GS Financial Corp. (the �Company�), (NASDAQ:GSLA), the holding
company of Guaranty Savings Bank (www.guarantysb.com), announced
quarterly earnings of $270,000 for the quarter ended September 30,
2008, up $201,000 or 291.3% from the same period in 2007. Earnings
per share for the third quarter of 2008 were $.21, up from $.06 for
the third quarter of 2007. The increase in earnings for the quarter
ended September 30, 2008 was primarily due to an increase in
interest and dividend income due to loan growth and improvement in
our net interest margin. President Stephen E. Wessel noted, �We
have been focused on reducing our cost of funds and the attainment
of revenue enhancements which resulted in an increase of $388,000
in net interest income for the third quarter of 2008 as compared to
the same period in 2007. During this time of financial crisis, many
of our customers have come to see us as a refuge of trust and
consistency which has helped us to increase both our loan and
deposit balances. Since 1937, we have been focused on keeping
things simple. Our reputation in the community is based upon
offering sensible, competitive, easy to use accounts and services
combined with personal attention to our customer�s financial
goals.� For the first nine months of 2008, net income totaled
$164,000, down 64.2% from $458,000 in the same period of 2007.
Earnings per share for the first nine months of 2008 were $.13,
down 65.8% or $.25 over the same time period in 2007. The decrease
in earnings for the first nine months of 2008 was primarily a
result of 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 two mutual funds that hold mortgage-backed
securities. In addition, the earnings for the first nine months of
2007 included the reversal of a provision for loan losses of
$300,000 compared with no provision or reversal in the same period
of 2008. President Wessel commented, �There continues to be
challenges in our industry, however, our third quarter results
reflect continued progress in the attainment of our strategic
goals. We have experienced growth in our core business of loans and
deposits while maintaining good credit quality resulting in
increased interest and dividend income while flattening our expense
growth in the third quarter of 2008.� Net interest income for the
quarter ended September 30, 2008 was $1.8 million, up 27.5% from
$1.4 million in the third quarter of 2007, and up 9.9% or $162,000
from the second quarter of 2008. The third quarter 2008 net
interest margin was 3.52%, up 10 basis points from 3.42% for the
third quarter of 2007, and up 7 basis points from 3.45% in the
second quarter of 2008. Net interest income for the first nine
months of 2008 was $4.9 million, up 18.2% from $4.2 million during
the same period in 2007. The increase in net interest income was
primarily the result of a decrease in deposit costs and the use of
lower cost Federal Home Loan Bank advances to fund loan growth. In
addition, the Company has successfully grown the amount of
non-interest bearing deposits which is one of our strategic
initiatives. The net interest margin for the first nine months of
2008 was 3.38%, down 9 basis points from 3.47% for the same time
period in 2007. Total assets at September 30, 2008 were $217.0
million compared to $186.5 million at December 31, 2007, an
increase of approximately $30.5 million or 16.4%. Net loans
increased $30.8 million or 26.0% from $118.5 million at year end
2007 to $149.3 at September 30, 2008. Deposit accounts increased
approximately $8.7 million or 6.7% from $129.5 million at December
31, 2007 to $138.2 million at September 30, 2008. Borrowings from
the Federal Home Loan Bank increased from $27.0 million at December
31, 2007 to $49.9 million at September 30, 2008. Stockholders�
equity was 12.6% of total assets at September 30, 2008 down from
15.1% at December 31, 2007. Financial highlights of the third
quarter of 2008 include: Gross loans increased by $30.0 million
(24.6%) during the first nine months of 2008 to $151.9 million at
September 30, 2008, with the majority of the growth in the real
estate secured loans, both residential and non-residential.
Deposits increased in the first nine months of 2008 by $8.7 million
(6.7%) to $138.2 million at September 30, 2008, including $4.1
million of growth in non-interest bearing deposits. Interest and
dividend income increased by $972,000 (11.8%) to $9.2 million for
the nine months ended September 30, 2008 compared to the same prior
year period. Non-interest expense as a percentage of average assets
fell from 3.18% for the first nine months of 2007 to 2.83% for the
first nine months of 2008 as the $298,000 or 7.4% increase in
non-interest expense was offset by growth in the Company�s assets
during that period. FORWARD-LOOKING INFORMATION Statements
contained in this news release which are not historical facts may
be forward-looking statements as that term is defined in the
Private Securities Litigation Reform Act of 1995. Such
forward-looking statements are subject to risks and uncertainties
which could cause actual results to differ materially from those
currently anticipated due to a number of factors. Factors which
could result in material variations include, but are not limited
to, changes in interest rates which could affect net interest
margins and net interest income, competitive factors which could
affect net interest income and noninterest income, changes in
demand for loans, deposits and other financial services in the
Company's market area; changes in asset quality, general economic
conditions as well as other factors discussed in documents filed by
the Company with the Securities and Exchange Commission from time
to time. In addition to risks and uncertainties described by the
Company in prior filings with the SEC, other risks and
uncertainties potentially impacting the Company are those related
to the Company in its primary market area impacted by Hurricane
Katrina, including the continuing effect of the storm and its
aftermath on the Company's operating expenses and on the Company's
borrowers and other customers. The Company undertakes no obligation
to update these forward-looking statements to reflect events or
circumstances that occur after the date on which such statements
were made. � � GS Financial Corp. Condensed Consolidated Statements
of Financial Condition � � � � � September 30, 2008 December 31,
2007 ($ in thousands) � (Unaudited) � (Audited) ASSETS Cash &
Amounts Due from Depository Institutions $ 2,994 $ 2,485
Interest-Bearing Deposits in Other Banks 2,950 6,008 Federal Funds
Sold 596 969 Securities Available-for-Sale, at Fair Value 48,618
47,747 Loans, Net 149,333 118,477 Accrued Interest Receivable 1,549
1,828 Premises & Equipment, Net 5,715 5,874 Stock in Federal
Home Loan Bank, at Cost 2,290 1,220 Other Real Estate 844 - Real
Estate Held-for-Investment, Net 439 450 Other Assets � � 1,651 � �
� 1,429 � Total Assets � $ 216,979 � � $ 186,487 � � LIABILITIES
Deposits Interest-Bearing Deposits $ 128,392 $ 123,825
Noninterest-Bearing Deposits � � 9,763 � � � 5,685 � Total Deposits
� � 138,155 � � � 129,510 � FHLB Advances 49,920 26,986 Other
Liabilities � � 1,555 � � � 1,827 � Total Liabilities � � 189,630 �
� � 158,323 � � STOCKHOLDERS' EQUITY Common Stock - $.01 Par Value
$ 34 $ 34 Additional Paid-in Capital 34,546 34,546 Unearned RRP
Trust Stock (143 ) (158 ) Treasury Stock (32,062 ) (32,062 )
Retained Earnings 25,697 25,919 Accumulated Other Comprehensive
Loss � � (723 ) � � (115 ) Total Stockholders' Equity � � 27,349 �
� � 28,164 � Total Liabilities & Stockholders' Equity $ 216,979
$ 186,487 � Selected Asset Quality Data Total Non Performing Assets
$ 2,919 $ 1,438 Non Performing Assets to Total Assets 1.35 % 0.77 %
� � � � GS Financial Corp. Condensed Consolidated Statements of
Income (Unaudited) � For the Three Months For the Nine Months � �
Ended September 30, � Ended September 30, ($ in thousands, except
per share data) � � 2008 � � � 2007 � � � 2008 � � � 2007 �
Interest and Dividend Income $ 3,214 $ 2,861 $ 9,220 $ 8,248
Interest Expense � � 1,413 � � � 1,448 � � � 4,288 � � � 4,075 � �
Net Interest Income 1,801 1,413 4,932 4,173 Provision (Reversal)
for Loan Losses � � - � � � - � � � - � � � (300 ) Net Interest
Income after Provision (Reversal) for Loan Losses � � 1,801 � � �
1,413 � � � 4,932 � � � 4,473 � � Non-interest Expense � � 1,448 �
� � 1,441 � � � 4,329 � � � 4,031 � Net Income before Non-interest
Income and Income Taxes � � 353 � � � (28 ) � � 603 � � � 442 � �
Non-interest Income � � 53 � � � 109 � � � (357 ) � � 181 � Income
Before Tax Expense � � 406 � � � 81 � � � 246 � � � 623 � � Income
Tax Expense � � 136 � � � 12 � � � 82 � � � 165 � Net Income � $
270 � � $ 69 � � $ 164 � � $ 458 � Earnings Per Share - Basic � $
0.21 � � $ 0.06 � � $ 0.13 � � $ 0.38 � Earnings Per Share -
Diluted � $ 0.21 � � $ 0.06 � � $ 0.13 � � $ 0.38 � � Selected
Operating Data Weighted Average Shares Outstanding 1,278,466
1,234,453 1,278,231 1,234,453 Return on Average Assets1 0.50 % 0.17
% 0.11 % 0.31 % Non-interest Expense/Average Assets1 2.70 % 3.29 %
2.83 % 3.18 % Net Interest Margin1 � � 3.52 % � � 3.42 % � � 3.38 %
� � 3.47 % 1Annualized
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