GS Financial Corp. Announces Second Quarter Results

GS Financial Corp., (NASDAQ:GSLA), the holding company
of Guaranty Savings Bank (www.guarantysb.com), announced quarterly
earnings of $243,000 for the quarter ended June 30, 2006, down
$28,000, or 10.3% from the same period in 2005. Earnings per share for
the second quarter of 2006 were $.20, down from $.23 for the second
quarter of 2005. Earnings for the quarter ended June 30, 2006 include
non-recurring securities losses of $76,000. "These are solid earnings
results," noted President Stephen E. Wessel. "In the past six months
we have greatly improved credit quality, increased our operating
capabilities and put a management team in place that is enhancing our
business development efforts."
   For the first six months of 2006, net income totaled $519,000, up
202% from $172,000 over the same time period in 2005. Earnings per
share over the first half of 2006 were $.43, up 207% from $.14 in the
first half of 2005. First half results in 2005 include the one-time
recognition of costs associated with the retirement of the Company's
former President and Chief Executive Officer. These costs totaled
$428,000, or $.36 per share ($282,000, or $.24 per share, after
related tax benefits).
   Net interest income for the quarter ended June 30, 2006 was $1.6
million, up 14% from $1.4 million in the second quarter of 2005, and
up 5% from $1.5 million in the first quarter of 2006. The second
quarter 2006 net interest margin was 3.80%, up 71 basis points from
3.09% for the second quarter of 2005, and up 31 basis points from
3.49% in the first quarter of 2006.
   Net interest income for the first half of 2006 was $3.2 million,
up 6% from $2.9 million in the first six months of 2005. The net
interest margin for the first half of 2006 was 3.65%, up 59 basis
points from 3.06% for the same time period in 2005.

   Additional financial highlights include the following:

   --  Total assets at June 30, 2006 were $172.7 million, down
        approximately 3% from December 31, 2005.

   --  Total loans at June 30, 2006 were $90.0 million, up
        approximately 19% from December 31, 2005.

   --  Deposits at June 30, 2006 were $123.0 million, up
        approximately 3% from December 31, 2005.

   --  Outstanding advances from the Federal Home Loan Bank at June
        30, 2006 were $23.6 million, down approximately 26% from
        December 31, 2005.

   --  Stockholders' equity at June 30, 2006 was $25.5 million, up
        $93,000 from December 31, 2005. Stockholders' equity as a
        percentage of total assets at June 30, 2006 was 14.74%, up
        from 14.30% at December 31, 2005.

   --  Non-interest expense for the second quarter of 2006 totaled
        $1.2 million, up approximately 9% from a year earlier.
        Non-interest expense for the first half of 2006 totaled $2.3
        million, down approximately 12% from the first six months of
        2005. Included in the first half of 2005 are the previously
        mentioned expenses associated with the retirement of the
        Company's former President and Chief Executive Officer.

   --  Non-performing assets were $558,000 at June 30, 2006, compared
        to $3.6 million at December 31, 2005. The ratio of
        non-performing assets to total assets at June 30, 2006 was
        .32% compared to 2.02% at December 31, 2005.

   --  The ratio of total loans to deposits at June 30, 2006 was
        73.19%, compared to 63.54% at December 31, 2005.

   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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                          GS Financial Corp.
       Condensed Consolidated Statements of Financial Condition

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                                                  6/30/2006 12/31/2005
($ in thousands)                                 (Unaudited) (Audited)
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ASSETS
  Cash & Amounts Due from Depository Institutions    $2,130    $3,040
  Interest-Bearing Deposits in Other Banks           12,208     4,515
  Federal Funds Sold                                  1,885    15,000
  Securities Available-for-Sale, at Fair Value       64,555    77,344
  Loans, Net                                         84,278    69,657
  Accrued Interest Receivable                         1,726     1,627
  Premises & Equipment, Net                           2,297     2,257
  Stock in Federal Home Loan Bank, at Cost            1,345     1,833
  Foreclosed Assets                                       -         -
  Real Estate Held-for-Investment, Net                  471       478
  Other Assets                                        1,846     1,863
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   Total Assets                                    $172,741  $177,614
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LIABILITIES
  Deposits
   Interest-Bearing Deposits                       $120,803  $116,798
   Noninterest-Bearing Deposits                       2,155     2,195
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   Total Deposits                                   122,958   118,993
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  FHLB Advances                                      23,615    32,106
  Other Liabilities                                     702     1,108
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   Total Liabilities                                147,275   152,207
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STOCKHOLDERS' EQUITY
  Preferred Stock - $.01 Par Value                       $-        $-
  Common Stock - $.01 Par Value                          34        34
  Additional Paid-in Capital                         34,631    34,565
  Unearned ESOP Stock                                  (120)     (239)
  Unearned RRP Trust Stock                             (698)     (698)
  Treasury Stock                                    (32,264)  (32,193)
  Retained Earnings                                  24,534    24,136
  Accumulated Other Comprehensive Loss                 (651)     (198)
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   Total Stockholders' Equity                        25,466    25,407
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   Total Liabilities & Stockholders' Equity        $172,741  $177,614


Selected Asset Quality Data
  Total Non Performing Assets                          $558    $3,582
  Non Performing Assets to Total Assets                0.32%     2.02%
  Allowance for Loan Losses to Non Performing
   Assets                                          1,023.84%   159.49%
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                          GS Financial Corp.
             Condensed Consolidated Statements of Income
                             (Unaudited)

                              For the Three Months  For the Six Months
                                 Ended June 30,       Ended June 30,
----------------------------------------------------------------------
($ in thousands, except per
 share data)                      2006      2005      2006      2005
----------------------------------------------------------------------
Interest and Dividend Income     $2,782    $2,647    $5,494    $5,310
Interest Expense                  1,170     1,220     2,344     2,443
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Net Interest Income               1,612     1,427     3,150     2,867
Provision for Loan Losses             -         -         -         -
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Net Interest Income after
 Provision for Loan Losses        1,612     1,427     3,150     2,867
----------------------------------------------------------------------

Non-interest Expense              1,187     1,071     2,319     2,588
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Net Income Before Non-Interest
 Income and Income Taxes            425       356       831       279
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Non-interest (Loss)  Income         (53)       24       (45)       32
----------------------------------------------------------------------
Income Before Tax Expense           372       380       786       311
----------------------------------------------------------------------

Income Tax Expense                  129       109       267       139
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Net Income                         $243      $271      $519      $172
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Earnings Per Share - Basic        $0.20     $0.23     $0.43     $0.14
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Earnings Per Share - Diluted      $0.20     $0.23     $0.43     $0.14
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Selected Operating Data
  Weighted Average Shares
   Outstanding                1,214,190 1,181,065 1,215,707 1,181,834
  Return on Average Assets(1)      0.56%     0.57%     0.59%     0.18%
  Non-Interest Expense/Average
   Assets(1)                       2.72%     2.26%     2.65%     2.69%
  Net Interest Margin(1)           3.80%     3.09%     3.65%     3.06%
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    (1) Annualized
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