UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2002
------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number: 0-25854
GFSB BANCORP, INC.
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(Name of Small Business Issuer in its Charter)
Delaware 04-2095007
- ------------------------------- -------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
221 West Aztec Avenue, Gallup, New Mexico 87301
- ----------------------------------------- ----------
(Address of Principal Executive Offices) (Zip Code)
Issuer's Telephone Number, Including Area Code: (505) 722-4361
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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
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As of October 31, 2002, there were issued and outstanding 1,150,106 shares of
the registrant's Common Stock.
GFSB Bancorp, Inc.
Index
Page No.
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PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements:
Condensed Consolidated Statements of Financial Condition
September 30, 2002 and June 30, 2002 3
Condensed Consolidated Statements of Earnings and Comprehensive Earnings
Three months ended September 30, 2002 and September 30, 2001 4
Condensed Consolidated Statements of Cash Flows
Three months ended September 30, 2002 and September 30, 2001 6
Notes to Condensed Consolidated Financial Statements 8
Item 2. Management's Discussion and Analysis or Plan of Operation 9
Item 3. Controls and Procedures 9
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 15
2
GFSB Bancorp, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
September 30, June 30,
2002 2002
------------- -------------
ASSETS
Cash and due from banks $ 4,798,839 $ 4,825,439
Interest-bearing deposits with banks 1,471,461 826,052
Available-for-sale investment securities 22,348,193 23,973,426
Available-for-sale mortgage-backed securities 28,090,985 27,290,274
Held-to-maturity investment securities 1,406,629 1,405,403
Stock of Federal Home Loan Bank, at cost, restricted 4,250,300 4,218,500
Loans receivable, net, substantially pledged 140,304,333 139,748,188
Accrued interest and dividends receivable 1,042,870 1,073,201
Premises and equipment 2,456,835 2,511,173
Other real estate and repossessed property 150,642 150,642
Prepaid and other assets 159,913 122,771
------------- -------------
TOTAL ASSETS $ 206,481,000 206,145,069
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Transaction and NOW accounts $ 22,141,212 $ 20,417,085
Savings and MMDA deposits 18,712,552 17,305,540
Time deposits 73,199,980 72,626,849
Advances from Federal Home Loan Bank 71,713,456 76,386,455
Repurchase agreements 1,610,174 1,234,857
Accrued interest payable 476,353 448,955
Advances from borrowers for taxes and insurance 593,572 416,575
Accounts payable and accrued liabilities 252,998 245,409
Deferred income taxes 578,346 568,728
Dividends declared and payable 110,506 110,506
Income taxes payable 243,336 1,168
------------- -------------
TOTAL LIABILITIES 189,632,485 189,762,127
------------- -------------
COMMITMENTS AND CONTINGENCIES - -
STOCKHOLDERS' EQUITY
Preferred stock, $.10 par value, 500,000
shares authorized; no shares issued or
outstanding - -
Common stock, $.10 par value, 1,500,000
shares authorized; 1,150,106 issued and outstanding
at September 30, 2002 and June 30, 2002 115,011 115,011
Additional paid-in-capital 2,790,894 2,761,251
Unearned ESOP stock (191,766) (207,926)
Retained earnings, substantially
restricted 12,821,457 12,420,358
Accumulated other comprehensive
earnings 1,312,919 1,294,248
------------- -------------
TOTAL STOCKHOLDERS' EQUITY 16,848,515 16,382,942
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 206,481,000 $ 206,145,069
============= =============
See notes to condensed consolidated financial statements.
3
GFSB Bancorp, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
AND COMPREHENSIVE EARNINGS
Three months ended
September 30,
-----------------------
2002 2001
----------- ----------
(Unaudited) (Unaudited)
Interest income
Loans receivable
Mortgage loans $2,135,694 $2,144,160
Commercial loans 331,480 353,267
Share and consumer loans 108,963 125,834
Investment and mortgage-backed securities 638,059 793,370
Other interest-earning assets 32,805 45,000
---------- ----------
TOTAL INTEREST EARNINGS 3,247,001 3,461,631
Interest expense
Deposits 794,345 1,213,486
Advances from Federal Home Loan Bank 804,994 877,910
Repurchase agreements 2,142 8,502
---------- ----------
TOTAL INTEREST EXPENSE 1,601,481 2,099,898
---------- ----------
NET INTEREST EARNINGS 1,645,520 1,361,733
Provision for loan losses 25,000 50,007
---------- ----------
NET INTEREST EARNINGS AFTER
PROVISION FOR LOAN LOSSES 1,620,520 1,311,726
---------- ----------
Non-interest earnings
Income from real estate operations 2,200 -
Miscellaneous income 12,165 12,587
Net gains from sales of loans 15,206 10,125
Service charge income 98,779 70,006
---------- ----------
TOTAL NON-INTEREST EARNINGS 128,350 92,718
---------- ----------
Non-interest expense
Compensation and benefits 538,306 419,505
FDIC insurance 4,329 4,760
Insurance 12,288 8,787
Stock services 3,944 2,613
Occupancy 136,040 101,712
Data processing 68,072 92,417
Professional fees 33,648 46,880
Advertising 35,713 20,833
Stationary, printing and office supplies 44,828 29,345
ATM expense 15,357 12,297
Supervisory exam fees 13,900 15,558
Postage 12,319 16,577
Other 77,055 68,592
---------- ----------
TOTAL NON-INTEREST EXPENSE 995,799 839,876
---------- ----------
4
GFSB Bancorp, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
AND COMPREHENSIVE EARNINGS - CONTINUED
Three months ended Three months ended
September 30, September 30,
-----------------------------------------
2002 2001
-----------------------------------------
(Unaudited) (Unaudited)
EARNINGS BEFORE INCOME TAXES 753,071 564,568
Income tax expense
Currently payable 241,468 173,688
Deferred provision - -
---------------- ----------------
241,468 173,688
---------------- ----------------
NET EARNINGS $ 511,603 $ 390,880
================ ================
Other Comprehensive Earnings
Unrealized gain, net of tax 18,671 149,823
---------------- ----------------
COMPREHENSIVE EARNINGS 530,274 540,703
================ ================
Earnings per common share
Basic $ 0.46 0.36
================ ================
Weighted average number of common shares outstanding
Basic 1,112,130 1,100,443
================ ================
Earnings per common share
Diluted 0.44 0.34
================ ================
Weighted average number of common shares outstanding
Diluted 1,156,063 1,140,381
================ ================
Comprehensive earnings per common share
Basic 0.48 0.49
================ ================
Diluted 0.46 0.47
================ ================
Dividends per share 0.10 0.09
================ ================
See notes to condensed consolidated financial statements.
5
GFSB Bancorp, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Increase (decrease) in cash and cash equivalents
Three months ended
September 30,
--------------------------
2002 2001
----------- -----------
(Unaudited) (Unaudited)
Cash flows from operating activities
Net earnings $ 511,603 $ 390,880
Adjustments to reconcile net earnings to
net cash provided by operations
Deferred loan origination fees (55,277) (62,524)
Gain on sale of loans (15,206) (10,125)
Provision for loan losses 25,000 50,007
Depreciation of premises and equipment 71,665 52,877
Amortization of investment and mortgage-
backed securities premiums (11,094) 62,675
Stock dividends on FHLB stock (31,800) (33,500)
Release of ESOP stock 45,803 37,653
Stock compensation 7,687 4,162
Net changes in operating assets and liabilities
Accrued interest and dividends receivable 30,331 (42,200)
Prepaid and other assets (37,142) (143,095)
Accrued interest payable 27,398 (8,589)
Accounts payable and accrued liabilities (98) 21,869
Repurchase agreements 375,317 85,948
Income taxes payable 242,168 (195,854)
----------- -----------
Net cash provided by
operating activities 1,186,355 210,184
----------- -----------
Cash flows from investing activities
Purchase of premises and equipment (17,327) (63,437)
Loan originations and principal
repayment on loans, net (510,662) 1,417,193
Principal payments on mortgage-backed
securities 2,291,281 2,877,594
Purchases of mortgage-backed securities (3,141,114) -
Purchases of available-for-sale securities (22,358) (3,992,187)
Maturities and proceeds from sale of
available-for-sale securities 85,000 200,000
Principal payments on available-for-sale securities 1,649,872 713,433
Purchase of FHLB stock - (800)
----------- -----------
Net cash provided by
investing activities 334,692 1,151,796
----------- -----------
6
GFSB Bancorp, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
Increase (decrease) in cash and cash equivalents
Three months ended Three months ended
September 30, September 30,
-----------------------------------------
2002 2001
--------------- --------------------
(Unaudited) (Unaudited)
Cash flows from financing activities
Net decrease in transaction accounts, passbook
savings, money market accounts, and
certificates of deposit $ 3,704,270 $ 909,708
Net increase in mortgage escrow funds 176,997 178,531
Proceeds from FHLB advances 91,986,387 165,567,462
Repayments on FHLB advances (96,659,386) (167,972,255)
Dividends paid or to be paid in cash (110,506) (103,510)
Price paid for vested management bonus
stock plan stock - 5,550
--------------- --------------------
Net cash used by
financing activities (902,238) (1,414,514)
--------------- --------------------
Increase (decrease) in cash and cash equivalents 618,809 (52,534)
Cash and cash equivalents at beginning of period 5,651,491 4,262,254
--------------- --------------------
Cash and cash equivalents at end of period $ 6,270,300 4,209,720
=============== ====================
Supplemental disclosures of cash flow information
Cash paid during the period for
Interest on deposits and advances $ 1,574,084 $ 2,099,985
Income taxes - 415,511
Change in unrealized gain, net of deferred
taxes on available-for-sale securities 18,671 149,823
Dividends declared not yet paid 110,506 98,453
See notes to condensed consolidated financial statements.
7
GFSB BANCORP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. The accompanying unaudited condensed consolidated financial
statements were in accordance with instructions for Form 10-QSB and therefore do
not include all disclosure necessary for a complete presentation of the
consolidated financial statements in conformity with accounting principles
generally accepted in the United States of America. However, all adjustments,
which are, in the opinion of management, necessary for the fair presentation of
the interim financial statements have been included. All such adjustments are of
a normal recurring nature. The condensed consolidated statements of earnings and
comprehensive earnings are not necessarily indicative of results, which may be
expected for the entire year, or for any other interim period.
Certain information and footnote disclosures normally included in the financial
statements prepared in accordance with accounting principles generally accepted
in the United States of America have been condensed or omitted pursuant to the
rules and regulations of the Securities and Exchange Commission. It is suggested
that these condensed unaudited financial statements be read in conjunction with
the Form 10-KSB for the year ended June 30, 2002.
8
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
General
The Private Securities Litigation Reform Act of 1995 contains safe harbor
provisions regarding forward-looking statements. When used in this discussion,
the words "believes", "anticipates", "contemplates", "expects", and similar
expressions are intended to identify forward-looking statements. Such statements
are subject to certain risks and uncertainties which could cause actual results
to differ materially from those projected. Those risks and uncertainties include
changes in interest rates, risks associated with the ability to control costs
and expenses, general economic conditions. We undertake no obligation to
publicly release the results of any revisions to those forward looking
statements which may be made to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events.
Overview
GFSB Bancorp, Inc. is a bank holding company headquartered in Gallup, New
Mexico, which provides a full range of deposits and traditional mortgage loan
products through its wholly owned banking subsidiary, Gallup Federal Savings
Bank. All references refer collectively to the Company and the Bank, unless the
context indicates otherwise.
Item 3. CONTROLS AND PROCEDURES
(a) Evaluation of disclosure controls and procedures. Based on their
--------------------------------------------------
evaluation as of a date within 90 days of the filing date of this Quarterly
Report on Form 10-QSB, the Registrant's principal executive officer and
principal financial officer have concluded that the Registrant's disclosure
controls and procedures (as defined in Rules 13a-14(c) and 15d-14(c) under the
Securities Exchange Act of 1934 (the "Exchange Act")) are effective to ensure
that information required to be disclosed by the Company in reports that it
files or submits under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in Securities and Exchange Commission
rules and forms.
(b) Changes in internal controls. There were no significant changes in
----------------------------
the Registrant's internal controls or in other factors that could significantly
affect these controls subsequent to the date of their evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.
9
RESULTS OF OPERATIONS
COMPARISON OF OPERATING RESULTS FOR QUARTER ENDED SEPTEMBER 30, 2002 COMPARED TO
QUARTER ENDED SEPTEMBER 30, 2001.
General
Net earnings for the three months ended September 30, 2002 increased $121,000 to
$512,000 from $391,000 for the three months ended September 30, 2001. The
increase in net earnings is primarily the result of an increase in net interest
earnings of $284,000, a $25,000 decrease in the provision for loan losses and a
$35,000 increase in non-interest earnings, offset by a $156,000 increase in
non-interest expense and a $67,000 increase in income tax expense. Please refer
to "Average Balance Sheets" for an analysis of the changes in net interest
earnings for the three months ended September 30, 2002 compared to the same 2001
period.
10
Average Balance Sheets
The following table sets forth certain information relating to the Company's
average balance sheet and reflects the average yield on assets and average cost
of liabilities for the periods indicated and the average annual yields earned
and rates paid. Average balances are derived from month-end balances. Management
does not believe that the use of month-end balances instead of daily average
balances has caused any material differences in the information presented.
Quarter ended September 30, 2002 Quarter ended September 30, 2001
---------------------------------------- ----------------------------------------
Average Average Average Average
Balance Interest Yield/Cost Balance Interest Yield/Cost
(Dollars in Thousands) (Dollars in Thousands)
Interest-earning assets:
Loans receivable (1) $140,319 $2,576 7.34% $129,249 $2,623 8.12%
Investment securities and
mortgage-backed securities 51,768 638 4.93% 56,099 793 5.65%
Other interest-earning
assets (2) 5,150 33 2.56% 4,754 45 3.79%
-------- ------ -------- ------
Total interest-earning assets 197,237 3,247 6.58% 190,102 3,461 7.28%
----- -----
Non-interest-earning assets 8,835 5,729
-------- --------
Total assets $206,072 $195,831
======== ========
Interest-bearing liabilities:
Transaction accounts $ 8,747 $ 18 .82% $ 7,614 $ 24 1.26%
Passbook savings 5,440 17 1.25% 4,677 16 1.37%
Money market accounts 12,235 37 1.21% 9,473 58 2.45%
Certificates of deposit 73,533 722 3.93% 77,591 1,116 5.75%
Other liabilities (3) 75,030 807 4.30% 70,828 886 5.00%
-------- ------ -------- ------
Total interest-bearing
liabilities 174,985 1,601 3.66% 170,183 2,100 4.94%
----- -----
Non-interest bearing
liabilities 14,407 10,411
-------- --------
Total liabilities 189,392 180,594
Stockholders' equity 16,680 15,237
-------- --------
Total liabilities and
stockholders' equity $206,072 $195,831
======== ========
Net interest income $1,646 $1,361
====== ======
Interest rate spread (4) 2.92% 2.34%
==== ====
Net yield on interest-
earning assets (5) 3.34% 2.86%
==== ====
Ratio of average interest-
Earning assets to average
interest-bearing liabilities 1.13X 1.12X
==== ====
(1) Average balances include non-accrual loans.
(2) Includes interest-bearing deposits in other financial institutions.
(3) Other liabilities include FHLB advances and Repurchase agreements.
(4) Interest-rate spread represents the difference between the average yield on
interest-earning assets and the average cost of interest-bearing
liabilities.
(5) Net yield on interest - earning assets represents net interest income as a
percentage of average interest-earning assets.
11
Rate/Volume Analysis
The table below sets forth certain information regarding changes in interest
income and interest expense of the Company for the periods indicated. For each
category of interest-earning assets and interest-bearing liabilities,
information is provided on changes attributable to (i) changes in volume; (ii)
changes in rates; (iii) changes in rate-volume. The changes attributable to the
combined impact of volume and rate have been allocated proportionately to the
changes due to volume and the changes due to rate.
Quarter ended September 30, 2002 vs.
2001
Increase (Decrease)
Due to
-------------------------------------
Rate/
Volume Rate Volume Net
------ ---- ------ -----
(Dollars in Thousands)
Interest income:
Loans receivable $225 $(252) $(21) $ (48)
Mortgage-backed securities and
investment securities (61) (101) 7 (155)
Other interest-earning assets 4 (15) (1) (12)
---- ----- ---- ----
Total interest-earning assets 168 (368) (15) (215)
Interest expense:
Transaction accounts 3 (8) (1) (6)
Savings accounts 3 (1) (1) 1
Money markets 17 (29) (9) (21)
Certificates of deposit (58) (353) 17 (394)
Other liabilities 53 (124) (8) (79)
---- ----- ---- ----
Total interest-bearing liabilities 18 (515) (2) (499)
---- ----- ---- ----
Net change in interest income $ 150 $ 147 $(13) $(284)
===== ===== ===== =====
Provision for Losses on Loans
The Company maintains an allowance for loan losses based upon management's
periodic evaluation of known and inherent risks in the loan portfolio, past loss
experience, adverse situations that may affect the borrower's ability to repay
loans, estimated value of the underlying collateral and current and expected
market conditions. The provision for loan loss was $25,000 and $50,000 for the
quarters ended September 30, 2002 and 2001, respectively. The decrease in the
provision for loan losses for the current three-month period was the result of
less loan growth in commercial loans, which tend to have greater credit risk
than residential real estate loans. While the Company maintains its allowance
for losses at a level which it considers to be adequate, there can be no
assurance that further additions will not be made to the loss allowances and
that such losses will not exceed the estimated amounts.
12
Non-Interest Earnings
Total non-interest earnings increased by $35,000 or 37.6% to $128,000 for the
quarter ended September 30, 2002 from $93,000 for the quarter ended September
30, 2001. This increase was primarily due to an increase in service charge
income of $29,000, which was the result of increased insufficient funds charges
collected on NOW and Checking accounts.
Non-Interest Expense
Total non-interest expense increased $156,000 or 18.6% to $996,000 for the
quarter ended September 30, 2002 from $840,000 for the quarter ended September
30, 2001. The most significant changes in non-interest expenses were increases
in compensation and benefits, occupancy costs, advertising and stationary,
printing and office supplies, offset by decreases in data processing and
professional fees. The $119,000 increase in compensation and benefits expense
reflects a $98,000 increase in general salaries and benefits expense primarily
due to the hiring of nine employees to staff the Bank's new branch and general
merit increases in administrative and other employee salaries, Other increases
in compensation and benefits include $12,000 in expense related to employee
stock compensation plans and $9,000 in expense related to director fee
compensation. Occupancy costs increased $34,000 due primarily to increases in
depreciation for furniture, fixtures, and equipment, maintenance contract
expense and other occupancy costs associated with maintaining the new branch.
Advertising expense increased $15,000 primarily due to the Bank's efforts to
achieve growth in the Farmington, New Mexico market, where the new branch is
located. Stationary, printing and office supplies increased $15,000 primarily
due to the purchase of forms and supplies for the new branch. Data processing
decreased $24,000 primarily due to higher service bureau expense in the quarter
ended September 30, 2001 due to a change to a new service provider. Professional
fees decreased $13,000 primarily due to lower legal fees in the quarter ended
September 30, 2002.
13
PART II. OTHER INFORMATION
- -------- -----------------
Item 1. Legal Proceedings
-----------------
Not applicable.
Item 2. Changes in Securities and Use of Proceeds
-----------------------------------------
Not applicable.
Item 3. Defaults Upon Senior Securities
-------------------------------
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
Not applicable.
Item 5. Other Information
-----------------
Not applicable.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) List of Exhibits
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***
10.5 2000 Stock Option Plan****
99.0 Certification pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
--------------
* 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.
**** Incorporated by reference to the Proxy Statement for the Annual
Meeting of Stockholders on October 27, 2000 and filed with the
SEC on September 25, 2000.
(b) Not applicable.
14
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
GFSB BANCORP, INC.
Date: November 13, 2002 /s/Jerry R. Spurlin
------------------ ------------------------------------------------
Jerry R. Spurlin
Assistant Secretary and Chief Financial Officer
(Duly Authorized Representative and
Principal Financial Officer)
15
SECTION 302 CERTIFICATION
I, Richard C. Kauzlaric, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of GFSB Bancorp, Inc.:
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
(a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
(b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
(c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):
(a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
(b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officer and I have indicated in this
quarterly report whether there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Date: November 13, 2002 /s/ Richard C. Kauzlaric
-------------------------- ------------------------------------------
Richard C. Kauzlaric
President
16
SECTION 302 CERTIFICATION
I, Jerry R. Spurlin, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of GFSB Bancorp, Inc.:
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
(a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
(b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
(c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):
(a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
(b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officer and I have indicated in this
quarterly report whether there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Date: November 13, 2002 /s/ Jerry R. Spurlin
----------------------- --------------------------------------------
Jerry R. Spurlin
Chief Financial Officer
17