Great American Bancorp : 2020 Q2 Earnings

NEWS RELEASE

FOR IMMEDIATE RELEASE

July 21, 2020

Contact: Mr. Patrick McWilliams

Chief Financial Officer and Investor Relations [phone]

Great American Bancorp, Inc. Announces Earnings for Second 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 $569 thousand for the six months ended June 30, 2020, which is a decrease of $395 thousand, or 41.0% from $964 thousand reported for the six months ended June 30, 2019. Basic and fully diluted earnings per share were $1.34 for the six months ended June 30, 2020 compared to $2.24 for the same period in 2019. The return on average assets ("ROA") and the return on average equity ("ROE") were 0.62% and 6.20% for the six months ended June 30, 2020, decreasing from 1.13% ROA and 10.80% ROE for the same period in 2019.

Net interest income decreased $578 thousand in the first six months of 2020 compared to the same period in 2019 due to a $485 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 $52 thousand in the first six months of 2020, from $1.856 million for the first six months of 2019 to $1.908 million in the first six 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 $360 thousand in the first six months of 2020 compared to the same period in 2019 due to the Company selling $21.283 million in loans during the first six months of 2020 compared to $6.781 million in loans during the same period in 2019. Customer service fees were down $75 thousand during the first six months of 2020 compared to the same period in 2019 due to less overdraft fess as a result of customers carrying higher average balances.

1

Total noninterest expense increased $28 thousand, from $3.617 million for the first six months in 2019 to $3.645 million for the same period in 2020, primarily due to an increase in professional fees and FDIC deposit insurance expense. During the first six 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 onetime credit was recorded in the first six months of 2019. In addition, the Company incurred additional professional fees during the first six months of 2020 related to collection efforts regarding nonperforming loans.

Net income for the three months ended June 30, 2020 was $289 thousand, which is a decrease of $117 thousand from $406 thousand reported for the same period in 2019 primarily due to a decrease in interest income and customer service fees offset by an increase in net gain on sales of loans. Interest income decreased $396 thousand in the three months ended June 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 $66 thousand in the three months ended June 30, 2020 compared to the same period in 2019 due to fewer overdraft fees charged to customers. Net gain on sales of loans increased $315 thousand in the three months ended June 30, 2020 compared to the same period in 2019 due to the Company selling $17.646 million in loans during the three months ended June 30, 2020 compared to $5.240 million in loans during the same period in 2019.

Total assets at June 30, 2020 were $198.229 million compared to $172.678 million at December 31, 2019, increasing $25.551 million. Total net loans, including loans held for sale, were $100.576 million at June 30, 2020, increasing $5.254 million or 5.51% from total net loans of $95.322 million at December 31, 2019. Total deposits increased $21.402 million, from $150.276 million at December 31, 2019 to $171.678 million at June 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."

###

GTPS-pr-2020-04

2

GREAT AMERICAN BANCORP, INC. AND SUBSIDIARY

Consolidated Balance Sheets

June 30, 2020 and December 31, 2019

(in thousands, except share data)

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

		June 30,		December 31,
		2020		2019
Assets
Cash and due from banks	$	3,849	$	4,300
Interest-bearing deposits		86,415		65,596
Cash and cash equivalents		90,264		69,896
Securities available for sale		82		87
Securities held to maturity		9		10
Federal Home Loan Bank stock, at cost		258		258
Loans held for sale		3,146		647
Loans, net of allowance for loan losses of $939 in 2020 and $944 in 2019		97,430		94,675
Premises and equipment, net		4,041		3,852
Goodwill		485		485
Other real estate owned		62		295
Other assets		2,452		2,473
Total assets	$	198,229	$	172,678
Liabilities and Stockholders' Equity
Liabilities
Deposits
Noninterest-bearing	$	44,771	$	34,241
Interest-bearing		126,907		116,035
Total deposits		171,678		150,276
Advances from borrowers for taxes and insurance		222		253
Federal Home Loan Bank advance		4,000		-
Other liabilities		3,730		3,744
Total liabilities		179,630		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		34,030		33,605
Accumulated other comprehensive income		(339)		(339)
Common stock in treasury, at cost (2020 - 580,437 shares; 2019 - 572,963 shares)		(18,412)		(18,181)
Total stockholders' equity		18,599		18,405
Total liabilities and stockholders' equity	$	198,229	$	172,678

3

GREAT AMERICAN BANCORP, INC. AND SUBSIDIARY

Consolidated Statements of Income

Six Months Ended June 30, 2020 and 2019

(unaudited, in thousands, except share data)

Interest and Dividend Income		2020		2019
Loans	$	2,344	$	2,454
Securities		2		3
Dividends on Federal Home Loan Bank stock		3		3
Deposits with financial institutions and other		238		723
Total interest and dividend income		2,587		3,183
Interest Expense
Deposits		37		55
Other		2		2
Total interest expense		39		57
Net Interest Income		2,548		3,126
Provision (Credit) for Loan Losses		-		-
Net Interest Income After Provision (Credit) for Loan Losses		2,548		3,126
Noninterest Income
Insurance sales commissions		910		987
Customer service fees		205		280
Other service charges and fees		167		180
Net gain on sales of loans		510		150
Loan servicing fees, net of amortization of mortgage servicing rights		26		69
Net gain (loss) on sale of other real estate owned		(7)		98
Other		97		92
Total noninterest income		1,908		1,856
Noninterest Expense
Salaries and employee benefits		2,201		2,214
Occupancy expense		300		322
Equipment expense		399		398
Professional fees		157		123
Marketing expense		99		113
Printing and office supplies		57		59
Directors and committee fees		88		89
Other real estate owned expense, net		11		10
FDIC deposit insurance expense		23		(22)
Other		310		311
Total noninterest expense		3,645		3,617
Income Before Income Taxes		811		1,365
Income tax expense		242		401
Net Income	$	569	$	964
Earnings per share, basic and diluted	$	1.34	$	2.24
Dividends Declared per Share	$	0.34	$	0.34

4

GREAT AMERICAN BANCORP, INC. AND SUBSIDIARY

Consolidated Statements of Income

Three Months Ended June 30, 2020 and 2019

(unaudited, in thousands, except share data)

Interest and Dividend Income		2020		2019
Loans	$	1,199	$	1,241
Securities		1		2
Dividends on Federal Home Loan Bank stock		2		2
Deposits with financial institutions and other		20		373
Total interest and dividend income		1,222		1,618
Interest Expense
Deposits		16		28
Other		1		1
Total interest expense		17		29
Net Interest Income		1,205		1,589
Provision (Credit) for Loan Losses		-		-
Net Interest Income After Provision (Credit) for Loan Losses		1,205		1,589
Noninterest Income
Insurance sales commissions		339		356
Customer service fees		80		146
Other service charges and fees		84		95
Net gain on sales of loans		427		112
Loan servicing fees, net of amortization of mortgage servicing rights		(4)		34
Net gain (loss) on sale of other real estate owned		-		-
Other		47		41
Total noninterest income		973		784
Noninterest Expense
Salaries and employee benefits		1,057		1,066
Occupancy expense		148		160
Equipment expense		203		201
Professional fees		77		62
Marketing expense		43		63
Printing and office supplies		25		27
Directors and committee fees		44		44
Other real estate owned expense, net		1		4
FDIC deposit insurance expense, net		12		11
Other		154		160
Total noninterest expense		1,764		1,798
Income Before Income Taxes		414		575
Income tax expense		125		169
Net Income	$	289	$	406
Earnings per share, basic and diluted	$	0.69	$	0.95
Dividends Declared per Share	$	0.17	$	0.17

5

GREAT AMERICAN BANCORP, INC. AND SUBSIDIARY

Selected Financial Data

(unaudited, in thousands, except share data)
					As of		As of
					June 30,		December 31,
					2020		2019
Total assets		$	198,229	$	172,678
Total loans, net				100,576		95,322
Loan loss reserve				939		944
Non-performing loans				3,435		3,594
Non-performing loans to total assets				1.73%		2.08%
Allowance for loan losses to total non-performing loans				27.34%		26.27%
Allowance for loan losses to total assets				0.47%		0.55%
Other real estate owned				62		295
Investment securities				91		97
Total deposits				171,678		150,276
Checking deposits				92,785		80,183
Money market deposits				28,254		23,306
Savings deposits				37,962		33,470
Certificates of deposit				12,677		13,317
Total stockholders' equity				18,599		18,405
		Three Months	Three Months	Six Months		Six Months
		Ended	Ended	Ended		Ended
		June 30, 2020	June 30, 2019	June 30, 2020		June 30, 2019
Net interest margin (annualized)	2.65%	3.92%		2.94%		3.90%
Return on average assets (annualized)	0.60%	0.94%		0.62%		1.13%
Return on average equity (annualized)	6.29%	8.96%		6.20%		10.80%

6