GS Financial Corp. (NASDAQ Global Market: GSLA) (the �Company�),
the holding company for Guaranty Savings Bank (the �Bank�),
reported earnings for the quarter ended March 31, 2009 of $378,000,
or $0.30 per share diluted, compared with earnings of $126,000, or
$0.10 per share diluted, for the same period in 2008, an increase
of 200.0%.
�I was pleased with our performance for the first quarter,� said
Stephen E. Wessel, President and CEO of GS Financial Corp. �We
generated a record quarter over quarter increase in deposits as our
bankers brought in an additional $30.6 million. Average loans also
grew by over 7.3% from prior quarter, and our capital levels
continued to be strong. More importantly, our income improved
significantly as demonstrated by an increase in interest income of
$401,000, non-interest income of $258,000, and net income of
$252,000 from the same quarter in the prior year.�
Net interest income for the quarter ended March 31, 2009 was
$1.9 million, which represents an increase of $383,000, or 25.7%,
from $1.5 million for the same period in 2008. The Company's net
interest margin increased 14 basis points from 3.21% for the first
quarter of 2008 to 3.35% for the same period in 2009. The increase
in net interest margin is primarily due to decreased deposit costs
that are attributable to the decrease in market rates of interest
which occurred throughout 2008 and have been maintained into
2009.
Interest and dividend income for the three months ended March
31, 2009 was $3.4 million, an increase of $401,000, or 13.4%, from
$3.0 million for the three months ended March 31, 2008. This
increase was due to the significant increase in the average balance
of interest-earning assets from March 31, 2008 to March 31,
2009.
Interest expense for the three months ended March 31, 2009 was
$1.5 million, an increase of $18,000, or 1.2%, from the same period
in 2008. This is primarily due to the Company's efforts to improve
its funding mix throughout 2008 and continuing into 2009 by
reducing its reliance on higher-cost sources of funds, such as
certificates of deposit, and emphasizing attracting lower-cost
transaction accounts while significantly increasing the average
balance of deposits.
Non-interest income increased by $258,000, or 224.4%, from
$115,000 in the first quarter of 2008 to $373,000 for the same
period in 2009, primarily due to a significant increase in the gain
on sales of residential loans in the secondary market primarily
attributable to favorable mortgage loan interest rates. As a result
of the increased activity, the Bank has expanded its mortgage
banking operations by hiring additional mortgage originators.
Non-interest expense for the first quarter of 2009 was $1.7
million, up approximately $260,000, or 18.4%, from $1.4 million for
the first quarter of 2008. President Wessel commented, �Our
expenses have increased, however, the biggest components of
non-interest expense included mortgage originator commissions,
increased FDIC deposit insurance premiums, and legal expenses
associated with the agreement we recently entered into with certain
shareholders.�
Non-performing assets increased during the first quarter of 2009
from $2.5 million at December 31, 2008 to $2.8 million at March 31,
2009. The largest component of non-performing assets is a $1.4
million delinquent renovation loan that is secured by a multifamily
dwelling located in the historic district of the French Quarter in
New Orleans, LA, which went to Sheriff's sale in April 2009 as
expected. Management believes its allowance for loan losses is
adequate to provide for any potential loan losses inherent in the
loan portfolio and did not record a provision for loan losses in
the first quarter of 2009.
Total Assets at March 31, 2009 were $251.0 million compared to
$221.9 million at December 31, 2008, an increase of approximately
$29.1 million, or 13.1%. Net loans increased $11.9 million, or
7.5%, in the first quarter of 2009 from $158.5 million at December
31, 2008 to $170.4 million at March 31, 2009. Deposit accounts
increased approximately $30.6 million, or 21.9%, during the first
quarter from $140.1 million to $170.7 million at December 31, 2008
and March 31, 2009, respectively. Borrowings from the Federal Home
Loan Bank decreased from $52.0 million at December 31, 2008 to
$49.9 million at March 31, 2009. Stockholders' equity was 11.2% of
total assets at March 31, 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 April 21, 2009, declared a quarterly cash dividend of
$0.10 per share. The dividend is payable to shareholders of record
as of May 5, 2009 and will be paid on May 20, 2009.
Highlights of the first quarter of 2009 include:
- Non-interest income for the
first quarter of 2009 totaled $373,000, up $258,000 (224.4%) from
$115,000 for the first quarter of 2008, primarily due to gains
recognized on the sales of mortgage loans in the secondary
market.
- Net interest income increased by
$383,000 (25.7%) from $1.5 million to $1.9 million for the quarters
ended March 31, 2008 and March 31, 2009, respectively.
- Average loans increased by $11.3
million (7.3%) during the first quarter of 2009 to $166.9 million
at March 31, 2009, with the majority of the growth in real-estate
secured loans, both residential and non-residential.
- Deposits increased in the first
quarter of 2009 by $30.6 million (21.9%) from $140.1 million at
December 31, 2008 to $170.7 million at March 31, 2009. This
includes $2.2 million (27.3%) of growth in non-interest bearing
deposits.
- Non-interest expense for the
first quarter of 2009 totaled $1.7 million, up $260,000 (18.4%)
from the same period in the prior year. However, as the Company has
grown during that period, non-interest expense as a percentage of
average assets fell from 2.91% in the first quarter of 2008 to
2.86% in the first quarter of 2009.
FORWARD-LOOKING INFORMATION
Statements contained in this news release which are not
historical facts may be forward-looking statements as that term is
defined in the Private Securities Litigation Reform Act of 1995.
Such forward-looking statements are subject to risks and
uncertainties which could cause actual results to differ materially
from those currently anticipated due to a number of factors.
Factors which could result in material variations include, but are
not limited to, changes in interest rates which could affect net
interest margins and net interest income, competitive factors which
could affect net interest income and non-interest income, changes
in demand for loans, deposits and other financial services in the
Company's market area; changes in asset quality, general economic
conditions as well as other factors discussed in documents filed by
the Company with the Securities and Exchange Commission from time
to time. In addition to risks and uncertainties described by the
Company in prior filings with the SEC, other risks and
uncertainties potentially impacting the Company are those related
to the Company in its primary market area impacted by Hurricane
Katrina, including the continuing effect of the storm and its
aftermath on the Company's operating expenses and on the Company's
borrowers and other customers. The Company undertakes no obligation
to update these forward-looking statements to reflect events or
circumstances that occur after the date on which such statements
were made.
� �
GS Financial Corp. Condensed Consolidated Statements
of Financial Condition � � � � �
March 31, 2009 December
31, 2008 ($ in thousands) �
(Unaudited) � (Audited) ASSETS
Cash & Amounts Due from Depository Institutions
$
2,917 $ 2,313 Interest-Bearing Deposits in Other Banks
6,315 569 Federal Funds Sold
8,532 323 Securities
Available-for-Sale, at Fair Value
50,216 47,617 Loans, Net
170,364 158,523 Accrued Interest Receivable
1,556
1,612 Premises & Equipment, Net
5,763 5,756 Stock in
Federal Home Loan Bank, at Cost
2,351 2,300 Other Real
Estate
461 461 Real Estate Held-for-Investment, Net
434 436 Other Assets � �
2,094 � � � 1,960 � Total
Assets �
$ 251,003 � � $ 221,870 � � LIABILITIES
Deposits Interest-Bearing Deposits
$ 160,600 $
132,145
Non-interest-Bearing Deposits
� �
10,143 � � � 7,970 � Total Deposits � �
170,743 �
� � 140,115 � FHLB Advances
49,853 52,002 Other Liabilities
� �
2,395 � � � 2,195 � Total Liabilities � �
222,991
� � � 194,312 � � STOCKHOLDERS' EQUITY Common Stock - $.01 Par
Value
$ 34 $ 34 Additional Paid-in Capital
34,548 34,546 Unearned RRP Trust Stock
(137 )
(143 ) Treasury Stock
(32,179 ) (32,062 ) Retained
Earnings
25,653 25,404 Accumulated Other Comprehensive
Income (Loss) � �
93 � � � (221 ) Total Stockholders' Equity
� �
28,012 � � � 27,558 � Total Liabilities &
Stockholders' Equity
$ 251,003 $ 221,870 � Selected
Asset Quality Data Total Non-Performing Assets
$
2,796 $ 2,472 Non-Performing Assets to Total Assets
1.11 % 1.11 % � � �
GS Financial Corp.
Condensed Consolidated Statements of Income
(Unaudited) � For the Three Months Ended � � March 31, ($ in
thousands, except per share data) �
2009 � 2008 Interest and
Dividend Income
$ 3,388 $ 2,987 Interest Expense � �
1,513 � � � 1,495 � � Net Interest Income
1,875 1,492
Provision for Loan Losses � �
- � � � - � Net Interest
Income after Provision for Loan Losses � �
1,875 � � � 1,492
� � Non-interest Expense � �
1,676 � � � 1,416 � Net Income
before Non-interest Income and Income Taxes � �
199 � � � 76
� � Non-interest Income � �
373 � � � 115 �
Income before Tax Expense
� �
572 � � � 191 � � Income Tax Expense � �
194 � �
� 65 � Net Income �
$ 378 � � $ 126 � Earnings Per
Share - Basic �
$ 0.30 � � $ 0.10 � Earnings Per
Share - Diluted �
$ 0.30 � � $ 0.10 � � Selected
Operating Data Weighted Average Shares Outstanding
1,274,892
1,285,800 Return on Average Assets1
0.64 % 0.26 %
Non-interest Expense/Average Assets1
2.86 % 2.91 %
Net Interest Margin1 � �
3.35 % � � 3.21 %
1Annualized �
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