[LOGO] GFSB
BANCORP, INC.
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FOR IMMEDIATE RELEASE FOR FURTHER INFORMATION CONTACT:
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September 20, 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 year ended June 30, 2004, of $1,350,000 ($1.14 per diluted
share). Earnings for the same period a year earlier were $1,690,000 ($1.46 per
diluted share). For the fourth quarter of fiscal 2004, earnings were $198,000
($0.17 per diluted share) compared to $473,000 ($0.41 per diluted share) for the
fourth quarter of fiscal 2003.
The decrease in earnings for the full year is primarily the result of a $260,000
increase in non-interest expense and a $517,000 increase in the provision for
loan losses, partially offset by an increase in net interest earnings of
$65,000, an increase in non-interest earnings of $244,000 and a $128,000
decrease in income tax expense. The fourth quarter earnings decline reflected a
$263,000 increase in the provision and $109,000 decrease in net interest income
which offset a $73,000 increase in non-interest income and a $30,000 decrease in
non-interest expense.
The increase in non-interest income for the full year was primarily due to a
$263,000 increase in service charge income and a $44,000 increase in
miscellaneous income, partially offset by a $62,000 decrease in net gains from
sales of loans. 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 increase in
miscellaneous income is primarily due to gains on the sale of other real estate
owned. The decrease in income tax expense is primarily due to a decrease in
earnings before income taxes. For the quarter, non-interest income increased
$73,000, primarily due to a $55,000 increase in service charge income and a
$13,000 increase in net gains from sales of loans.
The increase in non-interest expense was primarily attributable to bank growth
and an $82,000 increase in professional fees, which is primarily due to $52,000
in fees paid to consultants for services related to the Company's recently
announced plans to merge with First Federal Banc of the Southwest, Inc., and a
$30,000 increase in legal fees, audit expense and accounting fees largely due to
the Company's efforts to comply with requirements of the Sarbanes-Oxley Act. For
the quarter, non-interest expense decreased $30,000, primarily due to a $34,000
decrease in advertising and a $5,000 decrease in occupancy expense, partially
offset by a $10,000 increase in data processing.
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P.O. Box 820 o 221 West Aztec o Gallup, NM 87301
The increase in the provision for loan losses for the full year and fourth
quarter was primarily the result of an increase in classified loans, an increase
in charge-offs and growth in commercial and commercial real estate loans.
At June 30, 2004, the Company's capital to asset ratio was 7.8%, with assets and
stockholders' equity of $232.1 million and $18.1 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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06/30/04 06/30/03
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Cash and investments 39,625 37,208
Mortgage-backed securities 30,680 38,517
FHLB stock 4,409 4,333
Loans receivable, net 152,431 146,264
Loans held-for-sale 411 132
Premises and equipment 2,514 2,314
Prepaid and other assets 2,017 1,187
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TOTAL ASSETS 232,087 229,955
Deposits 133,860 129,759
Advances from FHLB 73,652 76,642
Other Secured Borrowings 4,815 3,658
Repurchase agreements 157 585
Accrued expenses and other liabilities 1,471 1,567
Stockholders' equity 18,132 17,744
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 232,087 229,955
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
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Three Months Ended Fiscal Year Ended
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06/30/04 6/30/03 06/30/04 06/30/03
Interest earnings 2,955 3,318 12,114 12,743
Interest expense 1,266 1,520 5,469 6,162
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NET INTEREST EARNINGS 1,689 1,798 6,645 6,581
Provision for loan losses 500 237 969 452
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NET INTEREST EARNINGS AFTER
PROVISION FOR LOAN LOSSES 1,189 1,561 5,676 6,129
Non-interest income 233 160 867 623
Non-interest expense 1,156 1,186 4,630 4,370
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EARNINGS BEFORE INCOME TAXES 266 535 1,913 2,382
Provision for income taxes 68 62 563 692
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NET EARNINGS 198 473 1,350 1,690
Weighted average number of 1,132 1,118 1,127 1,115
shares outstanding- basic
Earnings per common share-basic 0.17 0.42 1.20 1.52
Weighted average number of 1,194 1,166 1,183 1,160
shares outstanding- diluted
Earnings per common share-diluted 0.17 0.41 1.14 1.46
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