----

----

**UNITED STATESSECURITIES AND EXCHANGE COMMISSION****WASHINGTON, D.C.  20549**

**FORM 10-QSB**
| **ý** | **QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES EXCHANGE ACT OF 1934** |
|------------|----------------------------------------------------------------------------------------------|

**For the quarter ended June 30,2001**

**OR**
| **o** | **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES EXCHANGE ACT OF 1934** |
|-------|-----------------------------------------------------------------------------------------------|

** **

**For the transition period from___________ To ___________**

**Commission file number 0-25047**

**RFS BANCORP, INC.******(Exact name ofregistrant as specified in its charter)

| **UNITED STATES**                                               | **04-3449818**                        |
|-----------------------------------------------------------------|---------------------------------------|
| ****                                                            | ****                                  |
| (State  or other jurisdiction of incorporation or organization) | (I.R.S.  Employer Identification No.) |

 

| **310 BROADWAY**                          |        |
|-------------------------------------------|-------------|
| **REVERE, MASSACHUSETTS**                 | **02151**   |
| ****                                      | ****        |
| (Address  of principal executive offices) | (Zip  Code) |

** **

| **(781) 284-7777**                                       |
|----------------------------------------------------------|
| ****                                                     |
| Registrant’s  telephone number, including area code |

 

Indicate bycheck mark whether the registrant (1) has filed all reports required to befiled by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was requiredto file such reports), and (2) has been subject to such filing requirements forthe past 90 days.  **YES**            o         **NO**       ý

As of August14, 2001, 884,923 shares of the registrant’s common stock were outstanding.

----

----

**INDEX**

 

|        |                                                                                                                 |
|-------------|----------------------------------------------------------------------------------------------------------------------|
| **PART I**  | **FINANCIAL INFORMATION**                                                                                            |
|        |                                                                                                                 |
| Item 1      | Condensed Consolidated Financial Statements  (unaudited):                                                            |
|        |                                                                                                                 |
|        | Condensed  Consolidated Balance Sheets - June 30, 2001 and September 30, 2000                                        |
|        |                                                                                                                 |
|        | Condensed  Consolidated Statements of Income - Three Months Ended June 30, 2001 and 2000                             |
|        |                                                                                                                 |
|        | Condensed  Consolidated Statements of Income - Nine Months Ended June 30, 2001 and 2000                              |
|        |                                                                                                                 |
|        | Condensed  Consolidated Statements of Changes in Stockholders’ Equity-Nine Months Ended  June 30, 2001 and 2000 |
|        |                                                                                                                 |
|        | Condensed  Consolidated Statements of Cash Flows - Nine Months Ended June 30, 2001 and  2000                         |
|        |                                                                                                                 |
|        | Notes  to Unaudited Condensed Consolidated Financial Statements - June 30, 2001                                      |
|        |                                                                                                                 |
| Item  2     | Management’s  Discussion and Analysis of Financial Condition and Results of Operations                          |
|        |                                                                                                                 |
| Item 3      | Not applicable                                                                                                       |
|        |                                                                                                                 |
|        |                                                                                                                 |
| **PART II** | **OTHER INFORMATION**                                                                                                |
|        |                                                                                                                 |
| Items 1 - 5 | Not applicable                                                                                                       |
|        |                                                                                                                 |
| Item 6      | Exhibits and Reports  on Form 8-K                                                                                    |
|        |                                                                                                                 |
|        |                                                                                                                 |
|        | **SIGNATURES**                                                                                                       |
|        |                                                                                                                 |

 

**RFS BANCORP, INC. andSUBSIDIARY****CONDENSEDCONSOLIDATED BALANCE SHEETS****(INTHOUSANDS, EXCEPT SHARE INFORMATION)**

|                                       | June  30, 2001                                                                                                   |    | September  30, 2000 |    |
|--------------------------------------------|------------------------------------------------------------------------------------------------------------------|---------|---------------------|---------|
|                                       |                                                                                                                  |    |                     |    |
|                                       | (Unaudited)                                                                                                      |    |                |    |
| ASSETS                                     |                                                                                                             |    |                |    |
|                                       | Cash and due from  banks                                                                                         | $       | 6,958               |    | $ | 4,929 |   |
|                                       | Federal funds sold                                                                                               | 2,505   |                | 1,096   |   |
|                                       |                                                                                                             |         |                |         |   |
|                                       | Total cash and cash  equivalents                                                                                 | 9,463   |                | 6,025   |   |
|                                       | Securities available  for sale, at fair value                                                                    | 6,675   |                | 6,806   |   |
|                                       | Securities held to  maturity, at amortized cost                                                                  | 30,317  |                | 31,890  |   |
|                                       | Federal Home Loan  Bank, (“FHLB”) stock, at cost                                                       | 2,144   |                | 1,811   |   |
|                                       | Loans, net of  allowance for loan losses of $882 and $746,   respectively                                   | 95,035  |                | 85,546  |   |
|                                       | Bank premises and  equipment, net                                                                                | 4,423   |                | 3,783   |   |
|                                       | Accrued interest  receivable                                                                                     | 1,016   |                | 808     |   |
|                                       | Other assets                                                                                                     | 654     |                | 275     |   |
|                                       |                                                                                                                  |    |                     |    |
|                                       | Total assets                                                                                                     | $       | 149,727             |    | $ | 136,944 |   |
|                                       |                                                                                                                  |    |                     |    |
| LIABILITIES and  STOCKHOLDERS’ EQUITY |                                                                                                             |    |                |    |
|                                       |                                                                                                             |    |                |    |
|                                       | Deposits                                                                                                         | $       | 108,286             |    | $ | 92,449 |   |
|                                       | FHLB borrowings                                                                                                  | 29,929  |                | 33,904  |   |
|                                       | Accrued expenses and  other liabilities                                                                          | 820     |                | 352     |   |
|                                       |                                                                                                             |         |                |         |   |
|                                       | Total liabilities                                                                                                | 139,035 |                | 126,705 |   |
|                                       |                                                                                                                  |    |                     |    |
|                                       | Stockholders’ equity:                                                                                       |    |                |    |   |
|                                       |                                                                                                             |    |                |    |
|                                       | Common stock $.01 par  value, 5,000,000 shares authorized, 933,523 shares issued and 884,923 shares  outstanding | 9       |                | 9       |   |
|                                       | Additional paid-in  capital                                                                                      | 3,776   |                | 3,759   |   |
|                                       | Retained earnings                                                                                                | 7,093   |                | 6,923   |   |
|                                       | Unearned shares,  stock-based incentive plan (13,837 shares, at cost)                                            | (162    | )                   | (162    | ) |
|                                       | Treasury stock (48,600  shares, at cost)                                                                         | (435    | )                   | (435    | ) |
|                                       | Accumulated other  comprehensive income                                                                          | 692     |                | 461     |   |
|                                       | Unallocated ESOP  shares                                                                                         | (281    | )                   | (316    | ) |
|                                       |                                                                                                             |         |                |         |   |
|                                       | Total stockholders’  equity                                                                                 | 10,692  |                | 10,239  |   |
|                                       |                                                                                                             |         |                |         |   |
|                                       | Total liabilities and  stockholders’ equity                                                                 | $       | 149,727             |    | $ | 136,944 |   |
|                                       |                                                                                                             |         |                |         |   |
|                                            |                                                                                                                  |         |                     |         |  |  |  |  |  |

Seeaccompanying notes to unaudited condensed consolidated financial statements.

**RFS BANCORP, INC. andSUBSIDIARY****CONDENSED CONSOLIDATEDSTATEMENTS OF INCOME********(IN THOUSANDS EXCEPT PER SHARE DATA)**

|                                                               | Three  Months Ended                   |    |
|--------------------------------------------------------------------|---------------------------------------|---------|
|                                                               |                                       |    |
|                                                               | June  30, 2001                        |    | June  30, 2000 |   |
|                                                               |                                       |    |  |   |
|                                                               | (Unaudited)                           |    |
| Interest and dividend  income:                                     |                                  |    |   |   |
|                                                               |                                  |    |   |   |
|                                                               | Interest and fees on  loans           | $       | 1,926 |   | $ | 1,582 |   |
|                                                               | Interest and dividends  on securities | 662     |   | 700 |   |
|                                                               | Other interest                        | 83      |   | 27 |   |
|                                                               |                                  |         |   |  |   |
|                                                               | Total interest and  dividend income   | 2,671   |   | 2,309 |   |
|                                                               |                                       |    |  |   |
| Interest expense:                                                  |                                  |    |   |   |
|                                                               |                                  |    |   |   |
|                                                               | Deposits                              | 896     |   | 715 |   |
|                                                               | FHLB borrowings                       | 490     |   | 530 |   |
|                                                               |                                  |         |   |  |   |
|                                                               | Total interest expense                | 1,386   |   | 1,245 |   |
|                                                               |                                       |    |  |   |
| Net interest and  dividend income                                  | 1,285                                 |    | 1,064 |   |
|                                                               |                                  |    |   |   |
| Provision for loan  losses                                         | 48                                    |    | 36 |   |
|                                                               |                                       |    |  |   |
| Net interest and  dividend income, after provision for loan losses | 1,237                                 |    | 1,028 |   |
|                                                               |                                       |    |  |   |
| Other income:                                                      |                                  |    |   |   |
|                                                               |                                  |    |   |   |
|                                                               | Service charges on  deposit accounts  | 22      |   | 19 |   |
|                                                               | Other income                          | 88      |   | 81 |   |
|                                                               |                                  |         |   |  |   |
|                                                               | Total other income                    | 110     |   | 100 |   |
|                                                               |                                       |    |  |   |
| Operating expenses:                                                |                                  |    |   |   |
|                                                               |                                  |    |   |   |
|                                                               | Salaries and employees  benefits      | 587     |   | 492 |   |
|                                                               | Occupancy expense                     | 87      |   | 49 |   |
|                                                               | Equipment expense                     | 86      |   | 67 |   |
|                                                               | Advertising expense                   | 16      |   | 16 |   |
|                                                               | Office supplies  expense              | 21      |   | 19 |   |
|                                                               | Data processing  expenses             | 56      |   | 58 |   |
|                                                               | Professional fees                     | 68      |   | 69 |   |
|                                                               | Other expenses                        | 608     |   | 163 |   |
|                                                               |                                  |         |   |  |   |
|                                                               | Total operating  expenses             | 1,529   |   | 933 |   |
|                                                               |                                       |    |  |   |
| Income before income  taxes                                        | (182                                  | )       | 195 |   |
|                                                               |                                  |    |   |   |
| Provision for income  taxes                                        | (59                                   | )       | 64 |   |
|                                                               |                                       |    |  |   |
| Net income                                                         | $                                     | (123    | ) | $ | 131 |   |
|                                                               |                                       |    |  |   |
| Basic earnings(loss)  per share                                    | $                                     | (0.14   | ) | $ | 0.15 |   |
| Diluted earnings(loss)  per share                                  | $                                     | (0.14   | ) | $ | 0.15 |   |
|                                                               |                                  |    |   |   |
| Weighted average  shares outstanding :                             |                                  |    |   |   |
|                                                               | Basic                                 | 858,081 |   | 868,819 |   |
|                                                               | Diluted                               | 882,036 |   | 875,094 |   |
|                                                                    |                                       |         |  |  |  |  |  |  |

Seeaccompanying notes to unaudited condensed consolidated financial statements.

**RFSBANCORP, INC. and SUBSIDIARY****CONDENSED CONSOLIDATEDSTATEMENTS OF INCOME********(IN THOUSANDS EXCEPT PER SHARE DATA)**

|                                                               | Nine  Months Ended                    |    |
|--------------------------------------------------------------------|---------------------------------------|---------|
|                                                               |                                       |    |
|                                                               | June  30, 2001                        |    | June  30, 2000 |   |
|                                                               |                                       |    |  |   |
|                                                               | (Unaudited)                           |    |
| Interest and dividend  income:                                     |                                  |    |   |   |
|                                                               |                                  |    |   |   |
|                                                               | Interest and fees on  loans           | $       | 5,697 |   | $ | 4,531 |   |
|                                                               | Interest and dividends  on securities | 2,052   |   | 1,828 |   |
|                                                               | Other interest                        | 190     |   | 112 |   |
|                                                               |                                  |         |   |  |   |
|                                                               | Total interest and  dividend income   | 7,939   |   | 6,471 |   |
|                                                               |                                       |    |  |   |
| Interest expense:                                                  |                                  |    |   |   |
|                                                               |                                  |    |   |   |
|                                                               | Deposits                              | 2,602   |   | 1,996 |   |
|                                                               | FHLB borrowings                       | 1,645   |   | 1,352 |   |
|                                                               |                                  |         |   |  |   |
|                                                               | Total interest expense                | 4,247   |   | 3,348 |   |
|                                                               |                                       |    |  |   |
| Net interest and  dividend income                                  | 3,692                                 |    | 3,123 |   |
|                                                               |                                  |    |   |   |
| Provision for loan  losses                                         | 144                                   |    | 108 |   |
|                                                               |                                       |    |  |   |
| Net interest and  dividend income, after provision for loan losses | 3,548                                 |    | 3,015 |   |
|                                                               |                                       |    |  |   |
| Other income:                                                      |                                  |    |   |   |
|                                                               |                                  |    |   |   |
|                                                               | Service charges on  deposit accounts  | 73      |   | 168 |   |
|                                                               | Other income                          | 270     |   | 130 |   |
|                                                               |                                  |         |   |  |   |
|                                                               | Total other income                    | 343     |   | 298 |   |
|                                                               |                                       |    |  |   |
| Operating expenses:                                                |                                  |    |   |   |
|                                                               |                                  |    |   |   |
|                                                               | Salaries and employees  benefits      | 1,651   |   | 1,379 |   |
|                                                               | Occupancy expense                     | 244     |   | 153 |   |
|                                                               | Equipment expense                     | 223     |   | 190 |   |
|                                                               | Advertising expense                   | 76      |   | 49 |   |
|                                                               | Office supplies  expense              | 52      |   | 56 |   |
|                                                               | Data processing  expenses             | 180     |   | 172 |   |
|                                                               | Professional fees                     | 262     |   | 188 |   |
|                                                               | Other expenses                        | 947     |   | 441 |   |
|                                                               |                                  |         |   |  |   |
|                                                               | Total operating expenses              | 3,635   |   | 2,628 |   |
|                                                               |                                       |    |  |   |
| Income before income  taxes                                        | 256                                   |    | 685 |   |
|                                                               |                                  |    |   |   |
| Provision for income  taxes                                        | 86                                    |    | 236 |   |
|                                                               |                                       |    |  |   |
| Net income                                                         | $                                     | 170     |   | $ | 449 |   |
|                                                               |                                       |    |  |   |
| Basic earnings per  share                                          | $                                     | 0.20    |   | $ | 0.50 |   |
| Diluted earnings per  share                                        | $                                     | 0.20    |   | $ | 0.50 |   |
|                                                               |                                  |    |   |   |
| Weighted average  shares outstanding :                             |                                  |    |   |   |
|                                                               | Basic                                 | 858,081 |   | 889,600 |   |
|                                                               | Diluted                               | 873,107 |   | 895,290 |   |
|                                                               |                                  |    |   |   |
|                                                                    |                                       |         |  |  |  |  |  |  |

See accompanying notes to unauditedcondensed consolidated financial statements.

**RFSBANCORP, INC. and SUBSIDIARY****CONDENSED CONSOLIDATEDSTATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY********NINE MONTHS ENDED JUNE 30, 2001 AND 2000**(In Thousands)(Unaudited)

|                                                                              | **Common Stock** |   | **Additional Paid-in Capital** |   | **Retained Earnings** |   | **Treasury Stock** |   | **Unearned shares, Stock-based Incentive Plan** |   | **Accumulated Other Comprehensive Income(Loss)** |   | **Unallocated ESOP Shares** |   | **Total Stockholders’ Equity** |   |
|-----------------------------------------------------------------------------------|------------------|--------|--------------------------------|--------|-----------------------|--------|--------------------|--------|-------------------------------------------------|--------|--------------------------------------------------|--------|-----------------------------|--------|-------------------------------------|--------|
|                                                                              |                  |   |                                |   |                       |   |                    |   |                                                 |   |                                                  |   |                             |   |                                     |   |
| Balance  at September 30, 2000                                                    | $                | 9      |                           | $      | 3,759                 |   | $                  | 6,923  |                                            | $      | (435                                             | )      | $                           | (162   | )                                   | $      | 461 |   | $ | (316 | ) | $ | 10,239 |   |
| Comprehensive  income:                                                            |             |   |                           |   |                  |   |               |   |                                            |   |                                             |   |                        |   |                                |   |
| Net  income                                                                       | ---              |   | ---                            |   | 170                   |   | ---                |   | ---                                             |   | ---                                              |   | ---                         |   | ---                                 |   |
| Change  in unrealized holding gain on securities available for sale, net of taxes | ---              |   | ---                            |   | ---                   |   | ---                |   | ---                                             |   | 231                                              |   | ---                         |   | ---                                 |   |
| Comprehensive  income                                                             |             |   |                           |   |                  |   |               |   |                                            |   |                                             |   |                        |   | 401                                 |   |
| Unearned  compensation payment                                                    | ---              |   | ---                            |   | ---                   |   | ---                |   | ---                                             |   | ---                                              |   | 35                          |   | 35                                  |   |
| Common  stock repurchases                                                         | ---              |   | ---                            |   | ---                   |   | ---                |   | ---                                             |   | ---                                              |   | ---                         |   | ---                                 |   |
| Recognition  and retention plan                                                   | ---              |   | 17                             |   | ---                   |   | ---                |   | ---                                             |   | ---                                              |   | ---                         |   | 17                                  |   |
|                                                                              |                  |   |                                |   |                       |   |                    |   |                                                 |   |                                                  |   |                             |   |                                     |   |
| Balance  at June 30, 2001                                                         | $                | 9      |                           | $      | 3,776                 |   | $                  | 7,093  |                                            | $      | (435                                             | )      | $                           | (162   | )                                   | $      | 692 |   | $ | (281 | ) | $ | 10,692 |   |
|                                                                              |                  |   |                                |   |                       |   |                    |   |                                                 |   |                                                  |   |                             |   |                                     |   |
| Balance  at September 30, 1999                                                    | $                | 9      |                           | $      | 3,736                 |   | $                  | 6,357  |                                            | $      | ---                                              |   | $                           | (168   | )                                   | $      | 437 |   | $ | (351 | ) | $ | 10,020 |   |
| Comprehensive  income:                                                            |             |   |                           |   |                  |   |               |   |                                            |   |                                             |   |                        |   |                                |   |
| Net  income                                                                       | ---              |   | ---                            |   | 449                   |   | ---                |   | ---                                             |   | ---                                              |   | ---                         |   | ---                                 |   |
| Change  in unrealizedholding gain  on securities available for sale, net of taxes | ---              |   | ---                            |   | ---                   |   | ---                |   | ---                                             |   | (172                                             | )      | ---                         |   | ---                                 |   |
| Comprehensive  income                                                             |             |   |                           |   |                  |   |               |   |                                            |   |                                             |   |                        |   | 277                                 |   |
| Unearned  compensation payment                                                    | ---              |   | ---                            |   | ---                   |   | ---                |   | ---                                             |   | ---                                              |   | 35                          |   | 35                                  |   |
| Common  stock repurchases                                                         | ---              |   | ---                            |   | ---                   |   | (435               | )      | ---                                             |   | ---                                              |   | ---                         |   | (435                                | )      |
| Recognition  and retention plan                                                   | ---              |   | 16                             |   | ---                   |   | ---                |   | 6                                               |   | ---                                              |   | ---                         |   | 22                                  |   |
|                                                                              |                  |   |                                |   |                       |   |                    |   |                                                 |   |                                                  |   |                             |   |                                     |   |
| Balance  at June 30, 2000                                                         | $                | 9      |                           | $      | 3,752                 |   | $                  | 6,806  |                                            | $      | (435                                             | )      | $                           | (162   | )                                   | $      | 265 |   | $ | (316 | ) | $ | 9,919 |   |
|                                                                              |                  |   |                                |   |                       |   |                    |   |                                                 |   |                                                  |   |                             |   |                                     |   |
|                                                                                   |                  |        |                                |        |                       |        |                    |        |                                                 |        |                                                  |        |                             |        |                                     |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

Seeaccompanying notes to unaudited condensed consolidated financial statements.

**RFS BANCORP, INC. andSUBSIDIARY****Condensed ConsolidatedStatements of Cash Flows********(In Thousands)**

|                                                                                          | Nine  Months Ended  June 30, 2001 |   | Nine  Months Ended  June 30, 2000 |   |
|-----------------------------------------------------------------------------------------------|-----------------------------------|--------|-----------------------------------|--------|
|                                                                                          |                                   |   |                                   |   |
| Cash flows from  operating activities:                                                        | (unaudited )                      |   |
|                                                                                          |                              |   |                              |   |
| Net income                                                                                    | $                                 | 170    |                              | $      | 449 |   |
| Adjustments to  reconcile net income to net cash  provided by operating activities: |                              |   |                              |   |
|                                                                                          |                              |   |                              |   |
| Provision for loan  losses                                                                    | 144                               |   | 108                               |   |
| (Gain) loss on sale of  loans                                                                 | 10                                |   | 5                                 |   |
| Amortization, net of  accretion, of securities                                                | (19                               | )      | 11                                |   |
| Depreciation                                                                                  | 234                               |   | 180                               |   |
| Earned MRRP shares                                                                            | 17                                |   | 22                                |   |
| Reduction in  unallocated ESOP shares                                                         | 35                                |   | 35                                |   |
| Increase in interest  receivable                                                              | (208                              | )      | (284                              | )      |
| (Increase) decrease in  other assets                                                          | (53                               | )      | (282                              | )      |
| Increase (decrease) in  accrued expenses and other liabilities                                | (33                               | )      | 35                                |   |
| Change in deferred  loan origination fees, net                                                | 21                                |   | 115                               |   |
|                                                                                          |                                   |   |                                   |   |
| Net cash provided by  operating activities                                                    | 318                               |   | 394                               |   |
|                                                                                          |                                   |   |                                   |   |
| Cash flows from  investing activities:                                                        |                              |   |                              |   |
| Purchase of FHLB stock                                                                        | (333                              | )      | (294                              | )      |
| Purchases of  held-to-maturity securities                                                     | (987                              | )      | (8,483                            | )      |
| Purchases of  available-for-sale securities                                                   | ---                               |   | (1,524                            | )      |
| Proceeds from  maturities of held-to-maturity securities                                      | 3,108                             |   | 2,857                             |   |
| Net increase in loans                                                                         | (11,139                           | )      | (9,946                            | )      |
| Proceeds from sale of  loans                                                                  | 1,483                             |   | 853                               |   |
| Purchases of banking  premises and equipment                                                  | (874                              | )      | (1,252                            | )      |
|                                                                                          |                                   |   |                                   |   |
| Net cash used in  investing activities                                                        | (8,742                            | )      | (17,789                           | )      |
|                                                                                          |                                   |   |                                   |   |
| Cash flows from  financing activities:                                                        |                              |   |                              |   |
| Net increase in  deposits                                                                     | 15,837                            |   | 8,394                             |   |
| Proceeds from FHLB  advances                                                                  | 50,293                            |   | 42,500                            |   |
| Repayment of advances  from FHLB                                                              | (54,268                           | )      | (32,317                           | )      |
| Common stock  repurchases                                                                     | ---                               |   | (435                              | )      |
|                                                                                          |                                   |   |                                   |   |
| Net cash provided by  financing activities                                                    | 11,862                            |   | 18,142                            |   |
|                                                                                          |                                   |   |                                   |   |
| Net increase in cash  and cash equivalents                                                    | 3,438                             |   | 747                               |   |
|                                                                                          |                              |   |                              |   |
| Cash and cash  equivalents at beginning of period                                             | 6,025                             |   | 3,429                             |   |
|                                                                                          |                                   |   |                                   |   |
| Cash and cash  equivalents at end of period                                                   | $                                 | 9,463  |                              | $      | 4,176 |   |
|                                                                                          |                                   |   |                                   |   |
| Supplemental cash flow  information:                                                          |                              |   |                              |   |
|                                                                                          | Interest paid on  deposits        | $      | 2,305                             |   | $ | 1,995 |   |
|                                                                                          | Interest paid on FHLB  borrowings | $      | 1,683                             |   | $ | 1,165 |   |
|                                                                                          | Income taxes paid                 | $      | 224                               |   | $ | 352 |   |

Seeaccompanying notes to unaudited condensed consolidated financial statements.

**RFS BANCORP, INC. and SUBSIDIARY****Part I - Financial InformationItem 1 - Financial StatementsNotes to Unaudited CondensedConsolidated Financial StatementsJune 30, 2001**

***1)          Basisof Presentation and Consolidation***

The unauditedcondensed consolidated interim financial statements of RFS Bancorp, Inc., afederally chartered mid-tier stock holding company (“RFS Bancorp” or the“Company”) and subsidiary presented herein should be read in conjunction withthe consolidated financial statements for the year ended September 30, 2000included in the Annual Report on Form 10-KSB of RFS Bancorp, the holdingcompany for Revere Federal Savings Bank (the “Bank”).  The operating results for the periods ended June 30, 2001 arethose of the Company and Bank. The Bank is a federally chartered stock savingsbank founded in 1901.  47% of the sharesof common stock of the Company are owned by the public and 53% are owned byRevere MHC, a federal mutual holding company.

The unauditedconsolidated interim financial statements herein have been prepared inaccordance with generally accepted accounting principles in the United Statesof America for interim financial information and with the instructions to Form10-QSB and Article 10 of Regulation S-B. Accordingly, they do not include all of the information and footnotesrequired by generally accepted accounting principles in the United States ofAmerica  for completed financialstatements.

The year-endcondensed balance sheet data was derived from audited financial statements, butdoes not include all disclosures required by generally accepted accountingprinciples in theUnited States of America.

In the opinionof management, the consolidated financial statements reflect all adjustments(consisting solely of normal recurring accruals) necessary for a fairpresentation of such information. Interim results are not necessarily indicative of results to be expectedfor the entire year.

***2)          Commitmentsand Contingencies***

At June 30,2001, the Bank had outstanding commitments to originate loans amounting toapproximately $5.4 million, unused construction advances amounting toapproximately $2.2 million and unused lines of credit amounting toapproximately $2.4 million for commercial loans and $4.3 million for homeequity loans.

***3)          EarningsPer Share***

Earnings(loss)per share for the three months ended June 30, 2001 and June 30, 2000 were($0.14) and $0.15, and for the nine months ended June 30, 2001 and June 30,2000 were $0.20 and $0.50, respectively, on a basic and diluted basis.

Basic earningsper share represents income available to common stock divided by theweighted-average number of common shares outstanding during the period.  In calculating basic earnings per share, thenumber of shares of common stock outstanding is reduced by the number of sharesheld by the Company’s Employee Stock Ownership Plan (the “ESOP”) that have notbeen allocated or are not committed for release to participants’ individual accounts.  Diluted earnings per share reflectsadditional common shares that would have been outstanding if dilutive potentialcommon shares had been issued, as well as any adjustment to income that wouldresult from the assumed conversion. Potential common shares that may be issued by the Company relate solelyto outstanding stock options and unearned RRP shares and are determined usingthe treasury stock method.

***4)          RecentAccounting Pronouncement***

In June 1998,the FASB issued SFAS No. 133 "Accounting for Derivative Instrumentsand Hedging Activities". Statement No. 133, as amended by SFASNo. 138, establishes accounting and reporting standards for derivativeinstruments, including certain derivative instruments embedded in othercontracts and for hedging activities. The statement is effective for all fiscalquarters of fiscal years beginning after June 15, 2000. The Companyadopted the statement as of October 1, 2000. The adoption of SFAS No. 133 did not have a material effect on theCompany's consolidated financial statements.

FASB has issuedSFAS No. 140, “Accounting for Transfers and Servicing of Financial Assets andExtinguishments of Liabilities”.  ThisStatement replaces SFAS No. 125, “Accounting for Transfers and Servicing ofFinancial Assets and Extinguishments of Liabilities” and rescinds SFASStatement No. 127, “Deferral of the Effective Date of Certain Provisions ofFASB Statement No. 125".  SFAS No.140 provides accounting and reporting standards for transfers and servicing offinancial assets and extinguishments of liabilities.  This statement provides consistent standards for distinguishingtransfers of financial assets that are sales from transfers that are securedborrowings.  This statement is effectivefor transfers and servicing of financial assets and extinguishments ofliabilities occurringafterMarch 31, 2001; however, the disclosure provisions are effective for fiscalyears ending after December 15, 2000. The Company has not yet quantified the remaining provisions effective in2001; however, the Company does not expect that the adoption of this statementwill have a material impact on its financial position or results of operations.

             Statement of Financial AccountingStandards No. 141 improves the consistency of the accounting and reporting forbusiness combinations by requiring that all business combinations be accountedfor under a single method - the purchase method.  Use of the pooling-of-interests method is no longer permitted.  Statement No. 141 requires that the purchasemethod be used for business combinations initiated after June 30, 2001.  Management does not anticipate any impact onthe consolidated financial statements upon adoption of this statement.

             Statement of Financial AccountingStandards No. 142 requires that goodwill no longer be amortized to earnings,but instead be reviewed for impairment. The amortization of goodwill ceases upon adoption of the Statement,which for most companies, will be January 1, 2002.  Management does not anticipate any impact on the consolidatedfinancial statements upon adoption of this statement.

***5)          InvestmentSecurities***

             Debt and equity securities havebeen classified in the consolidated balance sheets according to management’sintention.  The carrying amount ofsecurities and their approximate fair values are as follows:

|                            | **June 30, 2001**                            | **September 30, 2000** |
|---------------------------------|---------------------------------------------------|------------------------|
|                            | ****                                              |                   | **** |   |
|                            | **Amortized Cost**                                |                   | **Fair Value** |   | **Amortized Cost** |   | **Fair Value** |   |
|                            | ****                                              |                   | **** |   | **** |   | **** |   |
|                            |                                              |                   | (In  Thousands) |   |   |   |
|                            |                                              |                   | (Unaudited) |   |   |   |
| Securities available  for sale: |                                              |                   |   |   |   |   |   |   |
|                            | Mortgage-backed  securities                       | $                      | 5,458 |   | $ | 5,447 |   | $ | 5,987 |   | $ | 5,830 |   |
|                            | Marketable equity  securities                     | 24                     |   | 1,228 |   | 24 |   | 976 |   |
|                            |                                              |                        |   |  |   |  |   |  |   |
|                            | Total                                             | $                      | 5,482 |   | $ | 6,675 |   | $ | 6,011 |   | $ | 6,806 |   |
|                            |                                                   |                   |  |   |  |   |  |   |
| Securities held to  maturity:   |                                              |                   |   |   |   |   |   |   |
|                            | U.S. government &  federal agency obligations | $                      | 12,489 |   | $ | 12,803 |   | $ | 12,487 |   | $ | 12,304 |   |
|                            | Mortgage-backed  securities                       | 15,941                 |   | 16,038 |   | 17,139 |   | 16,885 |   |
|                            | Asset-backed  securities                          | 1,862                  |   | 1,809 |   | 2,239 |   | 2,285 |   |
|                            | Foreign debt  securities                          | 25                     |   | 25 |   | 25 |   | 25 |   |
|                            |                                              |                        |   |  |   |  |   |  |   |
|                            | Total                                             | $                      | 30,317 |   | $ | 30,675 |   | $ | 31,890 |   | $ | 31,499 |   |
|                            |                                              |                        |   |  |   |  |   |  |   |
|                                 |                                                   |                        |  |  |  |  |  |  |  |  |  |  |  |  |  |

***6)            Loans***

The followingtable presents selected data relating to the composition of the Company’s loanportfolio by type of loan on the dates indicated.

|                                 | **At June 30, 2001**  |   | **At September 30, 2000** |   |
|--------------------------------------|----------------------------|--------|---------------------------|--------|
|                                 | ****                       |   | ****                      |   |
|                                 | **Amount**                 |   | **Percent**               |   | **Amount** |   | **Percent** |   |
|                                 | ****                       |   | ****                      |   | **** |   | **** |   |
|                                 |                       |   | (Dollars in Thousands)    |   |   |   |
|                                 |                       |   | (Unaudited)               |   |   |   |
| Residential mortgage  loans          | $                          | 56,869 |                      | 59.18  | % | $ | 50,226 |   | 58.10 | % |
| Commercial real estate  loans        | 22,677                     |   | 23.60                     |   | 18,251 |   | 21.11 |   |
| Construction and land  loans         | 3,511                      |   | 3.66                      |   | 4,472 |   | 5.17 |   |
| Commercial loans                     | 7,020                      |   | 7.31                      |   | 6,689 |   | 7.74 |   |
| Consumer loans                       | 1,618                      |   | 1.68                      |   | 1,524 |   | 1.77 |   |
| Home equity loans                    | 4,394                      |   | 4.57                      |   | 5,281 |   | 6.11 |   |
|                                 |                            |   |                           |   |  |   |  |   |
|                                 | Total loans                | 96,089 |                      | 100.00 | % | 86,443 |   | 100.00 | % |
|                                 |                       |   |                           |   |   |   |  |   |
| Less:                                |                       |   |                      |   |   |   |   |   |
| Deferred loan  origination fees, net | 172                        |   |                      |   | 151 |   |   |   |
| Allowance for loan  losses           | 882                        |   |                      |   | 746 |   |   |   |
|                                 |                            |   |                      |   |  |   |   |   |
|                                 | Total loans, net           | $      | 95,035                    |   |   |   | $ | 85,546 |   |   |   |
|                                 |                            |   |                      |   |  |   |   |   |
|                                      |                            |        |                           |        |  |  |  |  |  |  |  |  |  |  |

***7)          Allowancefor Loan Losses***

The followingtable analyzes activity in the Company’s allowance for loan losses for theperiods indicated.

|                                              | **Nine Months  Ended June 30, 2001**                 |   | **Nine Months  Ended June 30,  2000** |    |
|---------------------------------------------------|------------------------------------------------------|--------|---------------------------------------|---------|
|                                              | ****                                                 |   | ****                                  |    |
|                                              | (Dollars in Thousands)                               |   |
|                                              | (Unaudited)                                          |   |
| Average loans, net                                | $                                                    | 92,514 |                                  | $       | 75,992 |   |
|                                              |                                                      |   |                                       |    |
| Period-end gross loans                            | $                                                    | 96,089 |                                  | $       | 82,262 |   |
|                                              |                                                      |   |                                       |    |
| Allowance for loan  losses at beginning of period | $                                                    | 746    |                                  | $       | 624 |   |
| Provision for loan  losses                        | 144                                                  |   | 108                                   |    |
| Plus recoveries                                   | ---                                                  |   | ---                                   |    |
| Loans charged-off                                 | (8                                                   | )      | (1                                    | )       |
|                                              |                                                      |   |                                       |    |
| Allowance for loan  losses at end of period       | $                                                    | 882    |                                  | $       | 731 |   |
|                                              |                                                      |   |                                       |    |
| Non-performing loans                              | $                                                    | 522    |                                  | $       | 21 |   |
|                                              |                                                      |   |                                       |    |
| Ratios:                                           |                                                 |   |                                  |    |
|                                              | Allowance for loan  losses to period-end gross loans | .92    | %                                     | .89     | % |
|                                              | Allowance for loan  losses to non-performing loans   | 169.0  | %                                     | 3,481.0 | % |

***8)    Deposits and Borrowed Funds***

The followingtables set forth the various types of deposit accounts at the Company and thebalances in these accounts as well as the borrowings of the Company at thedates indicated.

|                     | **At June 30, 2001**  |   | **At September 30, 2000** |   |
|--------------------------|----------------------------|--------|---------------------------|--------|
|                     | ****                       |   | ****                      |   |
|                     | **Amount**                 |   | **Percent**               |   | **Amount** |   | **Percent** |   |
|                     | ****                       |   | ****                      |   | **** |   | **** |   |
|                     |                       |   | (Dollars in Thousands)    |   |   |   |
|                     |                       |   | (Unaudited)               |   |   |   |
| Deposits:                |                       |   |                      |   |   |   |   |   |
| Savings accounts         | $                          | 23,837 |                      | 22.01  | % | $ | 22,207 |   | 24.02 | % |
| NOW checking             | 11,064                     |   | 10.22                     |   | 8,913 |   | 9.64 |   |
| Demand deposits          | 18,095                     |   | 16.71                     |   | 13,039 |   | 14.10 |   |
| Money market accounts    | 7,988                      |   | 7.38                      |   | 2,699 |   | 2.92 |   |
| Certificates of  deposit | 47,302                     |   | 43.68                     |   | 45,591 |   | 49.32 |   |
|                     |                            |   |                           |   |  |   |  |   |
|                     | Total deposits             | $      | 108,286                   |   | 100.00 | % | $ | 92,449 |   | 100.00 | % |
|                     |                            |   |                           |   |  |   |  |   |
| Borrowed funds:          |                       |   |                      |   |   |   |   |   |
| Advances from FHLB       | $                          | 29,929 |                      |   |   | $ | 33,904 |   |   |   |
| Other borrowed funds     | ---                        |   |                      |   | --- |   |   |   |
|                     |                            |   |                      |   |  |   |   |   |
|                     | Total borrowed funds       | $      | 29,929                    |   |   |   | $ | 33,904 |   |   |   |
|                     |                            |   |                      |   |  |   |   |   |
|                          |                            |        |                           |        |  |  |  |  |  |  |  |  |  |

**PartI - Financial InformationItem 2 - Management'sDiscussion and Analysis of Financial Conditionand Results of OperationsJune 30, 2001**

**General**

             The following discussioncompares  the  financial  condition  of RFS Bancorp, Inc. (the “Company”)  at June 30, 2001 to September 30, 2000, andthe results of operations for the three months and nine months ended June 30,2001, compared to the same periods in 2000. This discussion and analysis shouldbe read in conjunction with the consolidated financial statements and relatednotes thereto included within this report.

             The Company may from time totime  make  written  or  oral "forward–lookingstatements." These forward–looking statements may be contained inthis quarterly filing with the Securities  and  Exchange Commission (the “SEC”),  theAnnual  Report to Shareholders,  other filings with the SEC, and inother  communications by the Company,which are made in good faith pursuant to the "safe harbor" provisionsof the Private Securities  LitigationReform Act of 1995. The words "may,”"could,”"should,”"would,” "believe,” "anticipate,” "estimate,” "expect,” "intend,”  "plan"and similar  expressions  are intended to identify forward–looking statements.

             Forward–looking statementsinclude statements with respect to the Company’s beliefs, plans, objectives,goals, expectations, anticipations, estimates and intentions, that are subjectto significant risks and uncertainties. The following factors, many of which are subject to change based onvarious  other  factors  beyond theCompany’s control, and other factors discussed in this Form 10–QSB, aswell as other factors identified in the Company’s filings with the SEC andthose presented  elsewhere by managementfrom time to time, could cause its financial performance  to differ materially  from the plans,objectives, expectations, estimates and intentions expressed in such forward–looking  statements:

| • | the strength of the United  States   economy in general and the strength of the local economies in which  the Company conduct operations;                                                                                                        |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | the effects of, and changes in, trade, monetary  and fiscal policies and laws, including interest rate policies of the Federal  Reserve Board;                                                                                                             |
| • | inflation, interest rate, market and monetary  fluctuations;                                                                                                                                                                                               |
| • | the timely development of and acceptance of  new products and services and the   perceived overall value of these products and services by users,  including the  features, pricing and  quality compared to competitors' products and services; |
| • | the willingness of users to substitute  competitors' products and services for the Company’s products and services;                                                                                                                                   |
| • | the Company’s success  in   gaining  regulatory  approval   of  their  products   and services, when required;                                                                                                |
| • | the impact of   changes  in  financial   services'  laws and  regulations (including laws concerning  taxes, banking, securities and insurance);                                                                             |
| • | the impact of   changes  in  financial   services'  laws and  regulations (including laws concerning  taxes, banking, securities and insurance);                                                                             |
| • | the impact of technological changes;                                                                                                                                                                                                                       |
| • | acquisitions;                                                                                                                                                                                                                                              |
| • | changes in consumer spending and saving habits;  and                                                                                                                                                                                                       |
| • | the Company’s success at managing the risks  involved in their business.                                                                                                                                                                              |

             This list of important  factors is not  exclusive.  The Companydoes not undertake to update any forward–looking statement, whetherwritten or oral, that may be made from time to time by or on behalf of theCompany.

             Results of operations are primarilydependent upon net interest and dividend income. Net interest income is thedifference between income earned on the Company’s loan and investment portfolioand the Company’s funds which consists of interest paid on deposits andborrowings.  Operating results are alsoaffected by the provision for loan losses, securities sales activities andservice charges on deposit accounts as well as other fees.  The Company’s operating expenses consist ofsalaries and employee benefits, occupancy and equipment expenses, professionalfees as well as marketing and other expenses. Results of operations are also significantly affected by generaleconomic and competitive conditions, particularly changes in interest rates andgovernment and regulatory policies.

**Market Risk Analysis**

*             Qualitative Disclosures About Market Risk.*Like other institutions, the Company’smost significant form of market risk is interest rate risk.  The Company is subject to interest rate riskto the degree that the Company’s interest-bearing liabilities, primarilydeposits with short and medium-term maturities, mature or reprice at differentrates than the Company’s interest-earning assets.  The Company believes it is critical to manage the relationshipbetween interest rates and the effect on the Company’s net portfolio value("NPV").  This approachcalculates the difference between the present value of expected cash flows fromassets and the present value of expected cash flows from liabilities, as wellas cash flows from off-balance sheet contracts.  The Company manages assets and liabilities within the context ofthe marketplace, regulatory limitations and within limits established by theCompany’s Board of Directors on the amount of change in NPV which is acceptablegiven certain interest rate changes.

             Anasset or liability is interest rate sensitive within a specific time period ifit will mature or reprice within that time period.  If the Company’s assets mature or reprice more quickly or to agreater extent than the Company’s liabilities, the Company’s net portfoliovalue and net interest income would tend to increase during periods of risinginterest rates but decrease during periods of falling interest rates.  Conversely, if the Company’s assets matureor reprice more slowly or to a lesser extent than the Company’s liabilities,the Company’s net portfolio value and net interest income would tend todecrease duringperiods of rising interest rates but increaseduring periods of falling interest rates. The Company’s policy has been to mitigate the interest rate riskinherent in the historical savings institution business of originatinglong-term loans funded by short-term deposits by pursuing certain strategiesdesigned to decrease the vulnerability of the Company’s earnings to materialand prolonged changes in interest rates. In this regard, the Company’s attempts to minimize interest rate riskby, among other things, emphasizing the origination and retention ofadjustable-rate loans and loans with shorter maturities and the sale oflong-term one-to-four family fixed-rate loans in the secondary market.

**Average Balances, Interest, Yields and Rates**

             The following tables set forthcertain information relating to the Company’s average balance sheet and reflectthe interest earned on assets and interest cost of liabilities for the periodsindicated and the average yields earned and rates paid for the periodsindicated.  Such yields and costs arederived by dividing income or expense by the average monthly balances of assetsand liabilities, respectively, for the periods presented.  Average balances are derived from dailybalances.  Loans on nonaccrual statusare included in the average balances of loans shown in the tables.  The investment securities in the followingtables are presented at amortized cost.

 

|                                                  | **Three Months Ended  June 30, 2001**     |    | **Three Months Ended  June 30, 2000** |   |
|-------------------------------------------------------|-------------------------------------------|---------|---------------------------------------|--------|
|                                                  | ****                                      |    | ****                                  |   |
|                                                  | **Average Balance**                       |    | **Interest Income/****Expense**       |   | **Yield/****Rate** |   | **Average Balance** |   | **Interest Income/****Expense** |   | **Yield/****Rate** |   |
|                                                  | ****                                      |    | ****                                  |   | **** |   | **** |   | **** |   | **** |   |
|                                                  | **(Dollars in Thousands)****(Unaudited)** |    |
| INTEREST-EARNING  ASSETS:                             |                                      |    |                                  |   |   |   |   |   |   |   |   |   |
|                                                  |                                      |    |                                  |   |   |   |   |   |   |   |   |   |
| Total  loans, net                                     | $                                         | 94,651  |                                  | $      | 1,926 |   | 8.14 | % | $ | 79,041 |   | $ | 1,582 |   | 8.01 | % |
| Investments                                           | 38,410                                    |    | 662                                   |   | 6.89 | % | 38,005 |   | 700 |   | 7.37 | % |
| Other  earning assets                                 | 7,833                                     |    | 83                                    |   | 4.24 | % | 1,903 |   | 27 |   | 5.68 | % |
|                                                  |                                           |    |                                       |   |   |   |  |   |  |   |   |   |
| Total  interest-earning assets                        | 140,894                                   |    | 2,671                                 |   | 7.58 | % | 118,949 |   | 2,309 |   | 7.76 | % |
|                                                  |                                      |    |                                       |   |   |   |   |   |  |   |   |   |
| Cash  and due from banks                              | 3,848                                     |    |                                  |   |   |   | 1,543 |   |   |   |   |   |
| Other  assets                                         | 6,599                                     |    |                                  |   |   |   | 6,263 |   |   |   |   |   |
|                                                  |                                           |    |                                  |   |   |   |  |   |   |   |   |   |
| Total  assets                                         | $                                         | 151,341 |                                  |   |   |   |   | $ | 126,755 |   |   |   |   |   |
|                                                  |                                           |    |                                  |   |   |   |  |   |   |   |   |   |
| INTEREST-BEARING  LIABILITIES:                        |                                      |    |                                  |   |   |   |   |   |   |   |   |   |
|                                                  |                                      |    |                                  |   |   |   |   |   |   |   |   |   |
| Passbook  & Statement Savings                     | $                                         | 22,988  |                                  | 125    |   | 2.18 | % | $ | 19,677 |   | 88 |   | 1.79 | % |
| NOW’s  and MMA’s                            | 19,370                                    |    | 102                                   |   | 2.11 | % | 11,658 |   | 53 |   | 1.82 | % |
| Certificate  of deposits                              | 46,856                                    |    | 669                                   |   | 5.71 | % | 42,801 |   | 574 |   | 5.36 | % |
|                                                  |                                           |    |                                       |   |   |   |  |   |  |   |   |   |
| Total  interest-bearing deposits                      | 89,214                                    |    | 896                                   |   | 4.02 | % | 74,136 |   | 715 |   | 3.86 | % |
|                                                  |                                      |    |                                  |   |   |   |   |   |   |   |   |   |
| FHLB  borrowings                                      | 34,815                                    |    | 490                                   |   | 5.63 | % | 33,847 |   | 530 |   | 6.26 | % |
|                                                  |                                           |    |                                       |   |   |   |  |   |  |   |   |   |
| Total  interest-bearing liabilities                   | 124,029                                   |    | 1,386                                 |   | 4.47 | % | 107,983 |   | 1,245 |   | 4.61 | % |
|                                                  |                                      |    |                                       |   |   |   |   |   |  |   |   |   |
| Demand  deposit accounts                              | 14,476                                    |    |                                  |   |   |   | 8,534 |   |   |   |   |   |
| Other  liabilities                                    | 1,783                                     |    |                                  |   |   |   | 250 |   |   |   |   |   |
|                                                  |                                           |    |                                  |   |   |   |  |   |   |   |   |   |
| Total  liabilities                                    | 140,288                                   |    |                                  |   |   |   | 116,767 |   |   |   |   |   |
|                                                  |                                      |    |                                  |   |   |   |   |   |   |   |   |   |
| Stockholders’  equity                            | 11,053                                    |    |                                  |   |   |   | 9,988 |   |   |   |   |   |
|                                                  |                                           |    |                                  |   |   |   |  |   |   |   |   |   |
| Total  liabilities and stockholders’ equity      | $                                         | 151,341 |                                  |   |   |   |   | $ | 126,755 |   |   |   |   |   |
|                                                  |                                           |    |                                  |   |   |   |  |   |   |   |   |   |
| Net  interest income                                  |                                      |    | $                                     | 1,285  |   |   |   |   |   | $ | 1,064 |   |   |   |
|                                                  |                                      |    |                                       |   |   |   |   |   |  |   |   |   |
| Interest  rate spread                                 |                                      |    |                                  |   | 3.11 | % |   |   |   |   | 3.15 | % |
|                                                  |                                      |    |                                  |   |   |   |   |   |   |   |   |   |
| Net  interest margin                                  |                                      |    |                                  |   | 3.65 | % |   |   |   |   | 3.58 | % |
|                                                  |                                      |    |                                  |   |   |   |   |   |   |   |   |   |
| Interest-earning  assets/interest-bearing liabilities |                                      |    |                                  |   | 113.60 | % |   |   |   |   | 110.15 | % |
|                                                       |                                           |         |                                       |        |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

|                                                  | **Nine Months Ended June  30, 2001** |    | **Nine Months Ended June  30, 2000** |   |
|-------------------------------------------------------|--------------------------------------|---------|--------------------------------------|--------|
|                                                  | ****                                 |    | ****                                 |   |
|                                                  | **Average Balance**                  |    | **Interest  Income/Expense**         |   | **Yield/Rate** |   | **Average Balance** |   | **Interest  Income/Expense** |   | **Yield/Rate** |   |
|                                                  | ****                                 |    | ****                                 |   | **** |   | **** |   | **** |   | **** |   |
|                                                  | (Dollars  in Thousands)(Unaudited)   |    |
| INTEREST-EARNING  ASSETS:                             |                                 |    |                                 |   |   |   |   |   |   |   |   |   |
| Total  loans, net                                     | $                                    | 92,514  |                                 | $      | 5,697 |   | 8.21 | % | $ | 75,992 |   | $ | 4,531 |   | 7.95 | % |
| Investments                                           | 38,837                               |    | 2,052                                |   | 7.04 | % | 35,635 |   | 1,828 |   | 6.84 | % |
| Other  earning assets                                 | 5,218                                |    | 190                                  |   | 4.85 | % | 2,808 |   | 112 |   | 5.32 | % |
|                                                  |                                      |    |                                      |   |   |   |  |   |  |   |   |   |
| Total  interest-earning assets                        | 136,569                              |    | 7,939                                |   | 7.75 | % | 114,435 |   | 6,471 |   | 7.54 | % |
|                                                  |                                 |    |                                      |   |   |   |   |   |  |   |   |   |
| Cash  and due from banks                              | 3,861                                |    |                                 |   |   |   | 1,692 |   |   |   |   |   |
| Other  assets                                         | 6,003                                |    |                                 |   |   |   | 4,824 |   |   |   |   |   |
|                                                  |                                      |    |                                 |   |   |   |  |   |   |   |   |   |
| Total  assets                                         | $                                    | 146,433 |                                 |   |   |   |   | $ | 120,951 |   |   |   |   |   |
|                                                  |                                      |    |                                 |   |   |   |  |   |   |   |   |   |
| INTEREST-BEARING  LIABILITIES:                        |                                 |    |                                 |   |   |   |   |   |   |   |   |   |
| Passbook  & Statement Savings                     | $                                    | 21,852  |                                 | 326    |   | 1.99 | % | $ | 18,566 |   | 229 |   | 1.64 | % |
| NOW’s  and MMA’s                            | 15,840                               |    | 241                                  |   | 2.03 | % | 10,693 |   | 132 |   | 1.65 | % |
| Certificate  of deposits                              | 46,534                               |    | 2,035                                |   | 5.83 | % | 42,016 |   | 1,635 |   | 5.19 | % |
|                                                  |                                      |    |                                      |   |   |   |  |   |  |   |   |   |
| Total  interest-bearing deposits                      | 84,226                               |    | 2,602                                |   | 4.12 | % | 71,275 |   | 1,996 |   | 3.73 | % |
| FHLB  borrowings                                      | 36,723                               |    | 1,645                                |   | 5.97 | % | 30,059 |   | 1,352 |   | 6.00 | % |
|                                                  |                                      |    |                                      |   |   |   |  |   |  |   |   |   |
| Total  interest-bearing liabilities                   | 120,949                              |    | 4,247                                |   | 4.68 | % | 101,334 |   | 3,348 |   | 4.41 | % |
|                                                  |                                 |    |                                      |   |   |   |   |   |  |   |   |   |
| Demand  deposit accounts                              | 12,784                               |    |                                 |   |   |   | 9,090 |   |   |   |   |   |
| Other  liabilities                                    | 1,787                                |    |                                 |   |   |   | 438 |   |   |   |   |   |
|                                                  |                                      |    |                                 |   |   |   |  |   |   |   |   |   |
| Total  liabilities                                    | 135,520                              |    |                                 |   |   |   | 110,862 |   |   |   |   |   |
| Stockholders’  equity                            | 10,913                               |    |                                 |   |   |   | 10,089 |   |   |   |   |   |
|                                                  |                                      |    |                                 |   |   |   |  |   |   |   |   |   |
| Total  liabilities and stockholders’ equity      | $                                    | 146,433 |                                 |   |   |   |   | $ | 120,951 |   |   |   |   |   |
|                                                  |                                      |    |                                 |   |   |   |  |   |   |   |   |   |
| Net  interest income                                  |                                 |    | $                                    | 3,692  |   |   |   |   |   | $ | 3,123 |   |   |   |
|                                                  |                                 |    |                                      |   |   |   |   |   |  |   |   |   |
| Interest  rate spread                                 |                                 |    |                                 |   | 3.07 | % |   |   |   |   | 3.13 | % |
| Net  interest margin                                  |                                 |    |                                 |   | 3.60 | % |   |   |   |   | 3.64 | % |
| Interest-earning  assets/interest-bearing liabilities |                                 |    |                                 |   | 112.91 | % |   |   |   |   | 112.93 | % |
|                                                       |                                      |         |                                      |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

**Rate/VolumeAnalysis**

             The following tables set forthcertain information regarding changes in interest income and interest expenseof the Company for the periods indicated. For each category of interest-earning asset and interest-bearing liability,information is provided on changes attributable to : (i) changes in volume(changes in volume multiplied by old rate); (ii) changes in rates (change inrate multiplied by old volume).  Changesin rate-volume (changes in rate multiplied by the changes in volume) areallocated between changes in rate and changes in volume.

|                           | Three Months Ended  June 30, 2001 vs. 2000 Increase (decrease) |   |
|--------------------------------|----------------------------------------------------------------|--------|
|                           |                                                                |   |
|                           | Due to                                                         |   |   |   |
|                           |                                                                |   |   |   |
|                           | Rate                                                           |   | Volume |   | Total |   |
|                           |                                                                |   |  |   |  |   |
|                           | (In Thousands)(Unaudited)                                      |   |
| Interest  and dividend income: |                                                           |   |   |   |   |   |
|                           |                                                           |   |   |   |   |   |
| Loans,  net                    | $                                                              | 27     |   | $ | 317 |   | $ | 344 |   |
| Investments                    | (16                                                            | )      | (22 | ) | (38 | ) |
| Other  earning assets          | (5                                                             | )      | 61 |   | 56 |   |
|                           |                                                                |   |  |   |  |   |
| Total                          | 6                                                              |   | 356 |   | 362 |   |
|                           |                                                                |   |  |   |  |   |
| Interest  expense:             |                                                           |   |   |   |   |   |
|                           |                                                           |   |   |   |   |   |
| Deposits                       | 69                                                             |   | 112 |   | 181 |   |
| Borrowed  funds                | (56                                                            | )      | 16 |   | (40 | ) |
|                           |                                                                |   |  |   |  |   |
| Total                          | 13                                                             |   | 128 |   | 141 |   |
|                           |                                                                |   |  |   |  |   |
| Change  in net interest income | $                                                              | (7     | ) | $ | 228 |   | $ | 221 |   |
|                           |                                                                |   |  |   |  |   |

 

|                           | Nine Months Ended June 30, 2001 vs. 2000 Increase  (decrease) |   |
|--------------------------------|--------------------------------------------------------------------|--------|
|                           |                                                                    |   |
|                           | Due to                                                             |   |   |   |
|                           |                                                                    |   |   |   |
|                           | Rate                                                               |   | Volume |   | Total |   |
|                           |                                                                    |   |  |   |  |   |
|                           | (In Thousands)(Unaudited)                                          |   |
| Interest  and dividend income: |                                                               |   |   |   |   |   |
|                           |                                                               |   |   |   |   |   |
| Loans,  net                    | $                                                                  | 153    |   | $ | 1,013 |   | $ | 1,166 |   |
| Investments                    | 56                                                                 |   | 168 |   | 224 |   |
| Other  earning assets          | (9                                                                 | )      | 87 |   | 78 |   |
|                           |                                                                    |   |  |   |  |   |
| Total                          | 200                                                                |   | 1,268 |   | 1,468 |   |
|                           |                                                                    |   |  |   |  |   |
| Interest  expense:             |                                                               |   |   |   |   |   |
|                           |                                                               |   |   |   |   |   |
| Deposits                       | 303                                                                |   | 303 |   | 606 |   |
| Borrowed  funds                | (5                                                                 | )      | 298 |   | 293 |   |
|                           |                                                                    |   |  |   |  |   |
| Total                          | 298                                                                |   | 601 |   | 899 |   |
|                           |                                                                    |   |  |   |  |   |
| Change  in net interest income | $                                                                  | (98    | ) | $ | 667 |   | $ | 569 |   |
|                           |                                                                    |   |  |   |  |   |

**Financial Condition andResults of Operations**

**Comparison of Financial Condition at June 30, 2001 andSeptember 30, 2000.**

             Total assets increased by $12.8million or 9.3% to $149.9 million at June 30, 2001 from $136.9 million atSeptember 30, 2000.  Total net loansincreased by $9.5 million or 11.1% to $95.0 million at June 30, 2001 as comparedto $85.5 million at September 30, 2000.  Cash and cash equivalents increased by $3.4 million or 57.1% to $9.5million at June 30, 2001 from $6.0 million at September 30, 2000.  This increase is primarily due to increasesin our deposit accounts.

             Total liabilities increased by$12.0 million or 9.5% at June 30, 2001 to $139.0 million from $126.7 million atSeptember 30, 2000.  Total depositsincreased by $15.8 million or 17.1% to $108.3 million at June 30, 2001 from $92.4million at September 30, 2000.  TotalFederal Home Loan Bank of Boston borrowings decreased by $40 million or 11.7%to $29.9 million at June 30, 2001 from $33.9 million at September 30, 2000.

**Comparison of the Operating Results for the Three MonthsEnded June 30, 2001 and 2000.**

*General.*Results of operations are primarily dependent upon net interest and dividendincome. Net interest income is the difference between income earned on theCompany’s loan and investment portfolio and the Company’s funds which consistsof interest paid on deposits and borrowings. Operating results are also affected by the provision for loan losses,securities sales activities and service charges on deposit accounts as well asother fees.  The Company’s operatingexpenses consist of salaries and employee benefits, occupancy and equipmentexpenses, professional fees as well as marketing and other expenses.  Results of operations are also significantlyaffected by general economic and competitive conditions, particularly changes ininterest rates and government and regulatory policies.

*Net Income(Net Loss).*The Company’s net income (loss) for the threemonths ended June 30, 2001 was ($123,000) as compared to $131,000 for the threemonths ended June 30, 2000.  This$254,000 or 193.9% decrease in net income during the period was the result ofan increase of $362,000 in interest and dividend income, an increase of $10,000in other income, offset by an increase of $141,000 in interest expense, anincrease in provision for loan losses of $12,000, an increase of $596,000 in operatingexpenses.  The continued expansion ofthe Company’s lending activities accounted for the increase in interest income,while its operating expenses increased due to charges of $400,000 by the Bankduring the quarter ended June 30, 2001 to other expenses in connection with a"Check Kiting Scheme." While the Bank is making every effort tocollect this amount, no assurances can be given that the Bank will besuccessful in recovering this amount. The return on average assets for the three months ended June 30, 2001was (.33%) compared to .41% for the three months ended June 30, 2000. 

*Net Interest and Dividend Income Before Provision for LoanLosses.* The Company’s net interest and dividendincome before provision for loan losses for the three months ended June 30,2001 increased $221,000 or 20.8% to $1.3 million from $1.1 million for thethree months ended June 30, 2000. The increase is attributed to a combination of the $344,000 increase ininterest and fees on loans , offset by a decrease of $38,000 in interest and dividends on securities and anincrease of $141,000 in interest expense on deposits and borrowed funds whichincrease resulted from higher interest rates paid on such deposits and funds.

             The average yield oninterest-earning assets decreased 18 basis points to 7.58% for the three monthsended June 30, 2001 from 7.76% for the three months ended June 30, 2000, whilethe average cost on interest-bearing liabilities decreased by 14 basis pointsto 4.47% for the three months ended June 30, 2001 from 4.61% for the threemonths ended June 30, 2000. The interest rate spread decreased to 3.11% for thethree months ended June 30, 2001 from 3.15% for the three months ended June 30,2000 and the net interest margin increased from 3.58% to 3.65% during thisperiod.

*Interest and Dividend Income.*Total interest and dividend incomeincreased by $362,000 or 15.7% to $2.7 million for the three months ended June30, 2001 from $2.3 million for the three months ended June 30, 2000.  The increase in interest and dividend incomewas a result of  increased volume ofcommercial and commercial real estate loans. The average balance of net loans for the three months ended June 30,2001 was $94.7 million compared to $79.0 million for the three months endedJune 30, 2000.  The average yield on netloans was 8.14% for the three months ended June 30, 2001 compared to 8.01% forthe three months ended June 30, 2000. The average balance of investment securities for the three months endedJune 30, 2001 was $38.4 million compared to $38.0 million for the three monthsended June 30, 2000.  The average yieldon investment securities was 6.89% for the three months ended June 30, 2001compared to 7.37% for the three months ended June 30, 2000.

*Interest Expense*.  Interestexpense increased by $141,000 or 11.3 % to $1.4 million for the three monthsended June 30, 2001 from $1.2 million for the three months ended June 30,2000.  Interest expense increasedprimarily as a result of an increase in the level of deposit balances duringthe three months ended June 30, 2001 as compared to the same period in2000.  Average interest-bearing depositsincreased by $15.1 million or 20.3% to $89.2 million for the three months endedJune 30, 2001 from $74.1 million for the three months ended June 30, 2000.  This increase is primarily due to increasesresulting from an increase in checking products and certificate of depositproducts with competitive rates.  Accordingly,interest expense on deposits increased $181,000 or 25.3% to $896,000 for thethree months ended June 30, 2001 compared to $715,000 for the three monthsended June 30, 2000.  Interest expenseon advances from the Federal Home Loan Bank decreased $40,000 or 7.6% to$490,000 for the three months ended June 30, 2001 from $530,000 for the threemonths ended June 30, 2000.

*Provision for Loan Losses*.  Theprovision for loan losses is a result of the Company’s periodic analysis of theadequacy of the allowance for loan losses. The provision for loan losses increased $12,000 or 33.3% to $48,000 forthe three months ended June 30, 2001 as compared to $36,000 for the same periodin 2000. The provision reflects management's assessment of potential losses andis based on a review of the risk characteristics as well as the growth of the loanportfolio.  The Bank considers manyfactors in determining the level of the provision for loan losses.  Collateral value on a loan by loan basis,trends of loan delinquencies, risk classification identified in the Bank’sregular review of individual loans, and economic conditions are major factorsin establishing the provision.  At June30, 2001, the balance of the allowance for loan losses was $882,000 or .92% oftotal loans versus $746,000 or .86% of total loans at September 30, 2000.  As the Bank continues to expand its smallbusiness lending, additional increases to the provision are likely.

*Noninterest Income.*Total noninterest income increased by $10,000 or10.0% to $110,000 for the three months ended June 30, 2001 from $100,000 forthe three months ended June 30, 2000. The increase was primarily the result of increased fees on transactionaldeposit accounts.  The Companyanticipates increases to noninterest income as it continues to expand thevolume of its deposit relationships.  Itis also the Company’s goal to increase its level of noninterest income byexpanding its delivery systems and by continually considering additionalsources of revenue.

*Noninterest Expense.* Noninterest expense increased by $596,000 or63.9%  to $1.5 million for the threemonths ended June 30, 2001 from $933,000 for the three months ended June 30,2000.   Salaries and employee benefitswas $587,000 for the three months ended June 30, 2001 as compared to $492,000for the three months ended June 30, 2000, an increase of $95,000 or 19.3%. Theincrease in noninterest expense is also attributed to charges of $400,000 bythe Bank to other expenses during the period in connection with a "CheckKiting Scheme." While the Bank is making every effort to collect thisamount, no assurances can be given that the Bank will be successful inrecovering this amount.

*Income Taxes. *The provision for income taxes amountedto ($59,000) for the three months ended June 30, 2001 as compared to $64,000for the three months ended June 30, 2000, resulting in effective tax rates of32.4% and 32.8%, respectively.  Theeffective tax rate reflects the Company’s utilization of a securitiesinvestment subsidiary to substantially reduce state income taxes.

**Comparison of the Operating Results for the Nine Months EndedJune 30, 2001 and 2000.**

*Net Income.*The Company’s net income for the nine monthsended June 30, 2001 was $170,000 as compared to $449,000 for the nine monthsended June 30, 2000.  This $279,000 or62.1% decrease in net income during the nine months ended June 30, 2001  was the result of an increase of $1.5million in interest and dividend income and an increase of $45,000 in otherincome, offset by an increase of $899,000 in interest expense, an increase inprovision for loan losses of $36,000 and an increase of $1.0 million in operating expenses.  The Company’s continued expansion of itslending activities accounted for the increase in interest income, while itsinterest expense increased due to increases in deposit balances and operatingexpenses increased due to charges of $400,000 by the Bank during the period toother expenses in connection with a "Check Kiting Scheme." While theBank is making every effort to collect this amount, no assurances can be giventhat the Bank will be successful in recovering this amount.  The return on average assets for the ninemonths ended June 30, 2001 was .15% compared to .49% for the nine months endedJune 30, 2000.

*Net Interest and Dividend Income Before Provision for LoanLosses.*The Company’s net interest and dividend income before provision for loan lossesfor the nine months ended June 30, 2001 increased $569,000 or 18.2% to $3.7million from $3.1 million for the nine months ended June 30, 2000. The increaseis attributed to a combination of the $1.2 million increase in interest andfees on loans and an increase of $224,000 in interest and dividends onsecurities, offset by an increase of $606,000 in interest expense on deposits and $293,000 in interest expense on borrowedfunds.

             The average yield on interest-earningassets increased 21 basis points to 7.75% for the nine months ended June 30,2001 from 7.54% for the nine months ended June 30, 2000, while the average coston interest-bearing liabilities increased by 27 basis points to 4.68% for thenine months ended June 30, 2001 from 4.41% for the nine months ended June 30,2000.  The interest rate spreaddecreased to 3.07% for the nine months ended June 30, 2001 from 3.13% for thenine months ended June 30, 2000 and the net interest margin decreased from 3.64%to 3.60% during the nine months ended June 30, 2001 as compared to the sameperiod in 2000.

*Interest and Dividend Income.*Total interest and dividend incomeincreased by $1.5 million or 22.7% to $7.9 million for the nine months endedJune 30, 2001 from $6.5 million for the nine months ended June 30, 2000.  The increase in interest and dividend incomewas a result of a higher level of commercial and commercial real estateloans.  The average balance of net loansfor the nine months ended June 30, 2001 was $92.5 million compared to $76.0million for the nine months ended June 30, 2000.  The average yield on net loans was 8.21% for the nine monthsended June 30, 2001 compared to 7.95% for the nine months ended June 30,2000.  The average balance of investmentsecurities for the nine months ended June 30, 2001 was $38.8 million comparedto $35.6 million for the nine months ended June 30, 2000.  The average yield on investment securitieswas 7.04% for the nine months ended June 30, 2001 compared to 6.84% for the sixmonths ended June 30, 2000.

*Interest Expense*. Interest expense increased by $899,000 or 26.9% to $4.2 million for thenine months ended June 30, 2001 from $3.3 million for the nine months endedJune 30, 2000.  Interest expenseincreased primarily as a result of an increase in the level deposits and FHLBborrowings during the nine months ended June 30, 2001.  Average interest-bearing deposits increasedby $13.0 million or 18.2% to $84.2 million for the nine months ended June 30,2001 from $71.3 million for the same period in 2000.  Deposit balances have increased as a result of an increase inchecking products, certificate of deposit products with competitive rates anddeposits attributable to the Chelsea branch. Accordingly, interest expense on deposits increased $606,000 or 30.4% to$2.6 million for the nine months ended June 30, 2001 compared to $2.0 millionfor the nine months ended June 30, 2000. Interest expense on FHLB borrowings increased $293,000 or 21.7% to $1.6million for the nine months ended June 30, 2001 from $1.4 million for the ninemonths ended June 30, 2000.  This isattributable to an increase in the level of such borrowings.

*Provision for Loan Losses*.  Theprovision for loan losses increased $36,000 or 33.3% to $144,000 for the ninemonths ended June 30, 2001 as compared to $108,000 for the same period in2000.  At June 30, 2001, the balance ofthe allowance for loan losses was $882,000 or .92% of total loans.  As the Bank continues to expand its smallbusiness lending, additional increases to the provision are likely.

*Noninterest Income.*Total noninterest income increased by $45,000 or15.1% to $343,000 for the nine months ended June 30, 2001 from $298,000 for thenine months ended June 30, 2000.  Theincrease was primarily the result of increased fees on transactional depositaccounts.  The Company anticipatesincreases to noninterest income as it continues to expand the volume of itsdeposit relationships.  It is also theCompany’s goal to increase its level of noninterest income by expanding itsdelivery systems and by continually considering additional sources of revenue.

*Noninterest Expense.* Noninterest expense increased by $1.0 millionor 38.3%  to $3.6 million for the ninemonths ended June 30, 2001 from $2.6 million for the nine months ended June 30,2000.  Salaries and employee benefits,the largest component of noninterest expense was $1.7 million for the ninemonths ended June 30, 2001 as compared to $1.4 million for the nine monthsended June 30, 2000, an increase of $272,000 or 19.7%. The increase innoninterest expense is also attributed to charges of $400,000 by the Bank toother expenses during the period in connection with a "Check KitingScheme." While the Bank is making every effort to collect this amount, noassurances can be given that the Bank will be successful in recovering thisamount.

*Income Taxes. *The provision for income taxes amountedto $86,000 for the nine months ended June 30, 2001 as compared to $236,000 forthe nine months ended June 30, 2000, resulting in effective tax rate of 33.6%and 34.5%, respectively.  The effectivetax rate reflects the Company’s utilization of a securities investmentsubsidiary to substantially reduce state income taxes.

**Liquidity and Capital Resources**

             As the Company’s primary businessconsists that of the Bank’s business, the Company’s primary sources of fundsare deposits, proceeds from the principal and interest payments on loans, debtand equity securities, and to a lesser extent, borrowings and proceeds from thesale of fixed rate mortgage loans to the secondary market.  While maturities and scheduled amortizationof loans and securities are predictable sources of funds, deposit outflows,mortgage prepayments, mortgage loan sales, and borrowings are greatlyinfluenced by general interest rates, economic conditions and competition.

             TheOffice of Thrift Supervision regulations require the Company to maintainsufficient liquidity to ensure its safe and sound operation.  Liquidity management is both a daily andlong-term function of management.  Ifthe Company requires funds beyond its ability to generate them internally, theCompany believes it could borrow additional funds from the FHLB.  At June 30, 2001, the Company had borrowingsof $29.9 million.

             At June 30, 2001, the Company had$5.4 million in outstanding commitments to originate loans.  The Company anticipates that it will havesufficient funds available to meet its current loan origination commitments.  Certificates of deposit which are scheduledto mature in one year or less totaled $38.2 million at June 30, 2001.  Based on historical experience, managementbelieves that a significant portion of such deposits will remain with the Bank.

             At June 30, 2001, the Company andthe Bank exceeded all of their regulatory capital requirements.

**Part II - Other InformationJune 30, 2001**

**PART II**            **OTHER INFORMATION**

**Items 1 - 5**        **Not Applicable**

**Item 6**  **Exhibits and Reports on Form 8-K**

(a)         Exhibits             None

(b)        Reportson Form 8-K

The Company filed a current report on Form 8-Kdated April 27, 2001 announcing that Revere, MHC, the majority shareholder ofthe Company’s common stock, had entered into an Agreement and Plan of Merger(the”Merger Agreement”) with Danvers Bancorp, Inc., a Massachusetts Corporationand bank holding company for Danvers Savings Bank, a Massachusetts SavingsBank.

Pursuant to the terms of the Merger Agreement,the mutual holding company structure of Revere, MHC will be eliminated andRevere Federal Savings Bank will merge with and into Danvers Savings Bank.

**SIGNATURES**

             Pursuant to the requirements of theSecurities Exchange Act of 1934, the Company has duly caused this report to besigned on its behalf by the undersigned thereunto duly authorized.

|                         |   | **RFS BANCORP, INC.**             |
|------------------------------|--------|-----------------------------------|
|                         |   |                              |
| Date:   August 14, 2001 | By:    | /s/   James J. McCarthy |   |
|                         |        |                              |   |  |   |
|                         |   |                              | James J. McCarthy |   |
|                         |   |                              | President and Chief Executive Officer |   |
|                         |   |                              |   |   |
|                         |   |                              |   |   |
|                         |   |                              |   |   |
| Date:   August 14, 2001 | By:    | /s/   Anthony J. Patti       |   |
|                         |        |                              |   |  |   |
|                         |   |                              | Anthony J. Patti |   |
|                         |   |                              | Executive Vice President and Chief Financial  Officer (principal accounting officer) |   |
|                         |   |                              |   |