007 � � 2006 � Interest Income $ 3,000 $ 2,706 $
11,248 $ 11,000 Interest Expense � 1,472 � � 1,298 � � 5,547 � �
4,904 � � Net Interest Income 1,528 1,408 5,701 6,096 Provision
(Reversal) for Loan Losses � - � � - � � (300 ) � (1,981 ) Net
Interest Income after Provision (Reversal) for Loan Losses � 1,528
� � 1,408 � � 6,001 � � 8,077 � � Noninterest Expense � 1,347 � �
1,346 � � 5,378 � � 4,926 � Net Income Before Non-Interest Income
and Income Taxes � 181 � � 62 � � 623 � � 3,151 � � Noninterest
Income � 244 � � 65 � � 425 � � 50 � Income Before Tax Expense �
425 � � 127 � � 1,048 � � 3,201 � � Income Tax Expense � 126 � � 42
� � 291 � � 1,088 � Net Income � 299 � � 85 � � 757 � � 2,113 � Net
Income Per Common Share $ 0.24 � $ 0.07 � $ 0.61 � $ 1.74 � �
Selected Operating Data Weighted Average Shares Outstanding
1,270,963 1,209,180 1,243,655 1,212,173 Return on Average Assets 1
0.65 % 0.20 % 0.44 % 1.21 % Non Interest Expense/Average Assets 1
2.95 % 3.13 % 3.12 % 2.82 % Net Interest Margin � 3.52 % � 3.37 % �
3.42 % � 3.58 % 1 Annualized for the three-month periods ended
December 31, 2007 and 2006.
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