GSLA GS Financial Corp. (MM)

GS Financial Corp., (NASDAQ: GSLA), the holding company of Guaranty Savings Bank (www.guarantysb.com), announced quarterly earnings of $293,000 for the quarter ended June 30, 2007, up $50,000, or 20.6% from the same period in 2006. Earnings per share for the second quarter of 2007 were $.24, up from $.20 for the second quarter of 2006. The increase in earnings for the quarter ended June 30, 2007 was primarily due to a reversal of provision for loan losses of $300,000, or $198,000 net of income taxes during the quarter. �We continue to make progress in executing our strategic objectives,� noted President Stephen E. Wessel. �Our residential and commercial loan demand continues to be robust. Recovery from the devastation of Hurricane Katrina is continuing to progress in some parts of our metropolitan area. In the first six (6) months of 2007 we have invested additional resources in new employees for mortgage origination and in commercial banking. We have purchased a new branch site to expand our presence to the west bank of Jefferson Parish. Our renovation and reconstruction of our flooded mid-city branch is nearly complete. We have also built a secondary marketing capability which will generate long-term revenue, and have introduced new products in mortgage banking, credit cards and remote deposit. We have successfully grown some of our targeted products such as demand deposit accounts, money market accounts and home equity lending along with more commercial owner-occupied building loans. These are significant steps in implementing the long-term strategic plan adopted by the Board of Directors that have increased our expenses during the six months but which we expect will enhance our profitability through the conversion of Guaranty Savings Bank from a traditional thrift to a community bank business model.� For the first six months of 2007, net income totaled $389,000, down 25.0% from $519,000 over the same time period in 2006. Earnings per share over the first half of 2007 were $.32, down 25.6% from $.43 in the first half of 2006. Net interest income, excluding loan loss reserves, for the quarter ended June 30, 2007 was $1.4 million, down 14.0% from $1.6 million in the second quarter of 2006, and up $21,000, or 1.5% from the first quarter of 2007. The second quarter 2007 net interest margin was 3.50%, down 30 basis points from 3.80% for the second quarter of 2006, and up 2 basis points from 3.48% in the first quarter of 2007. Net interest income for the first half of 2007 was $2.8 million, down 12.5% from $3.2 million in the first six months of 2006. This decline was primarily the result of increases in deposit costs only partially being offset by improved product mixes on both the asset and liability side of the balance sheet. The net interest margin for the first half of 2007 was 3.49%, down 16 basis points from 3.65% for the same time period in 2006. Additional financial highlights include the following: Total assets at June 30, 2007 were $169.9 million, up approximately 0.9% from December 31, 2006. Total loans at June 30, 2007 were $108.9 million, up approximately 11.4% from December 31, 2006. Deposits at June 30, 2007 were $125.2 million, up approximately 2.4% from December 31, 2006. Outstanding advances from the Federal Home Loan Bank at June 30, 2007 were $16.8 million, down approximately 1.3% from December 31, 2006. Stockholders� equity at June 30, 2007 was $27.0 million, down $177,000 from December 31, 2006. Stockholders� equity as a percentage of total assets at June 30, 2007 was 15.88%, down from 16.13% at December 31, 2006. Non-interest expense for the second quarter of 2007 totaled $1.3 million, up approximately 10.7% from a year earlier. Non-interest expense for the first half of 2007 totaled $2.6 million, up approximately 11.7% from the first six months of 2006. Non-performing assets were $502,000 at June 30, 2007, compared to $179,000 at December 31, 2006. The ratio of non-performing assets to total assets at June 30, 2007 was 0.30% compared to 0.11% at December 31, 2006. The ratio of total loans to deposits at June 30, 2007 was 86.98%, compared to 79.60% at December 31, 2006. FORWARD-LOOKING INFORMATION Statements contained in this news release which are not historical facts may be forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from those currently anticipated due to a number of factors. Factors which could result in material variations include, but are not limited to, changes in interest rates which could affect net interest margins and net interest income, competitive factors which could affect net interest income and noninterest income, changes in demand for loans, deposits and other financial services in the Company's market area; changes in asset quality, general economic conditions as well as other factors discussed in documents filed by the Company with the Securities and Exchange Commission from time to time. In addition to risks and uncertainties described by the Company in prior filings with the SEC, other risks and uncertainties potentially impacting the Company are those related to the Company in its primary market area impacted by Hurricane Katrina, including the continuing effect of the storm and its aftermath on the Company's operating expenses and on the Company's borrowers and other customers. The Company undertakes no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date on which such statements were made. � GS Financial Corp. Condensed Consolidated Statements of Financial Condition � � � � � ($ in thousands) � June 30, 2007 (Unaudited) � December 31, 2006 (Audited) ASSETS Cash & Amounts Due from Depository Institutions $ 1,702 $ 1,893 Interest-Bearing Deposits in Other Banks 2,107 6,544 Federal Funds Sold 360 2,680 Securities Available-for-Sale, at Fair Value 50,852 55,090 Loans, Net 105,466 93,987 Accrued Interest Receivable 1,883 2,004 Premises & Equipment, Net 4,263 3,578 Stock in Federal Home Loan Bank, at Cost 1,009 982 Real Estate Held-for-Investment, Net 457 464 Other Assets � � 1,825 � � � 1,158 � Total Assets � $ 169,924 � � $ 168,380 � � LIABILITIES Deposits Interest-Bearing Deposits $ 120,597 $ 119,364 Noninterest-Bearing Deposits � � 4,597 � � � 3,390 � Total Deposits � � 125,194 � � � 122,754 � FHLB Advances 16,817 17,042 Other Liabilities � � 927 � � � 1,420 � Total Liabilities � � 142,938 � � � 141,216 � � STOCKHOLDERS' EQUITY Common Stock - $.01 Par Value $ 34 $ 34 Additional Paid-in Capital 34,701 34,701 Unearned RRP Trust Stock (523 ) (523 ) Treasury Stock (32,493 ) (32,493 ) Retained Earnings 25,902 25,764 Accumulated Other Comprehensive Loss � � (635 ) � � (319 ) Total Stockholders' Equity � � 26,986 � � � 27,164 � Total Liabilities & Stockholders' Equity � $ 169,924 � � $ 168,380 � � Selected Asset Quality Data Total Non Performing Assets $ 502 $ 179 Non Performing Assets to Total Assets 0.30 % 0.11 % � GS Financial Corp. Condensed Consolidated Statements of Income (Unaudited) � � � For the Three Months Ended June 30, � For the Six Months Ended June 30, ($ in thousands, except per share data) � � 2007 � � � 2006 � � � 2007 � � � 2006 � Interest and Dividend Income $ 2,733 $ 2,782 $ 5,387 $ 5,494 Interest Expense � � 1,342 � � � 1,170 � � � 2,627 � � � 2,344 � � Net Interest Income 1,391 1,612 2,760 3,150 Provision (Reversal) for Loan Losses � � (300 ) � � - � � � (300 ) � � - � Net Interest Income after Provision (Reversal) for Loan Losses � � 1,691 � � � 1,612 � � � 3,060 � � � 3,150 � � Non-interest Expense � � 1,314 � � � 1,187 � � � 2,590 � � � 2,319 � Net Income Before Non-Interest Income and Income Taxes � � 377 � � � 425 � � � 470 � � � 831 � � Non-interest Income (Loss) � � 43 � � � (53 ) � � 72 � � � (45 ) Income Before Tax Expense � � 420 � � � 372 � � � 542 � � � 786 � � Income Tax Expense � � 127 � � � 129 � � � 153 � � � 267 � Net Income � $ 293 � � $ 243 � � $ 389 � � $ 519 � Earnings Per Share � Basic � $ 0.24 � � $ 0.20 � � $ 0.32 � � $ 0.43 � Earnings Per Share �Diluted � $ 0.24 � � $ 0.20 � � $ 0.32 � � $ 0.43 � � Selected Operating Data Weighted Average Shares Outstanding 1,234,453 1,214,190 1,234,453 1,215,707 Return on Average Assets 1 0.70 % 0.56 % 0.47 % 0.59 % Non-Interest Expense/Average Assets1 3.13 % 2.72 % 3.12 % 2.65 % Net Interest Margin1 � � 3.50 % � � 3.80 % � � 3.49 % � � 3.65 % 1 Annualized