[LOGO] GFSB
Bancorp, Inc.
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FOR IMMEDIATE RELEASE FOR FURTHER INFORMATION CONTACT:
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May 14, 2004 Jerry R. Spurlin, Chief Financial Officer
(505) 726-6500
GFSB BANCORP, INC. ANNOUNCES EARNINGS
Gallup, New Mexico - GFSB Bancorp, Inc. (NASDAQ SmallCap: GUPB), parent holding
company of Gallup Federal Savings Bank, Gallup, New Mexico, today announced
earnings for the quarter ended March 31, 2004, of $324,000 ($0.27 per diluted
share) and for the nine months ended March 31, 2004, of $1,151,000 ($.97 per
diluted share). Earnings for the same periods a year earlier were $280,000
($0.24 per diluted share) and $1,217,000 ($1.05 per diluted share).
The $44,000 increase in net earnings for the quarter is primarily attributable
to a $220,000 increase in net interest earnings and a $72,000 decrease in income
tax expense, partially offset by a $199,000 increase in the provision for loan
losses, an increase in non-interest expense of $47,000 and a $1,000 decrease in
non-interest earnings. The increase in net interest earnings is primarily due to
improvement in the Company's net interest margin, which was driven by a higher
volume of earning assets. The decrease in income tax expense is primarily due to
the recognition of certain permanent tax differences. The increase in the
provision for loan losses was primarily the result of an increase in classified
loans and growth in commercial and commercial real estate loans. The increase in
classified loans is primarily attributable to two loans, each with unique credit
quality concerns. The Company attributes the increase in non-interest expense
primarily to bank growth.
The $65,000 decrease in earnings for the nine months ended March 31, 2004 is
primarily the result of a $288,000 increase in non-interest expense and a
$254,000 increase in the provision for loan losses, partially offset by an
increase in net interest earnings of $173,000, an increase in non-interest
earnings of $170,000 and a $134,000 decrease in income tax expense. The Company
attributes the increase in non-interest expense primarily to bank growth. As
discussed above, the increase in the provision for loan losses was primarily the
result of an increase in classified loans and growth in commercial and
commercial real estate loans. The increase in net interest earnings is primarily
due to improvement in the Company's net interest margin. The increase in
non-interest earnings was primarily due to an increase in service charge income
of $208,000 and an increase in miscellaneous income of $39,000, partially offset
by a decrease in net gains from sales of loans of $75,000. The increase in
miscellaneous income is primarily due to a gain on the sale of other real estate
owned. The increase in service charge income is primarily due to increased
insufficient funds charges collected on NOW and checking accounts because of
increased volume of insufficient funds checks. The decrease in income tax
expense is primarily due to the recognition of certain permanent tax
differences.
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P.O. Box 820 o 221 West Aztec o Gallup, NM 87301
At March 31, 2004, the Company's capital to asset ratio was 7.8%, with assets
and stockholders' equity of $238.9 million and $18.5 million, respectively.
This release may contain forward-looking statements. We caution that such
statements may be subject to a number of uncertainties and actual results could
differ materially and, therefore, readers should not place undue reliance on any
forward-looking statements. The Company does not undertake, and specifically
disclaims, any obligation to publicly release the results of any revisions that
may be made to any forward-looking statements to reflect the occurrence of
anticipated or unanticipated events or circumstances after the date of such
statements.
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GFSB BANCORP, INC.
Selected Financial Information (Unaudited)
(dollars in thousands, except per share data)
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
At Period End
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03/31/04 03/31/03 06/30/03
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Cash and investments 40,167 32,063 37,208
Mortgage-backed securities 34,849 33,694 38,517
FHLB stock 4,393 4,306 4,333
Loans receivable, net 155,618 145,282 146,396
Premises and equipment 2,566 2,388 2,314
Prepaid and other assets 1,319 1,297 1,187
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TOTAL ASSETS 238,912 219,030 229,955
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Deposits 138,466 120,460 129,759
Advances from FHLB 74,535 75,068 76,642
Other secured borrowings 4,984 3,217 3,658
Repurchase agreements 639 772 585
Accrued expenses and other liabilities 1,751 2,202 1,567
Stockholders' equity 18,537 17,311 17,744
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 238,912 219,030 229,955
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CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
Three Months Ended Nine Months Ended
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03/31/04 03/31/03 03/31/04 03/31/03
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Interest earnings 3,066 3,021 9,160 9,425
Interest expense 1,326 1,501 4,203 4,642
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NET INTEREST EARNINGS 1,740 1,520 4,957 4,783
Provision for loan losses 339 140 469 215
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NET INTEREST EARNINGS AFTER
PROVISION FOR LOAN LOSSES 1,401 1,380 4,488 4,568
Non-interest earnings 187 188 633 463
Non-interest expense 1,168 1,121 3,474 3,185
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EARNINGS BEFORE INCOME TAXES 420 448 1,647 1,846
Net Income Tax Expense 96 168 496 629
NET EARNINGS 324 280 1,152 1,217
Weighted average number of 1,127 1,117 1,125 1,113
shares outstanding- basic
Earnings per common share-basic 0.29 0.25 1.02 1.09
Weighted average number of 1,183 1,165 1,181 1,159
shares outstanding- diluted
Earnings per common share-diluted 0.27 0.24 0.97 1.05
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