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 $293,000 for the quarter ended June 30, 
      2007, up $50,000, or 20.6% from the same period in 2006. Earnings per 
      share for the second quarter of 2007 were $.24, up from $.20 for the 
      second quarter of 2006. The increase in earnings for the quarter ended 
      June 30, 2007 was primarily due to a reversal of provision for loan 
      losses of $300,000, or $198,000 net of income taxes during the quarter.
    
    
      “We continue to make progress in executing our 
      strategic objectives,” noted President Stephen 
      E. Wessel. “Our residential and commercial 
      loan demand continues to be robust. Recovery from the devastation of 
      Hurricane Katrina is continuing to progress in some parts of our 
      metropolitan area. In the first six (6) months of 2007 we have invested 
      additional resources in new employees for mortgage origination and in 
      commercial banking. We have purchased a new branch site to expand our 
      presence to the west bank of Jefferson Parish. Our renovation and 
      reconstruction of our flooded mid-city branch is nearly complete. We 
      have also built a secondary marketing capability which will generate 
      long-term revenue, and have introduced new products in mortgage banking, 
      credit cards and remote deposit. We have successfully grown some of our 
      targeted products such as demand deposit accounts, money market accounts 
      and home equity lending along with more commercial owner-occupied 
      building loans. These are significant steps in implementing the 
      long-term strategic plan adopted by the Board of Directors that have 
      increased our expenses during the six months but which we expect will 
      enhance our profitability through the conversion of Guaranty Savings 
      Bank from a traditional thrift to a community bank business model.”
    
    
      For the first six months of 2007, net income totaled $389,000, down 
      25.0% from $519,000 over the same time period in 2006. Earnings per 
      share over the first half of 2007 were $.32, down 25.6% from $.43 in the 
      first half of 2006.
    
    
      Net interest income, excluding loan loss reserves, for the quarter ended 
      June 30, 2007 was $1.4 million, down 14.0% from $1.6 million in the 
      second quarter of 2006, and up $21,000, or 1.5% from the first quarter 
      of 2007. The second quarter 2007 net interest margin was 3.50%, down 30 
      basis points from 3.80% for the second quarter of 2006, and up 2 basis 
      points from 3.48% in the first quarter of 2007.
    
    
      Net interest income for the first half of 2007 was $2.8 million, down 
      12.5% from $3.2 million in the first six months of 2006. This decline 
      was primarily the result of increases in deposit costs only partially 
      being offset by improved product mixes on both the asset and liability 
      side of the balance sheet. The net interest margin for the first half of 
      2007 was 3.49%, down 16 basis points from 3.65% for the same time period 
      in 2006.
    
    
      Additional financial highlights include the following:
    
    
      
        Total assets at June 30, 2007 were $169.9 million, up approximately 
        0.9% from December 31, 2006.
      
      
        Total loans at June 30, 2007 were $108.9 million, up approximately 
        11.4% from December 31, 2006.
      
      
        Deposits at June 30, 2007 were $125.2 million, up approximately 2.4% 
        from December 31, 2006.
      
      
        Outstanding advances from the Federal Home Loan Bank at June 30, 2007 
        were $16.8 million, down approximately 1.3% from December 31, 2006.
      
      
        Stockholders’ equity at June 30, 2007 was 
        $27.0 million, down $177,000 from December 31, 2006. Stockholders’ 
        equity as a percentage of total assets at June 30, 2007 was 15.88%, 
        down from 16.13% at December 31, 2006.
      
      
        Non-interest expense for the second quarter of 2007 totaled $1.3 
        million, up approximately 10.7% from a year earlier. Non-interest 
        expense for the first half of 2007 totaled $2.6 million, up 
        approximately 11.7% from the first six months of 2006.
      
      
        Non-performing assets were $502,000 at June 30, 2007, compared to 
        $179,000 at December 31, 2006. The ratio of non-performing assets to 
        total assets at June 30, 2007 was 0.30% compared to 0.11% at December 
        31, 2006.
      
      
        The ratio of total loans to deposits at June 30, 2007 was 86.98%, 
        compared to 79.60% at December 31, 2006.
      
    
    
      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
        
      
      
        
           
        
        
           
        
        
           
        
        
           
        
        
           
        
      
      
        
          ($ in thousands)
        
        
           
        
        
          June 30, 2007 

          
            (Unaudited)
          
        
        
           
        
        
          December 31, 2006

          
            (Audited)
          
        
      
      
        
          ASSETS
        
        
        
        
        
        
        
        
        
      
      
        
          Cash & Amounts Due from Depository Institutions
        
        
        
        
          $
        
        
          1,702
        
        
        
        
        
        
          $
        
        
          1,893
        
        
        
      
      
        
          Interest-Bearing Deposits in Other Banks
        
        
        
        
        
        
          2,107
        
        
        
        
        
        
        
        
          6,544
        
        
        
      
      
        
          Federal Funds Sold
        
        
        
        
        
        
          360
        
        
        
        
        
        
        
        
          2,680
        
        
        
      
      
        
          Securities Available-for-Sale, at Fair Value
        
        
        
        
        
        
          50,852
        
        
        
        
        
        
        
        
          55,090
        
        
        
      
      
        
          Loans, Net
        
        
        
        
        
        
          105,466
        
        
        
        
        
        
        
        
          93,987
        
        
        
      
      
        
          Accrued Interest Receivable
        
        
        
        
        
        
          1,883
        
        
        
        
        
        
        
        
          2,004
        
        
        
      
      
        
          Premises & Equipment, Net
        
        
        
        
        
        
          4,263
        
        
        
        
        
        
        
        
          3,578
        
        
        
      
      
        
          Stock in Federal Home Loan Bank, at Cost
        
        
        
        
        
        
          1,009
        
        
        
        
        
        
        
        
          982
        
        
        
      
      
        
          Real Estate Held-for-Investment, Net
        
        
        
        
        
        
          457
        
        
        
        
        
        
        
        
          464
        
        
        
      
      
        
          Other Assets
        
        
           
        
        
           
        
        
          1,825
        
        
           
        
        
           
        
        
           
        
        
          1,158
        
        
           
        
      
      
        
          Total Assets
        
        
           
        
        
          $
        
        
          169,924
        
        
           
        
        
           
        
        
          $
        
        
          168,380
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          LIABILITIES
        
        
        
        
        
        
        
        
        
      
      
        
          Deposits
        
        
        
        
        
        
        
        
        
      
      
        
          Interest-Bearing Deposits
        
        
        
        
          $
        
        
          120,597
        
        
        
        
        
        
          $
        
        
          119,364
        
        
        
      
      
        
          Noninterest-Bearing Deposits
        
        
           
        
        
           
        
        
          4,597
        
        
           
        
        
           
        
        
           
        
        
          3,390
        
        
           
        
      
      
        
          Total Deposits
        
        
           
        
        
           
        
        
          125,194
        
        
           
        
        
           
        
        
           
        
        
          122,754
        
        
           
        
      
      
        
          FHLB Advances
        
        
        
        
        
        
          16,817
        
        
        
        
        
        
        
        
          17,042
        
        
        
      
      
        
          Other Liabilities
        
        
           
        
        
           
        
        
          927
        
        
           
        
        
           
        
        
           
        
        
          1,420
        
        
           
        
      
      
        
          Total Liabilities
        
        
           
        
        
           
        
        
          142,938
        
        
           
        
        
           
        
        
           
        
        
          141,216
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          STOCKHOLDERS' EQUITY
        
        
        
        
        
        
        
        
        
      
      
        
          Common Stock - $.01 Par Value
        
        
        
        
          
            $
          
        
        
          34
        
        
        
        
        
        
          $
        
        
          34
        
        
        
      
      
        
          Additional Paid-in Capital
        
        
        
        
        
        
          34,701
        
        
        
        
        
        
        
        
          34,701
        
        
        
      
      
        
          Unearned RRP Trust Stock
        
        
        
        
        
        
          (523
        
        
          )
        
        
        
        
        
        
          (523
        
        
          )
        
      
      
        
          Treasury Stock
        
        
        
        
        
        
          (32,493
        
        
          )
        
        
        
        
        
        
          (32,493
        
        
          )
        
      
      
        
          Retained Earnings
        
        
        
        
        
        
          25,902
        
        
        
        
        
        
        
        
          25,764
        
        
        
      
      
        
          Accumulated Other Comprehensive Loss
        
        
           
        
        
           
        
        
          (635
        
        
          )
        
        
           
        
        
           
        
        
          (319
        
        
          )
        
      
      
        
          Total Stockholders' Equity
        
        
           
        
        
           
        
        
          26,986
        
        
           
        
        
           
        
        
           
        
        
          27,164
        
        
           
        
      
      
        
          Total Liabilities & Stockholders' Equity
        
        
           
        
        
          $
        
        
          169,924
        
        
           
        
        
           
        
        
          $
        
        
          168,380
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Selected Asset Quality Data
        
        
        
        
        
        
        
        
        
      
      
        
          Total Non Performing Assets
        
        
        
        
          $
        
        
          502
        
        
        
        
        
        
          $
        
        
          179
        
        
        
      
      
        
          Non Performing Assets to Total Assets
        
        
        
        
        
        
          0.30
        
        
          %
        
        
        
        
        
        
          0.11
        
        
          %
        
      
    
    
      
        
           
        
      
      
        
          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)
        
        
           
        
        
           
        
        
          2007
        
        
           
        
        
           
        
        
           
        
        
          2006
        
        
           
        
        
           
        
        
           
        
        
          2007
        
        
           
        
        
           
        
        
           
        
        
          2006
        
        
           
        
      
      
        
          Interest and Dividend Income
        
        
        
        
          $
        
        
          2,733
        
        
        
        
        
        
          $
        
        
          2,782
        
        
        
        
        
        
          $
        
        
          5,387
        
        
        
        
        
        
          $
        
        
          5,494
        
        
        
      
      
        
          Interest Expense
        
        
           
        
        
           
        
        
          1,342
        
        
           
        
        
           
        
        
           
        
        
          1,170
        
        
           
        
        
           
        
        
           
        
        
          2,627
        
        
           
        
        
           
        
        
           
        
        
          2,344
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Net Interest Income
        
        
        
        
        
        
          1,391
        
        
        
        
        
        
        
        
          1,612
        
        
        
        
        
        
        
        
          2,760
        
        
        
        
        
        
        
        
          3,150
        
        
        
      
      
        
          Provision (Reversal) for Loan Losses
        
        
           
        
        
           
        
        
          (300
        
        
          )
        
        
           
        
        
           
        
        
          -
        
        
           
        
        
           
        
        
           
        
        
          (300
        
        
          )
        
        
           
        
        
           
        
        
          -
        
        
           
        
      
      
        
          Net Interest Income after Provision (Reversal) for Loan Losses
        
        
           
        
        
           
        
        
          1,691
        
        
           
        
        
           
        
        
           
        
        
          1,612
        
        
           
        
        
           
        
        
           
        
        
          3,060
        
        
           
        
        
           
        
        
           
        
        
          3,150
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Non-interest Expense
        
        
           
        
        
           
        
        
          1,314
        
        
           
        
        
           
        
        
           
        
        
          1,187
        
        
           
        
        
           
        
        
           
        
        
          2,590
        
        
           
        
        
           
        
        
           
        
        
          2,319
        
        
           
        
      
      
        
          Net Income Before Non-Interest Income and Income Taxes
        
        
           
        
        
           
        
        
          377
        
        
           
        
        
           
        
        
           
        
        
          425
        
        
           
        
        
           
        
        
           
        
        
          470
        
        
           
        
        
           
        
        
           
        
        
          831
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Non-interest Income (Loss)
        
        
           
        
        
           
        
        
          43
        
        
           
        
        
           
        
        
           
        
        
          (53
        
        
          )
        
        
           
        
        
           
        
        
          72
        
        
           
        
        
           
        
        
           
        
        
          (45
        
        
          )
        
      
      
        
          Income Before Tax Expense
        
        
           
        
        
           
        
        
          420
        
        
           
        
        
           
        
        
           
        
        
          372
        
        
           
        
        
           
        
        
           
        
        
          542
        
        
           
        
        
           
        
        
           
        
        
          786
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Income Tax Expense
        
        
           
        
        
           
        
        
          127
        
        
           
        
        
           
        
        
           
        
        
          129
        
        
           
        
        
           
        
        
           
        
        
          153
        
        
           
        
        
           
        
        
           
        
        
          267
        
        
           
        
      
      
        
          Net Income
        
        
           
        
        
          $
        
        
          293
        
        
           
        
        
           
        
        
          $
        
        
          243
        
        
           
        
        
           
        
        
          $
        
        
          389
        
        
           
        
        
           
        
        
          $
        
        
          519
        
        
           
        
      
      
        
          Earnings Per Share – Basic
        
        
           
        
        
          $
        
        
          0.24
        
        
           
        
        
           
        
        
          $
        
        
          0.20
        
        
           
        
        
           
        
        
          $
        
        
          0.32
        
        
           
        
        
           
        
        
          $
        
        
          0.43
        
        
           
        
      
      
        
          Earnings Per Share –Diluted
        
        
           
        
        
          $
        
        
          0.24
        
        
           
        
        
           
        
        
          $
        
        
          0.20
        
        
           
        
        
           
        
        
          $
        
        
          0.32
        
        
           
        
        
           
        
        
          $
        
        
          0.43
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Selected Operating Data
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Weighted Average Shares Outstanding
        
        
        
        
        
        
          1,234,453
        
        
        
        
        
        
        
        
          1,214,190
        
        
        
        
        
        
        
        
          1,234,453
        
        
        
        
        
        
        
        
          1,215,707
        
        
        
      
      
        
          Return on Average Assets 1
        
        
        
        
        
        
          0.70
        
        
          %
        
        
        
        
        
        
          0.56
        
        
          %
        
        
        
        
        
        
          0.47
        
        
          %
        
        
        
        
        
        
          0.59
        
        
          %
        
      
      
        
          Non-Interest Expense/Average Assets1
        
        
        
        
        
        
          3.13
        
        
          %
        
        
        
        
        
        
          2.72
        
        
          %
        
        
        
        
        
        
          3.12
        
        
          %
        
        
        
        
        
        
          2.65
        
        
          %
        
      
      
        
          Net Interest Margin1
        
        
           
        
        
           
        
        
          3.50
        
        
          %
        
        
           
        
        
           
        
        
          3.80
        
        
          %
        
        
           
        
        
           
        
        
          3.49
        
        
          %
        
        
           
        
        
           
        
        
          3.65
        
        
          %
        
      
      
        
          1 Annualized