SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
(Mark One):
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the fiscal year ended June 30, 2000, 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: 0-25854
GFSB BANCORP, INC.
----------------------------------------------
(Name of Small Business Issuer in its Charter)
Delaware 04-2095007
--------------------------------------------- -------------------
(State or Other Jurisdiction of Incorporation (I.R.S. Employer
or Organization) Identification No.)
221 West Aztec Avenue, Gallup, New Mexico 87301
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(Address of Principal Executive Offices) (Zip Code)
Issuer's Telephone Number, Including Area Code: (505) 722-4361
--------------
Securities Registered Under Section 12(b) of the Exchange Act: None
----
Securities Registered Under Section 12(g) of the Exchange Act:
Common Stock, par value $0.10 per share
---------------------------------------
(Title of Class)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 X NO .
--- ---
Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B is not contained in this form, and no disclosure will
be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. |_|
State issuer's revenues for its most recent fiscal year. $12,238,529.
----------
The aggregate market value of the voting and non-voting common equity
held by non-affiliates of the registrant, based on the average bid and asked
price of the registrant's Common Stock on the Nasdaq Smallcap Market at
September 15, 2000, was $6.5 million.
As of September 15, 2000, there were issued and outstanding 936,000
shares of the registrant's Common Stock.
Transitional Small Business Disclosure format (check one):
Yes No X
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DOCUMENTS INCORPORATED BY REFERENCE
1. Portions of Annual Report to Stockholders for Fiscal Year ended June 30,
2000. (Part II)
2. Portions of Proxy Statement for the 2000 Annual Meeting of Stockholders.
(Part III)
<PAGE>
PART I
GFSB Bancorp, Inc. (the "Company" or "Registrant") may from time to
time make written or oral "forward-looking statements", including statements
contained in the Company's filings with the Securities and Exchange Commission
(including this annual report on Form 10-KSB and the exhibits thereto), in its
reports to stockholders and in other communications by the Company, which are
made in good faith by the Company pursuant to the "safe harbor" provisions of
the Private Securities Litigation Reform Act of 1995.
These forward-looking statements involve risks and uncertainties, such
as statements of the Company's plans, objectives, expectations, estimates and
intentions, that are subject to change based on various important factors (some
of which are beyond the Company's control). The following factors, among others,
could cause the Company's financial performance to differ materially from the
plans, objectives, expectations, estimates and intentions expressed in such
forward-looking statements: the strength of the United States economy in general
and the strength of the local economies in which the Company conducts
operations; the effects of, and changes in, trade, monetary and fiscal policies
and laws, including interest rate policies of the Board of Governors of the
Federal Reserve System, inflation, interest rate, market and monetary
fluctuations; the timely development of and acceptance of new products and
services of the Company and the perceived overall value of these products and
services by users, including the features, pricing and quality compared to
competitors' products and services; the willingness of users to substitute
competitors' products and services for the Company's products and services; the
success of the Company in gaining regulatory approval of its products and
services, when required; the impact of changes in financial services' laws and
regulations (including laws concerning taxes, banking, securities and
insurance); technological changes; acquisitions; changes in consumer spending
and saving habits; and the success of the Company at managing these risks.
The Company cautions that this list of important factors is not
exclusive. The Company does not undertake to update forward-looking statements,
whether written or oral, that may be made from time to time by or on behalf of
the Company.
Item 1. Description of Business
--------------------------------
General
The Company is a Delaware corporation organized in March 1995 at the
direction of Gallup Federal Savings Bank (the "Bank") to acquire all of the
capital stock that the Bank issued in its conversion from the mutual to stock
form of ownership (the "Conversion"). On June 29, 1995, the Bank completed the
Conversion and became a wholly owned subsidiary of the Company. The Company is a
unitary savings and loan holding company which, under existing laws, generally
is not restricted in the types of business activities in which it may engage
provided that the Bank retains a specified amount of its assets in
housing-related investments. The Company conducts no significant business or
operations of its own other than holding all of the outstanding stock of the
Bank. References to the Company or Registrant generally refers to the
consolidated entity which includes the main operating company, the Bank, unless
the context indicates otherwise.
The Bank is a federally chartered stock savings bank headquartered in
Gallup, New Mexico. It is subject to examination and comprehensive regulation by
the Office of Thrift Supervision ("OTS") and its deposits are federally insured
by the Savings Association Insurance Fund ("SAIF"). The Bank is a member of and
owns capital stock in the Federal Home Loan Bank ("FHLB") of Dallas, which is
one of the 12 regional banks in the FHLB System.
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<PAGE>
The Registrant operates a traditional savings bank business, attracting
deposit accounts from the general public and using those deposits, together with
other funds, primarily to originate and invest in loans secured by one- to
four-family residential loans and commercial real estate loans. To a lesser
extent, the Registrant also originates construction loans, commercial business
loans, consumer loans, and multi-family loans.
Competition
The competition for deposit products comes from other insured financial
institutions such as commercial banks, thrift institutions, credit unions, and
multi-state regional banks in the Registrant's market area of Gallup, New Mexico
and the surrounding communities of McKinley County, New Mexico. Deposit
competition also includes a number of insurance products sold by local agents
and investment products such as mutual funds and other securities sold by local
and regional brokers. Loan competition varies depending upon market conditions
and comes from other insured financial institutions such as commercial banks,
thrift institutions, credit unions, multi-state regional banks, and mortgage
bankers.
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<PAGE>
Lending Activities
The following table sets forth the composition of the Registrant's loan
portfolio in dollar amounts and in percentages of the respective portfolios at
the dates indicated.
<TABLE>
<CAPTION>
At June 30,
------------------------------------------------------
2000 1999
----------------------- ----------------------------
$ % $ %
--------- ------ --------- ------
(Dollars in Thousands)
<S> <C> <C> <C> <C>
Type of Loans:
--------------
Mortgage loans:
Residential .......................... $ 79,234 68.02% $ 72,290 70.84%
Commercial real estate ............... 19,293 16.56 17,199 16.86
Construction:
Residential .......................... 1,081 .93 828 .81
Commercial ........................... 4,161 3.57 2,733 2.68
--------- ------ --------- ------
103,769 89.08 93,050 91.19
--------- ------ --------- ------
Commercial business .................... 6,993 6.00 4,460 4.37
--------- ------ --------- ------
Consumer:
Savings account ........................ 1,083 .93 1,067 1.05
Automobile and other ................... 4,642 3.99 3,459 3.39
--------- ------ --------- ------
5,725 4.92 4,526 4.44
--------- ------ --------- ------
Total loans ............................ $ 116,487 100.00% $ 102,036 100.00%
========= ====== ========= ======
Less:
Loans in process ....................... (2,246) (1,443)
Loan participations sold ............... (3,307) (2,938)
Deferred loan origination fees and costs (645) (647)
Allowance for loan losses .............. (512) (443)
--------- ---------
Total loans, net ......................... $ 109,777 $ 96,565
========= =========
Type of Security:
-----------------
Mortgage loans:
One-to-four-family ................... $ 79,604 68.34% $ 72,174 70.74%
Commercial real estate ............... 23,426 20.11 19,844 19.44
Multi-family ......................... 711 .61 944 .92
--------- ------ --------- ------
103,741 89.06 92,962 91.10
--------- ------ --------- ------
Commercial business .................... 7,021 6.03 4,548 4.46
--------- ------ --------- ------
Consumer:
Savings accounts ..................... 1,083 .93 1,067 1.05
Automobile and other ................. 4,642 3.99 3,459 3.39
--------- ------ --------- ------
5,725 4.92 4,526 4.44
--------- ------ --------- ------
Total .................................... $ 116,487 100.00% $ 102,036 100.00%
========= ====== ========= ======
</TABLE>
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<PAGE>
Loan Maturity Tables
The following table sets forth the estimated maturity of the
Registrant's loan portfolio at June 30, 2000. The table does not include
prepayments or scheduled principal repayments. Prepayments or scheduled
principal repayments totaled $22.9 million for the year ended June 30, 2000. All
mortgage loans are shown as maturing based on contractual maturities.
<TABLE>
<CAPTION>
Due Due after
within 1 through Due after
1 year 5 years 5 years Total
-------- --------- -------- --------
(In Thousands)
<S> <C> <C> <C> <C>
One-to-four-family......................... $ 797 $ 1,652 $ 76,074 $ 78,523
Multi-family and commercial real estate.... 2,134 10,642 7,200 19,976
Construction............................... 574 223 4,445 5,242
Commercial business........................ 2,648 2,208 2,165 7,021
Consumer................................... 849 2,983 1,893 5,725
-------- --------- -------- --------
Total...................................... $ 7,002 $ 17,708 $ 91,777 $116,487
======== ========= ======== ========
</TABLE>
The following table sets forth as of June 30, 2000 the dollar amount of
all loans due after June 30, 2001, which have fixed rates of interest and
floating or adjustable interest rates.
<TABLE>
<CAPTION>
Floating or
Fixed Rates Adjustable Rates Total
----------- ---------------- -----
(In Thousands)
<S> <C> <C> <C>
One-to-four-family............................. $ 69,172 $ 8,554 $ 77,726
Multi-family and commercial real estate........ 11,484 6,358 17,842
Construction................................... 3,276 1,392 4,668
Commercial business............................ 1,822 2,551 4,373
Consumer....................................... 3,058 1,818 4,876
-------- -------- ---------
Total.......................................... $ 88,812 $ 20,673 $ 109,485
======== ======== =========
</TABLE>
One-to-Four-Family Residential Loans. The Registrant's primary lending
activity consists of the origination of one-to-four-family residential mortgage
loans secured by property located in its primary market areas. The Registrant
generally originates owner-occupied one-to-four-family residential mortgage
loans in amounts up to 80% of the lesser of the appraised value or selling price
of the mortgaged property without requiring mortgage insurance. The Registrant
will originate a mortgage loan in an amount up to 95% of the lesser of the
appraised value or selling price of a mortgaged property, however, mortgage
insurance is generally required for the amount in excess of 80% of such value.
Non-owner-occupied residential mortgage loans are originated up to 80% of the
lesser of the appraised value or selling price of the property.
The Registrant primarily originates fixed-rate mortgage loans that have
maturities of up to 15 years. In addition, the Registrant originates loans with
terms over 15 years for sale in the secondary market. Generally, the
Registrant's underwriting guidelines conform to FHLMC and FNMA guidelines. At
June 30, 2000, fixed rate loans held-for-sale constituted 88% of the
one-to-four-family residential loan portfolio.
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<PAGE>
For all adjustable-rate mortgage loans, the Registrant requires the
borrower to qualify at the initial index interest rate. The adjustable-rate
mortgage loans provide for annual interest rate adjustments based upon the
one-year treasury rate with a maximum adjustment of not more than 2% over the
initial rate of interest. Adjustable-rate mortgage loans reprice every year and
provide for terms of up to 30 years with most loans having terms of 15 or 30
years.
It is the current policy of the Registrant to remain a portfolio lender
for its adjustable rate loans. Adjustable rate loans do have higher credit risks
compared to fixed-rate mortgage loans due to the possibility of borrower default
when interest rates reset higher and monthly payment amounts increase.
The one-to-four-family residential loan portfolio also includes second
mortgage loans if the Registrant holds the first mortgage loan for such property
and the combined loan to value ratio is no greater than 80%.
Multi-family and Commercial Real Estate Loans. Multi-family and
commercial real estate secured loans are originated in amounts generally up to
80% of the appraised value of the property. Such appraised value is determined
by an independent appraiser previously approved by the Registrant. The
Registrant's commercial real estate loans are permanent loans secured by
approved property such as churches, motels, small office buildings, retail
stores, small strip plazas, and other non-residential buildings. The Registrant
generally originates fixed-rate commercial real estate loans with balloon
maturities of five years and with amortization periods of up to 25 years, and to
a lesser extent, adjustable-rate loans based on a margin over the Wall Street
Journal prime rate.
Multi-family loans are primarily secured by apartment buildings,
located in the Registrant's primary market area. Loans secured by multi-family
property may be originated in amounts up to 80% of the appraised value with
either fixed or adjustable rates of interest. The Registrant generally
originates fixed-rate multi-family loans with balloon maturities of five years
and with amortization periods of up to 25 years, and to a lesser extent,
adjustable-rate loans based on a margin over the Wall Street Journal prime rate.
Multi-family and commercial real estate loans have significantly more
risk than one-to-four-family mortgage loans due to the usually higher loan
amounts and the credit risk, which arises from concentration of principal in a
smaller number of loans, the effects of general economic conditions on income
producing property and the difficulty of evaluating and monitoring the loans.
Construction Loans. The Registrant makes construction loans to
individuals to construct single-family owner-occupied homes and to builders who
have a proven track record on either a pre-sold or speculative basis. Loans made
to individual property owners are construction-to-permanent loans which
generally provide for the payment of interest during a construction period at
fixed or adjustable interest rates and then covert to permanent loans, having
terms similar to one-to-four-family residential mortgage loans. Loans made to
builders are generally loans which require the payment of interest at fixed
rates during the construction term and the payment of the principal in full at
the end of the construction period, which generally is for a term of 6 months.
Construction financing generally has a higher degree of credit risk
than one-to-four-family residential loans. The risk is dependent largely on the
value of the property when completed as compared to the estimated cost,
including interest, of building the property. If the estimated value is
inaccurate, the Registrant may have a completed project with a value too low to
assure full repayment of the loan.
Construction loans made to builders who are building to resell have a
maximum loan-to-value ratio of 80% of the appraised value of the property.
Construction loans to individuals who intend to occupy the finished premises
generally have a maximum loan-to-value ratio of 80%.
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<PAGE>
Commercial Business Loans. Commercial business loans, primarily
consisting of revolving lines of credit, short-term working capital loans, and
term loans up to seven years, are originated to meet the needs of local small
businesses. The majority of the loans are secured by inventory, equipment,
accounts receivable, marketable securities, savings deposits, real estate,
personal guaranties, or a combination of these types of collateral. Commercial
business loans generally involve a greater degree of risk than residential
mortgage loans and frequently carry larger loan balances. The Registrant offers
fixed-rate commercial business loans and adjustable-rate loans which adjust
daily based upon Wall Street Journal prime. This increased credit risk is a
result of several factors, including the concentration of principal in a limited
number of loans and borrowers, the effects of general economic conditions on
business cash flow, and the difficulty of evaluating and monitoring these types
of loans.
Consumer Loans. Consumer loans primarily consist of automobile loans,
home equity lines of credit, loans secured by savings accounts and unsecured
personal loans. Home equity lines of credit are originated on an adjustable rate
basis, with a loan to value ratio of 90%, if the Registrant holds the first
mortgage loan. Otherwise, the maximum loan to value ratio is 80%. Loans secured
by vehicles are financed for terms of up to 60 months, with fixed interest
rates. The underwriting standards employed by the Registrant for consumer loans
include a determination of the applicant's payment history on other debts and an
assessment of the borrower's ability to make payments on the proposed loan and
other indebtedness. In addition to the creditworthiness of the applicant, the
underwriting process also includes a comparison of the value of the security, if
any, in relation to the proposed loan amount. Consumer loans tend to have higher
interest rates and shorter maturities than one- to four-family first mortgage
loans, but are considered to entail a greater risk of default than one-to
four-family mortgage loans.
Loan Approval Authority and Underwriting. The loan approval process is
segmented by the type and size of loan. All loans secured by deposit accounts as
well as small real estate, commercial and consumer loans may be approved by
certain loan officers within designated limits. Members of senior management
have varying individual levels of authority to approve loans up to a maximum of
$100,000 for unsecured loans and $250,000 for secured loans. The Management Loan
Committee, consisting of all senior management and one non-employee Director,
may approve loans in excess of individual officer limits up to a maximum of
$350,000. The Executive Committee may approve loans up to $750,000. The Board of
Directors approves loans over $750,000. The Board of Directors ratifies all
loans that have been approved by officers or committees.
The Registrant uses board approved independent fee appraisers on most
real estate loans. It is the Registrant's policy to obtain title insurance on
all properties securing real estate loans and to obtain insurance coverage
appropriate to the collateral on secured loans.
Loan Commitments. At June 30, 2000, the Registrant had $9.1 million of
outstanding commitments to originate new loans at market interest rates and
$876,000 in undisbursed funds related to construction loans.
Non-Performing and Problem Assets
Loan Delinquencies. The Registrant's collection procedures provide that
when a mortgage loan is 15 days past due, a notice of nonpayment is sent. If
payment is still delinquent after 30 days past due, the customer will receive a
telephone call within ten days. If the delinquency continues, similar subsequent
efforts are made to eliminate the delinquency. If the loan continues in a
delinquent status for 120 days or more or more and no repayment plan is in
effect, the Board of Directors typically approves the initiation of foreclosure
proceedings. For consumer loans, a notice is generated when the loan is ten days
past due. Further collection efforts generally commence for consumer loans by
the time a payment is delinquent 20 days. Collection procedures for other
non-mortgage loans generally begin after a loan is one day delinquent. Loans are
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<PAGE>
reviewed on a monthly basis and are generally placed on a non-accrual status
when the loan becomes more than 90 days delinquent and, in the opinion of
management, the collection of additional interest is doubtful. Interest accrued
and unpaid at the time a loan is placed on non-accrual status is charged against
interest income. Subsequent interest payments, if any, are either applied to the
outstanding principal balance or recorded as interest income, depending on the
assessment of the ultimate collectibility of the loan.
The following table sets forth information regarding nonaccrual loans
and real estate owned, as of the dates indicated. The Registrant has no loans
categorized as troubled debt restructurings within the meaning of the Statement
of Financial Accounting Standards ("SFAS") 15 and no impaired loans within the
meaning of SFAS 114, as amended by SFAS 118. Interest income that would have
been recorded on loans accounted for on a nonaccrual basis under the original
terms of such loans was not material for the year ended June 30, 2000.
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<PAGE>
At June 30,
-----------
2000 1999
---- ----
(In Thousands)
Loans accounted for on a non-accrual basis:
Mortgage loans:
Permanent loans secured by 1-4 dwelling units ................ $542 $ 78
All other mortgage loans ..................................... 83 75
Non-mortgage loans:
Commercial ................................................... 16 --
Consumer ..................................................... 78 66
---- ----
Total .................................................... $719 $219
==== ====
Accruing loans which are contractually past due 90 days or more:
Mortgage loans:
Permanent loans secured by 1-4 dwelling units ................ $ -- $ --
All other mortgage loans ..................................... -- --
---- ----
Total .................................................... $ -- $ --
==== ====
Total non-accrual and accrual loans ............................ $719 $219
Real estate owned .............................................. 38 150
---- ----
Total non-performing assets .................................... $757 $369
==== ====
Total non-accrual and accrual loans to net loans ............... 0.66% 0.23%
Total non-accrual and accrual loans to total assets............. 0.41% 0.15%
Total non-performing assets to total assets .................... 0.43% 0.24%
Classified Assets. OTS regulations provide for a classification system
for problem assets of insured institutions which covers all problem assets.
Under this classification system, problem assets of insured institutions are
classified as "substandard," "doubtful," or "loss." An asset is considered
substandard if it is inadequately protected by the current net worth and paying
capacity of the obligor or of the collateral pledged, if any. Substandard assets
include those characterized by the "distinct possibility" that the insured
institution will sustain "some loss" if the deficiencies are not corrected.
Assets classified as doubtful have all of the weaknesses inherent in those
classified substandard, with the added characteristic that the weaknesses
present make "collection or liquidation in full," on the basis of currently
existing facts, conditions and values, "highly questionable and improbable."
Assets classified as loss are those considered "uncollectible" and of such
little value that their continuance as assets without the establishment of a
specific loss reserve is not warranted. Assets may be designated "special
mention" because of a potential weakness that does not currently warrant
classification in one of the aforementioned categories.
When an insured institution classifies problem assets as either
substandard or doubtful, it may establish general allowances for loan losses in
an amount deemed prudent by management. General allowances represent loss
allowances which have been established to recognize the inherent risk associated
with lending
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<PAGE>
activities, but which, unlike specific allowances, have not been allocated to
particular problem assets. When an insured institution classifies problem assets
as loss, it is required either to establish a specific allowance for losses
equal to 100% of that portion of the asset so classified or to charge off such
amount. An institution's determination as to the classification of its assets
and the amount of its valuation allowances is subject to review by the OTS,
which may order the establishment of additional general or specific loss
allowances. A portion of general loss allowances established to cover possible
losses related to assets classified as substandard or doubtful may be included
in determining an institution's regulatory capital, while specific valuation
allowances for loan losses generally do not qualify as regulatory capital.
At June 30, 2000, there were no loans with respect to which known
information about the possible credit problems of the borrowers or the cash
flows of the security properties have caused management to have concerns as to
the ability of the borrowers to comply with present loan repayment terms.
The following table sets forth the Registrant's classified assets in
accordance with its classification system at June 30, 2000 (in thousands):
Special mention............. $ 2,406
Substandard................. 906
Doubtful ................... --
Loss ....................... --
-------
Total....................... $ 3,312
=======
Real Estate Owned. Real estate acquired by the Bank as a result of
foreclosure or by deed in lieu of foreclosure is classified as real estate owned
until it is sold. When property is acquired it is recorded at the lower of the
cost or fair value. The Bank records loans as in substance foreclosures if the
borrower has little or no equity in the property based upon its documented
current fair value, the Bank can only expect repayment of the loan to come from
the sale of the property and if the borrower has effectively abandoned control
of the collateral or has continued to retain control of the collateral but
because of the current financial status of the borrower it is doubtful the
borrower will be able to repay the loan in the foreseeable future. In substance
foreclosures are accounted for as real estate acquired through foreclosure,
however, title to the collateral has not been acquired by the Bank. There may be
significant other expenses incurred such as attorney and other extraordinary
servicing costs involved with in substance foreclosures.
Allowances for Loan Losses. A provision for loan losses is charged to
operations based on management's evaluation of the losses that may be incurred
in the Registrant's loan portfolio. Such evaluation, which includes a review of
all loans of which full collectibility of interest and principal may not be
reasonably assured, considers the Registrant's past loan loss experience, known
and inherent risks in the portfolio, adverse situations that may affect the
borrower's ability to repay, estimated value of any underlying collateral, any
existing guarantees, past performance of the loan, available documentation for
the loan, legal impediments to collection, financial condition of the borrower,
and current economic conditions.
Management will continue to review the entire loan portfolio to
determine the extent, if any, to which further additional loss provisions may be
deemed necessary. There can be no assurance that the allowance for losses will
be adequate to cover losses which may in fact be realized in the future and that
additional provisions for losses will not be required.
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<PAGE>
The following table sets forth information with respect to the
Registant's allowance for loan losses at the dates indicated.
At June 30,
-----------------------
2000 1999
--------- ---------
(Dollars in Thousands)
Total loans outstanding, net .............. $ 109,777 $ 96,565
========= =========
Average loans outstanding ................. $ 103,252 $ 88,355
========= =========
Allowance balances (at beginning of period) $ 443 $ 387
Provision:
Residential ............................. 57 14
Consumer and commercial business ........ 148 124
--------- ---------
648 525
--------- ---------
Charge-offs:
Residential ............................. (113) (64)
Consumer and commercial business ........ (25) (18)
Recoveries:
Residential ............................. -- --
Consumer and commercial business ........ 2 --
--------- ---------
Net (charge-offs) recoveries .............. (136) (82)
--------- ---------
Allowance balance (at end of period) ...... $ 512 $ 443
========= =========
Allowance for loan losses as a percent
of total loans outstanding, net ......... .47% .46%
========= =========
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<PAGE>
Analysis of the Allowance for Loan Losses
The following table sets forth the allocation of the allowance by
category, which management believes can be allocated only on an approximate
basis. The allocation of the allowance to each category is not necessarily
indicative of future loss and does not restrict the use of the allowance to
absorb losses in any category.
At June 30,
-----------------------------------------------
2000 1999
---------------------- ----------------------
Percent of Percent of
Loans in Each Loans in Each
Category to Category to
Amount Total Loans Amount Total Loans
------ ------------- ------ -------------
(Dollars in Thousands)
Residential real estate.. $ 217 69% $ 273 72%
Commercial real estate... 131 20 71 20
Consumer and
commercial business.... 164 11 100 8
----- --- ----- ---
Total.................. $ 512 100% $ 443 100%
===== === ===== ===
Investment Activities
The Registrant is required under federal regulations to maintain a
minimum amount of liquid assets which may be invested in specified short-term
securities and certain other investments. The level of liquid assets varies
depending upon several factors, including: (i) the yields on investment
alternatives, (ii) management's judgment as to the attractiveness of the yields
then available in relation to other opportunities, (iii) expectation of future
yield levels, and (iv) management's projections as to the short-term demand for
funds to be used in loan origination and other activities. Investment
securities, including mortgage-backed securities, are classified at the time of
purchase, based upon management's intentions and abilities, as securities held
to maturity or securities available-for-sale. Debt securities acquired with the
intent and ability to hold-to-maturity are classified as held-to-maturity and
are stated at cost and adjusted for amortization of premium and accretion of
discount, which are computed using the level yield method and recognized as
adjustments of interest income. All other debt securities are classified as
available-for-sale.
Current regulatory and accounting guidelines regarding investment
securities (including mortgage- backed securities) require the Registrant to
categorize securities as "held-to-maturity," "available-for-sale" or "trading."
As of June 30, 2000, Registrant had securities (including mortgage-backed
securities) classified as "held-to-maturity" and "available-for-sale" in the
amount of $1,681,310 and $54,369,050 respectively and had no securities
classified as "trading." Securities classified as "available-for-sale" are
reported for financial reporting purposes at the fair market value with net
changes in the market value from period to period included as a separate
component of stockholders' equity, net of income taxes. Changes in the market
value of securities available-for-sale do not affect the Company's income. In
addition, changes in the market value of securities available-for-sale do not
affect the Bank's regulatory capital requirements or its loan-to-one borrower
limit.
At June 30, 2000, the Registrant's investment portfolio policy allowed
investments in instruments such as: (i) U.S. Treasury obligations, (ii) U.S.
federal agency or federally sponsored agency obligations, (iii) municipal
obligations, (iv) mortgage-backed securities, (v) banker's acceptances, (vi)
certificates of deposit,
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<PAGE>
(vii) investment grade corporate bonds, (viii) mortgage derivative securities,
(ix) private-label mortgage pass-thru securities and commercial paper. The board
of directors may authorize additional investments.
As a source of liquidity and to supplement Registrant's lending
activities, the Registrant has invested in residential mortgage-backed
securities. Mortgage-backed securities can serve as collateral for borrowings
and, through repayments, as a source of liquidity. Mortgage-backed securities
represent a participation interest in a pool of single-family or other type of
mortgages. Principal and interest payments are passed from the mortgage
originators, through intermediaries (generally quasi-governmental agencies) that
pool and repackage the participation interests in the form of securities, to
investors, like us. The quasi-governmental agencies guarantee the payment of
principal and interest to investors and include the Federal Home Loan Mortgage
Corporation ("FHLMC"), Government National Mortgage Association ("GNMA"), and
Federal National Mortgage Association ("FNMA").
Mortgage-backed securities typically are issued with stated principal
amounts. The securities are backed by pools of mortgages that have loans with
interest rates that are within a set range and have varying maturities. The
underlying pool of mortgages can be composed of either fixed rate or adjustable
rate mortgage loans. Mortgage-backed securities are generally referred to as
mortgage participation certificates or pass-through certificates. The interest
rate risk characteristics of the underlying pool of mortgages (i.e., fixed rate
or adjustable rate) and the prepayment risk, are passed on to the certificate
holder. The life of a mortgage-backed pass-through security is equal to the life
of the underlying mortgages. Expected maturities will differ from contractual
maturities due to scheduled repayments and because borrowers may have the right
to call or prepay obligations with or without prepayment penalties.
Mortgage-backed securities issued by FHLMC, GNMA, and FNMA make up a majority of
the pass-through certificates market.
-12-
<PAGE>
Investment Portfolio. The following table sets forth the carrying value
of the Registrant's securities at the dates indicated.
At June 30,
----------------
2000 1999
------- -------
(In Thousands)
Securities held-to-maturity:
Tax-exempt securities ..........................$ 695 $ 695
Corporate debt securities....................... 986 982
------- -------
Total securities held-to-maturity............. 1,681 1,677
------- -------
Securities available-for-sale:
Mutual funds.................................... 2,552 2,409
US Agency securities............................ 4,582 3,699
FHLMC stock..................................... 8 8
FNMA preferred.................................. 1,513 --
SLMA asset-backed note.......................... 1,992 1,991
Tax-exempt securities .......................... 4,695 987
Taxable securities ............................. 330 --
CMO securities ................................. 9,068 --
Mortgage-backed securities...................... 29,432 32,133
------- -------
Total securities available for sale........... 54,172 41,227
------- -------
Total investment and mortgage-backed securities...$55,853 $42,904
======= =======
-13-
<PAGE>
The following table sets forth information regarding the scheduled
maturities, carrying values, market value and weighted average yields for the
Bank's investment securities portfolio at June 30, 2000. The following table
does not take into consideration the effects of scheduled repayments or the
effects of possible prepayments.
<TABLE>
<CAPTION>
At June 30, 2000
----------------------------------------------------------------------------------------------------
Less than 1 to Over 5 to Over 10 Total
1 year 5 years 10 years years Securities
----------------- ----------------- ----------------- ----------------- --------------------------
Carrying Average Carrying Average Carrying Average Carrying Average Carrying Market
Value Yield Value Yield Value Yield Value Yield Value Yield Value
----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Securities held-to-maturity:
Tax-exempt securities (1).....$ -- --% $ -- --% $ 145 4.25% $ 550 8.00% $ 695 7.22% $ 673
Corporate debt securities..... -- -- 986 7.65 -- -- -- -- 986 7.65 999
------ ---- ------ ---- ------ ---- ------- ---- ------- ---- -------
Total securities
held-to-maturity........ -- -- 986 7.65 145 4.25 550 8.00 1,681 7.47 1,671
------ ---- ------ ---- ------ ---- ------- ---- ------- ---- -------
Securities available-for-sale:
Mutual funds.................. 2,552 5.74 -- -- -- -- -- -- 2,552 5.74 2,523
US Agency securities.......... -- -- 3,585 6.09 997 6.89 -- -- 4,582 6.26 4,497
FHLMC stock (2)............... -- -- -- -- -- -- 8 1.31 8 1.31 890
FNMA preferred................ -- -- -- -- -- -- 1,513 5.76 1,513 5.76 1,995
SLMA asset-backed securities -- -- -- -- -- -- 1,992 6.85 1,992 6.85 1,515
Tax-exempt securities (1)..... 101 4.03 802 4.86 -- -- 3,792 5.93 4,695 5.72 4,676
Taxable securities............ -- -- 165 10.00 165 10.00 -- -- 330 10.00 329
CMO securities................ -- -- -- -- 1,957 7.11 7,111 6.70 9,068 6.79 9,013
Mortgage-backed securities... -- -- -- -- -- -- 29,432 6.48 29,432 6.48 28,931
------ ---- ------ ---- ------ ---- ------- ---- ------- ---- -------
Total securities
available-for-sale...... 2,653 5.52 4,552 6.30 3,119 7.19 43,848 6.46 54,172 6.43 54,370
------ ---- ------ ---- ------ ---- ------- ---- ------- ---- -------
Total investment and
mortgage-backed
securities...................$2,653 5.52% $5,538 6.30% $3,264 7.06% $44,398 6.48% $55,853 6.46% $56,041
====== ==== ====== ==== ====== ==== ======= ==== ======= ==== =======
</TABLE>
----------------------------
(1) Average yield is computed on a book value basis rather than a tax
equivalent basis.
(2) Average yield is computed on a redemption value basis.
-14-
<PAGE>
Sources of Funds
General. Deposits are a major external source of the Registrant's funds
for lending and other investment purposes. The Registrant derives funds from
amortization and prepayment of loans and, to a much lesser extent, maturities of
investment securities, borrowings, mortgage-backed securities and operations.
Scheduled loan principal repayments are a relatively stable source of funds,
while deposit inflows and outflows and loan prepayments are significantly
influenced by general interest rates and market conditions.
Deposits. Consumer and commercial deposits are attracted principally
from within the Registrant's primary market area through the offering of a
selection of deposit instruments including regular savings accounts, money
market accounts, and term certificate accounts. Deposit account terms vary
according to the minimum balance required, the time period the funds must remain
on deposit, and the interest rate, among other factors. At June 30, 2000, the
Registrant had no brokered accounts.
Time Deposits. The following table indicates the amount of the
Registrant's time deposits of $100,000 or more by time remaining until maturity
as of June 30, 2000.
Maturity Period Time Deposits
--------------- -------------
(In Thousands)
Within three months....................... 9,039
More than three through six months........ 8,549
More than six through nine months......... 5,373
Over nine months.......................... 3,977
-------
Total............................ $26,938
=======
Borrowings
The Registrant may obtain advances from the FHLB of Dallas (the "FHLB")
to supplement its supply of lendable funds. Advances from the FHLB are typically
secured by a pledge of the Registrant's stock in the FHLB and a portion of the
Registrant's first mortgage loans and certain other assets. Each FHLB credit
program has its own interest rate, which may be fixed or variable, and range of
maturities. The Registrant, if the need arises, may also access the Federal
Reserve Bank discount window to supplement its supply of lendable funds and to
meet deposit withdrawal requirements. At June 30, 2000, borrowings with the FHLB
totalled $82,935,066, of which $57,239,000 were short-term. The following table
sets forth the maximum month end balances and the average balance of FHLB
advances for the periods indicated.
-15-
<PAGE>
During the Year Ended
June 30,
-------------------------
2000 1999
---------- ----------
(In thousands)
Maximum amount of short-term borrowings
outstanding at any month end:
Advances from FHLB........................... $57,239 $27,936
Approximate average short-term borrowings
outstanding with respect to:
Advances from FHLB........................... $37,174 $23,098
Approximate weighted average rate paid on:
Advances from FHLB........................... 5.98% 5.32%
Personnel
As of June 30, 2000, the Registrant employed 38 employees with 35
working full-time. None of the Registrant's employees are represented by a
collective bargaining group. The Registrant believes that its relationship with
its employees is good.
REGULATION
Regulation
Set forth below is a brief description of certain laws which relate to
the regulation of the Company and the Bank. The description does not purport to
be complete and is qualified in its entirety by reference to applicable laws and
regulations.
Recent Regulation
The Gramm-Leach-Bliley Act (the "Act") became effective March 11, 2000,
which permits qualifying bank holding companies to become financial holding
companies and thereby affiliate with securities firms and insurance companies
and engage in other activities that are financial in nature. The Act defines
"financial in nature" to include securities underwriting, dealing and market
making; sponsoring mutual funds and investment companies; insurance underwriting
and agency; merchant banking activities; and activities that the Board has
determined to be closely related to banking. A qualifying national bank also may
engage, subject to limitations on investment, in activities that are financial
in nature, other than insurance underwriting, insurance company portfolio
investment, real estate development, and real estate investment, through a
financial subsidiary of the bank.
The Act also prohibits new unitary thrift holding companies from
engaging in nonfinancial activities or from affiliating with an nonfinancial
entity. As a grandfathered unitary thrift holding company, the Company will
retain its authority to engage in nonfinancial activities. The
Gramm-Leach-Bliley Act will have few direct effects on the operations or powers
of federal savings associations or of savings and loan holding companies.
The Gramm-Leach-Bliley Act imposes significant new financial privacy
obligations and reporting requirements on all financial institutions, including
federal savings associations. Specifically, the statute, among other things,
will require financial institutions (a) to establish privacy policies and
disclose them to customers both at the commencement of a customer relationship
and on an annual basis and (b) to permit customers to opt out of a financial
institution's disclosure of financial information to nonaffiliated third
parties.
-16-
<PAGE>
The Gramm-Leach-Bliley Act requires the federal financial regulators to
promulgate regulations implementing these provisions within six months of
enactment, and the statute's privacy requirements will take effect one year
after enactment.
Regulation of the Company
General. The Company is a unitary savings and loan holding company
subject to regulatory oversight by the OTS. As such, the Company is required to
register and file reports with the OTS and is subject to regulation and
examination by the OTS. In addition, the OTS has enforcement authority over the
Company and its non-savings association subsidiaries, should such subsidiaries
be formed, which also permits the OTS to restrict or prohibit activities that
are determined to be a serious risk to the subsidiary savings association. This
regulation and oversight is intended primarily for the protection of the
depositors of the Bank and not for the benefit of stockholders of the Company.
As a unitary savings and loan holding company, the Company generally is
not subject to activity restrictions, provided the Bank satisfies the Qualified
Thrift Lender ("QTL") test. The Act terminated the "unitary thrift holding
company exemption" for all companies that applied to acquire savings
associations after May 4, 1999. Since the Company is grandfathered under this
provision of the Act, its unitary holding company powers and authorities were
not affected. However, if the Company were to acquire control of an additional
savings association, its business activities would be subject to restriction
under the Home Owners' Loan Act. Furthermore, if the Company were in the future
to sell control of the Bank to any other company, such company would not succeed
to the Company's grandfathered status under the Act and would be subject to the
same business activity restrictions. See "- Regulation of the Bank - Qualified
Thrift Lender Test."
Regulation of the Bank
General. Set forth below is a brief description of certain laws that
relate to the regulation of the Bank. The description does not purport to be
complete and is qualified in its entirety by reference to applicable laws and
regulations. As a federally chartered, SAIF-insured savings association, the
Bank is subject to extensive regulation by the OTS and the FDIC. Lending
activities and other investments must comply with various federal statutory and
regulatory requirements. The Bank is also subject to certain reserve
requirements promulgated by the Federal Reserve Board.
The OTS, in conjunction with the FDIC, regularly examines the Bank and
prepares reports for the consideration of the Bank's Board of Directors on any
deficiencies that are found in the Bank's operations. The Bank's relationship
with its depositors and borrowers is also regulated to a great extent by federal
and state law, especially in such matters as the ownership of savings accounts
and the form and content of the Bank's mortgage documents.
The Bank must file reports with the OTS and the FDIC concerning its
activities and financial condition, in addition to obtaining regulatory
approvals prior to entering into certain transactions such as mergers with or
acquisitions of other savings institutions. This regulation and supervision
establishes a comprehensive framework of activities in which an institution can
engage and is intended primarily for the protection of the SAIF and depositors.
The regulatory structure also gives the regulatory authorities extensive
discretion in connection with their supervisory and enforcement activities and
examination policies, including policies with respect to the classification of
assets and the establishment of adequate loan loss reserves for regulatory
purposes.
Insurance of Deposit Accounts. The deposit accounts held by the Bank
are insured by the SAIF to a maximum of $100,000 for each insured member (as
defined by law and regulation). Insurance of deposits may be terminated by the
FDIC upon a finding that the institution has engaged in unsafe or unsound
practices,
-17-
<PAGE>
is in an unsafe or unsound condition to continue operations or has violated any
applicable law, regulation, rule, order or condition imposed by the FDIC or the
institution's primary regulator.
The Bank is required to pay insurance premiums based on a percentage of
its insured deposits to the FDIC for insurance of its deposits by the SAIF. The
FDIC also maintains another insurance fund, the Bank Insurance Fund ("BIF"),
which primarily insures commercial bank deposits. The FDIC has set the deposit
insurance assessment rates for SAIF-member institutions for the first six months
of 2000 at 0% to .027% of insured deposits on an annualized basis, with the
assessment rate for most savings institutions set at 0%.
In addition, all FDIC-insured institutions are required to pay
assessments to the FDIC at an annual rate of approximately .0212% of insured
deposits to fund interest payments on bonds issued by the Financing Corporation
("FICO"), an agency of the Federal government established to recapitalize the
predecessor to the SAIF. These assessments will continue until the FICO bonds
mature in 2017.
Loans to One Borrower. A savings association may not make a loan or
extend credit to a single or related group of borrowers in excess of 15% of the
associations's unimpaired capital and surplus. An additional amount may be lent,
equal to 10% of the unimpaired capital and surplus, under certain circumstances.
At June 30, 2000, the Bank's lending limit for loans to one borrower was
approximately $1,768,443 and the bank had no outstanding commitments that
exceeded the loans to one borrower limit at the time originated or committed.
Regulatory Capital Requirements. OTS capital regulations require
savings institutions to meet three capital standards: (1) tangible capital equal
to 1.5% of total adjusted assets, (2) a leverage ratio (core capital) equal to
at least 3% of total adjusted assets, and (3) a risk-based capital requirement
equal to 8.0% of total risk-weighted assets.
Dividend and Other Capital Distribution Limitations. The OTS imposes
various restrictions or requirements on the ability of savings institutions to
make capital distributions, including cash dividends. A savings association that
is a subsidiary of a savings and loan holding company, such as the Bank must
file an application or a notice with the OTS at least 30 days before making a
capital distribution. Savings associations are not required to file an
application for permission to make a capital distribution and need only file a
notice if the following conditions are met: (1) they are eligible for expedited
treatment under OTS regulations, (2) they would remain adequately capitalized
after the distribution, (3) the annual amount of capital distribution does not
exceed net income for that year to date added to retained net income for the two
preceding years, and (4) the capital distribution would not violate any
agreements between the OTS and the savings association or any OTS regulations.
Any other situation would require an application to the OTS.
The OTS may disapprove an application or notice if the proposed capital
distribution would: (i) make the savings association undercapitalized,
significantly undercapitalized, or critically undercapitalized; (ii) raise
safety or soundness concerns; or (iii) violate a statue, regulation, or
agreement with the OTS (or with the FDIC), or a condition imposed in an
OTS-approved application or notice. Further, a federal savings association, like
the Bank, cannot distribute regulatory capital that is needed for its
liquidation account.
Qualified Thrift Lender Test. Federal savings institutions must meet
one of two Qualified Thrift Lender ("QTL") tests. To qualify as a QTL, a savings
institution must either (i) be deemed a "domestic building and loan association"
under the Internal Revenue Code by maintaining at least 60% of its total assets
in specified types of assets, including cash, certain government securities,
loans secured by and other assets related to residential real property,
educational loans and investments in premises of the institution or (ii) satisfy
the statutory QTL test set forth in the Home Owner's Loan Act by maintaining at
least 65% of its "portfolio assets" in certain"Qualified Thrift Investments"
(defined to include residential mortgages and related equity investments,
certain mortgage-related securities, small business loans, student loans and
credit card
-18-
<PAGE>
loans, and 50% of certain community development loans). For purposes of the
statutory QTL test, portfolio assets are defined as total assets minus
intangible assets, property used by the institution in conducting its business,
and liquid assets equal to 10% of total assets. A savings institution must
maintain its status as a QTL on a monthly basis in at least nine out of every 12
months. A failure to qualify as a QTL results in a number of sanctions,
including the imposition of certain operating restrictions and a restriction on
obtaining additional advances from its FHLB. At June 30, 2000, the Bank was in
compliance with its QTL requirement.
Federal Home Loan Bank System. The Bank is a member of the FHLB of
Dallas, which is one of 12 regional FHLBs that administers the home financing
credit function of savings associations. Each FHLB serves as a reserve or
central bank for its members within its assigned region. It is funded primarily
from proceeds derived from the sale of consolidated obligations of the FHLB
System. It makes loans to members (i.e., advances) in accordance with policies
and procedures established by the Board of Directors of the FHLB.
As a member, the Bank is required to purchase and maintain stock in the
FHLB of Dallas in an amount equal to at least 1% of its aggregate unpaid
residential mortgage loans, home purchase contracts or similar obligations at
the beginning of each year.
Liquidity Requirements. All savings associations are required to
maintain an average daily balance of liquid assets equal to a certain percentage
of the sum of its average daily balance of net withdrawable deposit accounts and
borrowings payable in one year or less. The liquidity requirement may vary from
time to time (between 4% and 10%) depending upon economic conditions and savings
flows of all savings associations. The current requirement is 4%, at June 30,
2000 the bank was in compliance with the regulatory requirement.
Federal Reserve System. The Federal Reserve Board requires all
depository institutions to maintain non-interest bearing reserves at specified
levels against their transaction accounts (primarily checking, NOW, and Super
NOW checking accounts) and non-personal time deposits. The balances maintained
to meet the reserve requirements imposed by the Federal Reserve Board may be
used to satisfy the liquidity requirements that are imposed by the OTS. At June
30, 2000, the Bank was in compliance with these Federal Reserve Board
requirements.
Item 2. Description of Property.
--------------------------------
The Registrant owns its main office located at 221 West Aztec Avenue,
Gallup, New Mexico. The Registrant leases additional office space across the
street from its main office. The lease expires December 31, 2007 and the
Registrant has an option, upon notification of the lessor by August 1, 2007, to
purchase the building for $275,000 or to extend the lease for an additional 10
years.
(b) Investment Policies. See "Item 1. Business" above for a general
description of the Registrant's investment policies and any regulatory or Board
of Directors' percentage of assets limitations regarding certain investments.
The Registrant's investments are primarily acquired to produce income, and to a
lesser extent, possible capital gain.
(1) Investments in Real Estate or Interests in Real
Estate. See "Item 1. Business - Lending Activities and - Regulation of the
Bank," and "Item 2. Description of Property."
(2) Investments in Real Estate Mortgages. See "Item 1.
Business - Lending Activities and - Regulation of the Bank."
(3) Investments in Securities of or Interests in Persons
Primarily Engaged in Real Estate Activities. See "Item 1. Business - Lending
Activities and - Regulation of the Bank."
-19-
<PAGE>
(c) Description of Real Estate and Operating Data. Not Applicable.
Item 3. Legal Proceedings
--------------------------
Neither the Company nor the Bank are engaged in any legal proceedings
of a material nature at the present time. From time to time the Bank is a party
to legal proceedings in the ordinary course of business wherein it enforces its
security interest in mortgage loans made by it.
Item 4. Submission of Matters to a Vote of Security Holders
------------------------------------------------------------
No matter was submitted to a vote of security holders during the fourth
quarter of the fiscal year.
PART II
Item 5. Market for Common Equity and Related Stockholder Matters
-----------------------------------------------------------------
The information contained under the section captioned "Stock Market
Information" in the Company's Annual Report to Stockholders for the fiscal year
ended June 30, 2000 (the "Annual Report") is incorporated herein by reference.
Item 6. Management's Discussion and Analysis or Plan of Operation
------------------------------------------------------------------
The information contained in the section captioned "Management's
Discussion and Analysis of Financial Condition and Results of Operations" in the
Annual Report is incorporated herein by reference.
Item 7. Financial Statements
-----------------------------
The Company's consolidated financial statements listed under Item 13
herein are incorporated herein by reference.
Item 8. Changes in and Disagreements with Accountants on Accounting and
--------------------------------------------------------------------------------
Financial Disclosure
--------------------
Not applicable.
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons: Compliance
--------------------------------------------------------------------------------
with Section 16(a) of the Exchange Act.
---------------------------------------
The information required under this item is incorporated herein by
reference to the Proxy Statement for the 2000 Annual Meeting (the "Proxy
Statement") contained under the sections captioned "Section 16(a) Beneficial
Ownership Reporting Compliance," "Proposal I - Election of Directors," and "-
Biographical Information."
Item 10. Executive Compensation
--------------------------------
The information required by this item is incorporated by reference to
the Proxy Statement contained under the section captioned "Director and
Executive Officer Compensation."
-20-
<PAGE>
Item 11. Security Ownership of Certain Beneficial Owners and Management
------------------------------------------------------------------------
(a) Security Ownership of Certain Beneficial Owners
(b) Security Ownership of Management
The information required by items (a) and (b) is incorporated
herein by reference to the Proxy Statement contained under the
sections captioned "Principal Holders" and "Proposal I -
Election of Directors."
(c) Management of the Company knows of no arrangements, including
any pledge by any person of securities of the Company, the
operation of which may at a subsequent date result in a change
in control of the Company.
Item 12. Certain Relationships and Related Transactions
--------------------------------------------------------
The information required by this item is incorporated herein by
reference to the Proxy Statement contained under the section captioned "Certain
Relationships and Related Transactions."
Item 13. Exhibits, List, and Reports on Form 8-K
------------------------------------------------
(a) Listed below are all financial statements and exhibits filed as
part of this report.
1. The consolidated statements of financial condition of
GFSB Bancorp, Inc. and Subsidiary as of June 30, 2000
and 1999 and the related consolidated statements of
earnings and comprehensive earnings, changes in
stockholders' equity and cash flows for each of the
two years ended June 30, 2000, together with the
related notes and the independent auditors' report of
Neff & Ricci LLP, independent certified public
accountants.
2. Schedules omitted as they are not applicable.
-21-
<PAGE>
The following exhibits are included in this Report or
are incorporated herein by reference.
<TABLE>
<CAPTION>
3. (a) List of Exhibits
<S> <C>
3.1 Certificate of Incorporation of GFSB Bancorp, Inc.*
3.2 Bylaws of GFSB Bancorp, Inc.*
10.1 1995 Stock Option Plan**
10.2 Management Stock Bonus Plan**
10.3 Form of Directors Deferred Compensation Agreement between the Bank
and Directors***
10.4 Form of Directors Stock Compensation Plan between the Company and
Directors of the Company***
13 Portions of the 2000 Annual Report to Stockholders
21 Subsidiaries of the Issuer (See "Item 1 - Description of Business")
23 Consent of Neff & Ricci LLP
27 Financial Data Schedule (electronic filing only)
</TABLE>
--------------
* Incorporated herein by reference to exhibits 3(i)(Certificate of
Incorporation) and 3(ii)(Bylaws) to the Registration Statement on Form
S-1 of the Registrant (File No. 33-90400) initially filed with the
Commission on March 17, 1995.
** Incorporated by reference to the identically numbered exhibits of the
Annual Report on Form 10-KSB for the fiscal year ended June 30, 1997
(File No. 0-25854) filed with the SEC.
*** Incorporated by reference to the identically numbered exhibits of the
Quarterly Report on Form 10-QSB for the quarter ended March 31, 2000
filed with the SEC.
(b) Not applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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 as of September 25,
2000.
GFSB BANCORP, INC.
By: /s/Richard C. Kauzlaric
---------------------------------------
Richard C. Kauzlaric
President and Chief Executive Officer
(Duly Authorized Representative)
Pursuant to the requirement of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated as of September 25,
2000.
By: /s/Dr. Wallace R. Phillips By: /s/Richard C. Kauzlaric
------------------------------- ---------------------------------
Dr. Wallace R. Phillips Richard C. Kauzlaric
Chairman of the Board President, Chief Executive
Officer and Director
By: /s/Jerry R. Spurlin By: /s/James Nechero, Jr.
------------------------------- ---------------------------------
Jerry R. Spurlin James Nechero, Jr.
Chief Financial Officer Director
By: /s/Vernon I. Hamilton By: /s/Michael P. Mataya
------------------------------- ---------------------------------
Vernon I. Hamilton Michael P. Mataya
Director Director
By: /s/Charles L. Parker, Jr. By: /s/George S. Perce
------------------------------- ---------------------------------
Charles L. Parker, Jr. George S. Perce
Director Director
By: /s/Richard P. Gallegos
-------------------------------
Richard P. Gallegos
President of Bank
