Greenville, Ohio, November 12, 2009. Greenville Federal Financial Corporation (the “Corporation”)
(OTCBB: GVFF), today announced the Corporation’s financial results for the first fiscal quarter.
For the quarter ended September 30, 2009, the Corporation reported net income of $62,000, or $0.03
per diluted share, compared to a net loss of $1.2 million, or $0.56 per share, for the same quarter
in 2008, and a net loss of $78,000, or $0.04 per diluted share, for the quarter ended June 30,
During the first quarter of fiscal year 2009, the Corporation incurred a non-cash impairment charge
on investment securities of approximately $1.4 million resulting from an investment by the
Corporation’s subsidiary, Greenville Federal, in the AMF Ultra Short Mortgage Fund (the “Fund”).
The Fund stabilized in the second half of fiscal year 2009, and no impairment charge was necessary
in either of the two quarters ended September 30, 2009. At September 30, 2009, the Corporation’s
investment in the Fund ended in an unrealized gain position of $462,000. The change in performance
of the Fund is the primary reason for the quarter-to-quarter improvement in net income. As of
September 30, 2009 Greenville Federal’s investment in the Fund had a fair market value of $12.0
In addition to the impairment charge, the increase in net income from the first quarter of fiscal
year 2009 to the same quarter of fiscal year 2010 reflected a decrease of $40,000, or 74.1%, in
federal income taxes, partially offset by an increase of $70,000, or 100.0%, in provision for
losses on loans, a $26,000, or 2.4%, decrease in net interest income and a $25,000, or 2.3%,
increase in general, administrative and other expense.
The decrease in net interest income was attributed to a $122,000 decrease in interest income and a
$96,000 decrease in interest expense. The increase in general, administrative and other expense
was due primarily to a $75,000 increase in other operating expenses, partially offset by a $63,000
decrease in data processing expense. The increase in other operating expenses was attributed to a
$52,000 increase in audit and accounting expense and a $36,000 increase in FDIC insurance premiums.
Comparing the quarter ended June 30, 2009, to the quarter ended September 30, 2009, net interest
income decreased less than 3%, the provision for losses on loans remained the same, other income
decreased 9.2% and general, administrative and other expense decreased 17.6%. The decrease in
general, administrative and other expense from the June quarter to the September quarter was
primarily due to the previously reported FDIC special assessment and the compensation benefits
related to the change in chief executive officers in the June quarter.
The Corporation reported total assets of $120.9 million at September 30, 2009, total liabilities of
$101.9 million, including deposits of $74.9 million, and total stockholders’ equity of $19.0
million, with no material changes from June 30, 2009.
Greenville Federal Financial Corporation is the holding company for Greenville Federal, a federally
chartered savings bank headquartered in Greenville, Ohio. Greenville Federal attracts deposits
from, and makes loans in, the Ohio counties of Darke, Preble, Auglaize, Miami, Shelby and Mercer
and the Indiana counties of Randolph and Wayne.