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x Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number: 0-22269

Louisiana	72-1341014
(State or Other Jurisdiction	(IRS Employer ID Number)
of Incorporation or Organization)

Registrant's Telephone Number: (504) 457-6220

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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.

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. _x__

As of March 18, 2002, there were 1,650,462 shares of the Registrant’s common stock, par value $.01 per share, issued and outstanding. The aggregate market value of such stock, excluding the shares held by all directors, officers and affiliates of the Registrant, was $17.0 million at March 18, 2002 based on the per common share price at closing of $15.00 on that date. The information presented in this Form 10-K at December 31, 2001 and 2000, and for the twelve months ended December 31, 2001, 2000, and 1999 represent the financial condition and results of operations of GS Financial Corp. and its wholly-owned subsidiary, Guaranty Savings & Homestead Association.

DOCUMENTS INCORPORATED BY REFERENCE

Listed hereunder are the following documents which have been incorporated by reference and the Part of the Form 10-K into which the document is incorporated.

(1)	Portions of the Annual Report to Shareholders for the fiscal year ended December 31, 2001 are incorporated into Part II, Items 5 through 8, and Part IV, Item 14.
(2)	Portions of the definitive proxy statement for the 2002 Annual Meeting of Shareholders to be filed within 120 days of the Registrant’s fiscal year end are incorporated into Part III, Items 10 through 13.

Item 1. BUSINESS

In addition to historical information, this Annual Report on Form 10-K includes certain "forward-looking statements," as defined in the Securities Act of 1933 and the Securities Exchange Act of 1934, based on current management expectations. The Company’s actual results could differ materially from those management expectations. Such forward-looking statements include statements regarding the Company’s intentions, beliefs or current expectations as well as the assumptions on which such statements are based. Stockholders and potential stockholders are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. Factors that could cause future results to vary from current management expectations include, but are not limited to, general economic conditions, legislative and regulatory changes, monetary and fiscal policies of the federal government, changes in tax policies, rates and regulations of federal, state and local tax authorities, changes in interest rates, deposit flows, the cost of funds, demand for loan products, demand for financial services, competition, changes in the quality or composition of the Company’s loan and investment portfolios, changes in accounting principles, policies or guidelines, and other economic, competitive, governmental and technological factors affecting the Company’s operations, markets, products, services and fees. The Company undertakes no obligation to update or revise any forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time.

General

GS Financial Corp. (the "Company") was incorporated under Louisiana law on December 24, 1996 as a thrift holding company. The Company commenced operations on April 1, 1997 upon the completion of its initial public offering of common stock, which trades on the Nasdaq National Market. On that date the Company’s wholly owned subsidiary, Guaranty Savings and Homestead Association (the "Association"), was converted from a Louisiana chartered mutual savings and loan association to a Louisiana chartered stock savings and loan association. This was accomplished through the offer and sale of common stock by the Company to certain depositors, employees, officers and directors of the Association as well as the GS Financial Employee Stock Ownership Plan (the "ESOP"). The Company simultaneously used a portion of the proceeds of its sale of common stock to acquire 100% of the stock of the Association.

The Company's principal business is conducted through the Association. Guaranty Savings and Homestead Association was founded in New Orleans, Louisiana in 1937 as a mutual savings and loan association. The Association’s unconsolidated assets at December 31, 2001 totaled $186.0 million and comprise 98.7% of the total consolidated assets of the Company. The Association provides financial services primarily to individuals, mainly through the origination of mortgage loans on 1-4 family residences. The Association accepts deposits in the form of passbook savings, certificates of deposit, demand deposit accounts and individual retirement accounts. The Association also invests in short and long term liquid investments such as US Treasury and Agency securities, mortgage backed securities, overnight Federal Funds, money market investments and qualified thrift grade mutual funds. The balance of the consolidated assets includes $1.7 million in similar short and long term liquid investments, and $.8 million in fixed assets held exclusively at the Company level.

Regulation

The Company’s primary regulator is the Office of Thrift Supervision ("OTS"). The OTS regulates all thrifts and thrift holding companies whose deposits are insured by the Savings Association Insurance Fund ("SAIF") which is administered by the Federal Deposit Insurance Corporation ("FDIC"). The Company, by virtue of its state charter is also subject to the rules and regulations of the Louisiana Office of Financial Institutions ("OFI"). These two agencies currently examine the Company approximately every 18 months on an individual basis, relying on the examination report of the other agency on cycles, alternating when it is not their year to examine the Association. The nature of such examinations includes safety and soundness issues or compliance with applicable laws and regulations. The Association was last examined by the OFI as of September 30, 2000 and the Company was last examined by the OTS as of December 31, 2000.

As a public registrant the Company is subject to the rules and regulations of the Securities and Exchange Commission ("SEC"). The Company also is subject to the rules of the NASDAQ Stock Market.

The Association has been a member of the Federal Home Loan Bank of Dallas ("FHLB") since 1937. The Federal Home Loan Bank System is comprised of 12 regional banks which serve thrifts and banks by offering investment opportunities and sources of funds.

Lending Activities

Loan Portfolio Composition. The following table sets forth the composition of the Company’s loan portfolio by type of loan at the dates indicated (in thousands):

				December 31,
				2001		2000		1999		1998		1997
Real Estate Loans:
	1-4 Family Residential		$	69,843	$	71,092	$	67,424	$	61,562	$	52,528
	FHA and VA			9		52		140		237		358
	Construction			1,056		619		646		740		99
	Commercial Real Estate			3,431		1,006		1,377		1,157		471
	Other			6,750		1,453		446		201		123
				---------		---------		---------		---------		---------
		Total Real Estate Loans		81,089		74,222		70,033		63,897		53,579
Consumer Loans:
	Second Mortgage			11		52		84		119		172
	Loans on Deposits			254		237		367		337		244
				---------		---------		---------		---------		---------
		Total Consumer Loans		265		289		451		456		416
Commercial Loans				683		381		-		-		-
				---------		---------		---------		---------		---------
		Total Loans		82,037		74,892		70,484		64,353		53,995
Allowance for
	Loan Losses			(435)		(420)		(424)		(463)		(410)
Net Deferred Loan
	Origination Costs			9		8		6		5		3
				---------		---------		---------		---------		---------
Net Loans			$	81,611	$	74,480	$	70,066	$	63,895	$	53,588
				=====		=====		=====		=====		=====

Contractual Term to Final Maturities. The following table sets forth certain information as of December 31, 2001 regarding the dollar amount of loans maturing in the Company’s portfolio, based on the contractual date of the loan’s final maturity, before giving effect to net items. Demand loans and loans having no stated maturity are reported as due in one year or less. The amounts shown below do not reflect normal principal amortization; rather, the balance of each loan outstanding at December 31, 2001 is shown in the appropriate year of the loan’s final maturity. The actual maturity of loans varies primarily on prepayments which to a large extent depend on market interest rates. In general if prevailing market rates fall below those of the portfolio, prepayments accelerate. Conversely if market interest rates increase above portfolio rates early pay-offs tend to decrease.

Fixed rate loans receivable as of December 31, 2001 are scheduled to mature and adjustable rate loans are scheduled to re-price as follows (in thousands):

					Under One Year		One to Five Years		Over Five to Ten Years		Over 10 Years		Total
					------		------		------		------		------
Loans Secured by 1-4 Family
	Residential:
		Fixed Rate		$	54	$	2,879	$	7,610	$	59,300	$	69,843
Other Loans Secured by
	Real Estate:
		Fixed Rate			58		2,127		3,546		5,526		11,257
Commercial Fixed Rate					286		-		124		273		683
All Other Loans					254		-		-		-		254
					------		------		------		------		------
				$	652	$	5,006	$	11,280	$	65,099	$	82,037
					=====		=====		=====		=====		=====

Loan Origination Activity. The table below sets forth the Company’s total loan origination and reduction experience during the periods indicated. Historically, the Company has not purchased or sold any loans.

			December 31,
			2001		2000		1999		1998		1997
			-------		-------		-------		-------		-------
Loan Originations (in thousands):
	1-4 Family Residential	$	12,062	$	10,846	$	13,082	$	14,697	$	14,806
	Construction		1,670		1,514		1,004		1,610		726
	Commercial real estate		1,430		323		306		526		75
	Consumer		252		106		266		283		149
	Commercial		610		383		-		-		-
	Other Real Estate		6,030		568		263		732		165
			-------		-------		-------		-------		-------
Total Loan Originations			22,054		13,740		14,921		17,848		15,921
Loan principal
	Repayments		(14,521)		(9,218)		(8,790)		(7,490)		(6,425)
Increase (decrease)
	due to other items		(14)		6		72		(51)		(33)
			-------		-------		-------		-------		-------
Net increase (decrease) in
	Loan portfolio	$	7,519	$	4,528	$	6,203	$	10,307	$	9,463
			======		======		======		======		======

Real Estate Lending Standards and Underwriting Policies.

The lending activities of the Company are subject to written underwriting standards and loan origination procedures established by the Company's Board of Directors and Management which are consistent with safe and sound banking requirements. These standards and procedures are incorporated into the Company's Underwriting Standards and Lending Policy which are reviewed annually by the Board of Directors (the "Board"). The underwriting standards dictate the manner in which loan applications are accepted and processed. Such standards are written to comply with all applicable laws and regulations including but not limited to Truth-In-Lending (Regulation Z) and the Real Estate Settlement and Procedures Act ("RESPA"). These standards pertain to such issues as appraisal guidelines, disclosure requirements, credit criteria, complete applications, and title requirements. The Company requires appraisals from Board-approved state licensed and certified appraisers. The lending policy establishes the overall direction of the Company's lending activities within the community and forms the basis for setting underwriting standards which are intended to limit the Company's exposure to credit risk. Such factors include loan amount, debt to income ratios, collateral, and acceptable rates and terms.

Briefly stated, the loan process consists of applicants meeting with loan personnel and providing pertinent documentation, including but not limited to, requested loan amount, property description, security offered as collateral, intended down payments and an acceptable rate and term consistent with the Company's then current lending policy. Upon receipt of a favorable credit report, an appraisal is obtained with requisite documentation to support the property's stated market value. Upon completion the loan package is presented to the Loan Committee for consideration. All applicants receive written notification of the Committee’s decision to approve or deny the request. Approved loans are assigned to one of the Company's approved attorneys for closing. Actions of the Loan Committee are submitted to the Board of Directors for consideration and ratification on a monthly basis.

Loan applications are accepted at all three of the Company’s full service branches and the two loan production offices in Ponchatoula and Metairie and forwarded to the Loan Committee which meets weekly. The Company requires a title insurance policy on all loans secured by real estate prior to closing.

The Company’s conventional fixed rate mortgage loans on 1-4 family residential dwellings are offered with terms up to 30 years. Currently, the minimum cash down payment is 20% of the lesser of purchase price or appraised value. The Company originates and funds construction loans which subsequently convert to permanent, fixed rate mortgage loans. During the construction period, the Company requires payment of interest only on the amount of principal drawn.

In 2000, the Company began shifting some of its lending activity towards the commercial market to diversify and enhance the products and services offered to its customers and add loans to the overall portfolio with yields higher than current market rates on residential mortgage loans. Commercial loans typically carry higher yields and associated risk than loans on 1-4 family dwellings. The Company offers mortgage loans on residential investment property, commercial real estate, condominiums and vacant ground. The Company also offers commercial asset based loans secured by non-real estate collateral such as inventory and accounts receivable.

During 2001, the Company was able to originate approximately $8 million of non-residential loans. Of this amount approximately $6 million was secured by multi-family dwellings. The Company applies similar underwriting standards to its commercial loans with particular attention paid to debt coverage ratios. Commercial loan documentation procedures differ from residential lending requirements on a case-by-case basis.

Loans are available to depositors of the Company secured by passbook savings or certificates of deposit at a rate 2 percentage points above the savings rate up to 90% of the face amount of a certificate of deposit or 90% of the current available balance of a passbook. The minimum amount on such loans is $1,000 and these loans are payable on demand subject to 30 days notice.

Asset Quality

General. The Company has adopted an asset classification policy which is designed to draw attention to assets before collection becomes a problem, thus maintaining the quality of the Company’s investment as an interest earning asset. The policy also insures the accurate reporting of the Company’s assets from a valuation standpoint.

All of the Company’s assets are reviewed on a quarterly basis. Payment histories as well as the value of the underlying collateral are reviewed and assessed in light of several risk factors. The most significant risk factor is the state of the local economy. A healthy economy is characterized by low unemployment which usually leads to strong real estate markets and the maintenance if not appreciation of underlying collateral values. Current interest rates and expectations of the movement thereof is also a significant risk factor. Low or falling interest rates can act to stimulate local real estate markets while also increasing prepayment speeds on existing assets. Rising or high interest rates usually slows down payments. The level of credit concentration the customer has with the Company is also a risk factor. Other risk factors include environmental factors which could impair the value of the underlying collateral of an asset or changes in federal and state regulations which might reduce the ability of the Company to collect all of the principal and interest owed to the Company.

The Company’s Watch List, comprising substandard and special mention assets is presented to the Board quarterly. Assets displaying tendencies which might hinder full collection of principal are classified as substandard. Such tendencies include but are not limited to late payments on loans or deterioration of the underlying collateral. Those loans classified substandard, for which a specific potential for loss has been identified, are considered "special assets." Assets classified as special mention are those not yet serious enough to merit the substandard classification but do require additional attention from management.

Loan collection efforts in the form of past due notices commence when loan payments are more than 15 days past due. Once a loan reaches 30 days past due status, the Company’s collection manager initiates personal contact with the borrower. When a loan becomes 90 days past due, the Company initiates foreclosure proceedings. At this point, loans are placed on non-accrual status. All interest and late charges due on such loans are reversed in the form of reserves for uncollectible interest and late charges.

Real estate acquired by the Company through foreclosure is classified as foreclosed real estate until such time as the property is sold. All such assets are booked at the lower of appraised value or cost which includes all principal, escrow overdrafts and attorney fees. All Foreclosed Real Estate is considered substandard.

Delinquent Loans and Non-Performing Assets. The following tables set forth the Company’s delinquent loans and non-performing assets as of the dates indicated. Balances are indicative of the total principal balances of such loans rather than the actual principal past due based on the number of payments past due. At December 31 of the five years presented, predominantly all of the Association’s delinquent loans and non performing assets were either 1-4 family residential dwellings or loans secured by 1-4 family residential loans.

		2001		2000		1999		1998		1997
		-----		-----		-----		-----		-----
30-89 Days	$	3,542	$	2,231	$	2,673	$	2,171	$	271
90+ Days		249		434		100		266		166
		-----		-----		-----		-----		-----
Total Delinquent Loans	$	3,791	$	2,665	$	2,773	$	2,437	$	437
		====		====		====		====		====

During 1998, the Company changed its data processing parameters to include accounts exactly 30 days past due in the delinquent 30-89 day category. This accounts for the material increase in the amount of loans delinquent 30-89 days in 1998 through 2001 compared to 1997.

			2001		2000		1999		1998		1997
			-----		-----		-----		-----		-----
90+ Day Delinquent Loans		$	249	$	434	$	100	$	266	$	166
Foreclosed Real Estate			-		117		14		-		-
			-----		-----		-----		-----		-----
Total Non Performing Assets		$	249	$	551	$	114	$	266	$	166
			===		===		===		===		===
Non Performing Loans as
	a % of Total Loans		.30%		.58%		.14%		.42%		.31%
Non Performing Assets as
	a % of Total Assets		.13%		.28%		.06%		.17%		.13%

Classified Assets. The following table presents information pertaining to the Company’s Watch list of classified assets and associated specific valuation allowances as of the dates indicated. All substandard and special mention loans receivable and related specific valuation allowances were on 1-4 family residential mortgage loans.

			At December 31,
			2001		2000		1999		1998		1997
			------		------		------		------		------
Substandard		$	1,771	$	1,785	$	1,633	$	1,970	$	1,564
Special Mention			66		127		148		241		298
			------		------		------		------		------
Gross			1,837		1,912		1,781		2,211		1,862
Less Allowance for
	Loan Loss *		-		-		(106)		(141)		(141)
			------		------		------		------		------
Net		$	1,837	$	1,912	$	1,675	$	2,070	$	1,721
			=====		=====		=====		=====		=====

* Up until the safety and soundness examination completed by the OTS in November, 1999, the Company maintained a specific and general valuation allowance for loan loss. At the suggestion of OTS regulators, the Company adopted a methodology of one single allowance for loan loss, eliminating the prior separate accounting of the specific and general valuation allowances for loan loss.

Allowance for Loan Loss. The allowance for loan loss ("ALL") is calculated by assessing the need for specific reserves on identified problem credits (see special assets in the previous paragraph) in addition to using historical and economic based percentages on certain classifications of homogeneous loans to arrive at an overall ALL. Several of these categories are based on the particular loan being included on the Company’s Watch List. Other categories are based on the type of underlying collateral such as commercial or residential real estate while still other categories are based on the nature of the loan such as construction versus permanent financing. At December 31, the ALL was allocated as follows for the five years presented:

Allocation of the Allowance for Loan Losses

(Dollars in Thousands)

Balance at End of Period Applicable to:	2001		2000		1999		1998		1997
	Amount	Percent of Total Loans	Amount	Percent of Total Loans	Amount	Percent of Total Loans	Amount	Percent of Total Loans	Amount	Percent of Total Loans
1-4 Family Residential	$ 337	85.1%	$ 390	94.9%	$ 340	95.7%	$ 377	95.7%	$ 373	97.3%
FHA and VA	-	0.0%	-	.1%	-	.2%	-	.4%	-	.7%
Construction	5	1.4%	-	.8%	-	.9%	-	1.1%	-	.2%
Commercial Real Estate	57	4.2%	24	1.3%	39	2.0%	15	1.8%	22	.9%
Other Real Estate	33	8.2%	-	1.9%	45	.6%	45	.3%	15	.2%
Second Mortgage	-	0.0%	-	.1%	-	.1%	26	.2%	-	.3%
Loans on Deposits	-	.3%	-	.3%	-	.5%	-	.5%	-	.5%
Commercial Loans	3	.8%	6	.5%	-	n/a	-	n/a	-	n/a
TOTAL	$ 435	100.0%	$ 420	100.0%	$ 424	100.0%	$ 463	100.0%	$ 410	100.0%

LOAN LOSS EXPERIENCE

Provisions for loan losses are charged to earnings to bring the total ALL to a level considered appropriate by management. Losses are incurred via foreclosure, deterioration of the underlying collateral, inability of the customer to repay the loan or other means. These losses are charged against the ALL. The ALL is evaluated on a quarterly basis and provisions to increase or adjustments to reduce the allowance to the appropriate level deemed by management are recorded when necessary. Charge-offs reduce the allowance while recoveries increase the allowance during the quarter. Management assesses the ALL accordingly and establishes additional provisions to bring the ALL to an appropriate level. The appropriate level of the ALL is determined by management’s estimation of the amount of loss associated with loans considered to be impaired in accordance with SFAS 114, "Accounting by Creditors for Impairment of a Loan," as well as management’s estimate of loss associated with the remaining portfolio. Historical analysis of factors such as number of foreclosures, level of delinquencies and amount of charge-offs as well as other factors such as local and national economic conditions help management set both the formula used to calculate the ALL for the remaining loan portfolio as well as an appropriate level for the ALL overall.

The following table sets forth the Company’s loan loss experience for the years presented. All of the charge-offs and provisions in the following table were on first mortgages of one-to-four family dwellings.

An analysis of the allowance for loan losses is as follow (dollars in thousands):

			Years Ended December 31,
			2001		2000		1999		1998		1997
Balance, Beginning			-----		-----		-----		-----		-----
	of Year	$	420	$	424	$	463	$	410	$	382
Provision for Losses			25		7		6		53		28
Loans Charged Off			(10)		(11)		(45)		-		-
Recoveries			-		-		-		-		-
			-----		-----		-----		-----		-----
Balance, End of Year		$	435	$	420	$	424	$	463	$	410
			====		====		====		====		====
Allowance for Loan
	Losses as a % of
	Total Loans Receivable	.53%		.56%		.60%		.72%		.77%
Allowance for Loan
	Losses as a % of
	Non Performing Loans	174.80%		96.69%		422.97%		174.01%		247.49%
Net Charge-Offs as a % of
	Average Loans	0.01%		0.02%		0.07%		-		-

Mortgage-Backed Securities

The Company has invested in a portfolio of fixed-rate, mortgage-backed securities that are issued or guaranteed by the Government National Mortgage Association (GNMA). GNMA securities represent direct obligations of the Federal government. Because of this, these securities are considered high quality investments with minimal credit risks. The guaranteed aspect of these investments results in yields slightly less than the actual yields on the underlying mortgage loans.

Mortgage-backed securities represent participating interests in pools of first mortgage loans originated and serviced by their prospective issuers. Principal and interest payments of the underlying mortgage loans are passed through intermediaries, including but not limited to the issuing agencies, on to investors such as GS Financial Corp. These securities in general offer slightly higher yields than United States Treasury obligations.

The Company invests in mortgage-backed securities with terms varying from 5 to 30 years. These securities are subject to variations in cash flow and yield due to the prepayment rates of the underlying mortgage loans. All such mortgage-backed securities meet the requirements of qualified thrifts investments as later defined.

On September 30, 1997 the Company reclassified all of its mortgage-backed securities as available-for-sale pursuant to SFAS 115. Management felt that this classification was more appropriate considering the magnitude of the Company’s investment in these instruments and the liquidity available should other investment opportunities arrive.

The following table sets forth the composition of the Company’s mortgage-backed securities portfolio at each of the dates indicated (dollars in thousands):

MORTGAGE-BACKED SECURITIES

December 31, 2001		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
		----------		----------		----------		----------
Available for Sale:
GNMA	$	857	$	28	$	-	$	885
		-------		-------		-------		-------
	$	857	$	28	$	-	$	885
		=====		=====		=====		=====
December 31, 2000		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
		----------		----------		----------		----------
Available for Sale:
FNMA	$	1,481	$	-	$	5	$	1,476
FHLMC		1,096		-		2		1,094
GNMA		1,541		4		-		1,545
		-------		-------		-------		-------
	$	4,118	$	4	$	7	$	4,115
		====		==		==		=====

The following table sets forth the maturities of the mortgage-backed security portfolio as of December 31, 2001 (dollars in thousands):

MORTGAGE-BACKED SECURITIES

	December 31, 2001		Amortized Cost		Fair Value	Weighted Average Rate
			---------		---------	---------
Mortgage-Backed Securities Maturing:
	In One Year or Less	$	-	$	-	-
	After One Year Through Five Years		-		-	-
	After Five Years Through Ten Years		-		-	-
	After Ten Years		857		885	8.25%
			------		------
		$	857	$	885
			====		====

The following table sets forth the purchases, sales and principal repayments of the Company’s mortgage-backed securities during the periods indicated (dollars in thousands):

MORTGAGE-BACKED SECURITIES

				2001		2000		1999
				-------		-------		-------
Mortgage Backed Securities
	Balance at January 1,		$	4,118	$	16,743	$	23,058
	Purchases			-		-		-
	Repayments			(925)		(1,956)		(6,227)
	Sales (Net of Gains)			(2,321)		(10,650)		-
	Amortizations of Premiums
		/Discounts (Net)		(15)		(19)		(88)
				-------		-------		-------
	Balance at December 31,		$	857	$	4,118	$	16,743
				====		======		======
	Weighted Average Yield			6.54%		6.68%		6.53%

Investment Securities

The Company invests in United States Treasury and Agency issued obligations ranging in term from 3 months to 10 years. The investment policy of the Company is reviewed periodically by Management and ratified annually by the Board of Directors. At present the investment policy of the Company strives to maintain a liquid, conservative portfolio of investments keeping in mind the cash flow and investment needs of the Company.

The Company also invests its excess cash in three institutional funds whose principal underlying holdings are qualified thrift investments. These three funds provide a supplement to the Company’s other short-term money market investments and Federal Funds Sold, typically yielding a higher rate of return while still providing excellent liquidity.

Interest rates dictate many of the investment decisions and policies of the Company. It is the policy of the Company not to engage in speculative purchasing, selling or trading of investments; however, certain profits may be taken from time to time on the sale of investments. When interest rate spreads reach acceptable levels the Company may utilize leveraged purchasing of investment securities. Also, when anticipated earnings permit, certain portfolio adjustments may be made to enhance the overall portfolio yield even though losses may be recognized in doing so.

INVESTMENT SECURITIES

Securities available-for-sale consist of the following (in thousands):

	December 31, 2001		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
			----------		----------		----------		----------
U. S. Government
	and Federal Agencies	$	801	$	85	$	-	$	886
Adjustable Rate
	Mortgage Mutual Fund		12,481		32		-		12,513
Ultra Short Term
	Mutual Fund		4,255		-		4		4,251
Intermediate
	Mortgage Mutual Fund		394		3		-		397
FHLMC Common Stock			16		1,031		-		1,047
FHLMC Preferred Stock			16,224		326		-		16,550
Equity Investments - Other			173		3		-		176
			-------		-------		-------		-------
		$	34,344	$	1,480	$	4	$	35,820
			======		=====		=====		=====
	December 31, 2000		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
			----------		----------		----------		----------
U. S. Government
	and Federal Agencies	$	2,389	$	72	$	-	$	2,461
Adjustable Rate
	Mortgage Mutual Fund		2,831		-		8		2,823
Intermediate
	Mortgage Mutual Fund		400		-		30		370
FHLMC Common Stock			25		1,767		-		1,792
FHLMC Preferred Stock			3,506		-		2		3,504
Equity Investments - Other			50		-		-		50
			-------		-------		-------		-------
		$	9,201	$	1,839	$	40	$	11,000
			=====		=====		===		=====

The following table sets forth the amount of investment securities which mature during each of the periods indicated at December 31, 2001 (dollars in thousands):

INVESTMENT SECURITIES

		Securities
		Available-for-Sale
	December 31, 2001		Amortized Cost		Fair Value	Weighted Average Rate
			---------		---------
Amounts Maturing in:
	In One Year or Less	$	33,543	$	34,934	5.07%
	After One Year Through Five Years		801		886	7.19%
	After Five Years Through Ten Years		-		-	-
			------		------
		$	34,344	$	35,820
			=====		=====

COLLATERALIZED MORTGAGE OBLIGATIONS

Currently, the Company’s investment in Collateralized Mortgage Obligations (CMOs) is limited to first-tranche Real Estate Mortgage Investment Conduits (REMICs). A REMIC is a pass through investment created under the Tax Reform Act of 1986 to issue multiple class mortgage-backed securities. The mulitiple classes within a REMIC are known as "tranches." The tranches are paid principal and/or interest based on the payment schedule outlined in the prospectus.

The Company’s investment in REMICs is limited to those issued by FNMA, FHLMC and "AAA" rated non-governmental issuers. These are defined to be within the 20% risk-weighted category for thrift institutions. The contractual maturity of a REMIC is defined by the latest maturity date of the underlying group of mortgage loans. In terms of actual cash flow, the term or duration of the REMIC’s purchased by the Company varies from 2 to 4 years. The cash flow of these investments facilitates the operating needs of the Company.

The following table sets forth the composition of the Company’s portfolio of Collateralized Mortgage Obligations indicated (in thousands):

COLLATERALIZED MORTGAGE OBLIGATIONS

December 31, 2001		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
		----------		----------		----------		----------
Available-for-Sale:
FNMA	$	1,283	$	-	$	9	$	1,274
FHLMC		13,702		153		65		13,790
Other		35,810		1,213		-		37,023
		-------		-------		-------		-------
	$	50,795	$	1,366	$	74	$	52,087
		=====		=====		===		=====

December 31, 2000		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
		----------		----------		----------		----------
Available-for-Sale:
FNMA	$	5,766	$	-	$	187	$	5,579
FHLMC		14,254		196		309		14,141
Other		33,562		583		120		34,025
		-------		-------		-------		-------
	$	53,582	$	779	$	616	$	53,745
		=====		=====		====		=====

Sources of Funds

General. Deposits have always been the primary source of the Company’s funds for lending and other investment purposes. The supply of retail deposits has decreased due to more investors putting their money in the markets. As a result, the Company has turned towards wholesale sources such as the FHLB which allows member institutions such as the Company to borrow money at discounted costs.

Deposits. The Company’s deposits are attracted principally from within its market area. Many depositors are also mortgage loan customers. The Company offers passbook savings, demand deposit accounts, now accounts and certificates of deposit. Terms for certificates of deposit vary from 6 months to 5 years while rates tend to increase with term.

The following table shows the distribution of, and certain other information relating to the Company’s deposits. Deposit account balances at December 31, 2001, 2000, and 1999 are summarized as follows (in thousands):

		Years Ending December 31,
			2001			2000			1999
				Wtd.			Wtd.			Wtd.
				Avg.			Avg.			Avg.
			Balance	Rate		Balance	Rate		Balance	Rate
			----------	----------		----------	----------		----------	----------
Demand Deposit
	Accounts	$	7,910	1.94%	$	3,185	4.64%	$	44	N/A
Regular Savings
	Accounts		20,042	2.75%		17,431	3.00%		20,170	3.00%
Certificates of
	Deposit		43,217	4.34%		38,263	5.85%		39,002	5.00%
			--------			--------			--------
		$	71,169		$	58,879		$	59,216
			=====			=====			=====

The following table sets forth the deposit cash flow of the Company during the periods indicated (in thousands):

		Year Ended December 31,
			2001		2000		1999
			------		------		------
Increase (decrease) before
	Interest Credited	$	10,019	$	(2,396)	$	(3,830)
Interest Credited			2,271		2,059		1,941
			------		------		------
Net increase (decrease) in deposits		$	12,290	$	(337)	$	(1,889)

The Company attempts to price its deposit accounts to remain generally competitive with other financial institutions in its market area, while maintaining its traditional margins. Traditionally the Company has relied on its passbook savings accounts as a core deposit base. During 2001, the Company was able to establish a portfolio of demand deposit accounts of approximately $8 million. This was in line with the Company's goals in diversify and expanding the products and services offered to its customers. The Company does not pay "jumbo" rates for deposits $100,000 and over.

The principal methods used by the Company to attract deposits include its emphasis on personal service, competitive interest rates and convenient office locations. The Company does not advertise for deposits outside of its primary market area. At December 31, 2001, the Company had no deposits that were obtained through deposit brokers.

The following table presents the amount of certificates of deposit at December 31, 2001 which mature during the periods indicated (dollars in thousands).

			Amount	Percent
			-------	-------
Certificate Accounts Maturing:
	Under 12 months	$	32,485	75.17%
	12 months to 24 months		8,049	18.62%
	24 months to 36 months		2,180	5.04%
	36 months to 48 months		496	1.15%
	48 months to 60 months		7	.02%
			------	-----
Total Certificates		$	43,217	100.00%
			=====	======

The following table sets forth the maturities of the Company’s deposits of $100,000 or more at December 31, 2001 by time remaining to maturity (in thousands).

Maturing in 3 months or less	$	4,315
Maturing in 3 to 6 months		1,257
Maturing in 6 months to 1 year		1,238
Maturing in 1 to 2 years		1,114
Maturing in more than 2 years		209
		------
Total Deposits $100,000 and over	$	8,133
		=====

Borrowings. During 2001 the Company obtained advances from the FHLB, as part of a leveraged investment program. The Company borrows the funds which are subsequently reinvested in mortgage-backed securities, collateralized mortgage obligations and other investments which earn interest at a rate greater than the rate charged on the advances. The advances consist of fully amortizing and balloon advances which mature between January, 2001 and June, 2008. A summary of the advances by maturity and interest rate are detailed as follows (in thousands):

			Weighted
Maturing in the Year			Average
Ending December 31,		Amount	Rate
-------------------		----------	----------
2002	$	17,241	5.67%
2003		23,098	5.51%
2004		6,225	5.57%
2005		10,205	5.97%
2006		5,462	5.55%
Thereafter		17,034	5.63%
		---------
	$	79,265

The maximum amount of advances outstanding at any month-end during 2001 was $102.1 million. The average balance outstanding during 2001 was $86.8 million.

Treasury Stock

Since 1998, the Company has been repurchasing shares of its common stock. The Company became eligible one year from the date of its initial public offering to begin repurchasing stock. For the first two years of the buyback program, the Company was limited to 10% per year per OTS regulations. On April 1, 2000, the three year anniversary of the Company’s IPO, the 10% per year limitation on buybacks was lifted. The following table summarizes the repurchase of shares of its common stock by year:

GS Financial Corp.

Common Stock Repurchases

	Shares	Average
Year	Repurchased	Price
1998	491,054	$ 16.95
1999	299,000	$ 12.22
2000	679,600	$ 12.64
2001	305,684	$ 15.09
	------------	--------
Total	1,775,338	$ 14.18

All purchases were open market transactions. Due to the highly capitalized condition of the Company, management felt that these purchases, most of which were at a discount to book value, were an effective way to reduce capital while still enhancing shareholder value. The alternative to reducing capital would have been rapid growth probably through some type of acquisition. Given the premium nature of current financial institution buyouts, the alternative approach to reducing capital through buybacks seemed a more conservative approach. These shares have not been retired and could potentially serve as a source of funding should the need arise in the future.

Subsidiaries

Guaranty Savings & Homestead Association is a wholly-owned subsidiary of the Company. The Company has no other subsidiaries.

Competition

Guaranty Savings & Homestead Association faces significant competition both in attracting deposits and in originating loans. Its most direct competition for deposits has come from commercial banks, credit unions, other savings and loans and mortgage brokers located in the metropolitan New Orleans market. The Association also competes for investors’ funds with short-term money market mutual funds and issuers of corporate and government securities. Guaranty Savings & Homestead Association does not rely on any individual group or entity for a material portion of its deposits or mortgage loan portfolio. The Association’s primary factors in competing in the home mortgage loan market are its efficient personal service and attractive interest rates and terms.

Employees

The Association had 36 full-time employees at December 31, 2001. None of these employees are represented by a collective bargaining agreement. Guaranty Savings & Homestead Association believes that it enjoys excellent relations with its personnel.

Regulation

Set forth below is a brief description of certain laws and regulations which are applicable to the Company and Guaranty Savings & Homestead Association. The description of these laws and regulations, as well as descriptions of laws and regulations contained elsewhere herein, does not purport to be complete and is qualified in its entirety by reference to applicable laws and regulations.

The Company

General. The Company, as a savings and loan holding company within the meaning of the Home Owners’ Loan Act, as amended ("HOLA"), is registered with and subject to OTS regulations, examinations, supervision and reporting. As a subsidiary of a savings and loan holding company, Guaranty Savings & Homestead Association is subject to certain restrictions in its dealings with the Company and any affiliates thereof.

Activities Restrictions. There are generally no restrictions on the activities of a savings and loan holding company which holds only one subsidiary savings institution. However, if the Director of the OTS determines that there is reasonable cause to believe that the continuation by a savings and loan holding company of an activity constitutes a serious risk to the financial safety, soundness or stability of its subsidiary savings institution, the Director may impose such restrictions as deemed necessary to address such risk, including limiting (i) payment of dividends by the savings institution; (ii) transactions between the savings institution and its affiliates; and (iii) any activities of the savings institution that might create a serious risk that the liabilities of the holding company and its affiliates may be imposed on the savings institution. Notwithstanding the above rules as to permissible business activities of unitary savings and loan holding companies, if the savings institution subsidiary of such a holding company fails to meet the qualified thrift lender ("QTL") test, as discussed under "- The Association – Qualified Thrift Lender Test," then such unitary holding company also shall become subject to the activities restrictions applicable to multiple savings and loan holding companies and, unless the savings institution re-qualifies as a QTL within one year thereafter, shall register as, and become subject to the restrictions applicable to, a bank holding company. See "- The Association – Qualified Thrift Lender Test."

If the Company were to acquire control of another savings institution, other than through merger or other business combination with Guaranty Savings, the Company would thereupon become a multiple savings and loan holding company. Except where such acquisition is pursuant to the authority to approve emergency thrift acquisitions and where each subsidiary savings institution meets the QTL test, as set forth below, the activities of the Company and any of its subsidiaries (other than Guaranty Savings or other subsidiary savings institutions) would thereafter be subject to further restrictions. Among other things, no multiple savings and loan holding company or subsidiary thereof which is not a savings institution shall commence or continue for a limited period of time after becoming a multiple savings and loan holding company or subsidiary thereof any business activity, other than: (i) furnishing or performing management services for a subsidiary savings institution; (ii) conducting an insurance agency or escrow business; (iii) holding, managing, or liquidating assets owned by or acquired from a subsidiary savings institution; (iv) holding or managing properties used or occupied by a subsidiary savings institution; (v) acting as trustee under deeds of trust; (vi) those activities authorized by regulation as of March 5, 1987 to be engaged in by multiple savings and loan holding companies; or (vii) unless the Director of the OTS by regulation prohibits or limits such activities for savings and loan holding companies. Those activities described in clause (vii) above also must be approved by the Director of the OTS prior to being engaged in by a multiple savings and loan holding company.

Limitations on Transactions with Affiliates. Transactions between savings institutions and any affiliate are governed by Sections 23A and 23B of the Federal Reserve Act. An affiliate of a savings institution is any company or entity which controls, is controlled by or is under common control with the savings institution. In a holding company context, the parent holding company of a savings institution (such as the Company) and any companies which are controlled by such parent holding company are affiliates of the savings institution. Generally, Sections 23A and 23B (i) limit the extent to which the savings institution or its subsidiaries may engage in "covered transactions" with any one affiliate to an amount equal to 10% of such institution’s capital stock and surplus, and contain an aggregate limit on all such transactions with all affiliates to an amount equal to 20% of such capital stock and surplus and (ii) require that all such transactions be on terms substantially the same, or at least as favorable, to the institution or subsidiary as those provided to a non-affiliate. The term "covered transaction" includes the making of loans, purchase of assets, issuance of guarantee and other similar transactions. In addition to the restrictions imposed by Sections 23A and 23B, no savings institution may (i) loan or otherwise extend credit to an affiliate, except for any affiliate which engages only in activities which are permissible for bank holding companies, or (ii) purchase or invest in any stocks, bonds, debentures, notes or similar obligations of any affiliate, except for affiliates which are subsidiaries of the savings institution.

In addition, Sections 22(h) and (g) of the Federal Reserve Act place restrictions on loans to executive officers, directors and principal stockholders. Under Section 22(h), secured loans to a director, an executive officer and to a greater than 10% stockholder of a savings institution, and certain affiliated interest of either, may not exceed, together with all other outstanding loans to such person and affiliated interests, the savings institution’s loans to one borrower limit (generally equal to 25% of the institution’s unimpaired capital and surplus). Section 22(h) also requires that loans to directors, executive officers and principal stockholders be made on terms substantially the same as offered in comparable transactions to other persons unless the loans are made pursuant to a benefit or compensation program that (i) is widely available to employees of the institution and (ii) does not give preference to any director, executive officer or principal stockholder, or certain affiliated interests of either, over other employees of the savings institution. Section 22(h) also requires prior Board approval for certain loans. In addition, the aggregate amount of extensions of credit by a savings institution to all insiders cannot exceed the institution’s unimpaired capital and surplus. Furthermore, Section 22(g) places additional restrictions on loans to executive officers. At December 31, 2001 Guaranty Savings was in compliance with the above restrictions.

Restrictions on Acquisitions. Except under limited circumstances, savings and loan holding companies are prohibited from acquiring, without prior approval of the Director of the OTS, (i) control of any other savings institution or savings and loan holding company or substantially all the assets thereof or (ii) more than 5% of the voting shares of a savings institution or holding company thereof which is not a subsidiary. Except with the prior approval of the Director of the OTS, no director or officer of a savings and loan holding company or person owning or controlling by proxy or otherwise more than 25% of such company’s stock, may acquire control of any savings institution, other than a subsidiary savings institution, or of any other savings and loan holding company.

The Director of the OTS may only approve acquisitions resulting in the formation of a multiple savings and loan holding company which controls savings institutions in more than one state if (i) the multiple savings and loan holding company involved controls a savings institution which operated a home or branch office located in the state of the institution to be acquired as of March 5, 1987; (ii) the acquirer is authorized to acquire control of the savings institution pursuant to the emergency acquisition provisions of the Federal Deposit Insurance Act ("FDIA"); or (iii) the statutes of the state in which the institution to be acquired is located specifically permit institutions to be acquired by the state-chartered institutions or savings and loan holding companies located in the state where the acquiring entity is located (or by a holding company that controls such state-chartered savings institutions).

Under the Bank Holding Company Act of 1956, the Federal Reserve Bank ("FRB") is authorized to approve an application by a bank holding company to acquire control of a savings institution. In addition, a bank holding company that controls a savings institution may merge or consolidate the assets and liabilities of the savings institution with, or transfer assets and liabilities to, any subsidiary bank which is a member of the Bank Insurance fund with the approval of the appropriate federal banking agency and the FRB. As a result of these provisions, there have been a number of acquisitions of savings institutions by bank holding companies in recent years.

Federal Securities Laws. The Company’s common stock is registered with the SEC under the Securities and Exchange Act of 1934 ("Exchange Act"). The Company is subject to the information, proxy solicitation, insider trading restrictions and other requirements under the Exchange Act.

Financial Modernization. Under the Gramm-Leach-Bliley Act enacted into law on November 12, 1999, no company may acquire control of a savings and loan holding company after May 4, 1999, unless the company is engaged only in activities traditionally permitted to a multiple savings and loan holding company or newly permitted to a financial holding company under Section 4 (k) of the Bank Holding Company Act. Existing savings and loan holding companies and those formed pursuant to an application filed with the OTS before May 4, 1999, may engage in any activity including non-financial or commercial activities provided such companies control only one savings and loan association that meets the Qualified Thrift Lender test. Corporate reorganizations are permitted, but the transfer of grand-fathered unitary thrift holding company status through acquisition is not permitted.

The Association

General. As a Louisiana chartered stock savings and loan association, the OFI is the Association’s chartering authority, and the OTS serves as the Association’s primary regulator. As such, the OFI and the OTS have extensive authority over the operations of Louisiana-chartered savings institutions. The Association is subject to periodic examinations and is required to file monthly, quarterly and annual reports with either or both parties. The investment and lending authority of savings institutions are prohibited from engaging in any activities not permitted by such laws and regulations. Such regulation and supervision is primarily intended for the protection of depositors.

Insurance of Accounts. The deposits of Guaranty Savings and Homestead Association are insured to the maximum permitted by the SAIF, which is administered by the FDIC, and are backed by the full faith and credit of the U.S. Government. As insurer, the FDIC is authorized to conduct examinations of, and to require reporting by, FDIC-insured institutions. It also may prohibit any FDIC-insured institution from engaging in any activity the FDIC determines by regulation or order to pose a serious threat to the FDIC. The FDIC also has the authority to initiate enforcement actions against savings institutions, after giving the OTS an opportunity to take such action.

The FDIC may terminate the deposit insurance of any insured depository institution, including Guaranty Savings and Homestead Association, if it determines after a hearing that the institution has engaged or is engaging in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations, or has violated any applicable law, regulation, order or any condition imposed by an agreement with the FDIC. It also may suspend deposit insurance temporarily during the hearing process for the permanent termination of insurance, if the institution has no tangible capital. If insurance of accounts is terminated, the accounts at the institution at the time of the termination, less subsequent withdrawals, shall continue to be insured for a period of six months to two years, as determined by the FDIC. Management is aware of no existing circumstances which would result in termination of the Association’s deposit insurance.

Regulatory Capital Requirements. Federally insured savings institutions are required to maintain minimum levels of regulatory capital. The OTS has established capital standards applicable to all savings institutions. These standards generally must be as stringent as the comparable capital requirements imposed on national banks. The OTS also is authorized to impose capital requirements in excess of these standards on individual institutions on a case-by-case basis.

Current OTS capital standards require savings institutions to satisfy three different capital requirements. Under these standards, savings institutions must maintain tangible capital (1.5%), core capital (3.0%), and risk based capital (8.0%). Core capital includes generally recognized capital such as common stockholders’ equity and retained earnings plus other items such as qualifying goodwill. Tangible capital is essentially the same but does not include qualifying supervisory goodwill. At December 31, 2001 the Association had no goodwill or other intangible assets which are deducted in computing its tangible capital.

In determining risk-based capital, a savings institution is allowed to include both core capital and supplementary capital. Assets are assigned to particular risk-weighted categories and subsequently multiplied by that particular percentage (cash and US Treasury and Agency securities equal 0%, 20% for high quality mortgage-backed securities including those issued by US Government Agencies and "AAA" rated private companies, state and local obligations, claims on FHLB’s and claims on domestic depository institutions, 50% for single family mortgage loans and 100% for all other loans and investments). The sum of these calculations becomes the total of risk-weighted assets which are then used to calculate the Association’s risk-based capital ratio.

At December 31, 2001, Guaranty Savings exceeded all of its regulatory capital requirements, with tangible, core and risk- based capital ratios of 14.40%, 14.40% and 28.71% respectively.

Liquidity Requirements. During 2001, the OTS adopted a final rule removing formal regulation requiring savings institutions to maintain an average daily balance of liquid assets equal to four percent of its average daily balance of net withdrawable deposit accounts and borrowings payable in one year or less commonly referred to as its liquidity base. The Association does maintain sufficient liquidity to ensure its safe and sound operation. This includes being able to meet its daily financial obligations including but not limited to loan disbursements, savings withdrawals, payment of cash dividends and operating expenses of the Association. The cash position of the Association is managed through monitoring and maintaining certain levels of cash on hand, overnight Federal Funds Sold and other short-term liquid assets.

Capital Distributions. Under OTS regulations, savings associations that would be well capitalized following a capital distribution are not subject to any requirement for notice or application unless the total amount of all capital distributions, including any proposed capital distribution, for the applicable calendar year would exceed an amount equal to the savings association's net income for that year to date plus the savings association's retained net income for the preceeding two years. However, because the Association is a subsidiary of a savings and loan holding company, the Association is required to give the OTS at least 30 days notice prior to any capital distribution to the Company.

Community Reinvestment. Under the Community Reinvestment Act of 1977, as amended ("CRA"), as implemented by OTS regulations, a savings institution has a continuing and affirmative obligation consistent with its safe and sound operation to help meet the credit needs of its entire community, including low and moderate income neighborhoods. The CRA does not establish specific lending requirements or programs for financial institutions nor does it limit an institution’s discretion to develop the types of products and services that it believes are best suited to its particular community, consistent with the CRA. The CRA requires the OTS, in connection with its examination of a savings institution, to assess the institution’s record of meeting the credit needs of its community and to take such record into account in its evaluation of certain applications by such institution. The CRA requires public disclosure of an institution’s CRA rating and requires the OTS to provide a written evaluation of an institution’s CRA performance utilizing a rating system which identifies four levels of performance that may describe an institution’s record of meeting community needs: outstanding, satisfactory, needs to improve and substantial noncompliance. The CRA also requires all institutions to make public disclosure of their CRA ratings. The Association’s current CRA rating is satisfactory.

Qualified Thrift Lender Test. The Qualified Thrift Lender (QTL) Test measures the Association’s level of qualified thrift investments compared to its total portfolio assets (total assets less intangibles, property used by a savings association in its business and liquidity investments in an amount not to exceed 20% of assets). Generally, qualified thrift investments ("QTI’s")are residential housing related assets. The Internal Revenue Service (IRS) requires a savings institution to have at least 65% of its assets in "QTI’s" to qualify for tax treatment as a building and loan association. At December 31, 2001, 99.99% of the Association’s assets were invested in QTI’s which was in excess of the percentage required to qualify the Association under the QTL test.

Federal Home Loan Bank System. Guaranty Savings and Homestead Association is a member of the FHLB of Dallas. 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 FHLB agency issued obligations. As a member, the Association is required to 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 or 5% of its advances from the FHLB of Dallas, whichever is greater. At December 31, 2001, Guaranty Savings and Homestead Association had $5.3 million in FHLB stock, which was in compliance with this requirement.

Federal Taxation

General. The Company and the Association are subject to the generally applicable corporate tax provisions of the Internal Revenue Code (the "Code"), and the Association is subject to certain additional provisions of the Code which apply to thrifts and other types of financial institutions. The following discussion of federal taxation is intended only to summarize certain pertinent federal income tax matters relevant to the taxation of the Company and the Association and is not a comprehensive discussion of the tax rules applicable to the Company and the Association.

Year. The Company files a consolidated federal tax return on the basis of a calendar year ending on December 31.

Bad Debt Reserves. A small financial institution (one with an adjusted basis of assets of less than $500 million), such as the Association, is required to determine additions to its bad debt reserves under the experience method. Under the experience method, the deductible annual addition to the institution’s bad debt reserves is the amount necessary to increase the balance of the reserve at the close of the taxable year to the greater of (a) the amount which bears the same ratio to loans outstanding at the close of the taxable year as the total net bad debts sustained during the current and five preceding taxable years bear to the sum of loans outstanding at the close of the same six years, or (b) the lower of (i) the balance of the reserve account at the close of the Association’s "base year," which was its tax year ended December 31, 1987, or (ii) if the amount of loans outstanding at close of the taxable year is less than the amount of loans outstanding at the close of the base year, the amount which bears the same ratio to loans outstanding at the close of the taxable year as the balance of the reserve at the close of the base year bears to the amount of loans outstanding at the close of the base year.

In 1996, the Association was required to change its method of computing its bad debt deduction from other methods previously allowable to the experience method. As a result of the change in law, the Association is required to include an amount into taxable income over a six-year period beginning in 1998. The amount required to be included in taxable income is the difference between its bad debt reserves at December 31, 1995, as determined under previously allowable bad debt methods, and the reserve allowable under the experience method at December 31, 1995. The amount to be included in the Association’s taxable income over the six-year period beginning with 1998 is $145,346, or $24,224 per year.

At December 31, 2001, the federal income tax reserves of the Association included $3.8 million for which no federal income tax has been provided. Because of these federal income tax reserves and the liquidation account to be established for the benefit of certain depositors of the Association in connection with the conversion of the Association to stock form, the retained earnings of the Association are substantially restricted.

Distributions. If the Association were to distribute cash or property to its sole stockholder, and the distribution was treated as being from its accumulated bad debt reserves, the distribution would cause the Association to have additional taxable income. A distribution is deemed to have been made from accumulated bad debt reserves to the extent that (a) the reserves exceed the amount that would have been accumulated on the basis of actual loss experience, and (b) the distribution is a "non-qualified distribution." A distribution with respect to stock is a non- qualified distribution to the extent that, for federal income tax purposes, (i) it is in redemption of shares, (ii) it is pursuant to a liquidation of the institution, or (iii) in the case of a current distribution, together will all other such distributions during the taxable year, it exceeds the institutions current and post-1951 accumulated earnings and profits. The amount of additional taxable income created by a non-qualified distribution is an amount that when reduced by the tax attributable to it is equal to the amount of the distribution.

Minimum Tax. The Internal Revenue Code imposes an alternative minimum tax at a rate of 20% on corporations with average annual gross receipts in excess of $7.5 million for the prior three tax years. Average annual gross receipts of the Company is in excess of $7.5 million and as a result, the Company is subject to the provisions of the alternative minimum tax provisions of the Code. The alternative minimum tax generally applies to a base of regular taxable income plus certain tax preferences ("alternative minimum taxable income" or "AMTI") and is payable to the extent such AMTI is in excess of an exemption amount. The Code provides items of tax preference including (a) tax exempt interest on newly issued (generally, issued after August 8, 1986) private activity bonds other than certain qualified bonds, (b) certain accelerated depreciation amounts and (c) 75% of the excess if any of (i) adjusted current earnings as defined in the Code, over (ii) AMTI (defined without regard to this preference and prior to reduction by net operating losses).

Net Operating Loss Carryovers. A financial institution may carry back net operating losses ("NOLs") to the preceding two taxable years and forward to the succeeding 20 taxable years. This provision applies to losses incurred in taxable years beginning after 1986. NOLs arising in tax years ending in 2001 and 2002 may be carried back five years. At December 31, 2001, the Association had no NOL carry-forwards for federal income tax purposes.

Capital Gains and Corporate Dividends-Received Deduction. Corporate net capital gains are taxed at a maximum rate of 35%. The corporate dividends-received deduction is 80% in the case of dividends received from 20% or more owned corporations with which a corporate recipient does not file a consolidated tax return. Corporations which own less than 20% of the stock of a corporation distributing a dividend may deduct only 70% of dividends received or accrued on their behalf. However, a corporation may deduct 100% of dividends from a member of the same affiliated group of corporations.

Other Matters. Federal legislation is introduced from time to time that would limit the ability of individuals to deduct interest paid on mortgage loans. Individuals are currently not permitted to deduct interest on consumer loans. Significant increases in tax rates or further restrictions on the deductibility of mortgage interest could adversely affect the Association. The Company’s federal income tax returns for the tax years ended December 31, 1998 forward are open under the statute of limitations and are subject to review by the IRS.

State Taxation

Any non-banking subsidiaries of the Association ( as well as the Company) are subject to the Louisiana Corporation Income Tax based on their Louisiana taxable income, as well as franchise taxes. The Corporation Income Tax applies at graduated rates from 4% upon the first $25,000 of Louisiana taxable income to 8% on all Louisiana taxable income in excess of $200,000. For these purposes, "Louisiana taxable income" means net income which is earned within or derived from sources within the State of Louisiana, after adjustments permitted under Louisiana law including a federal income tax deduction and an allowance for net operating losses, if any. As a stock thrift, the Association is subject to the Louisiana Shares Tax. The formula for deriving the assessed value is to; (a) calculate 15% of the sum of 20% of the company’s capitalized earnings, plus (b) 80% of the company’s taxable stockholders’ equity, and to subtract from that figure 50% of the company’s real and personal property assessment. Various items may also be subtracted in calculating a company’s capitalized earnings.

Franchise Tax

The Company is also subject to the Louisiana franchise tax, which is imposed upon equity and certain borrowings (the franchise base) at a rate of $3 for every $1,000 of franchise base. Financial institution holding companies are allowed to reduce the franchise base to the extent of investments in and advances to subsidiary financial institutions.

Item 2. PROPERTIES

The following table sets forth certain information relating to the Company’s offices at December 31, 2001. All properties are owned by the Company except for the Ponchatoula loan production office. All amounts are in thousands.

		Net
		Book		Total
Location		Value		Deposits
----------		------		-------
3798 Veterans Blvd., Metairie	$	1,771	$	59,062
1700 Veterans Blvd., Metairie *		532		-
2111 N. Causeway Blvd., Mandeville		307		3,211
3915 Canal St., New Orleans		238		8,896
1515 Hwy. 51 N., Ponchatoula, LA. **		-		-
		-----		------
	$	2,848	$	71,169
		=====		=====

* This location currently offers loan production only. Full service branch operations will begin some time in 2002.

** Loan production office only. Leased premises.

Item 3. LEGAL PROCEEDINGS

The Company and the Association are not involved in any pending legal proceedings other than nonmaterial legal proceedings occurring in the ordinary course of business.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There were no matters submitted to security holders during the quarter ending December 31, 2001.

Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The information required herein, to the extent applicable, is incorporated by reference from page 1 of the Registrant’s 2001 Annual Report to Stockholders ("Annual Report").

Item 6. SELECTED FINANCIAL DATA

The information required herein is incorporated by reference from pages 2 to 3 of the Registrant’s Annual Report.

Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The information required herein is incorporated by reference from pages 3 to 12 of the Registrant’s Annual Report.

Item 7a QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET

RISK

The information required herein is incorporated by reference from pages 13 to 17 of the Registrant’s Annual Report.

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The information required herein is incorporated by reference from pages 18 to 53 of the Registrant’s Annual Report.

Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not applicable

Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information required herein is incorporated by reference from pages 2-5 of the Registrant’s definitive proxy statement for the 2002 Annual Meeting of Stockholders ("Proxy Statement").

Item 11. EXECUTIVE COMPENSATION

The information required herein is incorporated by reference from pages 8-12 of the Registrant’s Proxy Statement.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

The information required herein is incorporated by reference from pages 6-7 of the Registrant’s Proxy Statement.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required herein is incorporated by reference from page 2 and page 10 of the Registrant’s Proxy Statement.

Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON

FORM 8-K.

(a)	Documents filed as part of this Report.

(1)	The following financial statements are incorporated by
		Reference from Item 8 hereof (see Exhibit 13):
			Report of Independent Auditors
			Consolidated Balance Sheets as of December 31, 2001 and 2000
			Consolidated Statements of Income for the Fiscal Periods
				Ended December 31, 2001, 2000 and 1999
			Consolidated Statements of Changes in Shareholders’ Equity for
				the Fiscal Periods Ended December 31, 2001, 2000 and 1999
			Consolidated Statements of Cash Flows for the Fiscal Periods
				Ended December 31, 2001, 2000 and 1999
			Notes to Consolidated Financial Statements

(2)	All schedules for which provision is made in the applicable
		Accounting regulation of the SEC are omitted because of the absence of conditions under which they are required or because the required information is included in the consolidated financial statements and related notes thereto.

(3)	The following exhibits are filed as part of this form 10-K, and this
		List includes the Exhibit Index.

3.1*	Articles of Incorporation of GS Financial Corp.
3.2*	Bylaws of GS Financial Corp.
4.1*	Stock Certificate of GS Financial Corp.
10.1**	GS Financial Corp. Stock Option Plan
10.2**	GS Financial Corp. Recognition and Retention Plan and Trust
.		Agreement for Employees and Non-Employee Directors
10.3*	Employment Agreement among GS Financial Corp. Guaranty Savings and
		Homestead Association and Donald C. Scott Dated February 13, 1997
10.4*	Employment Agreement among GS Financial Corp. Guaranty Savings and
		Homestead Association and Bruce A. Scott Dated February 13, 1997
13.0	2001 Annual Report to Stockholders
21.0	Subsidiaries of the Registrant - Reference is made to
		"Item 1" Business for the required information

* Incorporated herein by reference from the Registration Statement on Form SB-2 (Registration number 333-18841) filed by the Registrant with the SEC on December 26, 1996, as subsequently amended.

** Incorporated herein by reference from the definitive proxy statement, dated September 16, 1997, filed by the Registrant with the SEC (Commission File No. 000-22269)

Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

March 28, 2002

By:

/s/ Donald C. Scott ------------------- Donald C. Scott Chairman of the Board, President And Chief Executive Officer

Pursuant to the requirements 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.

Name and Signature	Title	Date Signed
/s/ Donald C. Scott ------------------- Donald C. Scott	Chairman of the Board, President and Chief Executive Officer (principal executive officer)	March 28, 2002
/s/ Bruce A. Scott ------------------- Bruce A. Scott	Executive Vice President and Director	March 28, 2002
/s/ Glenn R. Bartels ------------------- Glenn R. Bartels	Controller (principal financial and accounting officer)	March 28, 2002
/s/ J. Scott Key ------------------- J. Scott Key	Director	March 28, 2002
/s/ M.D. Paine, Jr. ------------------- M.D. Paine, Jr.	Director	March 28, 2002
/s/ Bradford A. Glazer ------------------- Bradford A. Glazer	Director	March 28, 2002
/s/ Stephen L. Cory ------------------- Stephen L. Cory	Director	March 28, 2002
/s/ Albert J. Zahn, Jr. ------------------- Albert J. Zahn, Jr.	Director	March 28, 2002
/s/ Kenneth B. Caldcleugh ------------------- Kenneth B. Caldcleugh	Director	March 28, 2002

Exhibit 13

February 1, 2002

TO OUR STOCKHOLDERS

It was a year to remember! The tragedy of September 11 riveted the world with devastating scenes witnessed on television. The repercussions exacerbated the already slowing economy. The shocking disbelief and incomprehension that we could be violated by such a savage act of terrorism was numbing as the video and commentary flowed from the New York area. Other events were as surprising: interest rates at levels not seen since the early 1960's; a tax cut; a budget surplus that may return to a deficit. We saw the coming together of our nation in an unprecedented exhibition of patriotism and charity.

We have all reexamined our priorities of faith, family and friends. What the long term consequences will be legislatively and commercially will be an evolving tapestry woven by a new awareness.

Your company, established with the stock offering in 1997, is still evolving with continued awareness, in our quest for a more efficient and profitable savings and loan. Our basics have not changed from our founding over 60 years ago; our vision of increasing opportunities and our attainment of ever higher goals for success remain a focus of our future.

With the decision to become a stock owned company in 1997, I expressed to family, friends and investors that five years would be required to transform an 84 million dollar mutual savings and loan into an entity that deserved investor confidence. We have attained a level of earnings based on solid assets, and an offering of consumer products that illustrates we are a viable competitor for our community's needs. We have nurtured an atmosphere of congenial customer service that is a breath of fresh air in a time when customer service is being sacrificed, and have done so profitably.

We pledge to you, our shareholders, that the successes experienced over the last five years will not be squandered. We will continue to strive for the vision instilled in us by our predecessors and founders. We will lead by example, and succeed in our endeavors to build a bettor mortgage, a better deposit account, and a better future for your company.

Sincerely,

/s/ Donald C. Scott
- -------------------
Donald C. Scott
President and Chairman of the Board

The Company

GS Financial Corp. (the "Company") is a thrift holding company which was organized and incorporated under the laws of the State of Louisiana on December 24, 1996. The Company’s primary business is conducted through its wholly owned subsidiary, Guaranty Savings & Homestead Association, at its five locations in the metropolitan New Orleans area.

Market Information

GS Financial Corp.’s common stock trades on The NASDAQ Stock Market under the symbol GSLA. The Company’s stock traded in the range shown below. At December 31, 2001, the closing price was $14.94 per share and there were approximately 800 shareholders of record.

2001

QUARTER ENDING	HIGH	LOW	Cash Dividend
------------------	------	------	-------
March 31, 2001	15.000	14.563	$.09
June 30, 2001	15.500	14.600	$.09
September 30, 2001	15.500	15.000	$.09
December 31, 2001	15.500	14.190	$.09

2000

QUARTER ENDING	HIGH	LOW	Cash Dividend
------------------	------	------	-------
March 31, 2000	12.250	10.063	$.09
June 30, 2000	12.875	11.000	$.09
September 30, 2000	13.250	12.125	$.09
December 31, 2000	14.938	12.875	$.09

Notice of Annual Meeting

The Annual Meeting of Shareholders of GS Financial Corp. will be held at the offices of Guaranty Savings & Homestead Association, 3798 Veterans Blvd., Metairie, Louisiana on Tuesday, April 23, 2002 at 10:00 a.m. CST.

Shareholder Services

Shareholders desiring to change the name, address or ownership of stock, to report lost certificates, or to consolidate accounts should contact our transfer agent:

Registrar and Transfer Company

10 Commerce Drive

Cranford, NJ 07016

1-800-368-5948

Investor Relations

Shareholders and others seeking financial information or copies of the Company’s publicly available financial information should contact:

Amy Mashburn, Compliance Officer or, Glenn R. Bartels, Controller

GS Financial Corp.

3798 Veterans Blvd.

Metairie, LA 70002

(504) 457-6220

The following selected consolidated financial and other data of the Company does not purport to be complete and should be read in conjunction with, and is qualified in its entirety by, the more detailed financial information, including the Consolidated Financial Statements of the Company and Notes thereto, contained elsewhere herein.

(Dollars in Thousands)			At December 31,
			2001	2000	1999	1998	1997
Selected Financial Condition:
	Total Assets		188,494	153,500	157,982	157,534	131,396
	Cash and Cash Equivalents		8,638	3,403	2,504	1,810	2,612
	Loans Receivable, Net		81,611	74,480	70,066	63,895	53,588
	Investment Securities		35,820	11,000	10,483	20,877	27,974
	Mortgage-Backed Securities		885	4,115	16,275	23,209	42,721
	Collateralized Mortgage Obligations		52,087	53,745	52,080	41,726	-
	Deposit Accounts		71,169	58,879	59,216	61,105	56,822
	Borrowings		79,265	54,191	53,988	45,381	16,157
	Equity		35,408	37,795	43,548	48,509	56,047
Selected Operating Data:
	Interest Income		13,100	11,262	10,658	9,585	8,347
	Interest Expense		7,825	5,875	5,221	4,087	3,014
	Net Interest Income		5,275	5,387	5,437	5,498	5,333
	Provision for Loan Losses		25	7	6	53	28
	Net Interest Income After Provision
		for Loan Losses	5,250	5,380	5,431	5,445	5,305
	for Loan Losses
	Non-Interest Income		634	(135)	(5)	233	73
	Non-Interest Expense		(3,678)	(3,384)	(3,301)	(3,453)	(2,708)
	Net Income Before Taxes
		and Extraordinary Item	2,206	1,861	2125	2,225	2,670
	Income Tax Expense		589	666	750	870	1,000
	Extraordinary Item		-	-	-	-	-
	Net Income		1,617	1,195	1,375	1,355	1,670
	Net Income per share - Basic		$1.04	$0.60	$0.58	$0.49	$0.53
	Net Income per share - Diluted		$1.04	$0.60	$0.58	$0.49	$0.53
	Dividends declared per share		$0.36	$0.36	$0.34	$0.28	$0.14

(Dollars in Thousands)		At December 31,
		2001	2000	1999	1998	1997
Other Data:
Profitability
	Average Yield Interest-Earning Assets	7.12	7.42	7.09	7.16	7.21
	Average Rate on Interest-Bearing Liabilities	5.22	5.24	4.85	4.76	4.60
	Average Interest Rate Spread	1.90	2.18	2.24	2.40	2.61
	Net Interest Margin	2.87	3.55	3.62	4.11	4.60
	Interest-Earning Assets as a % of Interest-
	Bearing Liabilities	122.80	135.40	139.62	156.04	176.66
	Net Interest Income After Provision for Loan
	Loss as a % of Non-Interest Expense	142.72	159.00	164.51	157.68	195.90
	Non-Interest Expense as a % of
	Average Assets	1.97	2.21	2.12	2.47	2.23
	Return on Average Assets	0.86	0.78	0.88	0.97	1.38
	Return on Average Equity	4.43	2.97	3.16	2.62	3.19
Capital Ratio's:
	Average Equity as a % of Total Assets	19.49	26.18	27.92	37.03	40.76
	Tangible Capital Ratio (Association alone)	14.40	16.22	17.68	27.62	32.61
	Core Capital Ratio (Association alone)	14.40	16.22	17.68	27.62	32.61
	Risk-Based Capital Ratio (Association alone)	28.71	39.54	49.15	72.60	79.41
Asset Quality Ratios:
	Non Performing Loans as a % of Total Loans	0.30	0.58	0.14	0.42	0.31
	Non Performing Assets as a % of Total Assets	0.13	0.28	0.06	0.17	0.13
	Allowance for Loan Losses as a % of Total
	Loans Receivable	0.53	0.56	0.60	0.72	0.77
	Allowance for Loan Losses as a % of Non
	Performing Loans	174.80	96.69	422.97	174.01	247.49

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of the financial condition and results of operations of GS Financial Corp. (the Company) and its subsidiary, Guaranty Savings and Homestead Association, for the years ended December 31, 1997 through 2001 is designed to assist readers in their understanding of the Company. This review should be read in conjunction with the audited consolidated financial statements, accompanying footnotes and supplemental financial data included herein.

FORWARD-LOOKING STATEMENTS

In addition to the historical information, this Annual Report includes certain "forward-looking statements" based on current management expectations. The Company’s actual results could differ materially, as defined in the Securities Act of 1933 and the Securities Exchange Act of 1934, from those management expectations. Such forward-looking statements include statements regarding our intentions, beliefs or current expectations as well as the assumptions on which such statements are based. Stockholders and potential stockholders are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. Factors that could cause future results to vary from current management expectations include, but are not limited to, general economic conditions, legislative and regulatory changes, monetary and fiscal policies of the federal government, changes in tax policies, rates and regulations of federal, state and local tax authorities, changes in interest rates, deposit flows, the cost of funds, demand for loan products, demand for financial services, competition, changes in the quality or composition of the Company’s loan and investment portfolios, changes in accounting principles, policies or guidelines, and other economic, competitive governmental and technological factors affecting the Company’s operations, markets, products, services and fees.

The Company undertakes no obligation to update or revise any forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time.

ASSETS

General – The Company's balance sheet affected by the eleven rate cuts enacted by the Federal Reserve. Early in 2001, the Company grew its total assets through both retail and wholesale funding. Investments were made in both Federal Home Loan Mortgage Corporation (FHLMC) preferred stock and collateralized mortgage obligations. Shortly thereafter, rapidly falling interest rates greatly accelerated prepayment speeds of many of the Company's loans and collateralzied mortgage obligations. This caused an influx of cash, which was mainly invested in short-term mutual funds. The falling interest rates helped the Company attract many new demand deposit accounts, which was one of the goals of 2001. The Company's other retail deposits, passbook savings and certificates of deposits, also grew in 2001. Total assets of the company increased $35 million or 23%, to $188.5 million at December 31, 2001, compared to $153.5 million at December 31, 2000. While prepayments of loans were high in 2001, the Company's investment in loans grew, largely in the area of non-residential mortgage loans. This was commensurate with the launching of the Company's commercial lending program, which originated approximately $7 million in commercial loans and mortgages during 2001.

Cash and Cash Equivalents – Cash and cash equivalents, consisting of interest and non-interest bearing deposits and Federal Funds Sold, increased $5.2 million, or 153%, from $3.4 million at December 31, 2000, to $8.6 million at December 31, 2001. Cash and cash equivalents are utilized in the daily operations of the Company. The Company maintains cash and cash equivalents sufficient to meet the daily operational needs of the Association including, but not limited to, operating expenses, loan funding, deposit withdrawals and investment purchases. The Company also maintains sufficient balances at the Federal Home Loan Bank (FHLB) Dallas to service its monthly obligations to that institution. Yields at the FLHB Dallas are comparable to the overnight rate of Federal Funds sold.

Loans Receivable, Net – Loans receivable, net, increased by $7.1 million, or 10%, from $74.5 million at December 31, 2000, to $81.6 million at December 31, 2001. The largest changes in the loan portfolio came in three areas. Mortgage loans on one-to-four single family dwellings decreased $1.3 million from $71.1 million at December 31, 2000, to $69.8 million at December 31, 2001. Mortgages on commercial real estate increased $2.4 million to $3.4 million at December 31, 2001. Other mortgage loans, made up primarily of loans on multi-family dwellings, increased $5.2 million to $6.7 million at December 31, 2001, compared to $1.5 million at December 31, 2000. During 2001, the Company originated 180 loans totaling $21.5 million. This represented the Company's highest annual loan origination volume ever. The new loan volume was offset by principal reductions, primarily payoff's rather than regular monthly payments, of $14.4 million.

Investment Securities – Investment securities consist of U.S. Treasury and Agency issued notes, three short-term mutual funds, FHLMC common and preferred stock and other equity investments. Investment securities increased $24.8 million, from $11.0 million at December 31, 2000, to $35.8 million at December 31, 2001. Early in 2001, the Company purchased $12.7 million of FHLMC preferred stock funded by advances from the FHLB Dallas. The FHLMC preferred stock purchased contains call options varying from three to seven years and coupons varying from 5% to 6%. Seventy percent of the dividends for the FHLMC preferred stock are tax free, boosting the effective yield of this investment. During 2001, because of its low dividend yield, the Company sold 10,000 shares of its FHLMC common stock at gain of $.6 million. The Company's short-term mutual funds are invested mostly in mortgage-based securities and money market type investments. These funds carry one-day availability and carry higher yields than overnight Federal Funds Sold or interest-bearing deposits in other financial institutions such as the Federal Home Loan Bank. Due to significant prepayments of the Company's portfolio of collateralized mortgage obligations, the investment in these mutual funds increased $13.9 million in 2001.

Mortgage-Backed Securities – Mortgage-backed securities decreased $3.2 million, or 78%, from $4.1 million at December 31, 2000, to $.9 million at December 31, 2001. In 2001 the Company sold $2.3 million in mortgage-backed securities to provide funds for other investments. At December 31, 2001 and 2000, all of the Company’s mortgage-backed securities were FHLMC, FNMA, or GNMA issued instruments. FHLMC and FNMA are enterprises sponsored by the Federal government while GNMA securities represent direct obligations of the Federal Government.

Collateralized Mortgage Obligations – The Company investment in Collateralized Mortgage Obligations (CMOs) is limited to first-tranche Real Estate Mortgage Investment Conduits (REMICs) which pay monthly. REMICs are multiple class mortgage-backed securities whereby an underlying pool of mortgages held by the issuer serves as collateral for the debt. The Company has REMICs issued by FNMA, FHLMC and "AAA" rated non-governmental agencies. The Company has found these instruments to be ideal for its wholesale growth strategy due to their regular repayment schedules and attractive yields. The expected life of these REMICs varies from two to fifteen years. Advances from the Federal Home Loan Bank funded most of the investment in CMOs. During 2001, the Company’s investment in CMOs decreased $1.6 million, or 3%, from $53.7 million at December 31, 2000, to $52.1 million at December 31, 2001. Purchases of CMOs during 2001 of $36.9 million were offset by payments of $37.6 million. Also in 2001, the Company sold $2.7 million of CMOs and realized a gain of $16,000.

LIABILITIES AND STOCKHOLDERS’ EQUITY

General – The Company’s deposits, borrowings and equity represent sources of funds for its various investments and operating needs.

Deposits – The Company’s deposits increased $12.3 million, or 21%, from $58.9 million at December 31, 2000, to $71.2 million at December 31, 2001. The increases came in demand deposits, passbook savings and certificates of deposit.

Passbook Savings - During 2001, passbook savings accounts increased $2.6 million from $17.4 million at December 31, 2000, to $20.0 million at December 31, 2001. This represents an increase of 12%. Most of the increase came late in the year, particularly after September 11, 2001. Falling rates for NOW accounts have also contributed to the increase in passbook savings.

NOW Accounts - NOW accounts increased from $3.2 million at December 31, 2000, to $7.9 million at December 31, 2001. This increase was part of a coordinated effort on the part of the company to establish a core base of demand deposit accounts. The Company started offering demand deposit accounts in 2000. Early in 2001, the Company was able to attract many new accounts by offering very favorable rates compared to other financial institutions in the local market.

Certificates of Deposit - Certificates of deposit increased from $38.3 million at December 31, 2000, to $43.2 million at December 31, 2001. This $4.9 million change represented a 13 % increase. Most of the growth in certificates of deposit came late in the year, with most growth coming in certificates with terms of one year or less.

Borrowings – The Company’s borrowings increased $25.1 million, from $54.2 million at December 31, 2000, to $79.3 million at December 31, 2001. The Company’s borrowings consist of fully amortizing, balloon and "bullet" (interest only until maturity) advances from the Federal Home Loan Bank of Dallas which mature between 2002 and 2008. These borrowings represent the continuation of the Company’s wholesale growth strategy of leveraged investing with most of the funds going to purchase CMOs or FHLMC preferred stock.

Stockholders’ Equity – Stockholders’ equity decreased $2.4 million, or 6%, from $37.8 million at December 31, 2000, to $35.4 million at December 31, 2001. The decrease was due to the net effects of the following events:

Purchase of Treasury Stock	$ (4.6 million)
2001 Net Income	1.6 million
Cash Dividends Paid	(.6 million)
Distribution of RRP Stock	.2 million
Distribution of ESOP Stock	.4 million
Increase in Other Comprehensive Income	.6 million
	--------------
NET CHANGE	$ (2.4 million)
	=========

Treasury Stock – During 2001, the Company repurchased 305,684 shares of its common stock for $4.6 million, or an average price of $15.09 per common share. Since the inception of its stock buyback program in 1998, the Company has repurchased 1,775,338 shares of its common stock at an average price of $14.18 per common share, or a total of $25.2 million, contributing to the enhancement of shareholder value. At December 31, 2001, the book value was $21.29 per common share. This compares to a book value of $19.20 per common share at December 31, 2000.

COMPARISON OF RESULTS OF OPERATIONS

General – The Company reported net income of $1.6 million, $1.2 million and $1.4 million for the years ended December 31, 2001, 2000, and 1999. The results for 2001 reflected increases in interest income and gains on sales of investment securities offset by increases in interest and overhead expenses. Falling interest rates during 2001 contributed to the decrease in net interest margin and net interest income. The results for 2000 reflected a net loss on the sale of securities. The earnings of the Company increased to $1.04 per common share in 2001 compared to $.60 per common share in 2000. The increase in earnings per share from 2000 to 2001 was due to reduced shares outstanding from 2000 to 2001, and by the gains realized on the sale of securities in 2001 compared to a loss on the sale of securities in 2000.

Interest Income – Interest income increased $1.8 million, or 16%, from $11.3 million in 2000 to $13.1 million in 2001. Overall results for 2001 reflected a yield of 7.12% on average earning assets of $184.0 million compared to average earning assets of $151.7 million in 2000 yielding 7.42%. Changes in interest income were made up of increases in interest income from loans, investment securities, CMOs and other interest-earning assets, offset by a decrease in interest income from mortgage-backed securities.

The yield on loans receivable decreased from 7.96% in 2000 to 7.85% in 2001. The decrease in yield was offset by an increase in the average balance of net loans receivable of $3.6 million from 2000 to 2001. With mortgage rates hitting their lowest points in over 20 years, the focus of the Company's efforts was the origination of approximately $7 million in commercial loans and mortgages, particularly in the last quarter of 2001. In general, commercial loans and mortgages carry higher rates than loans on single one to four family dwellings. A full year's impact of the commercial loans on the overall portfolio will help increase yields in 2002. During 2001, many of the Company's loans on single one to four family dwellings received temporary rate reductions rather than have the loans refinance elsewhere and payoff. The reversal of these reductions can only be determined by market interest rates.

Interest income on investment securities increased $1.0 million from $.4 million in 2000 to $1.4 million in 2001. The yield on investment securities went down from 5.71% in 2000 to 5.40% in 2001. The reduction was due to the falling yields of the Company’s investment in mortgage-based mutual funds, which carried significantly higher balances in 2001 due to the reinvestment of cash flows from rapidly repaying CMOs. The average balance of the funds was $7.8 million in 2001, compared to $1.6 million in 2000. These funds are predominantly secured by adjustable-rate, mortgage based assets. Currently, the Company’s mortgage-based mutual funds typically yield between 3.0% and 4.0% and act as a short-term investment. The average balance of investments increased $17.6 million, from 2000 to 2001. The increase in balance was due to the expansion of the Company's leveraged investing program and related purchase of FHLMC preferred stock, and to the re-investment of cash from CMO repayments in the Company's short-term mutual funds.

			For the Years Ended December 31,
			2001			2000			1999
			Average		Yield/	Average		Yield/	Average		Yield/
			Balance	Interest	Rate	Balance	Interest	Rate	Balance	Interest	Rate
Interest Earning Assets
	Loans Receivable		76,300	5,989	7.85%	72,744	5,788	7.96%	66,773	5,334	7.99%
	Mortgage Backed Securities		1,376	90	6.54%	11,985	800	6.68%	19,174	1,253	6.53%
	Investment Securities		24,988	1,350	5.40%	7,432	424	5.71%	15,427	972	6.30%
	Collateralized Mortgage		68,903	5,142	7.46%	53,136	3,799	7.15%	44,480	2,863	6.44%
		Obligations
	Other Interest Earning Assets		12,411	529	4.26%	6,421	451	7.02%	4,495	236	5.25%
	Total Interest Earning Assets		183,978	13,100	7.12%	151,718	11,262	7.42%	150,349	10,658	7.09%
	Non Interest Earning Assets		3,225			1,752			5,277
	TOTAL ASSETS		187,203			153,470			155,626
Interest Bearing Liabilities
	Passbooks Deposits		17,247	514	2.98%	17,964	523	2.91%	20,633	621	3.01%
	Interest Bearing Checking		5,797	207	3.57%	993	49	4.93%	n/a	n/a	N/a
	Certificates of Deposits		39,930	2,122	5.31%	39,151	2,094	5.35%	39,456	1,926	4.88%
	Borrowings		86,840	4,982	5.74%	53,944	3,209	5.95%	47,592	2,674	5.62%
	Total Interest Bearing Liabilities		149,814	7,825	5.22%	112,052	5,875	5.24%	107,681	5,221	4.85%
	Non Interest Bearing Liabilities		906			1,238			4,499
	TOTAL LIABILITIES		150,720			113,290			112,180
	Retained Earnings		36,483			40,180			43,446
	TOTAL LIABILITIES AND
		RETAINED EARNINGS	187,203			153,470			155,626
Net Interest Earning Assets			34,164			39,666			42,668
Net Interest Income				5,275			5,387			5,437
Net Interest Spread					1.90%			2.18%			2.24%
Net Interest Margin					2.87%			3.55%			3.62%

Interest on mortgage-backed securities decreased $.7 million from $.8 million in

2000 to $.1 million in 2001. The yield of the Company's mortgage-backed securities decreased in 2001 to 6.54%, compared to 6.68% in 2000. The average balance decreased from $12.0 million in 2000 to $1.4 million in 2001. The Company sold $2.3 million in mortgage-backed securities during 2001.

Interest income from CMOs increased $1.3 million from $3.8 million in 2000 to $5.1 million in 2001, representing an increase of 34%. During 2001 the average balance of CMOs was $68.9 million which yielded 7.46%. In 2000, CMOs carried an average balance of $53.1 million, which yielded 7.15%. The increased yield of 2001 versus 2000 was the result of rapid repayments of the underlying principal causing discounts to be earned much sooner than expected in larger lump sums. Discount accretion increases coupon yields, and currently, the majority of the CMO portfolio is made up of bonds purchased at discount.

Interest income from other interest earning assets increased from $.45 million in 2000 to $.53 million in 2001. This increase was the result of the Company maintaining higher average balances in Federal Funds Sold and other interest bearing deposits in other financial institutions. The yield on other interest earning assets was 4.26% on an average balance of $12.4 million in 2001, compared to 7.02% on an average balance of $6.4 million in 2000. The yield in 2000 included a special one-time dividend paid on the Federal Home Loan Bank stock. The Company currently has $5.3 million in Federal Home Loan Bank stock.

RATE/VOLUME ANALYSIS

The following table shows the extent to which changes in interest rates and changes in volume of interest-related assets and liabilities affected interest income and expense during 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 (change in volume multiplied by prior year rate) and (ii) changes in rate (change in rate multiplied by prior year volume). The combined effect of changes in both rate and volume has been allocated proportionately to the change due to rate and the change due to volume.

			12/31/00 to 12/31/01			12/31/99 to 12/31/00
			Rate	Volume	Total	Rate	Volume	Total
Interest Income
		Loans	(80)	281	201	(20)	474	454
		MBS	(17)	(693)	(710)	31	(484)	(453)
		Invest	(23)	949	926	(91)	(457)	(548)
		CMO's	165	1,178	1,343	319	617	936
		Other	(192)	270	78	76	139	215
Total			(147)	1,985	1,838	315	289	604
Interest Expense
		Savings/NOW's	13	(22)	(9)	2	(51)	(49)
		Int Bearing Checking	(14)	172	158	n/a	n/a	n/a
		Certificates	(16)	44	28	186	(18)	168
		Borrowings	(112)	1,885	1,773	154	381	535
Total			(129)	2,079	1,950	342	312	654
Decrease in
	Net Interest Income		(18)	(94)	(112)	(27)	(23)	(50)

Interest Expense – Interest expense increased $1.9 million, or 32%, from $5.9 million in 2000, to $7.8 million in 2001. Although the Company's overall cost of funds decreased from 2000 to 2001, the increase in interest expense was a result of a significant increase in interest-bearing deposits and FHLB advances. Total average interest-bearing liabilities in 2001 were $149.8 million compared to $112.1 in 2000. The Company's overall cost of funds was 5.22% in 2001 compared to 5.24% in 2000.

Interest Expense on Deposits - Expense on interest-bearing deposits increased $.1 million in 2001 to $2.8 million, compared to $2.7 million in 2000. The average cost of interest-bearing deposits in 2001 was 4.51% on an average balance of $63.0 million, compared to 2000 where an average balance of interest-bearing deposits of $58.1 million cost the Company 4.59.

Interest Expense on NOW Accounts - Expense on NOW accounts increased $.15 million in 2001 to $.2 million, compared to $.05 million in 2000. The average cost of NOW accounts was 3.57% on an average balance of $5.8 million in 2001. During 2000, NOW accounts averaged $1.0 million and cost 4.93%.

Interest Expense on Certificates of Deposit - Expense on certificates of deposit was relatively unchanged from 2000 to 2001. The cost in 2000 of 5.35% decreased slightly to 5.31% in 2001. The average balance of certificates of deposit increased slightly to $39.9 million in 2001 compared to $39.2 million in 2000. Most of the Company’s increase in certificates of deposit came late in 2001.

Interest Expense on Passbook Savings – The cost and average balance of passbook savings accounts was approximately the same in 2001 and 2000. The approximate cost for both years was 2.95% while the average balance for both years was $17.5 million. It should be noted that late in 2001 and early into 2002, the balance of the Company passbook savings accounts has increased approximately 20%.

Interest Expense on FHLB Advances – During 2001, interest expense on advances from the FHLB increased to $5.0 million compared to $3.2 million in 2000. The increase in cost was due to the increase in the average balance of FHLB advances from $53.9 million in 2000, to $86.8 million in 2001. This was due to the Company’s expansion of its leveraged investing program. The cost of FHLB advances in 2001 was 5.74%, compared to 5.95% in 2000.

Provision for Loan Losses -The Allowance for Loan Loss (ALL) is evaluated on a quarterly basis and provisions to increase or reductions to the ALL to a level deemed appropriate by management are made accordingly. Additional provisions are necessary when either growth of the entire loan portfolio, changes in the loan mix, or charge-offs drop the ALL below that level deemed appropriate by management. Reductions occur due to a decline in the size of the loan portfolio or when previously reserved-for loans are paid down or collected in full.

The Company had provision for loan losses of $25,000 in 2001 compared to $7,000 in 2000. These limited provisions to the ALL have been due to the low level of delinquent and substandard loans and the infrequent number of foreclosures over the past ten years. Charge-offs were also low with $10,000 charged off in 2001 compared to $11,000 in 2000. The provision for loan losses reflects management’s evaluation of the underlying credit risk of the Company’s loan portfolio to adequately provide for probable loan losses inherent in the loan portfolio as of the balance sheet date. As of December 31, 2001, the ALL as a percent of the entire loan portfolio was .53 % while the same number in 2000 was .56.%. The ALL as a percentage of non-performing loans was 175% at December 31, 2001, compared to 97% at December 31, 2000. Future additions to the ALL will be dependent on a number of factors including the performance of the Company’s loan portfolio, specifically in terms of delinquencies, foreclosures and charge-offs. Other factors include the local economy, inflation, and changes in interest rates and the effect of such changes on real estate values. Management believes that the ALL is adequate at December 31, 2001.

Non-Interest Income – Non-interest income increased $.7 million in 2001 to $.6 million for the current year compared to ($.1 million) for the twelve months ended December 31, 2000. During 2001, the Company had net gains on the sale of investments of $.6 million, compared to net losses during 2000 of ($.1 million). Also during 2001, other fee income increased to $27,000, compared to $11,000 during 2000.

Other Expenses - Other expenses increased $.3 million from $3.4 million for the twelve months ended December 31, 2000, compared to $3.7 million for the twelve months ended December 31, 2001. The increase was attributable in part to an increase in compensation expense of $.3 million. The expense associated with the ESOP increased due to an increase in the average price of the Company’s stock during 2001 compared to 2000. There were also additional employee salaries associated with five new employees hired during 2001. The new staff was hired in conjunction with the May, 2001 opening of the Company's loan production office in Ponchatoula, Louisiana, and with the opening of a second location in Metairie, Louisiana, which opened in February, 2002. There were minor increases or decreases in all other expenses.

Income Tax Expense – Income tax expense decreased from $.7 million in 2000, to $.6 million in 2001. The decrease was primarily due to the effects of the 70% dividend exclusion on dividends received from the Company’s investment in FHLMC common and preferred stock.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity measures the Company’s ability to meet its financial commitments and obligations on a timely basis. These commitments and obligations include loan disbursements, savings withdrawals by customers, the payment of dividends, cash letters and the daily operating expenses of the Company. Liquidity management involves the daily monitoring of cash on hand, non-interest bearing operating accounts, overnight Federal Funds Sold, short-term investments and the Company’s ability to convert these assets into cash without incurring a loss. Monthly paydowns on mortgage loans, mortgage-backed securities and collateralized mortgage obligations are anticipated and channeled to either cash on hand, overnight Federal Funds Sold or short-term investments in order to meet the Company’s demands and maximize interest earned on these funds.

The Company’s primary sources of funds are interest and non-interest bearing customer deposits, advances from the Federal Home Loan Bank and maturities of its existing investments including mortgage loans, mortgage-backed securities, investment securities and collateralized mortgage obligations. The Company offers competitive interest rates to maintain its core deposit base consisting of passbook savings, checking accounts and certificates of deposit. The Company does not utilize brokered deposits nor does it offer special rates for "jumbo" deposits of $100,000 or more. The actions of the Federal Reserve and subsequent fall of interest rates during 2001, greatly accelerated prepayments of the Company’s assets, specifically its loans and CMOs.

Guaranty Savings & Homestead Association, the Company’s wholly-owned subsidiary, is required to maintain regulatory capital sufficient to meet all three of the regulatory capital requirements, those being tangible capital (1.5%), core capital (3.0%), and risk-based capital (8.0%). As of December 31, 2001, the Association’s tangible and core capital amounted to $26.4 million, or 14.4% of adjusted total assets, while the Association’s risk-based capital was $26.8 million, or 28.7% of total adjusted risk-weighted assets. The Company remains "well capitalized" under OTS standards. Since the initial public offering in 1997, the Company has endeavored to reduce its capital level through stock buybacks, retail or wholesale asset growth and other means.

MARKET RISK ANALYSIS – ASSET LIABILITY MANAGEMENT

Qualitative Risk Analysis. The ability to maximize net interest income is largely dependent upon the achievement of a positive interest rate spread that could be sustained during fluctuations in prevailing interest rates. Interest rate sensitivity is a measure of the difference between amounts of interest-earning assets and interest-bearing liabilities which either re-price or mature within a given period of time. The difference or the interest rate re-pricing "gap" provides an indication of the extent to which an institution’s interest rate spread will be affected by changes in interest rates. A gap is considered positive when the amount of interest-rate sensitive assets exceeds the amount of interest-rate sensitive liabilities, and is considered negative when the amount of interest-rate sensitive liabilities exceeds the amount of interest-rate sensitive assets. Generally, during a period of rising interest rates, a negative gap within shorter maturities would adversely affect net interest income, while a positive gap within shorter maturities would result in an increase in net interest income. During a period of falling interest rates, a negative gap within shorter maturities would result in an increase in net interest income while a positive gap within shorter maturities would have the opposite effect. As of December 31, 2001, the ratio of the Association’s cumulative one-year gap to total assets was 27.8% and its ratio of interest-earning assets to interest-bearing liabilities maturing or re-pricing within one year was 154.4%.

In order to minimize the potential for adverse effects of material and prolonged increases in interest rates on the Association’s results of operations, the Association has adopted asset and liability management policies including an interest rate risk policy to better enable management to match the re-pricing and maturities of its interest-earning assets and interest-bearing liabilities. President Scott and Controller Bartels review monthly the re-pricing gap on an internal model specifically designed for the assets and liabilities currently being held by the Association. An interest rate risk report which analyzes changes to the net portfolio value (NPV) and net interest income is presented to the Board of Directors on a quarterly basis. The NPV is the difference between the market value of the Association’s assets and the market value of the Association’s liabilities and off balance sheet commitments. The Board reviews the internal model and a standard thrift industry model prepared by the OTS from the Association’s quarterly Consolidated Maturity and Rate Report.

The nature of thrifts such as Guaranty Savings & Homestead Association lends itself to the creation of negative gaps over the short term since the Association is invested primarily in home mortgage loans varying in length usually from 15 to 25 years while its longest term interest-bearing liabilities are five-year certificates of deposit and two seven year balloon FHLB advances. Therefore it is vital that the Association utilize its other investments to offset in the short-term (12-month) horizon the substantial negative re-pricing gap which arises from one to five years while at the same time maximizing net interest income. This is why the Association places much of its ready cash in short-term investments such as mortgage-based mutual funds through its primary broker, Shay Financial. These types of investments provide the benefit of overnight availability while producing yields approximately 150 basis points higher than overnight Federal Funds sold. The Association also places a high emphasis on cash flows in its portfolio of CMO REMIC’s. The duration of the Association’s CMO REMIC’s varies from two to fifteen years. At present, due to the large influx of cash and subsequent reinvestment in short-term mutual funds during 2001, the Association finds itself in a very positively gapped position over the twelve-month horizon.

Quantitative Risk Analysis Presented below, as of December 31, 2001 is an analysis of Guaranty Savings & Homestead Association’s interest rate risk as measured by changes in NPV for instantaneous and sustained parallel shifts in the yield curve, in 100 basis point increments, up and down 300 basis points in accordance with OTS regulations. As illustrated in the table, NPV is more sensitive to and may be more negatively impacted by rising rates than declining rates. This occurs principally because as rates rise, the market value of fixed-rate loans declines due to both the rate increase and slowing prepayments. When rates decline, the Association does not experience a significant rise in market value for these loans because borrowers prepay at relatively high rates. The value of the Association’s deposits and borrowings change in approximately the same proportion in rising or falling rate scenarios.

Change (in Basis Points)	Net Portfolio Value ------------------------
in Interest Rates	$ Amount	$ Change	% Change
	(Dollars in Thousands)
+300	19,589	-10,889	-36%
+200	23,459	-7,019	-23%
+100	27,032	-3,446	-11%
0	30,478
-100	34,175	3,697	+12%
-200	37,682	7,204	+24%
-300	41,090	10,612	+35%

The assumptions used by management to evaluate the vulnerability of the Association’s operations to changes in interest rates in the table above are based on assumptions utilized in the gap table below. Although management finds these assumptions reasonable, the interest rate sensitivity of the Association’s assets and liabilities and the estimated effects of changes in interest rates on the Association’s net interest income and NPV indicated in the above table could vary substantially if different assumptions were used or actual experience differs from such assumptions.

SENSITIVITY ANALYSIS

The following table summarizes the anticipated maturities or re-pricing of the Association’s interest-earning assets and interest-bearing liabilities as of December 31, 2001, based on the information and assumptions set forth in the notes below.

(Dollars in Thousands)		Within Three Months		Three to Twelve Months		More Than One Year to Three Years		More Than Three Years to Five Years		Over Five Years		Total
Interest-Earning assets:
	Cash and interest-earning deposits	$	8,141	$	-	$	-	$	-	$	-	$	8,141
	U.S. Government and Agency Securities (1)		-		-		-		800		-		800
	FHLMC & FHLB Stock		22,901		-		-		-		-		22,901
	Mortgage-based Mutual Funds		16,466		-		-		-		-		16,466
	Mortgage Loans (1)		4,844		14,532		38,754		23,653		-		81,783
	Commercial Loans (2)		55		231		-		-		397		683
	Collateralized Mortgage Obligations (1)		17,788		34,318		-		-		-		52,106
	Consumer Loans		254		-		-		-		-		254
TOTAL INTEREST-EARNING ASSETS			70,449		49,081		38,754		24,453		397		183,134
			=====		=====		=====		=====		=====		======
Interest Bearing Liabilities
	NOW Accounts		7,666		-		-		-		-		7,666
	Passbook Savings		20,042		-		-		-		-		20,042
	Certificates of Deposits (2)		8,621		23,864		10,229		503		-		43,217
	FHLB Advances (2)		3,405		13,836		29,323		15,667		17,034		79,265
TOTAL INTEREST-EARNING LIABILITIES			39,734		37,700		39,552		16,170		17,034		150,190
			=====		=====		=====		=====		=====		======
Excess/(deficiency) of interest-earning
assets over interest-bearing liabilities			$30,715		$11,381		($798)		$8,283		($16,637)		32,944
Cumulative excess/(deficiency) of interest-
earning assets over interest bearing liabilities			$30,715		$42,097		$41,298		$49,581		$32,944
Cumulative excess/(deficiency) of interest-
earning assets over interest bearing liabilities
as a percent of total assets			20.32%		27.85%		27.32%		32.80%		21.79%
Ratio of interest-earning assets to interest-
bearing liabilities			177.30%		130.19%		97.98%		151.22%		2.33%
Ratio of cumulative interest-earning assets
to interest-bearing liabilities			177.30%		154.36%		135.30%		137.24%		121.93%
(1) Based on average monthly payments for the
three months ended December 31, 2001
(2) Based on contractual maturities