Filed by: First Federal Banc of the Southwest, Inc.
Pursuant to Rule 425 under the Securities Act of 1933 and
deemed filed pursuant to rule 14a-12 under
the Securities Exchange Act of 1934
Subject Company: GFSB Bancorp, Inc.
Commission File No.: 000-25854
[FFBSW LETTERHEAD]
August 27, 2004
Dear Fellow Stockholder:
On behalf of the Board of Directors and management of First Federal
Banc of the Southwest, Inc. (the "Company"), attached is a press release
announcing our acquisition of GFSB Bancorp, Inc., the parent holding company for
Gallup Federal Savings Bank, through the issuance of stock and the payment of
cash. We believe this transaction will increase the Company's earnings base,
provide us with access to new markets, and increase the liquidity of our stock.
For additional information about the transaction, please see the attached press
release.
Very truly yours,
/s/ Aubrey L. Dunn, Jr.
Aubrey L. Dunn, Jr.
President and Chief Executive Officer
Attachment
PRESS RELEASE
FOR IMMEDIATE RELEASE CONTACT:
August 25, 2004 Jerry R. Spurlin
Chief Financial Officer
GFSB Bancorp, Inc.
(505) 726-6500
Aubrey L. Dunn, Jr.
President & CEO
First Federal Banc of the Southwest, Inc.
(505) 622-6201
GFSB BANCORP, INC. AND FIRST FEDERAL BANC OF THE SOUTHWEST,INC.
ANNOUNCE PLANS TO MERGE
Gallup and Roswell, New Mexico. GFSB Bancorp, Inc. (Nasdaq SmallCap: GUPB), the
holding company for Gallup Federal Savings Bank, and First Federal Banc of the
Southwest, Inc. ("FFBSW"), the holding company for First Federal Bank, Roswell,
New Mexico, announced today that they have signed a definitive merger agreement
pursuant to which GFSB will merge with and into FFBSW.
Under the terms of the agreement, upon consummation of the merger of GFSB into
FFBSW, each outstanding share of GFSB common stock will be converted into the
right to receive either $20.00 in cash or FFBSW common stock, at the election of
the holder, subject to an overall requirement that 51% of the total outstanding
GFSB common stock be exchanged for stock. The transaction is subject to various
conditions, including stockholder approval of both GFSB and FFBSW, and approval
by the applicable banking regulatory agencies.
Pursuant to the terms of the merger agreement, FFBSW has agreed to register
FFBSW's common stock under the Securities Exchange Act of 1934 and it will file
reports with the Securities and Exchange Commission. In addition, upon the
completion of the merger, its shares are expected to be listed on the NASDAQ.
GFSB operates through two offices in Gallup and Farmington New Mexico. FFBSW,
headquartered in Roswell, operates through 10 full service branches located in
Bernalillo, Chaves, Dona Ana, Lincoln, and Otero Counties New Mexico and El
Paso, Texas.
Aubrey L. Dunn, Jr., President and Chief Executive Officer of FFBSW, stated "we
are very excited about the merger with GFSB and believe it will provide
significant long-term benefits to our company and our stockholders. In one
transaction, we will become a public company and significantly increase the size
of our earnings base and competitive resources. The Board strongly feels that
this is in the best interests of our company, our stockholders and our local
communities."
Richard C. Kauzlaric, President and Chief Executive Officer of GFSB, stated that
he is "very pleased to be joining with FFBSW and look forward to the benefits
this affiliation will offer our stockholders, employees and customers."
The total value of the acquisition is approximately $24.1 million and is
conditioned upon customary conditions including minimum capital levels. The
merger is anticipated to be consummated in the first quarter of 2005.
Hovde Financial LLC served as the financial advisor to FFBSW and The Wallach
Company, a division of McDonald Investments, served as the financial advisor to
GFSB. Luse Gorman Pomerenk & Schick, PC served as legal counsel to FFBSW in the
transaction and Malizia Spidi & Fisch, PC served as legal counsel to GFSB.
First Federal Banc of the Southwest, Inc. headquartered in Roswell, New Mexico,
had $358 million in assets at June 30, 2004. The common stock of FFBSW is not
currently listed or traded on any national securities exchange or over the
counter market nor is FFBSW currently subject to the periodic reporting
requirements of the Securities Exchange Act of 1934, as amended.
GFSB Bancorp, Inc., headquartered in Gallup, New Mexico, had $231.8 million in
assets at June 30, 2004. The common stock of GFSB is traded on the Nasdaq
SmallCap Market under the symbol "GUPB."
This release may contain forward-looking statements as that term is defined in
the Private Securities Litigation Reform Act of 1995. Such forward-looking
statements are subject to risks and uncertainties which could cause actual
results to differ materially from those currently anticipated due to a number of
factors and therefore readers should not place undue reliance on any
forward-looking statements.
This document may be deemed to be solicitation material with respect to the
proposed merger of First Federal Banc of the Southwest, Inc. and GFSB Bancorp,
Inc. FFBSW and GFSB will be filing relevant documents concerning the merger with
the Securities and Exchange Commission, including a registration statement on
Form S-4 containing a joint proxy statement/prospectus. We urge investors to
read these documents when they become available because they contain important
information. Investors will be able to obtain these documents free of charge at
the SEC's website, www.sec.gov. In addition, these documents and any other
documents filed with the SEC by FFBSW will be available free of charge from the
Secretary of FFBSW (George A. Rosenbaum, Jr.) at 300 North Pennsylvania,
Roswell, New Mexico 88201, telephone (505) 622-6201 and any other documents
filed with the SEC by GFSB will be available free of charge from the Chief
Financial Officer of GFSB Bancorp, Inc. (Jerry R. Spurlin) at 221 West Aztec
Avenue, Gallup, New Mexico 87301, telephone (505) 726-6500. FFBSW and GFSB and
their directors and executive officers may be deemed to be participants in the
solicitation of proxies to approve the merger. Information about the directors
and executive officers of FFBSW and their ownership of FFBSW common stock will
be included in the joint proxy statement/prospectus. Information about the
directors and executive officers of GFSB and their ownership of GFSB common
stock is set forth in the proxy statement filed by GFSB with the SEC dated
September 26, 2003. Stockholders of FFBSW and GFSB should read the joint proxy
statement/prospectus and other documents to be filed with the SEC carefully
before making a decision concerning the merger.