GS Financial Corp. (MM) (NASDAQ:GSLA)
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GS Financial Corp. (NASDAQ:GSLA) (the "Company"), the
holding company for Guaranty Savings and Homestead Association (the
"Association"), announced a loss for the quarter ended December 31,
2005 of $4.1 million, or $3.45 per share, compared to a loss of
$246,000, or $.21 per share, for the quarter ended December 31, 2004.
For the year ended December 31, 2005, the loss was $3.7 million, or
$3.11 per share, compared to earnings of $199,000, or $.17 per share,
for the year ended December 31, 2004.
Earnings for the fourth quarter of 2005 were adversely affected by
a $4.8 million provision for loan losses made in light of potential
loan losses caused by the impact of Hurricane Katrina. The provision
for loan losses was made upon management's consideration of the impact
of both the economic damage suffered by the Association's borrowers as
a result of Hurricane Katrina as well as wind and flood damage to the
properties securing loans. Stephen Wessel, President of the Company
and the Association, commented that "After a careful review of our
loan portfolio and the effects of Hurricane Katrina, we determined
that the prudent thing to do was to make a significant provision for
loan losses. We are continuing to work with our borrowers and
customers to help them rebuild their homes and lives." Mr. Wessel went
on to state that "Fortunately, the Company continues to be very well
capitalized, which will permit us to not only absorb the losses from
Hurricane Katrina but also will allow us to redeploy our funds over
time into higher earning assets." While management believes the
Company's allowance for loan losses to be adequate following this
provision, the Company will continue to perform its regular evaluation
of the loan portfolio and make adjustments as necessary. The net
after-tax impact to earnings caused by this provision was a reduction
of $3.2 million to earnings in the fourth quarter of 2005. While
Katrina struck in August, 2005, it was not until the fourth quarter of
2005, when borrowers were required to resume payments, that there was
sufficient data to make a reasonable estimate of losses in the
Company's loan portfolio.
Also adversely impacting earnings in the fourth quarter was a $1.3
million writedown of an investment in an adjustable-rate mortgage
mutual fund. As shares of this investment have been selling below the
Association's cost basis for an extended period of time management has
deemed this impairment to be other-than-temporary and the losses have
been recognized in the income statement during the fourth quarter of
2005.
Net interest income for the quarter ended December 31, 2005 was
$1.3 million compared to $1.5 million for the same period in 2004 and
$5.6 million for the year ended December 31, 2005, slightly exceeding
calendar 2004 net interest income. The Company's net interest margin
increased to 3.10% for the fourth quarter of 2005 from 3.06% for the
year earlier quarter and was 3.08% for the year ended December 31,
2005 compared to 2.76% in 2004.
Total assets of the Company at December 31, 2005 amounted to $
177.8 million compared to $200.1 million at December 31, 2004. There
was a significant reduction in the Company's loan portfolio during
2005. Net loans at December 31, 2005 were $69.9 million compared to
$92.2 million at December 31, 2004. Subsequent to Hurricane Katrina,
there were significant loan payoffs, primarily from insurance proceeds
received on significantly damaged properties. The loan payoffs coupled
with the $4.8 million provision for loan losses taken in the fourth
quarter were the primary reasons for the reduction in the Company's
net loan portfolio during 2005.
The Association recently hired several individuals with extensive
commercial lending experience at regional banks in order to position
the Association to be a more active commercial lender in 2006 and
thereafter.
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.
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*T
GS Financial Corp.
Condensed Consolidated Statements of Financial Condition
(Unaudited)
----------------------------------------------------------------------
($ in thousands) December 31, 2005 December 31, 2004
----------------------------------------------------------------------
ASSETS
Cash & Due from Banks $ 3,040 $ 1,613
Interest Bearing Deposits 4,515 3,761
Federal Funds Sold 15,000 1,650
Securities Available-for-Sale,
at Fair Value 77,344 94,557
Loans, Net 69,897 92,158
Accrued Interest Receivable 1,620 596
Premises & Equipment, Net 2,257 2,508
Stock in Federal Home Loan
Bank, at Cost 1,833 2,445
Foreclosed Assets - -
Real Estate Held-for-Investment,
Net 478 493
Other Assets 1,862 285
----------------------------------------------------------------------
Total Assets $ 177,846 $ 200,066
----------------------------------------------------------------------
LIABILITIES
Interest Bearing Deposits $ 116,798 $ 129,758
Non-Interest Bearing Deposits 2,195 965
FHLB Advances 32,106 39,689
Other Liabilities 1,376 710
----------------------------------------------------------------------
Total Liabilities 152,475 171,122
----------------------------------------------------------------------
STOCKHOLDERS' EQUITY
Common Stock & Additional Paid
in Capital $ 34,563 $ 34,459
Unearned ESOP Stock (239) (521)
Unearned RRP Trust Stock (698) (865)
Treasury Stock (32,193) (32,119)
Retained Earnings 24,136 28,286
Accumulated Other Comprehensive
Income (198) (296)
----------------------------------------------------------------------
Total Stockholders' Equity 25,371 28,944
----------------------------------------------------------------------
Total Liabilities &
Stockholders' Equity $ 177,846 $ 200,066
----------------------------------------------------------------------
Selected Asset Quality Data
Total Non Performing Assets $ 10,002 $ 894
Non Performing Assets to Total
Assets 5.62% 0.45%
Allowance for Loan Losses to
Non Performing Assets 57.12% 102.90%
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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) 2005 2004 2005 2004
----------------------------------------------------------------------
Interest Income $ 2,486 $ 2,796 $ 10,466 $ 10,989
Interest Expense 1,182 1,297 4,856 5,436
----------------------------------------------------------------------
Net Interest Income 1,304 1,499 5,610 5,553
Provision for Loan
Losses 4,793 310 4,793 343
----------------------------------------------------------------------
Net Interest Income
(Loss) after Provision
for Loan Losses (3,489) 1,189 817 5,210
----------------------------------------------------------------------
Noninterest Expense 1,138 1,091 4,707 4,483
----------------------------------------------------------------------
Net Income (Loss)
Before Non-Interest
Income and Income
Taxes (4,627) 98 (3,890) 727
----------------------------------------------------------------------
Noninterest Income
(Loss) (1,211) (510) (1,295) (691)
----------------------------------------------------------------------
Income (Loss) Before
Tax Expense (Benefit) (5,838) (412) (5,185) 36
----------------------------------------------------------------------
Income Tax Expense
(Benefit) (1,758) (166) (1,508) (163)
----------------------------------------------------------------------
Net Income (Loss) $ (4,080) $ (246) $ (3,677) $ 199
----------------------------------------------------------------------
Net Income (Loss) Per
Common Share $ (3.45) $ (0.21) $ (3.11) $ 0.17
----------------------------------------------------------------------
Selected Operating Data
Weighted Average
Shares Outstanding 1,180,941 1,156,537 1,181,313 1,156,441
Return on Average
Assets (1) -9.02% -0.48% -1.96% 0.09%
Non Interest
Expense/Average
Assets (1) 2.52% 2.14% 2.51% 2.12%
Net Interest Margin 3.10% 3.06% 3.08% 2.76%
----------------------------------------------------------------------
(1) Annualized for the three-month periods ended December 31, 2005
and 2004.
*T