<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 June 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _________ to _____________
Commission File Number 0-22559
GSB FINANCIAL CORPORATION
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 06-1481061
- ---------------------------- -----------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification
organization) Number)
One South Church Street, Goshen, New York 10924
- ------------------------------------------- ----------
(Address of principal executive officer) (Zip Code)
Registrant's telephone number, including area code: (914) 294-6151
--------------
Indicate by check mark 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. Yes [ ] No [X]
As of June 30, 1997, there were no shares of the Registrant's common
stock issued and outstanding.
<PAGE>
GSB FINANCIAL CORPORATION
INDEX
Page
Number
------
PART I. FINANCIAL INFORMATION
Item 1. 1
Item 2. 1
PART II. OTHER INFORMATION 2
SIGNATURES 3
i
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PART I. FINANCIAL INFORMATION
GSB Financial Corporation (the "Holding Company") was incorporated
under the laws of the State of Delaware for the purpose of becoming the savings
and loan holding company of Goshen Savings Bank (the "Bank") in connection with
the Bank's conversion from a federally chartered mutual savings bank to a
federally chartered stock savings bank (the "Conversion"), pursuant to its Plan
of Conversion. The Plan of Conversion was approved by the Bank's members at a
special meeting held on June 24, 1997. The consummation of the Conversion was
subject to, among other things, the sale of the minimum number of shares offered
and compliance with the conversion approval letter of the Office of Thrift
Supervision. The Holding Company commenced a Subscription Offering of its shares
of common stock on May 14, 1997, in connection with the Conversion. The
Subscription Offering period closed on June 20, 1997. The Conversion was
consummated on July 9, 1997 and 2,248,250 shares of common stock of the Holding
Company were sold in the Subscription Offering at a purchase price of $10.00 per
share.
At June 30, 1997, the Holding Company had no material liabilities and
had not conducted any material operations.
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
-----------------
None.
Item 2. Changes in Securities
---------------------
None.
Item 3. Defaults Upon Senior Securities
-------------------------------
None.
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
None.
Item 5. Other Information
-----------------
Included herein as Exhibit 99 is a news release issued by the
Registrant setting forth certain information regarding financial results of
Goshen Savings Bank for the three and nine month periods ended June 30, 1997,
which were prior to the consummation of the Registrant's offering of common
stock.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
a) Exhibits
Exhibit No. Description
27 Financial Data Schedule as of June 30, 1997.
99 News Release
b) Reports on Form 8-K
None.
3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
GSB FINANCIAL CORPORATION
Date: August 13, 1997 Clifford E. Kelsey, Jr.
--------------------------------
Clifford E. Kelsey, Jr.
President
and Chief Executive Officer
(Principal Executive Officer)
Date: August 13, 1997 Richard C. Durland
----------------------------------
Richard C. Durland
Executive Vice President and Treasurer
(Principal Accounting Officer)
Date: August 13, 1997 Stephen W. Dederick
----------------------------------
Stephen W. Dederick
Chief Financial Officer
(Principal Financial Officer)
4
<PAGE>
GSB FINANCIAL CORPORATION
FORM 10-Q
EXHIBIT INDEX
Exhibit No. Description
27 Financial Data Schedule as of June 30, 1997.
99 New Release
5
<TABLE> <S> <C>
<ARTICLE> 9
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> JUN-30-1997
<CASH> 0
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 0
<ALLOWANCE> 0
<TOTAL-ASSETS> 0
<DEPOSITS> 0
<SHORT-TERM> 0
<LIABILITIES-OTHER> 0
<LONG-TERM> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITIES-AND-EQUITY> 0
<INTEREST-LOAN> 0
<INTEREST-INVEST> 0
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 0
<INTEREST-DEPOSIT> 0
<INTEREST-EXPENSE> 0
<INTEREST-INCOME-NET> 0
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 0
<INCOME-PRETAX> 0
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<YIELD-ACTUAL> 0
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 0
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 0
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
<PAGE>
EXHIBIT 99 - NEWS RELEASE
NEWS RELEASE
FOR IMMEDIATE RELEASE
July 31, 1997
For Additional Information Contact
Mr. Stephen W. Dederick
Chief Financial Officer
GSB Financial Corporation
One South Church Street
Goshen, New York 10924
(914) 294-6151
GSB Financial Corporation Announces
Third Quarter Results
Goshen, New York-, July 31, 1997 -- GSB Financial Corporation (NASDAQ.- GOSB)
announced earnings of $125,000 for the quarter ended June 30, 1997 (the third
quarter of its fiscal year) as compared to $113,000 for the third quarter of
1996. For the nine months ended June 30, 1997, net income totaled $524,000 as
compared to $319,000 for the nine months ended June 30, 1996. GSB Financial
Corporation (the "Company"), the holding company for Goshen Savings Bank (the
"Bank"), completed its initial public offering of 2,248,250 shares of its common
stock at a price of $10.00 per share on July 9, 1997.
The Bank's total assets amounted to $154.6 million at June 30, 1997 as compared
to $96.3 million at September 30, 1996. The increase was caused primarily by the
receipt of stock subscriptions for the Company's initial public offering. The
offering expired on June 20, 1997 but the excess subscriptions were not returned
until after the July 9 closing. Federal funds sold increased by $55.6 million to
$57.3 million at June 30, 1997 as stock subscriptions were temporarily invested
in federal funds pending the closing. Loans, net increased $5.2 million and
securities available for sale decreased by $2.9 million at June 30, 1997
compared to September 30, 1996 levels. Deposits totaled $96.5 million at June
30, 1997 compared to $83.4 million at September 30, 1996. The increase in
deposits was also caused principally by the Company's stock offering, as some
subscribers deposited funds into existing accounts at the Bank to pay for their
subscriptions.
Total equity increased to $12.5 million at June 30, 1997, from $11.7 million at
September 30, 1996. The increase in equity resulted from the retention of
$524,000 of net income for the first nine months of fiscal 1997 and an increase
of $274,000 in the net unrealized gain on securities available for sale.
Interest Income was $1.7 million for the third quarter of 1997 as compared to
$1.5 million for the third quarter of 1996. For the nine months ended June 30,
1997, interest income amounted to $5.0 million as compared to $4.6 million for
the same period in 1996. These increases were primarily due to an increase in
interest earned on loans caused by both volume and rate increases. To a lesser
extent, interest income increased due to an increase in the volume of federal
funds sold as the Company invested stock subscriptions received.
Interest Expense was $850,000 for the third quarter of 1997 as compared to
$802,000 for the same quarter in 1996. The increase in the third quarter was
mainly due to interest expense on the stock subscriptions. For the nine months
ended June 30, 1997, interest expense totaled $2.4 million as compared to $2.6
million for the same period in 1996.
Non-Interest Income was $65,000 for the third quarter of 1997 as compared to
$56,000 the same quarter in 1996. For the nine months ended June 30, 1997,
non-interest income totaled $282,000 as compared to $410,000 for the same period
in 1996. The decrease of $128,000 was primarily due to a decrease of $114,000 in
realized gains on securities and a decease of $26,000 on capital gain
distributions on a mutual fund investment, partially offset by an increase of
$17,000 in other income.
Non-Interest Expense was $723,000 for the third quarter of 1997, compared to
$614,000 for the comparable quarter in 1996. For the nine months ended June 30,
1997, non-interest expense amounted to $2.1 million as compared to $1.9 million
for the same period in 1996. These increases were primarily caused by an
increase in salaries and employee benefits expense due in substantial part to
normal salary increases, the effect of promotions, and a slight increase in
employees due to the opening of a branch. The nine month periods were also
affected by a $50,000 expense recorded during the second quarter of fiscal 1997
for costs related to the removal of environmental contamination on property
adjoining the Bank's main office.
Goshen Savings Bank is a federally-chartered stock savings bank operating out of
two offices in Goshen, New York.
Consolidated balance sheets and statements of income are attached.
<PAGE>
GSB Financial Corporation and Subsidiary
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands except shares and per share amounts)
<TABLE>
<CAPTION>
For the Quarter Ended For the Nine Months Ended
June 30, June 30,
---------------------- --------------------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
INTEREST INCOME
Loans $1,217 $1,085 $3,559 $3,187
Federal funds sold 119 34 167 109
Securities 291 317 981 1,051
Mortgage-backed securities 101 113 317 282
------ ------ ------ ------
Total interest income 1,728 1,549 5,024 4,629
INTEREST EXPENSE
Deposit accounts 808 802 2,331 2,574
Other borrowings -- -- 24 --
Stock subscription interest
expense 42 -- 42 --
------ ------ ------ ------
Total Interest expense 850 802 2,397 2,574
Net interest income 878 747 2,627 2,055
Provision for loan losses 10 -- 10 14
------ ------ ------ ------
Net interest income after
provision for loan losses 868 747 2,617 2,041
NON-INTEREST INCOME
Service charges on deposit
accounts 33 36 104 109
Other income 31 20 84 67
Net realized gains on
securities 1 -- 1 115
Capital gains distributions -- -- 93 119
------ ------ ------ ------
Total non-interest income 65 56 282 410
NON-INTEREST EXPENSE
Salaries and employee benefits 421 344 1,168 1,071
Occupancy and equipment 105 82 227 222
Other non-interest expense 197 188 702 628
------ ------ ------ ------
Total non-interest expense 723 614 2,097 1,921
------ ------ ------ ------
Income before income taxes 210 189 802 530
Income tax expense 85 76 278 211
------ ------ ------ ------
Net income $ 125 $ 113 $ 524 $ 319
====== ====== ====== ======
</TABLE>
<PAGE>
GSB Financial Corporation and Subsidiary
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands except shares and per share amounts)
June 30, September 30,
1997 1996
-------- -------------
ASSETS
Cash and due from banks $ 2,733 $ 2,964
Federal funds sold 57,300 1,720
Securities available for sale 20,228 23,081
Mortgage-backed securities available
for sale 578 --
Mortgage-backed securities held to
maturity (estimated market values of
$6,114 and $6,529 at June 30, 1997 and
September 30, 1996 respectively) 6,011 6,474
Loans, net 63,901 58,727
Banking house and equipment 2,275 2,261
Accrued interest receivable 647 665
Prepaid expenses and other assets 976 432
-------- --------
Total assets $154,649 $ 96,324
======== ========
LIABILITIES AND EQUITY
Liabilities
Deposits $ 96,511 $ 83,442
Mortgagors' escrow deposits 219 54
Stock subscription proceeds 44,356 --
Accrued expenses and other liabilities 1,018 1,081
Other borrowings -- --
Total liabilities $142,104 $ 84,577
Equity
Retained earnings $ 12,128 $ 11,604
Net unrealized gain on securities
available for sale 417 143
-------- --------
Total equity $ 12,545 $ 11,747
-------- ========
Total liabilities and equity $154,649 $ 96,324
======== ========
