GSLA GS Financial Corp. (MM)

GS Financial Corp. (NASDAQ: GSLA), the holding company of Guaranty Savings Bank (www.guarantysb.com), reported earnings for the quarter ended March 31, 2007 of $96,000, or $.08 per share, compared with $276,000, or $.23 per share for the same period in 2006. President Stephen E. Wessel noted �We continue to build the foundation for our long-term growth strategy by increasing our product offerings, technological capabilities and branch locations as well as adding talented banking professionals. These investments in our future have temporarily slowed earnings, but I am very excited about our opportunities to attract and service more customers enabling us to experience profitable growth in the near future.� Net interest income for the quarter ended March 31, 2007 was $1.4 million compared to $1.5 million for the same period in 2006. The Company�s net interest margin decreased slightly to 3.48% for the first quarter of 2007 from 3.49% for the same period in 2006. The decrease was the result of increasing deposit costs, prevalent throughout the banking industry, partially offset by a reduction in higher cost borrowings from the FHLB. Interest expense for the three months ended March 31, 2007 was $1.3 million, an increase of 9.5% over interest expense for the three months ended March 31, 2006. Non-interest expenses for the first quarter of 2007 were $1.3 million, up approximately $144,000 from the first quarter of 2006 total of $1.1 million. Loan quality continued to be sound during the first quarter of 2007. The Company experienced a decrease in non-performing loans from $2.2 million at March 31, 2006 to $334,000 at March 31, 2007. In addition, total non-performing assets at March 31, 2007 increased to $282,000 compared to $179,000 at December 31, 2006. Some credit quality concerns persist in our market as the area continues to recover from Hurricane Katrina. The ultimate ability of the area to economically recover is a major factor influencing the performance of the Bank�s loan portfolio. Total Assets at March 31, 2007 were $168.6 million compared to $168.4 million at December 31, 2006, an increase of approximately $235,000, or 0.1%. Net loans increased $3.5 million, or 3.7% in the first quarter of 2007. At March 31, 2007 net loans were $97.5 million compared to $94.0 million at year-end 2006. Deposit accounts increased approximately $1.9 million, or 1.5% during the first quarter, totaling $124.7 million at March 31, 2007 compared to $122.8 million at December 31, 2006. Borrowings from the Federal Home Loan Bank were reduced from $17.0 million at December 31, 2006 to $15.7 million at March 31, 2007. Stockholders� equity was 16.1% of total assets at both March 31, 2007 and December 31, 2006. During February, 2007 the Bank converted its former loan production office in Ponchatoula, Louisiana, to a full-service branch office. During March, 2007 the Company purchased a vacant site in Harvey, Louisiana for future branch expansion. 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 24, 2007, declared a quarterly cash dividend of $.10 per share. The dividend is payable to shareholders of record as of May 8, 2007 and is payable on May 23, 2007. Chairman Zahn further announced that Directors Donald C. Scott and Hayden W. Wren, III were re-elected at the Annual Meeting of Shareholders held on April 24, 2007, to a three-year term expiring in 2010. FORWARD-LOOKING INFORMATION Statements contained in this news release which are not historical facts may be forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from those currently anticipated due to a number of factors. Factors which could result in material variations include, but are not limited to, changes in interest rates which could affect net interest margins and net interest income, competitive factors which could affect net interest income and noninterest income, changes in demand for loans, deposits and other financial services in the Company's market area; changes in asset quality, general economic conditions as well as other factors discussed in documents filed by the Company with the Securities and Exchange Commission from time to time. In addition to risks and uncertainties described by the Company in prior filings with the SEC, other risks and uncertainties potentially impacting the Company are those related to the Company in its primary market area impacted by Hurricane Katrina, including the continuing effect of the storm and its aftermath on the Company's operating expenses and on the Company's borrowers and other customers. The Company undertakes no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date on which such statements were made. GS Financial Corp. Consolidated Statements of Financial Condition � � � � � � ($ in thousands) � March 31, 2007 (Unaudited) � December 31, 2006 (Audited) ASSETS Cash and Amounts due from Depository Institutions $ 1,705� $ 1,893� Interest-Bearing Deposits in Other Banks 6,868� 6,544� Federal Funds Sold 3,855� 2,680� Securities Available-for-Sale, at Fair Value 50,043� 55,090� Loans, Net 97,490� 93,987� Accrued Interest Receivable 1,771� 2,004� Premises & Equipment, Net 4,189� 3,578� Stock in Federal Home Loan Bank, at Cost 996� 982� Real Estate Held-for-Investment, Net 460� 464� Other Assets � � 1,238� � � 1,158� Total Assets � $ 168,615� � $ 168,380� � LIABILITIES Interest-Bearing Deposits $ 121,101� $ 119,364� Noninterest-Bearing Deposits 3,625� 3,390� FHLB Advances 15,689� 17,042� Other Liabilities � � 990� � � 1,420� Total Liabilities � � 141,405� � � 141,216� � STOCKHOLDERS' EQUITY Common Stock $ 34� $ 34� Additional Paid-in Capital 34,751� 34,701� Unearned RRP Trust Stock (573) (523) Treasury Stock (32,493) (32,493) Retained Earnings 25,734� 25,764� Accumulated Other Comprehensive Loss � � (243) � � (319) Total Stockholders' Equity � � 27,210� � � 27,164� Total Liabilities & Stockholders' Equity � $ 168,615� � $ 168,380� � Selected Asset Quality Data Total Non Performing Assets $ 282� $ 179� Non Performing Assets to Total Assets 0.17% 0.11% GS Financial Corp. Condensed Consolidated Statements of Income (Unaudited) � � � For the Three Months Ended March 31, ($ in thousands, except per share data) � 2007� � 2006� Interest and Dividend Income $ 2,654� $ 2,712� Interest Expense � � 1,284� � � 1,173� � Net Interest Income 1,370� 1,539� Provision for Loan Losses � � -� � � -� Net Interest Income after Provision for Loan Losses � � 1,370� � � 1,539� � Non-interest Expense � � 1,276� � � 1,132� Net Income Before Non-Interest Income and Income Taxes � � 94� � � 407� � Non-interest Income � � 29� � � 7� Income Before Income Tax Expense � � 123� � � 414� � Income Tax Expense � � 27� � � 138� Net Income � � 96� � � 276� Earnings Per Share � Basic � $ 0.08� � $ 0.23� Earnings Per Share �Diluted � $ 0.08� � $ 0.23� � Selected Operating Data Weighted Average Shares Outstanding 1,234,453� 1,215,567� Return on Average Assets1 0.23% 0.63% Non-Interest Expense/Average Assets1 3.10% 2.57% Net Interest Margin1 � � 3.48% � � 3.49% 1 Annualized