GS Financial Corp. (Nasdaq:GSLA) (the "Company"), the holding
company for Guaranty Savings Bank ("Guaranty"), reported a net loss
for the quarter ended December 31, 2009 of $99,000, or ($0.08) per
share diluted, compared with a net loss of $170,000, or ($0.13) per
share diluted, for the same period in 2008. Net income for 2009 was
$886,000 up from a net loss of $6,000 for 2008. Earnings per share
for the year ended December 31, 2008 are not meaningful compared to
$0.70 per share diluted for 2009.
President Stephen E. Wessel commented, "We are pleased to report
a profitable year in 2009 due in large part to a substantial
improvement in net interest income and an increase in noninterest
income. We were also able to grow core deposits as a cost
effective funding source that afforded us the opportunity to reduce
our FHLB advances by more than $11 million dollars. Unfortunately,
our financial results also reflect an increase in our provision for
loan losses, higher FDIC insurance costs, and elevated credit costs
including more than $400,000 of impairment losses on other real
estate owned. However, we remain very well capitalized,
and we are focused on improving our credit quality and
executing our strategic plan."
Highlights of the year ended December 31, 2009 include:
-
Total assets at December 31, 2009 were $271.6 million, up
approximately $49.7 million, or 22.4%, from December 31, 2008.
-
Average loans increased by $36.9 million, or 26.0%, during 2009
from $141.9 million at December 31, 2008 to $178.8 million at
December 31, 2009, with the majority of the growth in both
residential and commercial real estate mortgage loans.
-
Deposits increased during 2009 by $61.4 million, or 43.8%, from
$140.1 million at December 31, 2008 to $201.5 million at December
31, 2009. This includes $6.8 million, or 85.9%, of growth in
noninterest-bearing deposits.
-
Federal Home Loan Bank advances decreased by $11.5 million, or
22.1%, from $52.0 million at December 31, 2008 to $40.5 million at
December 31, 2009.
-
The ratio of average loans to average deposits decreased from
104.88% at December 31, 2008 to 97.37% at December 31, 2009, and
the ratio of interest-earning assets to interest-bearing
liabilities decreased from 117.05% to 113.13% when comparing those
same periods.
Net interest income for the quarter ended December 31, 2009 was
$2.2 million, which represents an increase of $458,000, or 26.3%,
from $1.7 million for the same period in 2008. Net interest income
for 2009 was $8.1 million, an increase of $1.4 million, or 21.0%,
from $6.7 million for 2008. The increases in net interest income
when comparing the quarterly and annual periods ended December 31,
2009 to the same periods in the prior year were primarily due to a
significant increase in the average balance of loans and a decrease
in the overall cost of interest-bearing deposits which were
partially offset by a decrease in the yield on investments,
including overnight funds, and an increase in the average balance
of interest-bearing deposits.
The net interest margin was 3.43% for the fourth quarter of
2009, up 10 basis points from 3.33% for the fourth quarter of 2008.
The increase in net interest margin during the fourth quarter was
primarily due to a 28 basis point increase in the average interest
rate spread which was positively impacted by an 85 basis point
reduction in the overall cost of interest-bearing liabilities. The
net interest margin for the year ended December 31, 2009 was 3.26%,
down 11 basis points from 3.37% for the prior year. The decrease in
the net interest margin from 2008 to 2009 was attributable to a 67
basis point decrease in the average yield on interest-earnings
assets that was substantially offset by a 61 basis point decrease
in the average cost of interest-bearing liabilities.
Non-performing assets increased $4.2 million, or 169.1%, from
$2.5 million at December 31, 2008 to $6.7 million at December 31,
2009. The increase in non-performing assets is primarily due to a
loan relationship with a commercial borrower consisting of five
loans aggregating $1.5 million that are secured by owner occupied,
nonresidential real estate located in New Orleans, Louisiana, that
are currently in the process of foreclosure and a $2.0 million
increase in other real estate owned during 2009. Other real estate
owned as of December 31, 2009 includes two properties that were
previously under renovation totaling $945,000. These properties
were obtained through foreclosure proceedings completed in December
2009 and are secured by residential real estate located in uptown
New Orleans, Louisiana, and non-residential real estate located in
Algiers, Louisiana. In addition, other real estate owned includes a
$950,000 multifamily dwelling that was previously under renovation
which is located in the historic district of the French Quarter in
New Orleans, Louisiana. The foreclosure proceedings for this
property were completed in April 2009, and the Company has been
marketing it for sale since May 2009. The Company recognized
impairment losses on other real estate owned of $375,000 and
$436,000, respectively, for the fourth quarter and year ended
December 31, 2009. No impairment losses were recognized on other
real estate owned in 2008.
A provision for loan losses of $300,000 was recorded during the
fourth quarter of 2009 based on the Company's assessment of its
credit risk while considering the overall increase in the level of
loan delinquencies and adversely classified loans. The Company
recorded a total of $500,000 in additional loan loss provisions
during 2009. There was no addition to the allowance for loan losses
in 2008. As of December 31, 2009, the Company's allowance for
losses was $2.4 million or 57.2% of non-performing loans compared
to $2.7 million or 135.2% of non-performing loans at December 31,
2008. The Company believes that the allowance for loan losses
recorded as of December 31, 2009 is sufficient to cover the
potential losses in its loan portfolio.
Noninterest income for the fourth quarter of 2009 was $231,000,
up from a loss of $637,000 for the fourth quarter of 2008. For the
annual period ended December 31 2009, noninterest income was $1.3
million as compared to a loss of $994,000 for the same period in
2008. The significant increase in noninterest income was due to
strong sales of residential loans in the secondary market during
2009 and the recognition of a non-cash impairment charge of $1.3
million (pre-tax) and $845,000 (after-tax) related to the Company's
investment in mutual funds that hold mortgage-backed securities in
2008.
Noninterest expense for the fourth quarter of 2009 was $2.2
million, up approximately $808,000, or 60.1%, from $1.3 million for
the fourth quarter of 2008. Noninterest expense for the year ended
December 31, 2009 was $7.5 million, which represents an increase of
$1.9 million, or 32.7%, from $5.7 million in the prior year.
Noninterest expense for 2009 was negatively impacted by an increase
in deposit insurance premiums, including a special assessment,
which totaled $75,000 and $322,000 for the three months and year
ended December 31, 2009, compared to $25,000 and $45,000 for the
respective prior year periods. In addition, there were increases in
mortgage originator commissions attributable to the increased
volume of loan sales and legal expenses associated with an
agreement we entered into with certain shareholders.
FORWARD-LOOKING INFORMATION
Statements contained in this news release which are not
historical facts may be forward-looking statements as that term is
defined in the Private Securities Litigation Reform Act of 1995.
Such forward-looking statements are subject to risks and
uncertainties which could cause actual results to differ materially
from those currently anticipated due to a number of factors.
Factors which could result in material variations include, but are
not limited to, changes in interest rates which could affect net
interest margins and net interest income, competitive factors which
could affect net interest income and noninterest income, changes in
demand for loans, deposits and other financial services in the
Company's market area; changes in asset quality, general economic
conditions as well as other factors discussed in documents filed by
the Company with the Securities and Exchange Commission from time
to time. The Company undertakes no obligation to update these
forward-looking statements to reflect events or circumstances that
occur after the date on which such statements were made.
GS Financial Corp.
|
Condensed Consolidated Statements of Financial
Condition
|
|
|
|
|
|
|
|
December 31, 2009
|
December 31, 2008
|
($ in thousands)
|
(Unaudited)
|
(Audited)
|
ASSETS
|
|
|
Cash & Amounts Due from Depository Institutions
|
$ 7,158
|
$ 2,313
|
Interest-Bearing Deposits in Other Banks
|
9,293
|
569
|
Federal Funds Sold
|
3,284
|
323
|
Securities Available-for-Sale, at Fair Value
|
50,455
|
47,617
|
Loans, Net
|
185,500
|
158,523
|
Accrued Interest Receivable
|
1,518
|
1,612
|
Other Real Estate
|
2,489
|
461
|
Premises & Equipment, Net
|
5,934
|
5,756
|
Stock in Federal Home Loan Bank, at Cost
|
2,354
|
2,300
|
Real Estate Held-for-Investment, Net
|
427
|
436
|
Other Assets
|
3,192
|
1,960
|
Total Assets
|
$ 271,604
|
$ 221,870
|
|
|
|
LIABILITIES
|
|
|
Deposits
|
|
|
Interest-Bearing Deposits
|
$ 186,681
|
$ 132,145
|
Noninterest-Bearing Deposits
|
14,812
|
7,970
|
Total Deposits
|
201,493
|
140,115
|
Advance Payments by Borrowers for Taxes and Insurance
|
249
|
167
|
FHLB Advances
|
40,512
|
52,002
|
Other Liabilities
|
1,329
|
2,028
|
Total Liabilities
|
243,583
|
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
|
(32,449)
|
(32,062)
|
Retained Earnings
|
25,780
|
25,404
|
Accumulated Other Comprehensive Income (Loss)
|
238
|
(221)
|
Total Stockholders' Equity
|
28,021
|
27,558
|
Total Liabilities & Stockholders' Equity
|
$ 271,604
|
$ 221,870
|
|
|
|
Selected Asset Quality Data
|
|
|
Total Non-Performing Assets
|
$ 6,653
|
$ 2,472
|
Non-Performing Assets to Total Assets
|
2.45%
|
1.11%
|
GS Financial Corp.
|
Condensed Consolidated Statements of Income
|
(Unaudited)
|
|
|
|
|
|
|
For the Three Months Ended
|
For the Year Ended
|
|
December 31,
|
December 31,
|
($ in thousands, except per share data)
|
2009
|
2008
|
2009
|
2008
|
Interest and Dividend Income
|
$ 3,561
|
$ 3,206
|
$ 14,159
|
$ 12,426
|
Interest Expense
|
1,360
|
1,463
|
6,084
|
5,751
|
|
|
|
|
|
Net Interest Income
|
2,201
|
1,743
|
8,075
|
6,675
|
Provision for Loan Losses
|
300
|
--
|
500
|
--
|
|
|
|
|
|
Net Interest Income after Provision for Loan Losses
|
1,901
|
1,743
|
7,575
|
6,675
|
|
|
|
|
|
Noninterest Income (Loss)
|
231
|
(637)
|
1,330
|
(994)
|
Noninterest Expense
|
2,152
|
1,344
|
7,529
|
5,673
|
|
|
|
|
|
(Loss) Income Before Income Tax Expense
|
(20)
|
(238)
|
1,376
|
8
|
|
|
|
|
|
Income Tax Expense (Benefit)
|
79
|
(68)
|
490
|
14
|
Net (Loss) Income
|
$ (99)
|
$ (170)
|
$ 886
|
$ (6)
|
(Loss) Earnings Per Share - Basic
|
$ (0.08)
|
$ (0.13)
|
$ 0.70
|
n/m
|
(Loss) Earnings Per Share - Diluted
|
$ (0.08)
|
$ (0.13)
|
$ 0.70
|
n/m
|
|
|
|
|
|
Selected Operating Data
|
|
|
|
|
Weighted Average Shares Outstanding
|
1,251,516
|
1,278,466
|
1,263,021
|
1,278,292
|
Return on Average Assets1
|
-0.15%
|
-0.31%
|
0.34%
|
n/m
|
Return on Average Stockholders' Equity1
|
-1.39%
|
-2.48%
|
3.13%
|
-0.02%
|
Net Interest Margin1
|
3.43%
|
3.33%
|
3.26%
|
3.37%
|
Average Loans to Average Deposits
|
94.70%
|
110.59%
|
97.37%
|
104.88%
|
Interest-Earning Assets to Interest-Bearing Liabilities
|
112.89%
|
116.12%
|
113.13%
|
117.05%
|
Efficiency Ratio
|
88.52%
|
121.52%
|
80.06%
|
99.86%
|
Noninterest Expense/Average Assets1
|
3.18%
|
2.44%
|
2.89%
|
2.73%
|
1 Annualized
|
|
|
|
|
CONTACT: GS Financial Corp.
Stephen F. Theriot, Chief Financial Officer
(504) 883-5528
GS Financial Corp. (MM) (NASDAQ:GSLA)
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