GS Financial Corp. (NASDAQ Global Market:GSLA) (the �Company�),
the holding company for Guaranty Savings Bank (�Guaranty�),
reported earnings for the quarter ended June 30, 2009 of $503,000,
or $0.40 per share diluted, compared with a loss of $232,000, or
($0.18) per share diluted, for the same period in 2008. Earnings
for the first half of 2009 were $881,000, or $0.69 per share
diluted, up from a loss of $106,000, or ($0.08) per share diluted,
for the first six months of 2008.
President Stephen E. Wessel commented, �The second quarter
earnings�increased�primarily due to strong growth in loans
and�transactional deposits. Interest income improved during the
quarter to $3.6 million and Guaranty's secondary marketing
activities resulted in�more than�$330,000 in�loan�sale income.�The
improvement in earnings from 2008 to 2009�is a result of the
execution of our plan to�expand our products and services as part
of our transition from a traditional thrift institution to a full
service community bank. We are especially gratified to achieve
these results despite a significant increase in our FDIC insurance
premiums due to an industry-wide�special assessment�which amounted
to approximately $127,000�in�the second quarter as compared to
$57,000 in the first quarter.�
Highlights of the second quarter and first six months of 2009
include:
- Total assets at June 30, 2009
were $264.7 million, up approximately $42.9 million, or 19.3% from
December 31, 2008. In addition, the return on average assets
increased to 0.76% for the second quarter of 2009.
- Average loans increased by $21.0
million, or 13.5%, during the first half of 2009 to $176.6 million
at June 30, 2009, with the majority of the growth in both
residential and nonresidential real estate secured loans.
- Deposits increased during the
first six months of 2009 by $49.5 million, or 35.3%, from $140.1
million at December 31, 2008 to $189.6 million at June 30, 2009.
This includes $2.1 million, or 26.0%, of growth in
noninterest-bearing deposits.
- Noninterest expense as a
percentage of average assets was 2.78% for the first six months of
2009 as compared to 2.92% for the same period in the prior
year.
Net interest income for the quarter ended June 30, 2009 was $1.9
million, which represents an increase of $308,000, or 18.8%, from
$1.6 million for the same period in 2008. Net interest income for
the first six months of 2009 was $3.8 million, up 22.1%, from $3.1
million during the same period in 2008. The increase in net
interest income was primarily the result of an increase in
interest-earning assets and a decrease in the overall cost of
deposits. The amount of noninterest-bearing deposits grew by
approximately $2.1 million, or 26.0%, from $7.9 million at December
31, 2008 to $10.0 million at June 30, 2009.
Net interest margin was 3.10% for the second quarter of 2009,
down 33 basis points from 3.43% for the same period in prior year,
and down 25 basis points from 3.35% in the first quarter of 2009.
The decrease in net interest margin was primarily due to an
increase in the average balance of overnight funds earning a
nominal rate of return and non-performing assets. President Wessel
noted, �Non-performing assets have increased this year as we�now
own�foreclosed properties that have not sold, and we recently
placed a $1.5 million commercial loan into nonaccrual status which
negatively impacted the net interest margin.�Although
non-performing assets increased to $4.9 million, they
represent�less than 2% of total assets.�
Noninterest income increased by $1.0 million, or 193.9%, from a
loss of $525,000 in the second quarter of 2008 to earnings of
$493,000 for the same period in 2009. For the first half of 2009,
noninterest income was $866,000 as compared to a loss of $410,000
for the first half of 2008. The increase in noninterest income was
primarily due to strong sales of residential loans in the secondary
market of loans originated during the first half of 2009 and the
recognition of a non-cash impairment charge of $651,000 (pre-tax)
and $430,000 (after-tax) related to the Company�s investment in
mutual funds that hold mortgage-backed securities during the second
quarter of 2008.
Noninterest expense for the second quarter of 2009 was $1.8
million, up approximately $320,000, or 21.8%, from $1.5 million for
the second quarter of 2008. Noninterest expense for the first six
months of 2009 was $3.5 million, which represents an increase of
$580,000, or 20.1%, from $2.9 million for the same period in the
prior year. The increase in noninterest expense is primarily due to
additional mortgage originator commissions, FDIC deposit insurance
premiums, and legal expenses associated with an agreement we
entered into with certain shareholders.
Total Assets at June 30, 2009 were $264.7 million compared to
$221.9 million at December 31, 2008, an increase of approximately
$42.9 million, or 19.3%. Net loans increased $20.5 million, or
12.9%, from $158.5 million at December 31, 2008 to $179.0 million
at June 30, 2009. Deposit accounts increased approximately $49.5
million, or 35.3%, during the first six months of 2009 from $140.1
million at December 31, 2008 to $189.6 million at June 30, 2009.
Borrowings from the Federal Home Loan Bank decreased from $52.0
million at December 31, 2008 to $44.5 million at June 30, 2009.
Stockholders� equity was 10.6% of total assets at June 30, 2009,
down from 12.4% at December 31, 2008.
Albert J. Zahn, Jr., Chairman of the Board of Directors of GS
Financial Corp. announced that the Board of Directors, at its
meeting on July 21, 2009, declared a quarterly cash dividend of
$0.10 per share. The dividend is payable to shareholders of record
as of July 31, 2009 and will be paid on August 14, 2009.
FORWARD-LOOKING INFORMATION
Statements contained in this news release which are not
historical facts may be forward-looking statements as that term is
defined in the Private Securities Litigation Reform Act of 1995.
Such forward-looking statements are subject to risks and
uncertainties which could cause actual results to differ materially
from those currently anticipated due to a number of factors.
Factors which could result in material variations include, but are
not limited to, changes in interest rates which could affect net
interest margins and net interest income, competitive factors which
could affect net interest income and noninterest income, changes in
demand for loans, deposits and other financial services in the
Company's market area; changes in asset quality, general economic
conditions as well as other factors discussed in documents filed by
the Company with the Securities and Exchange Commission from time
to time. In addition to risks and uncertainties described by the
Company in prior filings with the SEC, other risks and
uncertainties potentially impacting the Company are those related
to the Company in its primary market area impacted by Hurricane
Katrina, including the continuing effect of the storm and its
aftermath on the Company's operating expenses and on the Company's
borrowers and other customers. The Company undertakes no obligation
to update these forward-looking statements to reflect events or
circumstances that occur after the date on which such statements
were made.
�
GS Financial Corp. Condensed Consolidated Statements of
Financial Condition � �
June 30, 2009 � December 31,
2008 ($ in thousands) �
(Unaudited) � (Audited) ASSETS Cash
& Amounts Due from Depository Institutions
$
3,127 $ 2,313 Interest-Bearing Deposits in Other Banks
14,104 569 Federal Funds Sold
1,547 323 Securities
Available-for-Sale, at Fair Value
52,781 47,617 Loans, Net
179,005 158,523 Accrued Interest Receivable
1,593
1,612 Other Real Estate
1,847 461 Premises & Equipment,
Net
5,688 5,756 Stock in Federal Home Loan Bank, at Cost
2,352 2,300 Real Estate Held-for-Investment, Net
432
436 Other Assets � �
2,258 � � � 1,960 � Total Assets �
$ 264,734 � � $ 221,870 � � LIABILITIES Deposits
Interest-Bearing Deposits
$ 179,580 $ 132,145
Noninterest-Bearing Deposits � �
10,042 � � � 7,970 � Total
Deposits � �
189,622 � � � 140,115 � Advance Payments by
Borrowers for Taxes and Insurance
332 167 FHLB Advances
44,490 52,002 Other Liabilities � �
2,152 � � � 2,028
� Total Liabilities � �
236,596 � � � 194,312 � �
STOCKHOLDERS' EQUITY Common Stock - $.01 Par Value
$
34 $ 34 Additional Paid-in Capital
34,550 34,546
Unearned RRP Trust Stock
(132 ) (143 ) Treasury Stock
(32,215 ) (32,062 ) Retained Earnings
26,029
25,404 Accumulated Other Comprehensive Loss � �
(128
) � � (221 ) Total Stockholders' Equity � �
28,138 �
� � 27,558 � Total Liabilities & Stockholders' Equity �
$ 264,734 � � $ 221,870 � � Selected Asset Quality
Data Total Non-Performing Assets
$ 4,939 $ 2,472
Non-Performing Assets to Total Assets
1.87 % 1.11 % �
GS Financial Corp. Condensed Consolidated Statements of
Income (Unaudited) � �
For the Three Months Ended
� For the Six Months Ended � � June 30, June 30, ($ in thousands,
except per share data) � �
2009 � � � 2008 � �
2009 �
� � 2008 � Interest and Dividend Income
$ 3,610 � $
3,019
$ 6,998 � $ 6,006 Interest Expense � �
1,663 � � � 1,380 � �
3,176 � � � 2,876 � � Net
Interest Income
1,947 1,639
3,822 3,130 Provision for
Loan Losses � �
- � � � - � �
- � � � - � � Net
Interest Income after Provision for Loan Losses � �
1,947 �
� � 1,639 � �
3,822 � � � 3,130 � � Noninterest Income
(Loss)
493 (525 )
866 (410 ) Noninterest Expense � �
1,785 � � � 1,465 � �
3,461 � � � 2,881 � � Income
(Loss) Before Tax Expense
655 (351 )
1,227 (161 ) �
Income Tax Expense (Benefit) � �
152 � � � (119 ) �
346 � � � (55 ) Net Income (Loss) �
$ 503 � �
$ (232 )
$ 881 � � $ (106 ) Earnings (Loss) Per Share
- Basic �
$ 0.40 � � $ (0.18 )
$ 0.69 �
� $ (0.08 ) Earnings (Loss) Per Share - Diluted �
$
0.40 � � $ (0.18 )
$ 0.69 � � $ (0.08 ) �
Selected Operating Data Weighted Average Shares Outstanding
1,268,579 1,285,800
1,271,735 1,285,800 Return on
Average Assets1
0.76 % -0.23 %
0.71 %
0.47 % Noninterest Expense/Average Assets1
2.71 %
2.93 %
2.78 % 2.92 % Net Interest Margin1 � �
3.10 % � � 3.43 % �
3.21 % � � 3.32 %
1Annualized
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