United States
Securities and Exchange Commission
Washington, D.C. 20549
Form 10-Q
x Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended March 31, 1998
Commission File Number: 0-22269
GS Financial Corp.
(Exact Name of Registrant as Specified in its Charter)
Louisiana 72-1341014
(State or Other Jurisdiction (IRS
Employer ID Number)
of Incorporation or Organization)
3798 Veterans Blvd.
Metairie, LA 70002
(Address of Principal Executive Offices)
Registrant's Telephone Number: (504) 457-6220
Indicate by check whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for
the past 90 days.
x Yes No
------ ------
As of March 31, 1998, there were 3,349,500 shares of the
Registrant's Common stock outstanding.
GS Financial Corp.
Form 10-Q
Three Months ended March 31, 1998
Table of Contents
Part I - Financial Information
Item 1 Financial Statements
Consolidated Balance Sheets
(as of March 31, 1998 and December 31, 1997) 3
Consolidated Statements of Operations
(For the three months ended March 31, 1998 and 1997) 4
Consolidated Statements of Comprehensive Income
(For the three months ended March 31, 1998 and 1997) 5
Consolidated Statements of Equity Capital
(For the three months ended March 31, 1998 and 1997) 6
Consolidated Statements of Cash Flows
(For the three months ended March 31, 1998 and 1997) 7-8
Notes to Consolidated Financial Statements 8
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations 12-16
Item 3 Quantitative and Qualitative Disclosures about
Market Risk 16
Part II Other Information 16
Item 1 Legal Proceedings 16
Item 2 Changes in Securities 16
Item 3 Defaults Upon Senior Securities 16
Item 4 Submission of Matters to a Vote of Security
Holders 16-17
Item 5 Other Information 17
Item 6 Exhibits and Reports on Form 8-K 17
GS Financial Corp.
Consolidated Balance Sheets
(Dollars in thousands)
ASSETS
March 31, 1998 December 31, 1997
-------------- -----------------
Cash and Due from Banks $ 399 $ 376
Interest Bearing Deposits
in Other Institutions 1,187 1,186
Federal Funds Sold 800 1,050
Investment Securities 32,713 27,974
Loans (Net) 55,237 53,588
Mortgage-Backed Securities 26,150 42,721
Collateralized Mortgage
Obligation 8,331 -
Accrued Interest Receivable 619 587
Premises & Equipment 2,639 2,715
Other Assets 1,323 1,199
----------- ----------
TOTAL ASSETS $ 129,398 $ 131,396
=========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Interest Bearing Deposits $ 58,305 $ 56,822
Non-Interest Bearing Dep. 933 899
Borrowings 14,672 16,157
Other Liabilities 1,629 1,471
----------- ----------
TOTAL LIABILITIES 75,539 75,349
STOCKHOLDERS' EQUITY
Common Stock & Additional
Paid in Capital 33,783 33,692
Treasury Stock (1,836) -
Unrealized Gain on Securities
Available for Sale 1,400 1,858
Unearned ESOP Shares (2,424) (2,516)
Unearned RP Trust Stock (2,410) (2,076)
Other Stockholders' Equity 25,346 25,089
---------- ----------
TOTAL STOCKHOLDERS' EQUITY 53,859 56,047
----------- ----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 129,398 $ 131,396
=========== ==========
GS Financial Corp.
Consolidated Statements of Income
(Dollars in Thousands)
For the three Months Ended
March 31, 1998 March 31, 1997
-------------------------------
INTEREST INCOME
Interest & Fees on Loans $ 1,183 $ 980
Interest on Mortgage-Backed
Securities 586 114
Interest & Dividends on
Investment Securities 435 375
Interest on Collateralized
Mortgage Obligations 53 -
Other Interest Income 46 209
------ ------
TOTAL INTEREST INCOME 2,303 1,678
--------- ---------
INTEREST EXPENSE
Interest on Deposits 609 694
Interest on FHLB Advances 226
------- -------
TOTAL INTEREST EXPENSE 835 694
------- -------
NET INTEREST INCOME 1,468 984
PROVISION FOR LOAN LOSSES 19 -
------- -------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 1,449 984
NON-INTEREST INCOME
Gain/(Loss) on Sale of
Investments 259 (5)
Other Income 5 5
------- -------
TOTAL OTHER INCOME 264 -
OTHER EXPENSES (928) (515)
------- -------
INCOME OR LOSS BEFORE TAX
EXPENSE 785 469
INCOME TAX EXPENSE (286) (161)
------- -------
NET INCOME $ 499 $ 308
======= =======
EARNINGS PER SHARE - BASIC $ .16 n/a
=======
EARNINGS PER SHARE - DILUTED $ .16 n/a
=======
GS Financial Corp.
Consolidated Statements of Comprehensive Income
(Dollars in Thousands)
For the three Months Ended
March 31, 1998 March 31, 1997
-------------------------------
Net Income $ 499 $ 308
Other comprehensive income,
Net of income tax:
Unrealized gains/
(losses) on securities 23 (350)
--- ---
Comprehensive income $ 522 $ ( 42)
=== ===
<TABLE>
GS Financial Corp.
Consolidated Statements of Changes in Stockholders' Equity
For The Quarters Ended March 31, 1998, and 1997
(Dollars in Thousands)
<CAPTION>
Unrealized Gain
on Securities
Available for
Sale Net of
Additional Unearned Unearned Applicable Total
Common Paid-In Treasury ESOP RRP Trust Retained Deferred Stockholders'
Stock Capital Stock Shares Stock Earnings Income Tax Equity
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT
DECEMBER 31, 1996 $ - $ - $ - $ - $ - $ 23,862 $ 917 $ 24,779
Net Income-3 months
Ended March 31, 1997 - - - - - 308 - 308
Decrease in Unrealized
Gain on Securities
Available for Sale - - - - - - (352) (352)
BALANCE AT
MARCH 31, 1997 - - - - - $ 24,170 $ 565 $ 24,735
BALANCE AT
DECEMBER 31, 1997 $ 34 $ 33,658 $ - $ (2,516) $ (2,076) $ 25,089 $ 1,858 $ 56,047
Net Income-3 months
Ended March 31, 1998 - - - - - 499 - 499
Decrease in Unrealized
Gain on Securities
Available for Sale - - - - - - (458) (458)
Purchase of Treasury
Stock - - (1,836) - - - - (1,836)
Purchase of RRP Trust
Stock - - - - (334) - - (334)
Retirement of ESOP Debt - 91 - 92 - - - 183
Dividends Paid - - - - - (242) - (242)
BALANCE AT
MARCH 31, 1998 $ 34 $ 33,749 $ (1,836) (2,424) $ (2,410) $ 25,346 $ 1,400 $ 53,859
</TABLE>
GS Financial Corp.
Consolidated Statements of Cash Flows
(Dollars in Thousands)
For the Quarter Ended
March 31,
-----------------------
1998 1997
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 499 $ 308
Adjustments to Reconcile Net Income
to Net Cash Provided
by Operating Activities:
Depreciation 30 32
Discounts/Accretion (Net) 42 (6)
Provision for Losses 19
Dividend on Arm Fund (212)
ESOP Expense 163
Gain on Sale of Investments (Net of Loss) (259)
(Increase) Decrease in Prepaid Income 199
Deferred Income Tax 12 (3)
Changes in Operating Assets and Liabilities:
(Increase)/Decrease in
Accrued Interest Receivable (32) (145)
(Increase)/Decrease in Deferred Charges (31) (40)
Increase/(Decrease) in Accrued Income Tax 195 157
Increase/(Decrease) in Other Liabilities 199 466
(Increase)/Decrease in Other Assets (23) (609)
------ -------
Net Cash Provided by Operating Activities 602 359
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from Redemption of
Mutual Funds 3,749
Purchase of CMO's (9,429)
Proceeds from Maturities of CMO's 1,073
Purchase of Available-for-Sale
Securities (8,565)
Proceeds from Maturities of Available
for Sale Securities 1,000 3,100
Purchases of Mortgage-Backed
Securities (3,918)
Proceeds from Maturities of
Mortgage Backed Securities 3,287 206
Purchase of ARM Mutual Fund (9,100) (21)
Proceeds from Sales of Loans and
Investment Securities 12,646
Net Loan (Originations) or
Principal Repayments (1,649) (605)
Purchases of Premises and Equipment (13) (39)
Non-Cash Dividend - FHLB (13) (10)
---------- -------
Net Cash Provided by Investing Activities 1,551 (9,852)
---------- -------
CASH FLOW FROM FINANCING ACTIVITIES
Net Increase/(Decrease) in Deposits 1,483 2,377
Increase in Stock Subscription
Deposits 45,067
Purchases of Treasury Stock (1,836)
Net Increase/(Decrease) in
Unapplied Loan Payments 2 1
Payment of Cash Stock Dividends (242)
Net Increase/(Decrease) in Advance
Payments by Borrowers for Taxes
and Insurance 32 (54)
Purchase of Stock for Recognition &
Retention Plan (334)
Net Increase/(Decrease) in
FHLB Advances (1,484)
---------- ---------
Net Cash From/(Used in) Financing
Activities (2,379) 47,391
---------- ---------
NET CASH EQUIVALENTS (226) 37,898
CASH AND CASH EQUIVALENTS - December 31, 2,612 7,591
---------- ---------
CASH AND CASH EQUIVALENTS - March 31 $ 2,386 $ 45,489
========== =========
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
GS Financial Corp. (the "Company") was organized and
incorporated under the laws of the State of Louisiana on December 24,
1996, for the purpose of becoming the holding company of Guaranty
Savings and Homestead Association (the "Association"). The Company
filed Form SB-2 with the Securities and Exchange Commission ("SEC")
on December 26, 1996, which, as amended on February 6, 1997, was
declared effective by the SEC on February 11, 1997. The Association
filed an Application for Conversion with the Office of Thrift
Supervision ("OTS") and the Louisiana Office of Financial
Institutions ("OFI"), the two primary regulators of the Association.
The Association received approval for its application of conversion
along with related proxy materials from both the OTS and OFI by
letters dated February 7, 1997 and April 11, 1997 respectively.
Pursuant to the Plan of Conversion, the Company opened its
subscription offering on February 24, 1997 and closed the offering
on March 17, 1997. The Plan of Conversion was approved by the
members of the Association at a Special Meeting held March 25, 1997.
The accompanying financial statements represent the financial
position, results of operations and cash flows of the Company except
for those figures for the three months ended March 31, 1997, which
represent the results of operations and cash flows of the Association
exclusively. The accompanying financial statements were prepared in
accordance with instructions to Form 10-Q, and therefore, do not
include information or footnotes necessary for a complete
presentation of financial position, results of operations and cash
flows in conformity with generally accepted accounting principles.
However, all adjustments, consisting only of normally recurring
accruals, which, in the opinion of management are necessary for a
fair presentation of the financial statements, have been included.
The results of operations for the three months ended March 31,
1998 are not necessarily indicative of the results to be expected for
the year ending December 31, 1998. The unaudited consolidated
financial statements and the notes included herein should be read in
conjunction with the audited financial statements and notes thereto
for the year ended December 31, 1997.
(2) EMPLOYEE STOCK OWNERSHIP PLAN
Effective January 1, 1997 the Association terminated its former
retirement plan or Simplified Employee Pension Plan ("SEP") and
formally adopted an Employee Stock Ownership Plan ("ESOP") for the
benefit of its employees. The ESOP purchased 8% or 275,080 shares of
the common stock in the Conversion, which is the statutory limit.
The purchase of this stock was financed through a loan from the
Company which is secured by the above-mentioned shares. The balance
of that loan was $2.5 million at March 31, 1998. The Company
accounts for the ESOP in accordance with SOP 93-6 and as such
approximately 23,000 shares had been earned by plan participants at
December 31, 1997. The Association bears the cost of this plan as
compensation expense which is based on principal and interest
payments on the corresponding debt as well as the market value of the
stock.
(3) EARNINGS PER SHARE AND PAYMENTS OF DIVIDENDS
Earnings per share are computed using the weighted average
number of shares outstanding. During the first quarter of 1998 the
Company declared and paid dividends in the amount of $.07 per common
share.
(4) STOCK CONVERSION
As of March 31, 1997, the Association had incurred $772,371 in
stock Conversion costs which were netted against the proceeds from
the sale of stock. Of these costs, $493,758 had been accrued but not
paid at March 31, 1997. Also at March 31, 1997, the Association had
received $45.1 million in stock subscription deposits which were
being held in passbook savings deposits.
(5) INVESTMENTS
March 31, 1998 December 31,1997
-------------- -------------
(in thousands)
Amortized Market Amortized Market
AVAILABLE FOR SALE Cost Value Cost Value
US Government and
Agency Obligations $ 11,383 $ 11,669 $ 12,380 $ 12,663
ARM Mutual Fund 19,373 19,336 13,817 13,801
FHLMC Stock 35 1,708 35 1,510
------ ------ ------ ------
Total $ 30,791 $ 32,713 $ 26,232 $ 27,974
====== ====== ====== ======
(6) LOANS
March 31, December 31,
1998 1997
(Dollars in Thousands) -------- -----------
Total Loans $ 55,661 $ 53,995
Allowance for Loan Losses (429) (410)
Net Unearned Fees 5 3
-------- --------
TOTAL NET LOANS $ 55,237 $ 53,588
======== ========
Permanent Mortgages (1-4 family) $ 54,731 $ 53,058
Construction (1-4 family) 74 99
Commercial Mortgages 524 471
Other Mortgages 122 123
Consumer (secured by deposits) 210 244
---------- ----------
TOTAL LOANS $ 55,661 $ 53,995
======== ========
Allowance for Loan Losses
March 31,
---------
1998 1997
(Dollars in thousands) ---- ----
Beginning Balance,Quarter $ 410 $ 382
Provision for Losses 19 0
Loans Charged Off 0 0
----- -------
Ending Balance, Quarter $ 429 $ 382
(7) MORTGAGE BACKED SECURITIES
March 31, December 31,
1998 1997
--------- ------------
(in thousands)
Amortized Market Amortized Market
AVAILABLE FOR SALE Cost Value Cost Value
------ ----- ------ -----
GNMA Fixed Rate (1-4 family) $ 11,012 $ 11,169 $ 13,935 $ 14,414
FHLMC Fixed Rate (1-4 family) 3,409 3,418 10,659 11,202
FNMA Fixed Rate (1-4 family) 11,510 11,563 17,054 17,105
------ ------ ------ ------
TOTAL MORTGAGE BACKED SECURITIES $ 25,931 $ 26,150 $ 41,648 $ 42,721
====== ====== ====== ======
(8) INTEREST BEARING DEPOSITS
March 31, December 31,
1998 1997
--------- -----------
(thousands)
Passbook Savings $ 23,072 $ 22,314
Certificates of Deposits 35,233 34,508
------- ------
TOTAL INTEREST BEARING DEPOSITS $ 58,305 $ 56,822
======= ======
(9) Stock Option Plan
On October 15, 1997, the stockholders approved the adoption of
the GS Financial Corp. 1997 Stock Option Plan for the benefit of
directors, officers and other key employees. Under this plan,
343,850 shares of common stock have been reserved for issuance
pursuant to the exercise of stock options granted under the Stock
Option Plan. The Company has followed all disclosure requirements
set forth in SFAS 123, "Accounting for Stock-Based Compensation." As
of March 31, 1998, 275,076 shares had been granted, however, due to
the 5 year vesting requirement, no options had been earned.
(10) Management Recognition and Retention Plan
On October 15, 1997 the Company established the 1997 Recognition
and Retention Plan and Trust as an incentive to retain personnel of
experience and ability in key positions. Stockholders approved a
total of 137,540 shares of stock to be granted pursuant to the RRP,
or 4% of the common stock issued in the Conversion. Such shares are
to be acquired in open market transactions. Shares are earned over a
5 year vesting period commencing on the date of grant. The cost of
the stock acquisition is being expensed by the Association over the 5
year vesting period as compensation costs. During the three months
ended March 31, 1998 the Association purchased an additional 17,500
shares to bring the total shares purchased to 137,500.
(11) Treasury Stock
On February 18, 1998 the OTS approved a stock repurchase program
by the Company for 171,925 or 5% of the aggregate shares outstanding.
During the three months ended March 31, 1998, the Company acquired
89,000 shares at a total cost of $1.8 million.
Item 2
Management's Discussion and Analysis of
Financial Condition and Results of Operations
GENERAL
The Company's principal business is conducted through its wholly
owned subsidiary, Guaranty Savings and Homestead Association. The
Association, founded in New Orleans, Louisiana in 1937, provides
financial services primarily to individuals. It's principal products
include mortgage loans, passbook savings accounts and certificates of
deposit. The Association also invests in short and long term liquid
investments such as overnight Federal Funds, United States Treasury
and Agency issued securities and mortgage-backed securities.
The following discussion compares the financial condition of GS
Financial Corp. at March 31, 1998 to December 31, 1997 and the
results of operations for the three months ended March 31, 1998 and
1997. The results of operations for the three months ending March
31, 1997 represent that of Guaranty Savings & Homestead Association
alone.
CHANGES IN FINANCIAL CONDITION
At March 31, 1998, the assets of the Company totaled $129.4
million, a decrease of $2.0 million, or 1.5%, from December 31, 1997.
Net loans receivable increased by $1.6 million, or 3.0%, to $55.2
million at March 31, 1998 compared to $53.6 million at December 31,
1997. The increase came primarily in loans on 1-4 family residential
dwellings which increased $1.6 million or 3.0%, from $53.1 million at
December 31, 1997 to $54.7 million at March 31, 1998. This growth
over the three months ended March 31, 1998 was funded through the
liquidation of various short term funds, investments and mortgage-
backed securities.
Mortgage-backed securities decreased $16.5 million, or 38.6%, to
$26.2 million at March 31, 1998 compared to $42.7 million at December
31, 1997. This decrease was due to the sale of $12.4 million in
mortgage-backed securities which netted the Company gains of $.3
million. The decrease was also attributable to paydowns of $3.3
million for the three months ended March 31, 1998. The sale yielded
the Company a profit, while at the same time liquidated funds for
anticipated loan demand. The sale was also facilitated by the rapid
repayment of many of these instruments which was correspondingly
reducing the overall yield of the mortgage-backed security portfolio.
Investment securities increased $4.7 million, or 16.8%, to $32.7
million at March 31, 1998 compared to $28.0 million at December 31,
1997. This increase was the result of the re-investment of funds
from the sale of mortgage-backed securities in an adjustable rate
mortgage-backed mutual fund which acts as a short term investment
vehicle for the Company at yields over that of overnight Fed Funds or
money market rates.
During the three months ended March 31, 1998, the Company
invested $9.4 million of the proceeds from the sale of mortgage-
backed securities in first tranch, Collateralized Mortgage
Obligations. This made funds more readily available to meet high
mortgage loan demand while at the same time providing an investment
instrument with yields over short-term rates but with a maturity of
one year or less.
Interest bearing deposits increased $1.5 million, or 2.6%, to
$58.3 million at March 31, 1998 compared to $56.8 million at December
31, 1997. The increase was approximately 50% in passbook savings and
50% in certificate of deposit accounts.
Equity capital decreased $2.1 million, or 3.7%, to $53.9 million
at March 31, 1998 compared to $56.0 million at December 31, 1997.
The decrease was due to the net effects of $1.8 million in purchases
of Treasury Stock; $.3 million in the purchase of stock by the
Recognition and Retention Plan Trust; $.5 million in net income for
the three months ended March 31, 1998; $.2 million in cash dividends
paid and a $.3 million reduction in unrealized gain on securities
available for sale.
RESULTS OF OPERATIONS
GENERAL
The Company reported net income for the three months ended March
31, 1998 of $.5 million which was an increase of $.2 million compared
to $.3 million for the three months ended March 31, 1997. The
increase was due primarily to an increase in net interest income of
$.5 million, or 55.6%, to $1.4 million for the three months ended
March 31, 1998 compared to $.9 million for the three months ended
March 31, 1997.
INTEREST INCOME
Total interest income increased $.6 million, or 35.3%, to $2.3
million for the three months ended March 31, 1998 compared to $1.7
million for the three months ended March 31, 1997. This was due
mostly to increases in interest on mortgage-backed securities and
loans where increases have occurred in the balances of these assets
whose growth was funded with proceeds from the sale of common stock
and borrowings from the FHLB.
Interest on loans increased $.2 million, or 20.0%, to $1.2
million for the three months ended March 31, 1998 compared to $1.0
million for the three months ended March 31, 1997. This was due
primarily to growth in the loan portfolio. The average balance of
the loan portfolio for the three months ended March 31, 1998 was
$54.3 million (net) compared to $44.4 million (net) for the three
months ended March 31, 1997. The average yield on loans for the
three months ended March 31, 1997 was 8.83% (annualized) compared to
8.71% (annualized) for the three months ended March 31, 1998.
Interest on mortgage-backed securities increased $.5 million, or
500.0%, to $.6 million for the three months ended March 31, 1998
compared to $.1 million for the three months ended March 31, 1997.
This was primarily due to the large increase in the average balance
of mortgage-backed securities. For the three months ending March 31,
1998 the average balance was $36.8 million which for the same period
in 1997 the average balance was $7.8 million. This increase in
investment was funded partly by a portion of the $30.8 million in
proceeds from the sale of common stock as well FHLB Advances. The
average annualized yield of mortgage-backed securities was 6.4% for
the three months ending March 31, 1998 and 5.9% for the same period
in 1997.
Other interest income consists mainly of interest income on
overnight Fed Funds sold and interest bearing deposits in other
financial institutions. Other interest income decreased $.15 million
or 75.0%, from $.2 million for the three months ending March 31,1997
compared to $.05 million for the three months ending March 31, 1998.
This was due to the large investment in overnight Fed Funds for the
first quarter 1997 due to the influx of stock subscription funds
beginning in February, 1997. The average balance in Fed Funds was
$12.1 million for the three months ending March 31, 1997 and $1.7
million for the same period in 1998.
PROVISION FOR LOAN LOSSES
The Company had a provision for loan loss for the quarter ended
March 31, 1998 of $.02 million compared to no provision for the three
months ending March 31, 1997. The provision in 1998 was due to the
growth of the loan portfolio to keep the general valuation allowance
at a level deemed appropriate by management based on a quarterly
review. Such review considers each individual loan's performance and
condition of the underlying collateral. Management targets a certain
percentage of the entire mortgage portfolio given the current
economic conditions at which the general valuation allowance is
deemed adequate. The Company employs the reserve method of
accounting for its general and specific valuation allowances for loan
losses.
INTEREST EXPENSE
The Company's total interest expense increased $.1 million, or
14.3%, to $.8 million for the three months ended March 31, 1998
compared to $.7 million for the three months ended March 31, 1997.
The increase was the net effect of additional interest expense of $.2
million on advances from the Federal Home Loan Bank and a decrease of
$.1 million on interest bearing deposits. The cost of interest
bearing deposits decreased from 4.5% (annualized) for the three
months ending March 31, 1997 to 4.2% (annualized) for the same period
in 1998. This decrease was due to a reduction in rates paid on
passbook savings accounts. The Company's overall cost of funds
including advances from the Federal Home Loan Bank was 4.6% for the
three months ended March 31, 1998 compared to 4.5% for the three
months ended March 31, 1997.
OTHER EXPENSES
Other expenses for the three months ended March 31, 1998 were
$.9 million compared to $.5 million for the three months ended March
31, 1997. This represents an increase of $.4 million or 80.0% from
March 31, 1997 to March 31, 1998. Salaries and employee benefits
increased $.3 million, or 75.0% to $.7 million for the three months
ended March 31, 1998 compared to $.4 million for the three months
ended March 31, 1997. This was due to adoption and implementation of
the Employee Stock Ownership Plan (ESOP) and Recognition and
Retention Plan and Trust.
LIQUIDITY AND CAPITAL RESOURCES
Liquidity measures the Company's ability to meet its short-term
obligations with ready cash. The Company is required under Federal
regulations to maintain certain levels of "liquid" investments,
specifically not less than 5% of its average daily balance of net
withdrawable deposit accounts. For its liquid investments, the
Company utilizes a combination of cash on hand, certain money market
investments and deposits in other Financial institutions as well as
U.S. Government and Agency issued securities. As of March 31, 1998,
the Company's liquidity stood at 47.5% or $31.0 million in excess of
the minimum requirement.
The Company is required to maintain regulatory capital
sufficient to meet all three of the regulatory capital requirements,
those being tangible capital (1.5%), core capital (3.0%), and risk-
based capital (8.0%). As of March 31, 1998, the Company's tangible
and core capital amounted to $38.8 million or 34.17% of adjusted
total assets, while the Company's risk-based capital was $39.0
million or 79.59% of total adjusted risk-weighted assets.
Item 3 - Quantitative and Qualitative Disclosures about Market Risk
Quantitative and qualitative disclosures about market risk are
presented at December 31, 1997 in the Company's Annual Report on Form
10-K, filed with the SEC on March 30, 1998. Management believes
there have been no material changes in the Company's market risk
since December 31, 1997.
Part II - Other Information
Item 1 - Legal Proceedings
There are no matters required to be reported under this item.
Item 2 - Changes in Securities
There are no matters required to be reported under this item.
Item 3 - Defaults Upon Senior Securities
There are no matters required to be reported under this item.
Item 4 - Submission of Matters to a Vote of Security Holders:
On March 30, 1998, the Company commenced a proxy solicitation of
its stockholders with respect to the Annual Meeting of Stockholders
held on April 28, 1998. There were two issues considered at the
Annual Meeting, the election of three directors and the ratification
of the appointment of the Company's independent auditors. Both
issues were passed by the vote reflected below.
Approval of the election of Victor Kirschman to a three year term as
director.
For Withheld
--- --------
1,764,883 7,410
Approval of the election of Mannie D. Paine, Jr. to a three year term
as director.
For Withheld
--- --------
1,774,883 7,410
Approval of the election of Donald C. Scott to a three year term as
director.
For Withheld
--- --------
1,780,918 1,375
Approval to ratify the appointment of LaPorte, Sehrt, Romig and Hand
as the Company's independent auditors.
For Against Abstained
--- ------- ---------
1,781,283 450 560
Item 5 - Other Information
There are no matters required to be reported under this item.
Item 6 - Exhibits and Reports on Form 8-K:
(a) Exhibits
27.0 Financial Data Schedule
(b) No Form 8-K reports were filed during the quarter.
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934,
the registrant has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
GS FINANCIAL CORP.
DATE: MAY 12, 1998 BY:/s/Donald C. Scott
------------------
DONALD C. SCOTT, CHAIRMAN OF THE
BOARD, PRESIDENT AND
CHIEF EXECUTIVE OFFICER
DATE: MAY 12, 1998 BY:/s/Glenn R. Bartels
-------------------
GLENN R. BARTELS
CONTROLLER
16
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 399
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0
0
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</TABLE>
