GS Financial Corp. (Nasdaq:GSLA) (the "Company"), the holding
company for Guaranty Savings Bank ("Guaranty"), reported earnings
for the quarter ended December 31, 2010 of $699,000, or $0.56 per
share basic and diluted, compared with a net loss of $99,000, or
($0.08) per share basic and diluted, for the same period in 2009.
Net income for the year ended December 31, 2010 was $407,000, or
$0.33 per share basic and diluted, compared with net income of
$886,000, or $0.70 per share basic and diluted, for 2009.
President Stephen E. Wessel commented, "We are pleased to report
earnings for the fourth quarter resulting in a net profit for the
year due to improved business performance. Our net interest income
increased $1.2 million or 14.7% for 2010, and our net interest
margin increased by 36 basis points to 3.62% in 2010. This is a
direct result of improvements in our deposit mix and a focus on our
core lending competencies.
We also made progress towards improving our credit quality and
added $500,000 to our loan loss provision in the fourth quarter.
While we are not satisfied with the elevated level of
non-performing assets, we have made real progress in 2010 despite
the soft housing market and slow economy and are encouraged by our
core bank earnings. We maintain a strong capital and liquidity
profile, credit trends have improved, and core bank earnings are
solid."
Net interest income for the quarter ended December 31, 2010 was
$2.3 million, which represents an increase of $127,000 compared to
the quarter ended December 31, 2009. Net interest income increased
by $1.2 million to $9.3 million for 2010 compared to $8.1 million
for 2009. The increases in net interest income when comparing the
quarterly and annual periods ended December 31, 2010 to the same
periods in the prior year are primarily due to a decrease in the
cost of interest-bearing deposits combined with an increase in the
average balance of loans. This was partially offset by a decrease
in the average yield on interest-earning assets and an increase in
the average balance of interest-bearing deposits.
Interest and dividend income decreased by $229,000, or 6.4%, and
interest expense decreased by $356,000, or 26.2%, for the fourth
quarter of 2010 compared to the fourth quarter of 2009. For the
year ended December 31, 2010, interest and dividend income was
$13.7 million, a decrease of $439,000, or 3.1%, from $14.2 million
for the year ended December 31, 2009. Interest expense for 2010 was
$4.5 million, which represents a decrease of $1.6 million, or
26.7%, when compared to the prior year.
The net interest margin improved by 25 basis points from 3.43%
for the three months ended December 31, 2009 to 3.68% for the three
months ended December 31, 2010. The net interest margin for the
year ended December 31, 2010 improved to 3.62% from 3.26% for the
same period in the prior year. The increase in net interest margin
for the quarter ended December 31, 2010 compared to the quarter
ended December 31, 2009 was primarily attributable to a 53 basis
point decrease in the average cost of interest-bearing deposits and
a $4.0 million increase in the average balance of loans. This was
partially offset by a 34 basis point decrease in the average yield
on loans, a 121 basis point decrease in the average yield on
mortgage-backed securities, and a $12.3 million increase in the
average balance of time deposits. The 36 basis point improvement in
the net interest margin when comparing 2009 to the same period in
2010 was primarily due to an 83 basis point decrease in the average
cost of interest-bearing deposits and an $11.8 million increase in
the average balance of loans. This was partially offset by 39 and
113 basis point decreases in the average yields on loans and
mortgage-backed securities, respectively, and a $12.2 million
increase in the average balance of time deposits.
Based on the Company's assessment of its credit risk and the
review of adversely classified loans, a provision for loan losses
of $500,000 was recorded during the fourth quarter of 2010. During
2010, the Company recorded a total of $2.8 million in provisions
for loan losses. The provisions primarily reflected updated
collateral values received on impaired loans. The Company recorded
a total of $500,000 in loan loss provisions during 2009, $300,000
of which was recorded during the fourth quarter. As of December 31,
2010, the Company's allowance for losses was $3.7 million, or 34.1%
of nonperforming loans and 1.9% of total loans, compared to $2.4
million or 57.2% of nonperforming loans and 1.3% of total loans, at
December 31, 2009. The Company believes that the allowance for loan
losses recorded as of December 31, 2010 is appropriate to cover the
probable losses in its loan portfolio.
Nonperforming assets consists of loans on nonaccrual status,
including nonaccrual troubled debt restructurings, and foreclosed
assets. The following table sets forth the Company's nonperforming
assets at the dates indicated. The Company did not have loans
greater than 90 days delinquent and accruing interest at the dates
indicated.
NONPERFORMING
ASSETS |
|
2010 |
2009 |
($ in thousands) |
December 31 |
September 30 |
December 31 |
Loans Accounted for on a Nonaccrual
Basis |
$ 10,765 |
$ 11,072 |
$ 4,164 |
Foreclosed Assets |
1,358 |
1,408 |
2,489 |
Total Nonperforming Assets |
$ 12,123 |
$ 12,480 |
$ 6,653 |
Performing Troubled Debt Restructurings
(TDRs) |
592 |
590 |
-- |
Select Asset Quality Ratios: |
|
|
|
Nonaccrual Loans to Total
Loans |
5.58% |
5.81% |
2.22% |
Nonperforming Assets to Loans
Plus Foreclosed Assets |
6.24% |
6.50% |
3.50% |
Nonperforming Assets to Total
Assets |
4.60% |
4.67% |
2.45% |
Nonperforming Assets and TDRs
to Total Assets |
4.82% |
4.89% |
2.45% |
Allowance for Loans Losses to
Nonperforming Loans |
34.10% |
36.78% |
57.16% |
Allowance for Loans
Losses to Total Loans |
1.90% |
2.16% |
1.27% |
Nonperforming assets increased $5.5 million, or 82.2%, from $6.7
million at December 31, 2009 to $12.1 million at December 31, 2010.
A significant portion of the increase in nonperforming loans is
attributable to delinquencies on smaller balance loans secured by
one-to-four family, residential real estate located in New Orleans,
Louisiana, and its neighboring parishes. However, the increase in
nonperforming assets from December 31, 2009 to December 31, 2010 is
also due to the following significant loan relationships which were
placed on nonaccrual status in 2010: a $1.3 million loan secured by
a non-owner-occupied, commercial warehouse located in New Orleans,
Louisiana; two loans to the same commercial borrower aggregating
$882,000 secured by a non-owner-occupied, restaurant building
located in New Orleans, Louisiana; a $740,000 loan secured by
non-owner-occupied, commercial real estate, located in New Orleans,
Louisiana; and two loans aggregating $573,000 to the same
commercial borrower which are secured by one parcel of vacant land
located in Mandeville, Louisiana, and one parcel of vacant land
located in Covington, Louisiana.
Real estate owned decreased by $1.1 million from $2.5 million at
December 31, 2009 to $1.4 million at December 31, 2010. This is
primarily due to the sale of a multifamily dwelling located in a
historic district of New Orleans, Louisiana, which had a cost basis
of $756,000 and the sale of a one-to-four family dwelling located
in New Orleans, Louisiana, which had a cost basis of $563,000. The
Company realized losses on the sale of real estate owned
aggregating $6,000 for the year ended December 31, 2010. For the
year ended December 31, 2009, the Company realized a net gain of
$35,000 on the sale of real estate owned.
As of December 31, 2010, real estate owned included seven
one-to-four family dwellings aggregating $1.1 million that are
primarily located in New Orleans, Louisiana. Additional properties
included in real estate owned as of December 31, 2010, included:
two parcels of vacant land located in New Orleans, Louisiana, and
one parcel of vacant land located in Abita Springs, Louisiana; one
multifamily dwelling located in New Orleans, Louisiana; and a
commercial property located in Chalmette, Louisiana.
Noninterest income for the fourth quarter of 2010 was $1.1
million, an increase of $885,000 from $231,000 for the fourth
quarter of 2009. For the year ended December 31, 2010, noninterest
income increased by $680,000 to $2.0 million from $1.3 million for
the prior year. The quarterly and annual increases in noninterest
income when comparing the respective periods ended December 31,
2010 and December 31, 2009 were primarily due to the recognition of
gains on the sales of investment securities in 2010. The
investments sold were primarily US Agency and mortgage-backed
securities with longer durations. There was a $128,000 increase in
the gains realized on the sales of residential loans in the
secondary market when comparing the fourth quarter of 2010 to the
same period in 2009. However, the total gains realized on
residential loan sales during 2010 decreased by $230,000 when
compared to 2009.
Noninterest expense for the fourth quarter of 2010 was $2.0
million, which represents a decrease of approximately $163,000, or
7.6%, from $2.2 million for the fourth quarter of 2009. Noninterest
expense for the annual period ended December 31, 2010 increased by
$528,000, or 7.0%, to $8.1 million from $7.5 million for the year
ended December 31, 2009. Noninterest expense for both the quarterly
and annual periods ended December 31, 2010 was negatively impacted
by increases in compensation, due to the opening of our Elmwood
branch during the fourth quarter of 2009, and occupancy costs, due
to the completion of construction on our Manhattan branch's
permanent facility in the fourth quarter of 2010, which was
originally opened in 2007 using a temporary building. In addition
consulting fees paid in conjunction with the modification of $24.6
million of the Company's outstanding FHLB advances, legal costs
associated with additional collection activity, and taxes and
insurance on foreclosed assets increased noninterest expense during
2010 when compared to 2009. Noninterest expense for the fourth
quarter of 2009 included impairment losses on real estate owned of
$375,000. There were no impairment losses on real estate owned
recorded during the fourth quarter of 2010. For the year ended
December 31, 2010, the Bank recorded aggregate impairment losses of
$425,000 on real estate owned, which represents a decrease of
$11,000 when compared to the prior year.
FORWARD-LOOKING INFORMATION
Statements contained in this news release which are not
historical facts may be forward-looking statements as that term is
defined in the Private Securities Litigation Reform Act of 1995.
Such forward-looking statements are subject to risks and
uncertainties which could cause actual results to differ materially
from those currently anticipated due to a number of factors.
Factors which could result in material variations include, but are
not limited to, changes in interest rates which could affect net
interest margins and net interest income, competitive factors which
could affect net interest income and noninterest income, changes in
demand for loans, deposits and other financial services in the
Company's market area, changes in asset quality, general economic
conditions as well as other factors discussed in documents filed by
the Company with the Securities and Exchange Commission from time
to time. The Company undertakes no obligation to update these
forward-looking statements to reflect events or circumstances that
occur after the date on which such statements were made.
GS Financial
Corp. |
Condensed Consolidated
Statements of Financial Condition |
|
|
|
|
December 31, 2010 |
December 31, 2009 |
($ in thousands) |
(Unaudited) |
(Audited) |
ASSETS |
|
|
Cash & Amounts Due
from Depository Institutions |
$ 4,270 |
$ 7,158 |
Interest-Bearing Deposits
in Other Banks |
5,267 |
9,293 |
Federal Funds Sold |
717 |
3,284 |
Securities
Available-for-Sale, at Fair Value |
48,308 |
50,455 |
Loans, Net |
189,229 |
185,500 |
Accrued Interest
Receivable |
1,498 |
1,518 |
Other Real Estate |
1,358 |
2,489 |
Premises & Equipment,
Net |
6,819 |
5,934 |
Stock in Federal Home
Loan Bank, at Cost |
1,702 |
2,354 |
Real Estate
Held-for-Investment, Net |
418 |
427 |
Other
Assets |
4,225 |
3,192 |
Total Assets |
$ 263,811 |
$ 271,604 |
|
|
|
LIABILITIES |
|
|
Deposits |
|
|
Noninterest-Bearing |
$ 15,696 |
$ 14,812 |
Interest-Bearing |
183,060 |
186,681 |
Total Deposits |
198,756 |
201,493 |
Advance Payments by
Borrowers for Taxes and Insurance |
223 |
249 |
FHLB Advances |
35,398 |
40,512 |
Other
Liabilities |
1,744 |
1,329 |
Total
Liabilities |
236,121 |
243,583 |
|
|
|
STOCKHOLDERS' EQUITY |
|
|
Common Stock -- $.01 Par
Value |
$ 34 |
$ 34 |
Additional Paid-in
Capital |
34,541 |
34,550 |
Unearned RRP Trust
Stock |
(105) |
(132) |
Treasury Stock |
(32,449) |
(32,449) |
Retained Earnings |
25,685 |
25,780 |
Accumulated Other Comprehensive Income |
(16) |
238 |
Total Stockholders'
Equity |
27,690 |
28,021 |
Total Liabilities
& Stockholders' Equity |
$ 263,811 |
$ 271,604 |
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) |
2010 |
2009 |
2010 |
2009 |
Interest and Dividend Income |
$ 3,332 |
$ 3,561 |
$ 13,720 |
$ 14,159 |
Interest Expense |
1,004 |
1,360 |
4,459 |
6,084 |
|
|
|
|
|
Net Interest Income |
2,328 |
2,201 |
9,261 |
8,075 |
Provision for Loan Losses |
500 |
300 |
2,800 |
500 |
|
|
|
|
|
Net Interest Income after Provision for Loan
Losses |
1,828 |
1,901 |
6,461 |
7,575 |
|
|
|
|
|
Noninterest Income |
1,116 |
231 |
2,010 |
1,330 |
Noninterest Expense |
1,989 |
2,152 |
8,057 |
7,529 |
|
|
|
|
|
Income (Loss) Before Income Tax Expense |
955 |
(20) |
414 |
1,376 |
|
|
|
|
|
Income Tax Expense |
256 |
79 |
7 |
490 |
Net Income (Loss) |
$ 699 |
$ (99) |
$ 407 |
$ 886 |
Earnings (Loss) Per Share -
Basic |
$ 0.56 |
$ (0.08) |
$ 0.33 |
$ 0.70 |
Earnings (Loss) Per Share -
Diluted |
$ 0.56 |
$ (0.08) |
$ 0.33 |
$ 0.70 |
|
|
|
|
|
Key Ratios: |
|
|
|
|
Return on Average
Assets1 |
1.04% |
-0.15% |
0.15% |
0.34% |
Return on Average
Stockholders' Equity1 |
9.77% |
-1.39% |
1.43% |
3.13% |
Net Interest Margin1 |
3.68% |
3.43% |
3.62% |
3.26% |
Average Loans to Average
Deposits |
95.38% |
94.70% |
94.28% |
97.37% |
Average Interest-Earning
Assets to |
|
|
|
|
Average Interest-Bearing
Liabilities |
115.66% |
112.89% |
113.51% |
113.13% |
Efficiency Ratio |
57.78% |
88.52% |
71.48% |
80.06% |
Noninterest Expense to
Average Assets1 |
2.96% |
3.18% |
2.97% |
2.89% |
Stockholders' Equity to
Total Assets |
10.50% |
10.32% |
10.50% |
10.32% |
1Annualized |
|
|
|
|
CONTACT: Stephen F. Theriot, Chief Financial Officer
(504) 883-5528
GS Financial Corp. (MM) (NASDAQ:GSLA)
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