Great American Bancorp : 2020 Q3 Earnings

NEWS RELEASE

FOR IMMEDIATE RELEASE

October 20, 2020

Contact: Mr. Patrick McWilliams

Chief Financial Officer and Investor Relations [phone]

Great American Bancorp, Inc. Announces Earnings for Third Quarter 2020

Champaign, Illinois - Great American Bancorp, Inc. (OTC Pink®/GTPS), the holding company for First Federal Savings Bank of Champaign-Urbana, reported net income of $1.004 million for the nine months ended September 30, 2020, which is a decrease of $302 thousand, or 23.1% from $1.306 million reported for the nine months ended September 30, 2019. Basic and fully diluted earnings per share were $2.38 for the nine months ended September 30, 2020 compared to $3.05 for the same period in 2019. The return on average assets ("ROA") and the return on average equity ("ROE") were 0.71% and 7.24% for the nine months ended September 30, 2020, decreasing from 1.02% ROA and 9.61% ROE for the same period in 2019.

Net interest income decreased $848 thousand in the first nine months of 2020 compared to the same period in 2019 due to a $795 thousand decrease in interest income from deposits with financial institutions and other, which are mostly overnight deposits maintained at the Federal Reserve Bank and the Federal Home Loan Bank ("FHLB"). Interest income earned on deposits with financial institutions and other was lower in 2020 due to the Federal Open Market Committee ("FOMC") decreasing the Federal funds target rate three times in 2019 (August, September, and October), as well as two times in March 2020 as a result of the COVID-19 pandemic.

Noninterest income increased $443 thousand in the first nine months of 2020, from $2.700 million for the first nine months of 2019 to $3.143 million in the first nine months of 2020. The increase in noninterest income is due to the increase in net gains on sales of loans offset by a decrease in most other categories. Net gain on sales of loans increased $840 thousand in the first nine months of 2020 compared to the same period in 2019 due to the Company selling $37.524 million in loans during the first nine months of 2020 compared to $12.382 million in loans during the same period in 2019. Customer service fees decreased $129 thousand during the first nine months of 2020 compared to the same period in 2019 due to less overdraft fess as a result of customers carrying higher average balances.

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Total noninterest expense decreased $29 thousand, from $5.469 million for the first nine months in 2019 to $5.440 million for the same period in 2020, primarily due to a decrease in salaries and employee benefits, offset by an increase in professional fees and FDIC deposit insurance expense. Salaries and employee benefits decreased $57 thousand due to reduced part-time employee hours as a result of the Bank's lobbies being closed. During the first nine months of 2019, the Bank was notified by the FDIC that small banks (total consolidated assets of less than $10 billion) were awarded assessment credit for the portion of their assessment that contributed to the growth in the reserve ratio. The one-time credit was recorded in the first nine months of 2019. In addition, the Company incurred additional professional fees during the first nine months of 2020 related to collection efforts regarding nonperforming loans.

Net income for the three months ended September 30, 2020 was $435 thousand, which is an increase of $93 thousand from $342 thousand reported for the same period in 2019 primarily due to an increase in net gain on sales of loans offset by a decrease in interest income and customer service fees. Net interest income decreased $270 thousand in the three months ended September 30, 2020 compared to the same period in 2019 primarily due to the decrease in the Federal funds target rate as a result of the COVID-19 pandemic. Customer service fees decreased $54 thousand in the three months ended September 30, 2020 compared to the same period in 2019 due to fewer overdraft fees charged to customers. Net gain on sales of loans increased $480 thousand in the three months ended September 30, 2020 compared to the same period in 2019 due to the Company selling $16.240 million in loans during the three months ended September 30, 2020 compared to $5.602 million in loans during the same period in 2019.

Total assets at September 30, 2020 were $199.131 million compared to $172.678 million at December 31, 2019, increasing $26.453 million. Total net loans, including loans held for sale, were $93.774 million at September 30, 2020, decreasing $1.548 million or 1.62% from total net loans of $95.322 million at December 31, 2019. Total deposits increased $22.337 million, from $150.276 million at December 31, 2019 to $172.613 million at September 30, 2020.

First Federal Savings Bank of Champaign-Urbana is headquartered in Champaign, Illinois, and operates through its administrative/branch office in Champaign and through one additional full service branch located in Urbana, Illinois. The Bank also provides full service brokerage activities through a third-partybroker-dealer. The Bank's subsidiary, Park Avenue Service Corporation, sells insurance products through the GTPS Insurance Agency. The Bank's deposits are insured by the Federal Deposit Insurance Corporation.

This earnings report may contain certain forward-looking statements which are based on management's current expectations regarding economic, legislative, and regulatory issues that may impact the Company's earnings in future periods. Factors that could cause future results to vary materially from current management expectations include, but are not limited to, general economic conditions, changes in interest rates, deposit flows, real estate values, and competition, changes in accounting principles, policies, or guidelines, changes in legislation or regulation, and other economic, competitive, governmental, regulatory and technological factors affecting the Company's operations, pricing, products and services. Great American Bancorp, Inc. stock is traded on OTC Pink®, under the symbol, "GTPS."

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GTPS-pr-2020-05

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GREAT AMERICAN BANCORP, INC. AND SUBSIDIARY

Consolidated Balance Sheets

September 30, 2020 and December 31, 2019

(in thousands, except share data)

(unaudited except for amounts reported as of December 31, 2019)

	September 30,		December 31,
		2020		2019
Assets
Cash and due from banks	$	4,690	$	4,300
Interest-bearing deposits		92,269		65,596
Cash and cash equivalents		96,959		69,896
Securities available for sale		80		87
Securities held to maturity		9		10
Federal Home Loan Bank stock, at cost		258		258
Loans held for sale		3,311		647
Loans, net of allowance for loan losses of $990 in 2020 and $944 in 2019		90,463		94,675
Premises and equipment, net		4,071		3,852
Goodwill		485		485
Other real estate owned		946		295
Other assets		2,549		2,473
Total assets	$	199,131	$	172,678
Liabilities and Stockholders' Equity
Liabilities
Deposits
Noninterest-bearing	$	43,793	$	34,241
Interest-bearing		128,820		116,035
Total deposits		172,613		150,276
Advances from borrowers for taxes and insurance		54		253
Federal Home Loan Bank advance		4,000		-
Other liabilities		3,614		3,744
Total liabilities		180,281		154,273
Stockholders' Equity
Preferred stock, $0.01 par value;
1,000,000 shares authorized; none issued		-		-
Common stock, $0.01 par value;
1,000,000 shares authorized and issued		10		10
Additional paid-in capital		3,310		3,310
Retained earnings		34,392		33,605
Accumulated other comprehensive income		(339)		(339)
Common stock in treasury, at cost (2020 - 584,335 shares; 2019 - 572,963 shares)		(18,523)		(18,181)
Total stockholders' equity		18,850		18,405
Total liabilities and stockholders' equity	$	199,131	$	172,678

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GREAT AMERICAN BANCORP, INC. AND SUBSIDIARY

Consolidated Statements of Income

Nine Months Ended September 30, 2020 and 2019

(unaudited, in thousands, except share data)

		2020		2019
Interest and Dividend Income
Loans	$	3,564	$	3,648
Securities		3		4
Dividends on Federal Home Loan Bank stock		5		4
Deposits with financial institutions and other		260		1,055
Total interest and dividend income		3,832		4,711
Interest Expense
Deposits		53		83
Other		3		4
Total interest expense		56		87
Net Interest Income		3,776		4,624
Provision (Credit) for Loan Losses		50		-
Net Interest Income After Provision (Credit) for Loan Losses		3,726		4,624
Noninterest Income
Insurance sales commissions		1,314		1,375
Customer service fees		309		438
Other service charges and fees		261		273
Net gain on sales of loans		1,102		262
Loan servicing fees, net of amortization of mortgage servicing rights		31		92
Net gain (loss) on sale of other real estate owned		(11)		97
Other		137		163
Total noninterest income		3,143		2,700
Noninterest Expense
Salaries and employee benefits		3,269		3,326
Occupancy expense		467		480
Equipment expense		608		597
Professional fees		229		183
Marketing expense		130		168
Printing and office supplies		84		83
Directors and committee fees		132		133
Other real estate owned expense, net		24		26
FDIC deposit insurance expense		39		(10)
Other		458		483
Total noninterest expense		5,440		5,469
Income Before Income Taxes		1,429		1,855
Income tax expense		425		549
Net Income	$	1,004	$	1,306
Earnings per share, basic and diluted	$	2.38	$	3.05
Dividends Declared per Share	$	0.51	$	0.51

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