GS Financial Corp. Announces First Quarter Results
27 April 2010 - 10:15PM
GS Financial Corp. (Nasdaq:GSLA) (the "Company"), the holding
company for Guaranty Savings Bank ("Guaranty"), reported a net loss
for the quarter ended March 31, 2010 of $52,000, or ($0.04) per
share basic and diluted, compared with earnings of $378,000, or
$0.30 per share basic and diluted, for the same period in 2009.
President Stephen E. Wessel commented, "We are disappointed to
report a net loss of $52,000 for the quarter which was due, in
large part, to the recordation of a $500,000 provision for loan
losses as non-performing loans have increased from the prior
quarter. Our highest priority continues to be dedicating resources
to reduce the level of non-performing loans and to disposing of
foreclosed properties as judiciously as possible. On a positive
note, our core banking income has improved as net interest income
increased nearly 17% when comparing the first quarter of 2010 to
the same period in 2009. In addition, our net interest margin also
improved to 3.43% during the first quarter of 2010."
Highlights of the quarter ended March 31, 2010 include:
-
Total assets at March 31, 2010 were $277.3 million, up
approximately $5.7 million, or 2.1%, from December 31, 2009.
-
Loans increased by $3.1 million, or 1.7%, during the first
quarter from $185.5 million at December 31, 2009 to $188.6 million
at March 31, 2010, with the majority of the growth in both
residential and commercial real estate mortgage loans.
-
Total deposits at March 31, 2010 were $206.9 million, which
represents an increase of $5.5 million, or 2.7%, from $201.5
million at December 31, 2009.
-
Net interest margin increased by 8 basis points to 3.43% for the
first quarter of 2010 from 3.35% for the same period in the prior
year.
-
The ratio of average loans to average deposits decreased from
109.27% at March 31, 2009 to 93.56% at March 31, 2010, and the
ratio of average interest-earning assets to average
interest-bearing liabilities decreased from 114.47% to 110.91% when
comparing those same periods.
Net interest income for the quarter ended March 31, 2010 was
$2.2 million, which represents an increase of $317,000, or 16.9%,
from $1.9 million for the same period in 2009. The increase in net
interest income when comparing the quarterly period ended March 31,
2010 to the same period in the prior year was primarily due to an
increase in the average balance of loans and a significant decrease
in the overall cost of interest-bearing deposits which was
partially offset by a decrease in the yield on interest-earning
assets and an increase in the average balance of interest-bearing
deposits. Interest and dividend income increased by $55,000, or
1.6%, and interest expense decreased by $262,000, or 17.3%, for the
first quarter of 2009 compared to the first quarter of 2010.
The net interest margin was 3.43% for the three months ended
March 31, 2010, up 8 basis points from 3.35% for the same period in
2009. The increase in net interest margin when comparing the first
quarters of 2010 and 2009 was attributable to a 26 basis point
increase in the average interest rate spread. From the first
quarter of 2009 to the same period in 2010, there was a 92 basis
point reduction in the overall cost of interest-bearing liabilities
that was partially offset by a 66 basis point reduction in the
overall yield on interest-earning assets.
Non-performing assets increased $2.6 million, or 39.0%, from
$6.7 million at December 31, 2009 to $9.2 million at March 31,
2010. The increase in non-performing assets is primarily due to a
loan relationship with a borrower consisting of five loans
aggregating $1.2 million that are secured by non-owner occupied,
residential real estate located in New Orleans, Louisiana, and a
loan for $495,000 to a commercial borrower that was originated
prior to Hurricane Katrina and is secured by undeveloped land
located in New Orleans East. Both of these loans were in the
process of foreclosure as of March 31, 2010. Other real estate
owned as of March 31, 2010 includes two properties that were
previously under renovation totaling $945,000. These properties
were obtained through foreclosure proceedings completed in December
2009 and include residential real estate located in uptown New
Orleans, Louisiana, and in Algiers, Louisiana. In addition, other
real estate owned includes a $950,000 multifamily dwelling that was
previously under renovation which is located in the historic
district of the French Quarter in New Orleans, Louisiana. The
foreclosure proceeding for this property was completed in April
2009, and the Company has been marketing it for sale since May
2009. The Company recognized impairment losses on other real estate
owned of $436,000 in 2009. No impairment losses were recognized on
other real estate owned in the first quarters of 2010 or 2009.
A provision for loan losses of $500,000 was recorded during the
first quarter of 2010 based on the Company's assessment of its
credit risk while considering the overall increase in the level of
loan delinquencies and adversely classified loans. The Company
recorded a total of $500,000 in additional loan loss provisions
during 2009, none of which were recorded during the first quarter
of 2009. As of March 31, 2010, the Company's allowance for losses
was $2.8 million, or 40.3% of non-performing loans and 1.5% of
ending loans, compared to $2.4 million or 57.2% of non-performing
loans and 1.3% of ending loans, at December 31, 2009. The Company
believes that the allowance for loan losses recorded as of March
31, 2010 is sufficient to cover the potential losses in its loan
portfolio.
Noninterest income for the first quarter of 2010 was $213,000,
down $160,000, or 42.9%, from $373,000 for the first quarter of
2009. The reduction in noninterest income was primarily due to a
decrease in the sales volume of residential loans in the secondary
market when comparing those periods. Noninterest expense for the
first quarter of 2010 was $2.0 million, up approximately $344,000,
or 20.5%, from $1.7 million for the first quarter of 2009.
Noninterest expense for the three months ended March 31, 2010 was
negatively impacted by increases in compensation and occupancy
costs associated with the branch expansion during 2009, deposit
insurance premiums, and taxes and insurance on foreclosed assets.
Noninterest expense for the first quarter of 2010 also included the
consulting fees paid in conjunction with the modification in terms
for $24.6 million of the Company's outstanding FHLB advances.
FORWARD-LOOKING INFORMATION
Statements contained in this news release which are not
historical facts may be forward-looking statements as that term is
defined in the Private Securities Litigation Reform Act of 1995.
Such forward-looking statements are subject to risks and
uncertainties which could cause actual results to differ materially
from those currently anticipated due to a number of factors.
Factors which could result in material variations include, but are
not limited to, changes in interest rates which could affect net
interest margins and net interest income, competitive factors which
could affect net interest income and noninterest income, changes in
demand for loans, deposits and other financial services in the
Company's market area; changes in asset quality, general economic
conditions as well as other factors discussed in documents filed by
the Company with the Securities and Exchange Commission from time
to time. The Company undertakes no obligation to update these
forward-looking statements to reflect events or circumstances that
occur after the date on which such statements were made.
GS Financial Corp.
|
Condensed Consolidated Statements of Financial
Condition
|
|
|
|
|
|
|
|
March 31, 2010
|
December 31, 2009
|
($ in thousands)
|
(Unaudited)
|
(Audited)
|
ASSETS
|
|
|
Cash & Amounts Due from Depository Institutions
|
$ 5,167
|
$ 7,158
|
Interest-Bearing Deposits in Other Banks
|
5,479
|
9,293
|
Federal Funds Sold
|
5,107
|
3,284
|
Securities Available-for-Sale, at Fair Value
|
56,128
|
50,455
|
Loans, Net
|
188,583
|
185,500
|
Accrued Interest Receivable
|
1,501
|
1,518
|
Other Real Estate
|
2,272
|
2,489
|
Premises & Equipment, Net
|
6,078
|
5,934
|
Stock in Federal Home Loan Bank, at Cost
|
2,356
|
2,354
|
Real Estate Held-for-Investment, Net
|
425
|
427
|
Other Assets
|
4,198
|
3,192
|
Total Assets
|
$ 277,294
|
$ 271,604
|
|
|
|
LIABILITIES
|
|
|
Deposits
|
|
|
Noninterest-Bearing
|
$ 12,759
|
$ 14,812
|
Interest-Bearing
|
194,184
|
186,681
|
Total Deposits
|
206,943
|
201,493
|
Advance Payments by Borrowers for Taxes and Insurance
|
333
|
249
|
FHLB Advances
|
40,386
|
40,512
|
Other Liabilities
|
1,582
|
1,329
|
Total Liabilities
|
249,244
|
243,583
|
|
|
|
STOCKHOLDERS' EQUITY
|
|
|
Common Stock -- $.01 Par Value
|
$ 34
|
$ 34
|
Additional Paid-in Capital
|
34,552
|
34,550
|
Unearned RRP Trust Stock
|
(124)
|
(132)
|
Treasury Stock
|
(32,449)
|
(32,449)
|
Retained Earnings
|
25,602
|
25,780
|
Accumulated Other Comprehensive Income
|
435
|
238
|
Total Stockholders' Equity
|
28,050
|
28,021
|
Total Liabilities & Stockholders' Equity
|
$ 277,294
|
$ 271,604
|
|
|
|
Selected Asset Quality Ratios:
|
|
|
Loans Delinquent 90 Days or More to Total Loans
|
3.64%
|
2.22%
|
Total Delinquent Loans to Total Loans
|
5.23%
|
4.04%
|
Allowance for Loans Losses to Total Delinquent Loans
|
28.04%
|
31.46%
|
Allowance for Loans Losses to Non-performing Loans
|
40.27%
|
57.16%
|
Allowance for Loans Losses to Ending Loans
|
1.47%
|
1.27%
|
GS Financial Corp.
|
Condensed Consolidated Statements of Income
|
(Unaudited)
|
|
|
|
|
|
For the Three Months Ended
|
|
|
March 31,
|
|
($ in thousands, except per share data)
|
2010
|
2009
|
|
Interest and Dividend Income
|
$ 3,443
|
$ 3,388
|
|
Interest Expense
|
1,251
|
1,513
|
|
|
|
|
|
Net Interest Income
|
2,192
|
1,875
|
|
Provision for Loan Losses
|
500
|
--
|
|
|
|
|
|
Net Interest Income after Provision for Loan Losses
|
1,692
|
1,875
|
|
|
|
|
|
Noninterest Income
|
213
|
373
|
|
Noninterest Expense
|
2,020
|
1,676
|
|
|
|
|
|
(Loss) Income Before Income Tax Expense
|
(115)
|
572
|
|
|
|
|
|
Income Tax (Benefit) Expense
|
(63)
|
194
|
|
Net (Loss) Income
|
$ (52)
|
$ 378
|
|
(Loss) Earnings Per Share - Basic
|
$ (0.04)
|
$ 0.30
|
|
(Loss) Earnings Per Share - Diluted
|
$ (0.04)
|
$ 0.30
|
|
|
|
|
|
Key Ratios:
|
|
|
|
Return on Average Assets(1)
|
-0.08%
|
0.64%
|
|
Return on Average Stockholders'
Equity(1)
|
-0.74%
|
5.42%
|
|
Net Interest Margin(1)
|
3.43%
|
3.35%
|
|
Average Loans to Average Deposits
|
93.56%
|
109.27%
|
|
Average Interest-Earning Assets to Average Interest-Bearing
Liabilities
|
110.91%
|
114.47%
|
|
Efficiency Ratio
|
83.99%
|
74.57%
|
|
Noninterest Expense/Average
Assets(1)
|
2.96%
|
2.86%
|
|
Stockholders' Equity to Total Assets
|
10.12%
|
11.16%
|
|
(1) Annualized
|
|
|
|
CONTACT: GS Financial Corp.
Stephen F. Theriot, Chief Financial Officer
(504) 883-5528
GS Financial Corp. (MM) (NASDAQ:GSLA)
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