GS Financial Corp. (Nasdaq:GSLA) (the "Company"), the holding
company for Guaranty Savings Bank ("Guaranty"), reported earnings
for the quarter ended June 30, 2010 of $138,000, or $0.11 per share
basic and diluted, compared with earnings of $503,000, or $0.40 per
share basic and diluted, for the same period in 2009. Earnings for
the first half of 2010 were $87,000, or $0.07 per share basic and
diluted, compared with earnings of $881,000, or $0.69 per share
basic and diluted, for the first six-months of 2009.
President Stephen E. Wessel commented, "We are reporting net
income of $138,000 for the second quarter. Our results for the
quarter reflect continued improvements in net interest income,
which increased by 21.4%, and in our net interest margin. However,
our bottom line was adversely affected by our need to increase our
allowance for loan losses and to write-down the value of certain
foreclosed properties, reflecting the challenges we face in the
continuing recession."
Highlights of the second quarter and first six-months of 2010
include:
- Total assets at June 30, 2010 were $274.0 million, up
approximately $2.3 million, or 0.9%, from December 31, 2009.
- Loans increased by $1.4 million, or 0.7%, during the first half
of 2010 from $185.5 million at December 31, 2009 to $186.9 million
at June 30, 2010, with the majority of the growth in one-to
four-family residential mortgage loans.
- Total deposits at June 30, 2010 were $204.1 million, which
represents an increase of $2.6 million, or 1.3%, from $201.5
million at December 31, 2009. Approximately $1.2 million of this
growth was in non-interest-bearing deposit accounts which have
increased by 8.3% from $14.8 million at December 31, 2009 to $16.0
million at June 30, 2010.
- Advances from the Federal Home Loan Bank of Dallas were reduced
by $1.5 million, or 3.8%, during the first half of 2010 from $40.5
million at December 31, 2009 to $39.0 million at June 30,
2010.
- Net interest margin increased by 53 basis points to 3.63%
during the second quarter of 2010 from 3.10% for the same period in
the prior year. For the six months ended June 30, 2010, net
interest margin increased by 32 basis points to 3.53% from 3.21%
for the first half of 2009.
- The ratio of average loans to average deposits decreased to
92.88% for the three months ended June 30, 2010 from 95.86% for the
same period in the prior year.
Net interest income for the quarter ended June 30, 2010 was $2.4
million, which represents an increase of $417,000, or 21.4%, from
$1.9 million for the quarter ended June 30, 2009. Net interest
income for the first six-months of 2010 was $4.6 million, an
increase of $735,000, or 19.2%, from the same period in the prior
year. The increases in net interest income when comparing both the
three and six-month periods ended June 30, 2010 to the same periods
in the prior year are primarily due to a decrease in the cost of
interest-bearing deposits combined with a significant 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 $80,000, or 2.2%, and
interest expense decreased by $497,000, or 29.9%, for the second
quarter of 2010 compared to the second quarter of 2009. For the
first six-months of 2010, interest and dividend income was $7.0
million, a decrease of $25,000, or 0.4%, from the first six-months
of 2009. Interest expense for the first half of 2010 was $2.4
million, which represents a decrease of $760,000, or 23.9%, when
compared to the same period in the prior year.
The net interest margin was 3.63% for the three months ended
June 30, 2010, up 53 basis points from 3.10% for the same period in
2009. The net interest margin for the first half of 2010 improved
by 32 basis points to 3.53% from 3.21% for the first half of 2009.
The increase in net interest margin for the quarter ended June 30,
2010 compared to the quarter ended June 30, 2009 was attributable
to a 99 basis point decrease in the average cost of
interest-bearing liabilities. This was partially offset by a 43
basis point decrease in the yield on loans and a 119 basis point
decrease in the yield on mortgage-backed securities. There was a 32
basis point improvement in the net interest margin when comparing
the first half of 2009 to the same period in 2010. This was
primarily due to a 102 basis point decrease in the average cost of
interest-bearing deposits that was negatively impacted by a 42
basis point decrease in the average yield on loans and a 119 basis
point decrease in the average yield on mortgage-backed
securities.
Non-performing assets consists of loans on non-accrual status
and foreclosed assets. The following table sets forth the Company's
non-performing assets at the dates indicated. The Company did not
have loans greater than 90 days delinquent and accruing interest at
the dates indicated.
NON-PERFORMING
ASSETS |
|
2010 |
2009 |
($ in thousands) |
June 30 |
March 31 |
December 31 |
Loans Accounted for on a Non-Accrual
Basis |
$ 9,701 |
$ 6,973 |
$ 4,164 |
Foreclosed Assets |
1,542 |
2,272 |
2,489 |
Total Non-Performing Assets |
$ 11,243 |
$ 9,245 |
$ 6,653 |
Loans Greater Than 90 Days Past Due and
Accruing Interest |
-- |
-- |
-- |
Troubled Debt Restructurings |
590 |
-- |
-- |
Select Asset Quality Ratios: |
|
|
|
Non-Performing Assets to Loans Plus
Foreclosed Assets |
5.86% |
4.77% |
3.50% |
Non-Performing Assets to Total
Assets |
4.10% |
3.33% |
2.45% |
Non-Performing Loans to Total Loans |
5.10% |
3.64% |
2.22% |
Total Delinquent Loans to Total
Loans |
6.40% |
5.23% |
4.04% |
Allowance for Loans Losses to Total
Delinquent Loans |
28.24% |
28.04% |
31.46% |
Allowance for Loans Losses to
Non-Performing Loans |
35.46% |
40.27% |
57.16% |
Allowance for Loans
Losses to Ending Loans |
1.81% |
1.47% |
1.27% |
Non-performing assets increased $4.6 million, or 69.0%, from
$6.7 million at December 31, 2009 to $11.2 million at June 30,
2010. The majority of the increase in non-performing loans is due
to smaller balance loans secured by one-to four-family residential
real estate located in New Orleans and its neighboring parishes.
However, the increase in non-performing assets from December 31,
2009 to June 30, 2010 is also due to the following significant loan
relationships which were placed on non-accrual status during the
first and second quarters of 2010: a $1.4 million loan secured by
non-owner-occupied, commercial real estate, a $722,000 loan secured
by a twelve unit, multi-family dwelling, and a $495,000 loan
secured by vacant land. All of the real estate collateral which
secures these significant loan relationships is located in New
Orleans, Louisiana.
As of June 30, 2010 real estate owned included two properties
that were previously under renovation totaling $536,000. These
properties were obtained through foreclosure proceedings completed
in December 2009 and are secured by residential real estate located
in New Orleans, Louisiana, and in Algiers, Louisiana. In addition,
other real estate owned included a $756,000 multi-family 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 remaining components of other real estate owned as of
June 30, 2010 included: two parcels of vacant land located in New
Orleans, Louisiana, a one-to four-family dwelling located in
Westwego, Louisiana, and a commercial property located in
Chalmette, Louisiana. The Company recognized impairment losses on
other real estate owned of $436,000 in 2009 and an additional
impairment loss of $195,000 in the second quarter of 2010. None of
the impairment losses recognized in 2009 occurred during the first
six-months of the year.
Based on the Company's assessment of its credit risk and the
continued increase in the level of loan delinquencies and adversely
classified loans, a provision for loan losses of $650,000 was
recorded during the second quarter of 2010. Through the first
six-months of 2010, the Company has recorded $1.2 million in
provisions for loan losses. The Company recorded a total of
$500,000 in additional loan loss provisions during 2009, none of
which were recorded during the first six-months of 2009. As of June
30, 2010, the Company's allowance for losses was $3.4 million, or
35.5% of non-performing loans and 1.8% of total loans, compared to
$2.4 million or 57.2% of non-performing loans and 1.3% of total
loans, at December 31, 2009. The Company believes that the
allowance for loan losses recorded as of June 30, 2010 is
sufficient to cover the potential losses in its loan portfolio.
Non-interest income for the second quarter of 2010 was $427,000,
down $66,000, or 13.4%, from $493,000 for the second quarter of
2009. For the first six-months of 2010, non-interest income
decreased by $226,000 to $640,000 from $866,000 for the same period
in the prior year. The reduction in non-interest income for both
the three and six month periods ended June 30, 2010 when compared
to the same periods ended June 30, 2009 was due to a significant
decrease in the gains recorded on residential loan sales in the
secondary market and losses recognized on the sales of real estate
owned. The decrease in non-interest income during the second
quarter of 2010 was mitigated by $317,000 in gains recognized on
the sales of investment securities, primarily US Agency and
mortgage-backed securities, with longer durations.
Non-interest expense for the second quarter of 2010 was $2.0
million, up approximately $178,000, or 10.0%, from $1.8 million for
the second quarter of 2009. Non-interest expense for the six months
ended June 30, 2010 increased by $522,000, or 15.1%, to $4.0
million from $3.5 million for the same period in the prior year.
Non-interest expense for both the three and six-month periods ended
June 30, 2010 was negatively impacted by increases in compensation
and occupancy costs primarily associated with the opening of our
Elmwood branch during the latter half of 2009, 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. Non-interest expense for the quarter and
year-to-date periods ended June 30, 2010 also includes a $195,000
impairment loss on real estate owned.
President Wessel noted, "In our efforts to improve future
earnings, we are planning to reduce marketing expenses and
charitable contributions. We will also be closing our branch
located in Ponchatoula, Louisiana, on September 30, 2010. We are
committed to improving our expense management in order to achieve
better financial performance for the Company."
FORWARD-LOOKING INFORMATION
Statements contained in this news release which are not
historical facts may be forward-looking statements as that term is
defined in the Private Securities Litigation Reform Act of 1995.
Such forward-looking statements are subject to risks and
uncertainties which could cause actual results to differ materially
from those currently anticipated due to a number of factors.
Factors which could result in material variations include, but are
not limited to, changes in interest rates which could affect net
interest margins and net interest income, competitive factors which
could affect net interest income and noninterest income, changes in
demand for loans, deposits and other financial services in the
Company's market area, changes in asset quality, adverse effects in
the Company's market area as a result of the recent oil spill in
the Gulf of Mexico, general economic conditions as well as other
factors discussed in documents filed by the Company with the
Securities and Exchange Commission from time to time. The Company
undertakes no obligation to update these forward-looking statements
to reflect events or circumstances that occur after the date on
which such statements were made.
|
GS Financial
Corp. |
Condensed Consolidated
Statements of Financial Condition |
|
|
|
|
June 30,
2010 |
December 31, 2009 |
($ in thousands) |
(Unaudited) |
(Audited) |
ASSETS |
|
|
Cash & Amounts Due from Depository
Institutions |
$ 4,082 |
$ 7,158 |
Interest-Bearing Deposits in Other
Banks |
7,991 |
9,293 |
Federal Funds Sold |
2,480 |
3,284 |
Securities Available-for-Sale, at Fair
Value |
56,038 |
50,455 |
Loans, Net |
186,857 |
185,500 |
Accrued Interest Receivable |
1,547 |
1,518 |
Other Real Estate |
1,542 |
2,489 |
Premises & Equipment, Net |
6,318 |
5,934 |
Stock in Federal Home Loan Bank, at
Cost |
2,358 |
2,354 |
Real Estate Held-for-Investment, Net |
423 |
427 |
Other Assets |
4,315 |
3,192 |
Total Assets |
$ 273,951 |
$ 271,604 |
|
|
|
LIABILITIES |
|
|
Deposits |
|
|
Noninterest-Bearing |
$ 16,043 |
$ 14,812 |
Interest-Bearing |
188,050 |
186,681 |
Total Deposits |
204,093 |
201,493 |
Advance Payments by Borrowers for Taxes
and Insurance |
390 |
249 |
FHLB Advances |
38,974 |
40,512 |
Other Liabilities |
2,101 |
1,329 |
Total Liabilities |
245,558 |
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 |
25,615 |
25,780 |
Accumulated Other
Comprehensive Income |
757 |
238 |
Total Stockholders'
Equity |
28,393 |
28,021 |
Total Liabilities &
Stockholders' Equity |
$ 273,951 |
$ 271,604 |
|
|
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) |
2010 |
2009 |
2010 |
2009 |
Interest and Dividend Income |
$ 3,530 |
$ 3,610 |
$ 6,973 |
$ 6,998 |
Interest Expense |
1,166 |
1,663 |
2,416 |
3,176 |
|
|
|
|
|
Net Interest Income |
2,364 |
1,947 |
4,557 |
3,822 |
Provision for Loan Losses |
650 |
-- |
1,150 |
-- |
|
|
|
|
|
Net Interest Income after Provision for
Loan Losses |
1,714 |
1,947 |
3,407 |
3,822 |
|
|
|
|
|
Noninterest Income |
427 |
493 |
640 |
866 |
Noninterest Expense |
1,963 |
1,785 |
3,983 |
3,461 |
|
|
|
|
|
Income Before Income Tax Expense |
178 |
655 |
64 |
1,227 |
|
|
|
|
|
Income Tax Expense (Benefit) |
40 |
152 |
(23) |
346 |
Net Income |
$ 138 |
$ 503 |
$ 87 |
$ 881 |
Earnings Per Share -
Basic |
$ 0.11 |
$ 0.40 |
$ 0.07 |
$ 0.69 |
Earnings Per Share -
Diluted |
$ 0.11 |
$ 0.40 |
$ 0.07 |
$ 0.69 |
|
|
|
|
|
Key Ratios: |
|
|
|
|
Return on Average Assets1 |
0.20% |
0.76% |
0.06% |
0.71% |
Return on Average Stockholders'
Equity1 |
1.95% |
7.10% |
0.61% |
6.26% |
Net Interest Margin1 |
3.63% |
3.10% |
3.53% |
3.21% |
Average Loans to Average Deposits |
92.88% |
95.86% |
93.22% |
101.93% |
Average Interest-Earning Assets to |
|
|
|
|
Average Interest-Bearing Liabilities |
112.37% |
113.33% |
111.64% |
113.86% |
Efficiency Ratio |
70.32% |
73.01% |
76.65% |
73.76% |
Noninterest Expense/Average Assets1 |
2.84% |
2.69% |
2.90% |
2.77% |
Stockholders' Equity to Total Assets |
10.36% |
10.63% |
10.36% |
10.63% |
1Annualized |
|
|
|
|
CONTACT: GS Financial Corp.
Stephen F. Theriot, Chief Financial Officer
(504) 883-5528
GS Financial Corp. (MM) (NASDAQ:GSLA)
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