GS Financial Corp. Announces Fourth Quarter and Year-End Results

  
    
  
  
    
      GS Financial Corp. (NASDAQ Global Market: GSLA) (the “Company”), 
      the holding company for Guaranty Savings Bank (the “Bank”), 
      announced earnings for the quarter ended December 31, 2007 of $299,000, 
      or $.24 per share, compared to net income of $85,000, or $.07 per share, 
      for the quarter ended December 31, 2006. For the year ended December 31, 
      2007, earnings were $757,000, or $.61 per share, compared to $2.1 
      million, or $1.74 per share, for the year ended December 31, 2006.
    
    
      “In general, 2007 was a challenging year for 
      the banking industry. But, our strong fourth quarter concluded the year 
      on a positive note for GS Financial and Guaranty Savings Bank,” 
      noted President Stephen Wessel. “We made 
      progress in the fulfillment of many of our strategic objectives in the 
      past year with regards to increased loan growth, enhanced product 
      offerings, new banking locations and improved technology. Both planned 
      expense growth due to the addition of new banking locations and a 
      challenging interest rate environment hampered profitability during the 
      year. However, in the fourth quarter of 2007 our expenses leveled off 
      while our revenue and loan production continued to increase resulting in 
      improved operating performance. We have continued to implement all of 
      our main strategic objectives and our much improved fourth quarter 
      results reflect the progress we have made. As we continue to evolve as 
      an institution, we are positioning ourselves for long-term growth and 
      financial success.”
    
    
      Net interest income for the quarter ended December 31, 2007 was $1.5 
      million compared to $1.4 million for the same period in 2006. For the 
      year ended December 31, 2007 net interest income, excluding loan loss 
      provisions, was $5.7 million compared to $6.1 million for calendar 2006, 
      a decline of 6.5%. The Company’s net interest 
      margin increased to 3.52% for the fourth quarter of 2007 from 3.37% for 
      the year earlier quarter and declined to 3.42% for the year ended 
      December 31, 2007 compared to 3.58% for calendar 2006. Our results for 
      2007 include a $300,000 reversal of the provision for loans losses 
      compared to a $2.0 million reversal in 2006.
    
    
      Total assets of the Company at December 31, 2007 amounted to $185.7 
      million, up 10.3% from $168.4 million at December 31, 2006. There was 
      significant growth in the Company’s loan 
      portfolio during 2007, which occurred in both the commercial real estate 
      and residential mortgage segments. Net loans at December 31, 2007 were 
      $118.4 million compared to $94.0 million at December 31, 2006, an 
      increase of 26.1%. Loan quality continued to be sound in 2007 as the 
      local economy in South Louisiana continues to rebound from the impact of 
      Hurricane Katrina. The Bank’s level of 
      non-performing assets increased to $1.0 million at December 31, 2007 
      compared to $191,000 at December 31, 2006 due to two loan relationships 
      that were place on non-accrual status, both secured by properties 
      impacted by Hurricane Katrina. We made significant provisions to our 
      allowance for loan losses in 2005 after Hurricane Katrina specifically 
      for situations such as these, and management believes the current 
      reserve levels to be adequate.
    
    
      The Bank is continuing to expand its secondary marketing efforts. In the 
      fourth quarter, the Bank recognized $85,000 in gains on loans sold which 
      is included in non-interest income. The Bank has also been approved in 
      the fourth quarter by two additional secondary market loan investors 
      which assisted in the expansion of residential mortgage product 
      offerings.
    
    
      “We think 2008 will be a good year for 
      Guaranty Savings Bank because we have a good management team, talented 
      lenders, a healthy capital position, adequate loan loss reserves, 
      diversified revenue streams and a good mix of products coupled with 
      service differentiation in our market which has been disrupted by big 
      bank consolidation activity,” stated 
      President Wessel. “We are excited about our 
      opportunities to continue to grow revenue and profitability on a 
      consistent basis in 2008.”
    
    
      Highlights of 2007 include:
    
    
      
        Gross loans grew by $24.7 million during 2007 (25.3%) to $121.9 
        million at December 31, 2007, with the growth almost entirely in 
        real-estate secured loans, both residential and non-residential.
      
      
        The Bank sold $15.1 million of residential loans in 2007, including 
        $6.6 million of loans in the fourth quarter, resulting in gains on 
        loan sales of $189,000 for the year and $85,000 for the fourth quarter.
      
      
        Deposits grew in 2007 by $6.9 million (5.6%) to $129.9 million at 
        December 31, 2007, including $2.3 million of growth in non-interest 
        bearing deposits.
      
      
        Stockholders’ equity at December 31, 2007 
        was $28.2 million, up $945,000 from December 31, 2006. Stockholders’ 
        equity as a percentage of total assets at December 31, 2007 was 
        15.21%, down from 16.16% at December 31, 2006.
      
      
        Non-interest expense for the fourth quarter of 2007 totaled $1.3 
        million, relatively unchanged from the year earlier period. 
        Non-interest expense for all of 2007 totaled $5.4 million, up 
        approximately 9.2% from 2006.
      
      
        Non-interest income for the fourth quarter of 2007 totaled $244,000, 
        up from $65,000 in the fourth quarter of 2006, due primarily to gains 
        recognized on sales of mortgage loans in the secondary market, an 
        activity in which the Bank did not engage in until the latter part of 
        the fourth quarter of 2006, and a $110,000 non-recurring item.
      
      
        During 2007, the Bank re-opened its newly renovated Mid-City New 
        Orleans office, which was flooded as a result of Hurricane Katrina, 
        converted its loan production office in Ponchatoula, LA to a 
        full-service branch and opened a new location on the Westbank of 
        Jefferson Parish in Harvey, LA.
      
    
    
      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
        
      
      
        
          (Unaudited)
        
      
      
        
           
        
        
           
        
        
           
        
        
           
        
      
      
        
          ($ in thousands)
        
        
          
            Dec. 31, 2007
          
        
        
           
        
        
          
            Dec. 31, 2006
          
        
      
      
        
          ASSETS
        
        
        
        
           
        
        
        
      
      
        
          Cash & Due from Banks
        
        
          $
        
        
          2,480
        
        
        
        
        
        
          $
        
        
          1,892
        
        
        
      
      
        
          Interest Bearing Deposits
        
        
        
        
          6,008
        
        
        
        
        
        
        
        
          6,544
        
        
        
      
      
        
          Federal Funds Sold
        
        
        
        
          970
        
        
        
        
        
        
        
        
          2,680
        
        
        
      
      
        
          Securities Available-for-Sale, at Fair Value
        
        
        
        
          47,748
        
        
        
        
        
        
        
        
          55,090
        
        
        
      
      
        
          Loans, Net
        
        
        
        
          118,477
        
        
        
        
        
        
        
        
          93,987
        
        
        
      
      
        
          Accrued Interest Receivable
        
        
        
        
          1,828
        
        
        
        
        
        
        
        
          2,004
        
        
        
      
      
        
          Premises & Equipment, Net
        
        
        
        
          5,845
        
        
        
        
        
        
        
        
          3,578
        
        
        
      
      
        
          Stock in Federal Home Loan Bank, at Cost
        
        
        
        
          1,220
        
        
        
        
        
        
        
        
          982
        
        
        
      
      
        
          Real Estate Held-for-Investment, Net
        
        
        
        
          450
        
        
        
        
        
        
        
        
          464
        
        
        
      
      
        
          Other Assets
        
        
           
        
        
          645
        
        
           
        
        
           
        
        
           
        
        
          1,161
        
        
           
        
      
      
        
          Total Assets
        
        
          $
        
        
          185,671
        
        
           
        
        
           
        
        
          $
        
        
          168,382
        
        
           
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          LIABILITIES
        
        
        
        
        
        
        
      
      
        
          Interest Bearing Deposits
        
        
        
        
          124,160
        
        
        
        
        
        
        
        
          119,599
        
        
        
      
      
        
          Non-Interest Bearing Deposits
        
        
        
        
          5,680
        
        
        
        
        
        
        
        
          3,390
        
        
        
      
      
        
          FHLB Advances
        
        
        
        
          26,986
        
        
        
        
        
        
        
        
          17,042
        
        
        
      
      
        
          Other Liabilities
        
        
           
        
        
          613
        
        
           
        
        
           
        
        
           
        
        
          1,064
        
        
           
        
      
      
        
          Total Liabilities
        
        
          $
        
        
          157,439
        
        
           
        
        
           
        
        
          $
        
        
          141,095
        
        
           
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          STOCKHOLDERS' EQUITY
        
        
        
        
        
        
        
      
      
        
          Common Stock & Additional Paid in Capital
        
        
        
        
          34,682
        
        
        
        
        
        
        
        
          34,785
        
        
        
      
      
        
          Unearned RRP Trust Stock
        
        
        
        
          (159
        
        
          )
        
        
        
        
        
        
          (573
        
        
          )
        
      
      
        
          Treasury Stock
        
        
        
        
          (32,166
        
        
          )
        
        
        
        
        
        
          (32,493
        
        
          )
        
      
      
        
          Retained Earnings
        
        
        
        
          25,990
        
        
        
        
        
        
        
        
          25,887
        
        
        
      
      
        
          Accumulated Other Comprehensive Loss
        
        
           
        
        
          (115
        
        
          )
        
        
           
        
        
           
        
        
          (319
        
        
          )
        
      
      
        
          Total Stockholders' Equity
        
        
          $
        
        
          28,232
        
        
           
        
        
           
        
        
          $
        
        
          27,287
        
        
           
        
      
      
        
          Total Liabilities & Stockholders' Equity
        
        
          $
        
        
          185,671
        
        
           
        
        
           
        
        
          $
        
        
          168,382
        
        
           
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Selected Asset Quality Data
        
        
        
        
        
        
        
      
      
        
          Total Non Performing Assets
        
        
        
        
          1,070
        
        
        
        
        
        
        
        
          191
        
        
        
      
      
        
          Non Performing Assets to Total Assets
        
        
        
        
          0.58
        
        
          %
        
        
        
        
        
        
          0.11
        
        
          %
        
      
      
        
          Allowance for Loan Losses to Total Loans
        
        
        
        
          2.82
        
        
          %
        
        
        
        
        
        
          3.82
        
        
          %
        
      
      
        
          Allowance for Loan Losses to Total Non-performing loans
        
        
           
        
        
          320.75
        
        
          %
        
        
           
        
        
           
        
        
          1,953.93
        
        
          %
        
      
    
    
      
        
          GS Financial Corp.
        
      
      
        
          Condensed Consolidated Statements of Income
        
      
      
        
          (Unaudited)
        
      
      
        
           
        
      
      
        
           
        
        
          For the three months ended December 31,
        
        
          For the year ended 

          
            December 31,
          
        
      
      
        
          ($ in thousands, except per share data)
        
        
           
        
        
          2007
        
        
           
        
        
           
        
        
          2006
        
        
           
        
        
           
        
        
          2007
        
        
           
        
        
           
        
        
          2006
        
        
           
        
      
      
        
          Interest Income
        
        
          $
        
        
          3,000
        
        
        
        
          $
        
        
          2,706
        
        
        
        
          $
        
        
          11,248
        
        
        
        
          $
        
        
          11,000
        
        
        
      
      
        
          Interest Expense
        
        
           
        
        
          1,472
        
        
           
        
        
           
        
        
          1,298
        
        
           
        
        
           
        
        
          5,547
        
        
           
        
        
           
        
        
          4,904
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Net Interest Income
        
        
        
        
          1,528
        
        
        
        
        
        
          1,408
        
        
        
        
        
        
          5,701
        
        
        
        
        
        
          6,096
        
        
        
      
      
        
          Provision (Reversal) for Loan Losses
        
        
           
        
        
          -
        
        
           
        
        
           
        
        
          -
        
        
           
        
        
           
        
        
          (300
        
        
          )
        
        
           
        
        
          (1,981
        
        
          )
        
      
      
        
          Net Interest Income after Provision (Reversal) for Loan Losses
        
        
           
        
        
          1,528
        
        
           
        
        
           
        
        
          1,408
        
        
           
        
        
           
        
        
          6,001
        
        
           
        
        
           
        
        
          8,077
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Noninterest Expense
        
        
           
        
        
          1,347
        
        
           
        
        
           
        
        
          1,346
        
        
           
        
        
           
        
        
          5,378
        
        
           
        
        
           
        
        
          4,926
        
        
           
        
      
      
        
          Net Income Before Non-Interest Income and Income Taxes
        
        
           
        
        
          181
        
        
           
        
        
           
        
        
          62
        
        
           
        
        
           
        
        
          623
        
        
           
        
        
           
        
        
          3,151
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Noninterest Income
        
        
           
        
        
          244
        
        
           
        
        
           
        
        
          65
        
        
           
        
        
           
        
        
          425
        
        
           
        
        
           
        
        
          50
        
        
           
        
      
      
        
          Income Before Tax Expense
        
        
           
        
        
          425
        
        
           
        
        
           
        
        
          127
        
        
           
        
        
           
        
        
          1,048
        
        
           
        
        
           
        
        
          3,201
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Income Tax Expense
        
        
           
        
        
          126
        
        
           
        
        
           
        
        
          42
        
        
           
        
        
           
        
        
          291
        
        
           
        
        
           
        
        
          1,088
        
        
           
        
      
      
        
          Net Income
        
        
           
        
        
          299
        
        
           
        
        
           
        
        
          85
        
        
           
        
        
           
        
        
          757
        
        
           
        
        
           
        
        
          2,113
        
        
           
        
      
      
        
          Net Income Per Common Share
        
        
          $
        
        
          0.24
        
        
           
        
        
          $
        
        
          0.07
        
        
           
        
        
          $
        
        
          0.61
        
        
           
        
        
          $
        
        
          1.74
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Selected Operating Data
        
        
        
        
        
        
        
        
        
      
      
        
          Weighted Average Shares Outstanding
        
        
        
        
          1,270,963
        
        
        
        
        
        
          1,209,180
        
        
        
        
        
        
          1,243,655
        
        
        
        
        
        
          1,212,173
        
        
        
      
      
        
          Return on Average Assets 1
        
        
        
        
          0.65
        
        
          %
        
        
        
        
          0.20
        
        
          %
        
        
        
        
          0.44
        
        
          %
        
        
        
        
          1.21
        
        
          %
        
      
      
        
          Non Interest Expense/Average Assets 1
        
        
        
        
          2.95
        
        
          %
        
        
        
        
          3.13
        
        
          %
        
        
        
        
          3.12
        
        
          %
        
        
        
        
          2.82
        
        
          %
        
      
      
        
          Net Interest Margin
        
        
           
        
        
          3.52
        
        
          %
        
        
           
        
        
          3.37
        
        
          %
        
        
           
        
        
          3.42
        
        
          %
        
        
           
        
        
          3.58
        
        
          %
        
      
      
        
          1 Annualized for the three-month 
          periods ended December 31, 2007 and 2006.