GS Financial Corp. (NASDAQ:GSLA), the holding company of Guaranty
Savings and Homestead Association "the Association",
(www.gsha.com), announced quarterly earnings of $231,000 for the
quarter ended September 30, 2005, down 4% from $240,000 reported
for the same period in 2004. Diluted earnings per share for the
third quarter of 2005 were $.20, unchanged from the third quarter
of 2004. Net income for the first nine months of 2005 totaled
$403,000, down 9% from $445,000 reported for the same time period
in 2004. Earnings per share over the first nine months of 2005 were
$.34, down 10% from $.38 in the first nine months of 2004. The
results for the first nine months of 2005 include the one-time
recognition of costs associated with the retirement of the
Company's former President and Chief Executive Officer. These costs
totaled $428,000, or $.36 per share ($282,000, or $.24 per share,
after related tax benefits). Excluding the impact of this one-time
charge, net earnings from operations for the nine months ended
September 30, 2005 were $685,000, or $.58 per share. GS Financial's
third quarter earnings were adversely affected by Hurricane
Katrina, which struck the Association's primary market area on
August 29, 2005. While the full impact of this event on the
Association's financial condition and results of operation are in
the process of being fully assessed, the Company has included
certain charges in its third quarter results. The following
summarizes certain effects of the hurricane on the Company's
operations: -- One of the Association's four full service branches
suffered significant damage to both the building and its contents.
As a result, the Company has recognized a pre-tax impairment charge
of approximately $155,000. This branch is expected to remain out of
service for several months. -- The Association has granted its
customers a three-month deferral of loan payments. Interest
continues to accrue on these loans; however, late charges are being
waived. Loans that have become past due more than 90 days as a
result of this deferral continue to be treated as a performing
asset. -- The Association continues to evaluate its reserves for
loan losses in light of the destruction sustained in the area.
However, at this point, the Association has not completed any
assessment sufficient to permit it to increase its reserves for
loan losses and additional provisions may be required in the
future. Despite the widespread damage to the area and the temporary
displacement of Company employees, the Association was able to
resume operations at its main office and branches as soon as civil
evacuation orders were lifted by local authorities. Net interest
income for the quarter ended September 30, 2005 was $1.4 million,
down approximately $21,000, or 1% from the third quarter of 2004,
and up less than 1%, or $12,000 from the second quarter of 2005.
The third quarter 2005 net interest margin was 3.20%, up 29 basis
points from 2.91% from the third quarter of 2004, and up 11 basis
points from 3.09% in the second quarter of 2005. Net interest
income for the first nine months of 2005 was $4.3 million, up 6%
from $4.1 million in the first nine months of 2004. The net
interest margin for the first nine months of 2005 was 3.10%, up 38
basis points from 2.72% for the same time period in 2004.
Additional financial information include the following: -- Total
assets at September 30, 2005 were $181.2 million, down
approximately 9% from December 31, 2004. -- Loans at September 30,
2005 were $84.9 million, down approximately 8% from December 31,
2004. -- Deposits at September 30, 2005 were $117.5 million, down
approximately 10% from December 31, 2004. -- Outstanding advances
from the Federal Home Loan Bank at September 30, 2005 were $33.9
million, down approximately 14% from December 31, 2004. --
Stockholders' equity at September 30, 2005 was $28.7 million, down
less than 1% from December 31, 2004. Stockholders' equity as a
percentage of total assets at September 30, 2005 was 15.84%, up
from 14.47% at December 31, 2004. -- Non-interest expense for the
third quarter of 2005 totaled $1.0 million, down approximately 13%
from a year earlier. Non-interest expense for the first nine months
of 2005 totaled $3.6 million, up approximately 5% from the first
nine months of 2004. Included in the first half of 2005 are the
previously mentioned expenses associated with the retirement of the
Company's former President and Chief Executive Officer. Excluding
the impact of this one-time charge, non-interest expenses for the
first nine months would have been $3.1 million, down approximately
7% from the previous year. -- Non-performing assets were $346,000
at September 30, 2005, compared to $894,000 at December 31, 2004.
The ratio of non-performing assets to total assets at September 30,
2005 was .19% compared to .45% at December 31, 2004. -- Reserve
coverage of non-performing assets at September 30, 2005 was 266%
compared to 103% at December 31, 2004. Reserve coverage of total
loans was 1.07% at September 30, 2005 compared to .99% at December
31, 2004. -- The ratio of loans to deposits at September 30, 2005
was 72.26%, compared to 70.5% at December 31, 2004. 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. -0- *T GS Financial Corp. Condensed Consolidated
Statements of Financial Condition
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9/30/2005 12/31/2004 ($ in thousands) (Unaudited) (Audited)
----------------------------------------------------------------------
ASSETS Cash & Amounts Due from Depository Institutions $1,678
$1,613 Interest-Bearing Deposits from Other Banks 4,331 3,761
Federal Funds Sold 2,730 1,650
----------------------------------------------------------------------
Total Cash and Cash Equivalents 8,739 7,024
----------------------------------------------------------------------
Securities Available-for-Sale, at Fair Value 80,834 94,557 Loans,
Net 84,901 92,158 Accrued Interest Receivable 1,115 596 Premises
& Equipment, Net 2,380 2,508 Stock in Federal Home Loan Bank,
at Cost 2,150 2,445 Foreclosed Assets 159 - Real Estate
Held-for-Investment, Net 481 493 Other Assets 443 285
----------------------------------------------------------------------
Total Assets $181,202 $200,066
----------------------------------------------------------------------
LIABILITIES Deposits Interest-Bearing Deposits $116,459 $129,758
Noninterest-Bearing Deposits 1,034 965
----------------------------------------------------------------------
Total Deposits 117,493 130,723
----------------------------------------------------------------------
FHLB Advances 33,937 39,689 Other Liabilities 1,072 710
----------------------------------------------------------------------
Total Liabilities 152,502 171,122
----------------------------------------------------------------------
STOCKHOLDERS' EQUITY Preferred Stock - $.01 Par Value $- $- Common
Stock - $.01 Par Value 34 34 Additional Paid-in Capital 34,572
34,425 Unearned ESOP Stock (310) (521) Unearned RRP Trust Stock
(861) (865) Treasury Stock (32,193) (32,119) Retained Earnings
28,335 28,286 Accumulated Other Comprehensive Loss (877) (296)
----------------------------------------------------------------------
Total Stockholders' Equity 28,700 28,944
----------------------------------------------------------------------
Total Liabilities & Stockholders' Equity $181,202 $200,066
----------------------------------------------------------------------
Selected Asset Quality Data Total Non Performing Assets $346 $894
Non Performing Assets to Total Assets 0.19% 0.45% Allowance for
Loan Losses to Non Performing Assets 265.90% 102.90%
----------------------------------------------------------------------
GS Financial Corp. Condensed Consolidated Statements of Income
(Unaudited) For the Three Months For the Nine Months Ended
September 30, Ended September 30,
----------------------------------------------------------------------
($ in thousands, except per share data) 2005 2004 2005 2004
----------------------------------------------------------------------
Interest and Dividend Income $2,670(1) $2,793 $7,980(1) $8,193
Interest Expense 1,231 1,333 3,674 4,139
----------------------------------------------------------------------
Net Interest Income 1,439 1,460 4,306 4,054 Provision for Loan
Losses - - - 33
----------------------------------------------------------------------
Net Interest Income after Provision for Loan Losses 1,439 1,460
4,306 4,021
----------------------------------------------------------------------
Non-interest Expense 981 1,129 3,569 3,392
----------------------------------------------------------------------
Net Income Before Non-Interest Income and Income Taxes 458 331 737
629
----------------------------------------------------------------------
Impairment Charge Related to Hurricane Katrina (155) - (155) -
Non-interest Income 39 (85) 71 (181)
----------------------------------------------------------------------
Income Before Tax Expense 342 246 653 448
----------------------------------------------------------------------
Income Tax Expense 111 6 250 3
----------------------------------------------------------------------
Net Income $231 $240 $403 $445
----------------------------------------------------------------------
Earnings Per Share - Basic $0.20 $0.21 $0.34 $0.38
----------------------------------------------------------------------
Earnings Per Share -Diluted $0.20 $0.20 $0.34 $0.38
----------------------------------------------------------------------
Selected Operating Data Weighted Average Shares Outstanding
1,180,635 1,152,393 1,181,436 1,156,409 Return on Average Assets(2)
0.50% 0.46% 0.28% 0.28% Non-Interest Expense/Average Assets(2)
2.12% 2.18% 3.76% 3.18% Net Interest Margin(2) 3.20% 2.91% 3.10%
2.72%
----------------------------------------------------------------------
(1) Includes approximately $397,000 of interest accrued on loans
but for which payments have not been received as a result of loan
deferrals granted in the wake of Hurricane Katrina. (2) Annualized
*T
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