U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549FORM 10-KSB

[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934
        For the Fiscal Year Ended June 30, 2001

OR

[  ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934
      For the transition period from ________________to________________





PART I

Item 1.      Description of Business
GeneralSobieski Bancorp, Inc.

The loan committee, comprised of three Bank's directors serving on a three-month rotating basis, has authority of the Bank's board of directors to approve loans up to $250,000; any loans over $250,000 must be approved by the entire Board of Directors.
     Under regulations of the Office of Thrift Supervision (the "OTS"), the Bank's loans-to-one-borrower limit is generally limited to the greater of 15% of unimpaired capital and surplus or $500,000.  See "Regulation - Federal Regulation of Savings Associations".  At June 30, 2001, the maximum amount which the Bank could loan to any one borrower and the borrower's related entities was $1,577,000.  At June 30, 2001, the Bank had no loans with aggregate outstanding balances in excess of this amount.  At that date, the Bank's largest lending relationship to a single borrower or group of related borrowers totaled $1,346,000.  As of June 30, 2001, this loan was performing in accordance with its terms.
     All of the Bank's lending is subject to its written underwriting standards and loan origination procedures.  Decisions on loan applications are made on the basis of detailed applications and property valuations.  Properties securing real estate loans made by Sobieski Bank are generally appraised by Board-approved independent appraisers.  In the loan approval process, Sobieski Bank assesses the borrower's ability to repay the loan, the adequacy of the proposed collateral, the employment stability of the borrower, the credit worthiness of the borrower as well as the strength of the personal guarantor of business loan requests.
     The Bank requires evidence of marketable title and lien position or appropriate title insurance (except on certain home equity loans) on all loans secured by real property.  The Bank also requires fire and extended coverage casualty insurance in amounts at least equal to the lesser of the principal amount of the loan or the value of improvements on the property, depending on the type of loan.  As required by federal regulations, the Bank also requires flood insurance to protect the property securing its interest if property is located in a designated flood area.



|                          | At June 30,
|------------------------- | -----------
|                          | 2001       
|                          | Amount     
|(Dollars in Thousands)   
|One-to-four family        | $62,283    
|Commercial loans          | 19,894     
|Home equity               | 3,933      
|Other consumer loans      | 2,731      
|                          |            
|Total loans               | $88,841    
|                          |            
|                          |            
|Allowance for loan losses | (340)      
|                          |            
|Total loans, net          | $88,501    
|                          |            
|                          |            

The following table shows the composition of the Company's loan portfolio by fixed and adjustable-rate loans at the dates indicated.

|                               | At June 30,
|------------------------------ | -----------
|                               | 2001       
|                               | Amount     
|(Dollars in Thousands)        
|Fixed-Rate Loans:             
|One-to-four-family             | $54,812    
|Consumer loans                 | 1,565      
|Commercial loans               | 3,455      
|                               |            
|Total fixed-rate loans         | $59,832    
|                               |            
|Adjustable-Rate Loans:         |            
|One-to-four-family             | 7,471      
|Commercial loans               | 16,439     
|Home equity and other consumer | 5,099      
|                               |            
|Total adjustable-rate loans    | 29,009     
|                               |            
|Total loans                    | $88,841    
|                               |            
|Allowance for loan losses      | (340)      
|                               |            
|Total loans, net               | $88,501    

The following schedule illustrates the amortization schedule by contractual maturity of the Company's loan portfolio at June 30, 2001.  Loans which have adjustable or renegotiable interest rates are shown as maturing in the period during which the contract is due.  The schedule does reflect scheduled principal amortization but does not reflect the effects of possible prepayments or enforcement of due-on-sale clauses.

|Real Estate                                 |                 |                           |                                     
|------------------------------------------- | --------------- | ------------------------- | ------------------------------------
|                                            | One-Four Family | Multi-Family & Commercial | Home Equity Consumer & Deposit Loans
|                                            |                 | (Dollars in Thousands)    |                                     
|Due during the twelvemonths ending June 30, |                 |                           |                                     
|2002(1)                                     | $  1,856        | $    868                  | $   624                             
|2003                                        | 2,003           | 935                       | 677                                 
|2004                                        | 2,159           | 777                       | 736                                 
|2005 and 2006                               | 4,736           | 1,240                     | 1,540                               
|2007 to 2011                                | 15,062          | 4,020                     | 2,500                               
|2012 to 2031                                | 36,467          | -0-                       | 587                                 
|                                            |                 |                           |                                     
|Total                                       | $62,283         | $7,840                    | $6,664                              
|                                            |                 |                           |                                     
|Weighted average interest rate              | 7.44%           | 7.92%                     | 8.19%                               



The following table shows the amount of non-mortgage commercial loans outstanding as of June 30, 2001, based on remaining scheduled repayments of principal due in the periods indicated, classified according to sensitivity to changes in interest rates.



|Maturing                             | FixedRate | VariableRate | Total 
|------------------------------------ | --------- | ------------ | ------
|Within  one year                     | 599       | 3,080        | 3,679 
|After one year but within five years | 1,311     | 5,205        | 6,516 
|After five years                     | -0-       | 1,859        | 1,859 
|                                     | 1,910     | 10,144       | 12,054

The total amount of loans due after June 30, 2002 that have predetermined interest rates is $59.3 million.

One-to-Four Family Residential Mortgage and Home Equity Lending.  Residential loan originations are generated by the Bank's marketing efforts, its present customers, walk-in customers and referrals from real estate brokers.  Historically, the Bank has focused its lending efforts primarily on the origination of fixed-rate loans secured by first mortgages on owner-occupied, single-family residences in its market area.  In September 1994, the Bank began to originate adjustable rate mortgage ("ARM") loans.  At June 30, 2001, the Company's one-to-four family residential mortgage loan portfolio totaled $62.3 million, or 70.1% of the Company's gross loan portfolio.
     The Bank currently offers fixed-rate and adjustable rate mortgage and home equity loans.  For the year ended June 30, 2001, the Bank originated $15.4 million of one-to-four family real estate related loans.  At June 30, 2001, the Bank had $7.5 million of one-to-four family adjustable-rate mortgage loans, and $54.8 million of one-to-four family fixed-rate mortgage loans.
     The Bank currently originates fixed-rate loans with terms of maturity up to 30 years.  Interest rates charged on these fixed-rate loans are priced on a regular basis according to market conditions.  The Bank also offers adjustable-rate mortgage loans at rates and on terms determined in accordance with market and competitive factors.  The Bank currently originates one-to-five year ARM loans, with up to a 30-year amortization schedule, with a stated interest rate margin over the one-year Constant Maturity Treasury Index.  These loans provide for a 1.5% maximum annual cap and a cap over the life of the loan of 4.50%.  As a consequence of using caps, the interest rates on these loans may not be as rate sensitive as is the Bank's cost of funds.  Currently, all ARM loans originated provide for an interest rate floor below which the interest rate charged may not fall.
     Borrowers with adjustable-rate mortgage loans are qualified at the fully indexed rate.  Adjustable-rate loans decrease the risk to the Bank associated with changes in interest rates but involve other risks, primarily because as interest rates rise, the payment by the borrower may rise to the extent permitted by the terms of the loan, thereby increasing the potential for default.  At the same time, the market value of the underlying property may be adversely affected by higher interest rates.
     
     Currently, Sobieski Bank will loan up to 80% of the appraised value on fixed-rate conventional mortgages of the security property without private mortgage insurance ("PMI") on owner occupied, one-to-four family loans and up to 97% with PMI on the sale price of such security properties.  Sobieski will also loan up to 85% of the appraised value on adjustable rate mortgages on the security property without private mortgage insurance.  Residential loans do not include prepayment penalties, are not assumable and do not produce negative amortization.  Real estate loans originated by the Bank contain a "due on sale" clause allowing the Bank to declare the unpaid principal balance due and payable upon the sale of the security property.
     The loans currently originated by the Bank are typically underwritten and documented pursuant to the guidelines of Freddie Mac.  The Bank currently retains some loans originated in its portfolio for selling originated-for-sale loans to primarily Freddie Mac.

The Bank also originates second mortgage and home equity lines of credit.  At June 30, 2001, the Bank's second mortgage loans and home equity loans totaled $325,000 and $3.9 million, respectively.  Second mortgage loans have fixed or variable rates of interest and have terms up to 15 years.  Home equity loans have adjustable interest rates and terms of up to 12 years.  These loans are underwritten using similar guidelines as for single family mortgage lending.
     Residential Construction Lending.  To a limited extent, the Bank also originates loans for the construction of one-to-four family residences.  At June 30, 2001, the Bank's construction loan portfolio totaled $0.8 million, or 0.9% of its gross loan portfolio.  As of that date, all of these loans were secured by property located within the Bank's market area.
     All of the construction loans to individuals for their residences are structured to be converted to permanent loans at the end of the construction phase, which typically runs from four to six months.  These construction loans have rates and terms comparable to one-to-four family loans offered by the Bank, except that during the construction phase, the borrower pays interest only.  The maximum loan-to-value ratio of owner occupied single-family construction loans is 80% without PMI and 95% with PMI.  Residential construction loans are generally underwritten pursuant to the same guidelines for originating permanent residential loans.
     Construction loans are obtained primarily from walk-in customers and builder and realtor referrals.  The application process includes submission to the Bank of plans and costs of the project to be constructed.  These items are used to determine the appraised value of the subject property.  Loans are based on the lesser of current appraised value or the cost of construction (land plus building).
     The Bank's construction loan agreements generally provide that loan proceeds are disbursed in increments as construction progresses.  The Bank periodically reviews the progress of the underlying dwelling before disbursements are made.  Nevertheless, construction lending is generally considered to involve a higher level of credit risk than one-to-four family residential lending since the risk of loss on construction loans is dependent largely upon the accuracy of the initial estimate of the individual property's value upon completion of the project and the estimated cost (including interest) of the project.
     Consumer Lending.  Currently, the Bank is making consumer loans.  The product line includes personal lines of credit, overdraft protection, automobile, marine, motorcycle, and recreational vehicle loans.  The revolving and overdraft lines of credit feature variable rates of interest with the remaining product lines featuring fixed rates having repayment terms of one to six years.  As of June 30, 2001, consumer loans including home equity loans referred to above totaled $6.7 million.  
     The underwriting standards employed by the Bank for consumer loans include a determination of the applicant's payment history on other debts and an assessment of the borrower's ability to meet payments on the proposed loan along with their existing obligations.  In addition to the creditworthiness of the applicant, the underwriting process also includes a comparison of the value of the security, if any, in relation to the proposed loan amount.
     Consumer loans may entail greater risk than residential mortgage loans, particularly in the case of consumer loans which are unsecured or secured by rapidly depreciable assets such as automobiles.  In such cases, any repossessed collateral for defaulted consumer loans may not provide adequate sources of repayment for the outstanding loan balances as a result of the greater likelihood of damage, loss, or depreciation.  In addition, consumer loan collections are dependent on the borrower's continuing financial stability, and thus are more likely to be affected by adverse personal circumstances.  Furthermore, the application of various federal and state laws, including federal and state bankruptcy and insolvency laws, may limit the amount which can be recovered on such loans.
     Commercial Business Lending.Commercial adjustable-rate loans at June 30, 2001 totaled $16.4 million or 18.5% of the Company's gross loan portfolio.  These loans consist of participation certificates guaranteed by the SBA, participations with other financial institutions in commercial real estate and non-real estate loans and internally originated commercial real estate and non-real estate loans.  Unlike residential mortgage loans, which generally are made on the basis of the borrower's ability to make repayment from his or her employment and other income, and which are secured by real property whose value tends to

be more easily ascertainable, commercial business loans are generally of higher risk and typically are made on the basis of the borrower's ability to make repayment from the cash flow of the borrower's business.  As a result, the ability of funds for the repayment of commercial business loans may be substantially dependent on the success of the business itself (which, in turn, may be dependent upon the general economic environment.)
     Fixed-rate commercial business loans at June 30, 2001 totaled $3.5 million or 3.9% of the Company's gross loan portfolio.  These loans are originated internally or purchased participations originated by other financial institutions.
     Commercial loans are predominately set to re-price on a basis that ranges from monthly through 5 years.  Due to the nature of fixed-asset commercial lending and larger dollar amounts associated with this type of transaction, adjustable rate agreements commonly utilized are mutually beneficial to the borrower, by paying interest rates that reflect current market climate, and to the lending institution, particularly in regard to interest rate risk management.Originations and Purchases of Loans     Loan originations are developed from continuing business with depositors and borrowers, soliciting realtors, builders, walk-in customers and small business entities.
     While the Bank originates both adjustable-rate and fixed-rate loans, its ability to originate loans to a certain extent is dependent upon the relative customer demand for loans in its market, which is affected by the interest rate environment, among other factors.  For the year ended June 30, 2001, the Bank originated $18.1 million in loans, as compared to $28.0 million for the year ended June 30, 2000.  Originations during fiscal 2001 consisted of $15.4 million of one-to-four family real estate loans, and $2.7 million in nonresidential real estate and commercial loans.
     Loan originations during the year ended June 30, 2001 were lower than the prior year.  The Bank believes the decrease was caused by a very volatile interest rate environment throughout the period and particularly the higher rate environment experienced for the first half of the current fiscal period.  Historically, the Bank generally retained all its loan originations in its portfolio with the exception of a $5.3 million loan sale in the secondary market during fiscal 2000.  During the fiscal year, sales of loans to Freddie Mac totaled $11.3 million.  Both the current and prior year loan sales are part of interest risk management strategy.

In order to supplement its lending activities, the Bank invests funds in mortgage-backed securities.  See Note 3 of the Notes to Consolidated Financial Statements.  Virtually all of the mortgage-backed securities purchased by the Bank have adjustable interest rate features.  See "Business-Investment Activities".
     The following table shows the loan origination and purchase activities of the Bank for the periods indicated.

|                                                 | Year Ended June 30,
|------------------------------------------------ | -------------------
|                                                 | 2001               
|                                                 |                    
|Originations:                                    |                    
|One-to-four family real estate and home equity   | $15,418            
|Deposit loans                                    | 197                
|Non-residential real estate and commercial loans | 2,489              
|                                                 |                    
|Total originations                               | 18,104             
|                                                 |                    
|Purchases:                                       |                    
|Purchases of commercial business loans           | -0-                
|                                                 |                    
|Sales:                                           |                    
|One-to-four family loans                         | (11,339)           
|                                                 |                    
|Repayments:                                      |                    
|Loans                                            | (11,005)           
|Other, net                                       | (540)              
|                                                 |                    
|Total repayments                                 | 11,545             
|                                                 |                    
|Net (decrease) increase                          | (4,780)            

Asset Quality
     General.When a borrower fails to make a required payment on a loan, the Bank attempts to cause the delinquency to be cured by contacting the borrower.  In the case of loans secured by real estate, a reminder notice is sent to the borrower on all loans over 15 days delinquent.  When a loan becomes 15 days delinquent, late charges are assessed and a notice of late charges is sent to the borrower.  An additional late notice is sent to the borrower if the delinquency is not cured within 30 days of the required payment date.  If the loan becomes 60 days delinquent and the borrower has not attempted to contact the Bank to arrange an acceptable plan to bring the loan current, the borrower is contacted by telephone.  If the borrower contacts the Bank with a reasonable explanation for the delinquency, the Bank generally will attempt to reach workable accommodations with the borrower to bring the loan current.  All proposed workout arrangements are evaluated on a case by case basis, based on the best judgement of the Bank's management, considering, among other things, the borrower's past credit history, current financial status, cooperativeness, future prospects and

the reason for the delinquency.  If the loan is more than 90 days delinquent, the loan will be referred to the Bank's legal counsel for collection.  In all cases, if the Bank believes that its collateral is at risk and added delay would place the collectibility of the balance of the loan in further question, management may refer loans for collection even sooner than the 90 days described above.
     
     When a loan becomes delinquent 90 days or more, the Bank will place the loan on non-accrual status.  The loan will remain on a non-accrual status as long as the loan is 90 days delinquent.
     The following table sets forth the Bank's delinquencies by type, by amount and by percentage of type as of June 30, 2001.

|Loans Delinquent For:
|---------------------
|                     
|                     
|                     
|Real estate:         
|One-to four family   
|Home equity          
|Commercial           
|                     
|Total                
|                     

Non-Performing Assets.  The table below sets forth the amounts and categories of non-performing assets.  Loans are placed on non-accrual status when the collection of principal and/or interest becomes doubtful.  Foreclosed assets include assets acquired in settlement of loans.  The Bank had no accruing loans more than 90 days delinquent at June 30, 2001.

|                                           | At June 30,
|------------------------------------------ | -----------
|                                           | 2001       
|                                           |            
|Non-accruing loans:                        |            
|One-to-four family                         | $   121    
|Commercial loans                           | -0-        
|Consumer                                   | 2          
|                                           |            
|Total                                      | 123        
|                                           |            
|Restructured loans                         | $1,097     
|                                           |            
|Accruing over 90 days past due             | -0-        
|                                           |            
|Foreclosed assets:                         |            
|One-to-four family                         | 68         
|Other                                      | 958        
|                                           |            
|Total                                      | 1,026      
|                                           |            
|Total non-performing and foreclosed assets | $2,246     
|                                           |            
|Total as a percentage of total assets      | 1.75%      

For the year ended June 30, 2001 gross interest income which would have been recorded had the non-accruing loans been current in accordance with their original terms amounted to $3,700.  The amounts of interest income included in net income on these loans was $7,700.

Other Loans of Concern.During the quarter ended June 30, 2000, the Company became aware of certain circumstances related to a loan to a single borrower in which the Bank had purchased a participation interest.  The borrower has discontinued principal and interest payments on the loan and had filed for Chapter 11 bankruptcy protection.  Under the terms of a plan, which had been accepted by the lead participants, borrower and the bankruptcy court, the collateral of this loan was surrendered to the lead participant to be sold. At June 30, 2000, management had classified this loan, totaling $1,013,175, as impaired.  On July 25, 2001, the collateral for this loan was sold.  Under terms of the sale, the Company participated in financing and will  recover the full outstanding principal balance.

At June 30, 2001, management classified a loan participation interest in the amount of $1,097,113 as impaired due to the restructuring of the payments due from the borrower.  The  Company became aware of subsequent events occurring on August 22, 2001 when the borrower filed for Chapter 11 bankruptcy protection.  Management does not expect any losses on this loan as the collateral is currently in use to support debt payments and appears to have sufficient market value to cover the outstanding loan balance.
     Classified Assets.Federal regulations provide for the classification of loans and other assets, such as debt and equity securities considered by the OTS to be of lesser quality, as "substandard", "doubtful" or "loss".  An asset is considered "substandard" if it is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any.  "Substandard" assets include those characterized by the "distinct possibility" that the insured institution will sustain "some loss" if the deficiencies are not corrected.  Assets classified as "doubtful" have all of the weaknesses inherent in those classified "substandard" with the added characteristic that the weaknesses present make "collection or liquidation in full" on the basis of currently existing facts, conditions and values, "highly questionable and improbable."  Assets classified as "loss" are those considered "uncollectable" and of such little value that their continuance as assets without the establishment of a specific loss reserve is not warranted.
     When an insured institution classifies problem assets as either substandard or doubtful, it may establish specific allowances for loan losses in an amount deemed prudent by management.  General allowances represent loss allowances which have been established to recognize the inherent risk associated with lending activities, but which, unlike specific allowances, have not been allocated to particular problem assets.  When an insured institution classifies problem assets as "loss", it is required either to establish a specific allowance for losses equal to 100% of that portion of the asset as classified or to charge-off such amount.  An institution's determination as to the classification of its assets and the amount of its valuation allowances is subject to review by the regulatory authorities, who may order the establishment of additional general or specific loss allowances.
     In connection with the filing of its periodic reports with the OTS and in accordance with its classification of assets policy, the Bank regularly reviews problem loans and real estate acquired through foreclosure to determine whether such assets require classification in accordance with applicable regulations.  On the basis of management's review of its loans, at June 30, 2001, the Bank had classified a total of $123,000 of its loans as substandard, none as doubtful and none as loss.  At June 30, 2001, total classified loans comprised $123,000 or 0.9% of the Company's capital and 0.10% of the Company's total assets.

Allowance for Loan Losses.The allowance for loan losses is established through a provision for loan losses based on management's evaluation of the risk inherent in its loan portfolio and changes in the nature and volume of its loan activity, including those loans which are being specifically monitored by management.  Such evaluation, which includes a review of loans for which full collectibility may not be reasonably assured, considers, among other matters, the loan classifications, discussed above, the estimated fair value of the underlying collateral, economic conditions, historical loan loss experience, the amount of loans outstanding and other factors that warrant recognition in providing for an adequate loan loss allowance.  A significant factor considered in the unallocated allowance was the historically low level of loans other than one-to-four family real estate loans.  Management recognizes that as loan growth continues additional provisions to the allowance may be required.
     Real estate acquired in settlement of loans is initially recorded at fair market value at the date of acquisition, establishing a new cost basis by a charge to the allowance for loan losses, and is subsequently carried at the lower of cost or net realizable value.  Costs of improvements made to facilitate sales are capitalized; costs of holding the property are charged to expense.  It is Sobieski's policy to provide valuation allowances for estimated losses whenever, based upon management's evaluation, a significant and permanent decline in value occurs.
     Although management believes that it uses the best information available to determine the allowance, unforeseen market conditions could result in adjustments and net earnings could be significantly affected if circumstances differ substantially from the assumptions used in making the final determination.  Future additions to the Bank's allowance for loan losses will be the result of periodic loan, property and collateral reviews and thus cannot be predicted in advance.  In addition, federal regulatory agencies, as an integral part of the examination process, periodically review the Bank's allowance for loan losses.  Such agencies may require the Bank to recognize additions to the allowance level based upon their judgement of the information available to them at the time of their examination.  At June 30, 2001, the Bank had a total allowance for losses on loans of $340,000 representing 27.86% of total non-performing loans and .38% of the Bank's gross loans.  See Note 4 of the Notes to Consolidated Financial Statements.

The following table sets forth an analysis of the Bank's allowance for loan  losses.

|                                                                              | Year Ended June 30,
|----------------------------------------------------------------------------- | -------------------
|                                                                              | 2001               
|                                                                              |                    
|Balance at beginning of period                                                | $   395            
|                                                                              |                    
|Charge-offs:                                                                  |                    
|Commercial Loans                                                              | 88                 
|One-to-four family                                                            | 17                 
|                                                                              |                    
|Recoveries                                                                    | -0-                
|                                                                              |                    
|Provision charged to operations                                               | 50                 
|                                                                              |                    
|Balance at end of period                                                      | $   340            
|                                                                              |                    
|Ratio of net charge-offs to average
   loans outstanding during the period    | 0.12%              
|                                                                              |                    
|Ratio of net charge-offs to average
   non-perfoming assets during the period | 7.9%               

The distribution of the Company's allowance for loan losses at the dates indicated is summarized as follows:

|                     | At June 30,
|-------------------- | -----------
|                     | 2001       
|                     | Allowance  
|One-to-four family   | $  168     
|Commercial loans     | 98         
|Home equity          | 10         
|Other consumer loans | 26         
|Unallocated          | 38         
|                     |            
|Total  (2)           | $  340     



Investment Activities
     General.

As of June 30, 2001, all of the Bank's mortgage-backed securities were backed by government sponsored agency programs.  Accordingly, management believes that the Bank's mortgage-backed securities are generally resistant to credit problems.
     The Bank's mortgage-backed securities portfolio consists of securities issued under government-sponsored agency programs, including those of Fannie Mae, Freddie Mac and the Government National Mortgage Bank ("GNMA"). Fannie Mae, Freddie Mac and GNMA certificates are modified pass-through mortgage-backed securities that represent undivided interests in underlying pools of fixed-rate, or certain types of adjustable rate, predominantly single-family and, to a lesser extent, multi-family residential mortgages issued by those government-sponsored entities.  As a result, the interest rate risk characteristics of the underlying pool of mortgages, i.e., fixed rate or adjustable rate, as well as prepayment risk, are passed on to the certificate holder.  Fannie Mae and Freddie Mac generally provide the certificate holder a guarantee of timely payments of interest and ultimate collection of principal, whether or not collected.  GNMA's guarantee to the holder is timely payments of principal and interest, backed by the full faith and credit of the U.S. Government.
     Mortgage-backed securities generally yield less than the loans that underlie such securities, because of the cost of payment guarantees or credit enhancements that reduce credit risk to holders.  Since federal agency mortgage-backed securities generally carry a yield approximately 50 to 100 basis points below that of the corresponding type of residential loan (due to the implied federal agency guarantee fee and the retention of a servicing spread by the loan servicer), in the event that the proportion of the Bank's assets consisting of mortgage-backed investments increase in the future, the Bank's assets yields would be adversely affected.  Mortgage-backed securities are also more liquid than individual mortgage loans and may be used to collateralize obligations of the Bank.  In general, mortgage-backed securities issued or guaranteed by Fannie Mae and Freddie Mac are weighted at no more than 20% for risk-based capital purposes, and mortgage-backed securities issued or guaranteed by GNMA are weighted at 0% for risk-based capital purposes, compared to an assigned risk weighing of 50% to 100% for whole residential mortgage loans.
     While mortgage-backed securities carry a reduced credit risk as compared to whole loans, such securities remain subject to the risk that a fluctuating interest rate environment, along with other factors such as the geographic distribution of the underlying mortgage loans, may alter the prepayment rate of such mortgage loans and so affect the prepayment speed, and value, of such securities.  Mortgage-backed securities involve a risk that actual prepayments will differ from estimated prepayments over the life of the security which may require adjustments to the amortization of any premium or accretion of any discount relating to such instruments, thereby changing the net yield on such securities.  There is also reinvestment risk associated with the cash flows from such securities.  In addition, the market value of such securities may be adversely affected by changes in interest rates.  The adjustable rate and/or short maturity of the Bank's portfolio is designed to minimize that risk.

Investment Securities and Other Interest-Earning Assets.  At June 30, 2001, Sobieski Bank's interest-bearing deposits with financial institutions totaled $1.2 million, or .9% of total assets and certificates of deposit of other federally insured institutions totaled $1.4 million or 1.1% of total assets.
Other investment securities, consisting of U.S. Government Treasury notes, agency, municipal, and corporate debt securities, totaled $6.1 million, or 4.8% of total assets.  In addition, as of such date, the Bank had an investment of $1.8 million in FHLB stock, satisfying its requirement for membership in the FHLB of Indianapolis.  It is the Bank's general policy to purchase securities which are U.S. Government securities or federal agency obligations or other issues that are rated investment grade.  At June 30, 2001, the weighted average maturity of the securities portfolio (excluding FHLB stock) was 4.8 years.
     The Bank also invested in collateralized mortgage obligations and certain participating interests in real estate mortgage investment conduits ("REMICs") (hereinafter collectively referred to as "CMOs).  CMOs are special types of pass-through certificates in which the stream of principal and interest payments on the underlying mortgages or mortgage-backed securities is used to create classes with different maturities and, in some cases, amortization schedules, as well as a residual interest, with each such class possessing different risk characteristics.
The CMO instruments the Bank purchased are most like debt instruments because these CMO instruments have stated principal amounts and traditionally defined interest-rate terms.  Purchasers of certain other CMO instruments are entitled to the excess, if any, of the issuer's cash inflows, including reinvestment earnings, over the cash outflows for debt service and administrative expenses.  These CMO instruments may include instruments designated as residual interests and are thought to be "high risk" in that these CMO instruments could result in the loss of a portion of the original investment.  Cash flows from residual interests are extremely sensitive to prepayments and, thus, contain a high degree of interest-rate risk.

The following table sets forth the maturities of the Bank's investment portfolio at June 30, 2001.

|                                                       |                 | Maturities (In Thousands)           |                                      |               
|------------------------------------------------------ | --------------- | ----------------------------------- | ------------------------------------ | --------------
|                                                       | Within One Year | After One Year
But WithinFive Years | After Five Years
But WithinTen Years | AfterTen Years
|U.S. Treasury and U.S. Government Agency securities(1) | 434             | 786                                 | 1,294                                | 793           
|Obligations of states and political Subdivision(2)     | -0-             | 294                                 | 457                                  | 250           
|Mortgage-backed securities(3)                          | 494             | 2,314                               | 3,821                                | 15,647        
|Corporate obligations                                  | -0-             | 1,774                               | -0-                                  | -0-           
|Equity securities                                      | -0-             | -0-                                 | -0-                                  | 25            
|                                                       |                 |                                     |                                      |               
|                                                       | 928             | 5,168                               | 5,572                                | 16,715        
|                                                       |                 |                                     |                                      |               
|Weighted average yield(2)                              | 6.18%           | 6.02%                               | 6.06%                                | 6.23%         



The following table sets forth the composition of the Bank's investment and mortgage-backed securities at the dates indicated.

|                                                      | At June 30,
|----------------------------------------------------- | -----------
|                                                      | 2001       
|                                                      | BookValue  
|                                                      |            
|Investment securities:                                |            
|U.S. Government securities                            | $  1,0007  
|U.S. agency securities                                | 2,300      
|Municipal securities                                  | 1,001      
|Corporate Obligations                                 | 1,774      
|Equity securities                                     | 25         
|Subtotal                                              | 6,107      
|FHLB stock                                            | 1,776      
|Total investment securities and FHLB stock            | 7,883      
|                                                      |            
|Other interest-earning assets:                        |            
|Interest-bearing deposits with financial institutions | $   1,249  
|Certificates of Deposit                               | 1,388      
|Total other interest-earning assets                   | 2,637      
|                                                      |            
|Mortgage-backed securities:                           |            
|GNMA                                                  | $   4,876  
|FNMA                                                  | 4,068      
|FHLMC                                                 | 1,630      
|CMO's                                                 | 11,638     
|Subtotal                                              | 22,212     
|                                                      |            
|Unamortized premium, net                              | 64         
|Total mortgage-backed securities                      | $  22,276  

Sources of Funds
     General.



|                     | 2001     | 2000     | 1999    
|-------------------- | -------- | -------- | --------
|Opening balance      | $73,928  | $64,231  | $60,517 
|New deposits         | 4,661    | 9,236    | 3,061   
|Interest credited(1) | 406      | 461      | 653     
|                     |          |          |         
|Ending balance       | $78,995  | $73,928  | $64,231 
|                     |          |          |         
|Net increase         | $  5,067 | $  9,697 | $  3,714
|                     |          |          |         
|Percent increase     | 6.85%    | 15.10%   | 6.14%   

(1) Includes interest credited to passbook, NOW and money market deposit accounts, but not certificates of deposit.

The following table sets forth the dollar amount of average savings deposits and the average weighted rate paid in the various types of deposit programs offered by the Bank for the years indicated.

|                                  | 2001          | 2000            | 1999            
|--------------------------------- | ------------- | --------------- | ----------------
|                                  | AverageAmount | Percentof Total | AverageRate Paid
|Transaction and Savings Deposits: |               |                 |                 
|NOW and MMDA accounts             | $  6,504      | 8.6%            | 1.68%           
|Savings deposits                  | 12,924        | 17.2%           | 2.28%           
|                                  |               |                 |                 
|Total non-certificates            | 19,428        | 25.8%           | 2.08%           
|                                  |               |                 |                 
|Certificates                      | 55,870        | 74.2%           | 6.06%           
|                                  |               |                 |                 
|Total average deposits            | $75,298       | 100.0%          | 5.03%           

The following table shows rate and maturity information for the Bank's certificates of deposit as of June 30, 2001.



|                                  | Total                  | Percentof Total
|--------------------------------- | ---------------------- | ---------------
|                                  | (Dollars in Thousands)
|Certificate accounts maturing in: |                        |                
|12 months or less                 | $   42,550,710         | 70.7%          
|Over 12 months to 36 months       | 16,892,359             | 28.1           
|Over 36 months                    | 740,587                | 1.2            
|                                  |                        |                
|Total                             | $  60,183,656          | 100.0%         

The following table indicates the amount of the Bank's certificates of deposit of $100,000 and over by time remaining until maturity as of June 30, 2001.

|                                                 |                 | Maturity          |                    |              
|------------------------------------------------ | --------------- | ----------------- | ------------------ | -------------
|                                                 |                 | (In Thousands)    |                    |              
|                                                 | 3 monthsor less | Over 3 to6 months | Over 6 to12 months | Over 12months
|Certificates of deposit of $100,000 
    or more | 8,847           | 2,556             | 5,486              | 3,380        

Borrowings.Although deposits are the Bank's primary source of funds, the Bank may utilize FHLB advances or other borrowings to support lending activities and to assist the Banks's asset/liability management strategy when they are a less costly source of funds and may be invested at a positive interest rate spread or when the Bank desires additional capacity to fund loan demand.  At  June 30, 2001, the Bank had borrowings of $34.0 million.

The following table sets forth the primary short term borrowings for the bank.

|              | At June 30, 2001 |              | FiscalPeriod borrowings           
|------------- | ---------------- | ------------ | ----------------------------------
|              | Amount           | WeightedRate | Weighted AverageRemaining Maturity
|FHLB advances | $8,000,000       | 4.04%        | 121 days                          

Earnings, Stockholders' Equity and Dividend Information.The following table sets forth earnings, earnings related data and per share data:

|                                       | 2001                                 | 2000      | 1999     
|-------------------------------------- | ------------------------------------ | --------- | ---------
|                                       | (In thousands except per share data)
|Average stockholders' equity           | $12,916                              | $12,710   | $12,695  
|Net Income                             | $     607                            | $     667 | $     597
|Return on average assets               | .52%                                 | .60%      | .58%     
|Average equity to average total assets | 11.02%                               | 11.37%    | 12.44%   
|Return on average stockholders' equity | 4.70%                                | 5.25%     | 4.70%    
|Basic earnings per share               | $      .94                           | $    1.00 | $    0.86
|Cash dividends declared per share      | $      .32                           | $    0.32 | $    0.32
|Dividend payout percentage             | 34%                                  | 32%       | 37%      

Service Corporation Activities

Banks on a case-by-case basis.
     The capital regulations require tangible capital of at least 1.5% of adjusted total assets (as defined by regulation).  Tangible capital generally includes common stockholders' equity and retained income, and certain noncumulative perpetual preferred stock and related income and excludes unrealized appreciation or depreciation on securities available for sale.  In addition, all intangible assets, other than a limited amount of purchased mortgage-servicing rights, must be deducted from tangible capital.  At June 30, 2001, the Bank did not have any intangible assets.
     The OTS regulations establish special capitalization requirements for savings Banks that own subsidiaries.  Under these regulations certain subsidiaries are consolidated for capital purposes and others are excluded from assets and capital.  In determining compliance with the capital  requirements, all subsidiaries engaged solely in activities permissible for national banks or engaged in certain other activities solely as agent for its customers are "includable" subsidiaries that are consolidated for capital purposes in proportion to the Bank's level of ownership, including the assets of includable subsidiaries in which the Bank has a minority interest that is not consolidated for GAAP purposes.  For excludable subsidiaries, the debt and equity investments in such subsidiaries are deducted from assets and capital.  At June 30, 2001, the Bank did not have any active subsidiaries.
     At June 30, 2001, the Bank had tangible capital of $10.1 million, or 8.0% of adjusted total assets, which is approximately $8.3 million above the minimum requirement of 1.5% of adjusted total assets in effect on that date.
     The capital standards also require core capital equal to at least 3% of adjusted total assets (as defied by regulation).  Core capital generally consists of tangible capital plus certain intangible assets, including supervisory goodwill (which is phased-out over a five-year period) and a limited amount of purchased credit card relationships.  As a result of the prompt corrective action provisions of FDICIA discussed below, however, a savings Bank must maintain a core capital ratio of at least 4% to be considered adequately capitalized unless its supervisory condition is such to allow it to maintain a 3% ratio.  At June 30, 2001, the Bank had no intangible assets, which were subject to these tests.
     At June 30, 2001, the Bank had core capital of $10.1 million, or 8.0% of adjusted total assets, which is $5.1 million above the minimum leverage ratio requirement of 4% as in effect on that date.
     The OTS risk-based requirement requires savings Banks to have total capital of at least 8% of risk-weighted assets.  Total capital consists of core capital, as defined above and supplementary capital.  Supplementary capital consists of certain permanent and maturing capital instruments that do not qualify as core capital and general valuation loan and lease loss allowances up to a maximum of 1.25% or risk-weighted assets.  Supplementary capital may be used to satisfy the risk-based requirement only to the extent of core capital.  At June 30, 2001, the Bank had no capital instruments that qualify as supplementary capital and $340,000 of general loss reserves, which was less than 1.25% of risk-weighted assets.
     In determining the amount of risk-weighted assets, all assets, including certain off-balance

sheet items, will be multiplied by a risk weight, ranging from 0% to 100%, based on the risk inherent in the type of asset.  For example, the OTS has assigned a risk weight of 50% for prudently underwritten permanent one-to-four family first lien mortgage loans not more than 90 days delinquent and having a loan to value ratio of not more than 80% at origination unless insured to such ratio by an insurer approved by the FNMA or FHLMC.
     On June 30, 2001, the Bank had risk-based capital of $10.5 million (including $10.1 million in core capital and $340,000 in general loss reserves) and risk-weighted assets of $67.7 million or total capital of 15.5% of risk-weighted assets.  This amount was $5.1 million above the 8% requirement in effect on that date.
     The OTS and the FDIC are authorized and, under certain circumstances required, to take certain actions against Banks that fail to meet their capital requirements.  The OTS is generally required to take action to restrict the activities of an "undercapitalized Bank" (generally defined to be one with less than either a 4% core capital ratio, a 4% Tier 1 risk-based capital ratio or an 8% risk-based capital ratio).  Any such Bank must submit a capital restoration plan and until such plan is approved by the OTS may not increase its assets, acquire another institution, establish a branch or engage in any new activities, and generally may not make capital distributions.  The OTS is authorized to impose the additional restrictions, discussed below, that are applicable to significantly undercapitalized Banks.
     As a condition to the approval of the capital restoration plan, any company controlling an undercapitalized Bank must agree that it will enter into a limited capital maintenance guarantee with respect to the institution's achievement of its capital requirements.
     Any savings Bank that fails to comply with its capital plan or is "significantly undercapitalized" (i.e. Tier 1 risk-based or core capital ratios of less than 3% or a risk-based capital ratio of less than 6%) must be made subject to one or more of additional specified actions and operating restrictions mandated by FDICIA.  These actions and restrictions include requiring the issuance of additional voting securities; limitations on asset growth; mandated asset reduction; changes in senior management; divestiture, merger or acquisition of the Bank; restrictions on executive compensation; and any other action the OTS deems appropriate.  A Bank that becomes "critically undercapitalized"(i.e., a tangible capital ratio of 2% or less) is subject to further mandatory restrictions on its activities in addition to those applicable to significantly undercapitalized Banks.  In addition, the OTS must appoint a receiver (or conservator with the concurrence of the FDIC) for a savings Bank, with certain limited exceptions, within 90 days after it becomes critically undercapitalized.
     Any undercapitalized Bank is also subject to other possible enforcement actions by the OTS or the FDIC.  Such actions could include a capital directive, a cease-and-desist order, civil money penalties, the establishment of restrictions on all aspects of the Bank's operations or the appointment of a receiver or conservator or a forced merger into another institution.
     The OTS is also generally authorized to reclassify an Bank into a lower capital category and impose the restrictions applicable to such category if the institution is engaged in unsafe or unsound practices or is in an unsafe or unsound condition.



The imposition by the OTS or the FDIC of any of these measures on Sobieski Bank may have a substantial adverse effect on the Bank's operations and profitability.

Limitations on Dividends and Other Capital Distributions
     OTS regulations impose various restrictions on savings institutions with respect to their ability to make distributions of capital, which include dividends, stock redemptions or repurchases, cash-out mergers and other transactions charged to the capital account.
     Generally, savings institutions, such as the Bank, that before and after the proposed distribution remain well-capitalized, may make capital distributions during any calendar year equal to the greater of 100% of net income for the year-to date period plus retained net income for the two preceding years.  However, an institution deemed to be in need of more than normal supervision by the OTS may have its dividend authority restricted by OTS.  The Bank may pay dividends in accordance with this general authority.
     Savings institutions proposing to make any capital distribution need not submit written notice to the OTS prior to such distribution unless they are, as is the Bank, a subsidiary of a holding company, or would not remain well-capitalized following the distribution.  Savings institutions that do not, or would not meet their current minimum capital requirements following a proposed capital distribution or propose to exceed these net income limitations must obtain OTS approval prior to making such distribution.  The OTS may object to the distribution during that 30-day period based on safety and soundness concerns.Liquidity     Federal regulations require the Bank to maintain sufficient liquidity to maintain its safe and sound operation.  Management believes that the level of the bank liquid assets as well as loan repayments and other sources of funds will be adequate to meet the Company's foreseeable liquidity needs. Qualified Thrift Lender TestAll savings Banks, including Sobieski Bank, are required to meet a qualified thrift lender ("QTL") test to avoid certain restrictions on their operations.  This test requires a savings Bank to have at least 65% of its portfolio assets (as defined by regulation) in qualified thrift investments on a monthly average for nine out of every 12 months on a rolling basis.  As an alternative, the savings bank may maintain 60% of its assets in those assets specified in Section 7701(a)(19) of the Internal Revenue Code.  Under either test, such assets primarily consist of residential housing related loans and investments.  At June 30, 2001, the Bank met the test and has always met the QTL test since its effectiveness.
     Any savings association that fails to meet the QTL test must convert to a national bank charter, unless it requalifies as a QTL and thereafter remains a QTL.  If a Bank does not requalify and converts to a national bank charter, it must remain SAIF-insured until the FDIC permits it to transfer to the Bank Insurance Fund.  If a bank that fails the test has not yet requalified and has not converted to a national bank, its new investments and activities are limited to those permissible for both a savings bank and a national bank, and it is limited to national bank branching rights in its home state.  In addition, the bank is immediately ineligible to receive any new FHLB borrowings and is subject to national bank limits for payment of dividends.

If such bank has not requalified or converted to a national bank within three years after the failure, it must divest of all investments and cease all activities not permissible for a national bank.  In addition, it must repay promptly any outstanding FHLB borrowings, which may result in pre-payment penalties.  If any bank that fails the QTL test is controlled by a holding company, then within one year after the failure, the holding company must register as a bank holding company and become subject to all restrictions on bank holding companies.  See "Regulation-Holding Company Regulation".Community Reinvestment ActUnder the Community Reinvestment Act ("CRA"), every FDIC insured institution has a continuing and affirmative obligation consistent with safe and sound banking practices to help meet the credit needs of its entire community, including low and moderate-income neighborhoods.  The CRA does not establish specific lending requirements or programs for financial institutions nor does it limit an institution's discretion to develop the types of products and services that it believes are best suited to its particular community, consistent with the CRA.  The CRA requires the OTS, in connection with the examination of the Bank, to assess the institution's record of meeting the credit needs of its community and to take such record into account in its evaluation of certain applications, such as a merger or the establishment of a branch, by Sobieski Federal.  An unsatisfactory rating may be used as the basis for the denial of an application by the OTS.
     Due to the heightened attention being given to the CRA in recent years, the Bank may be required to devote additional funds for investment and lending in its local community. The Bank was examined for CRA compliance in September 1999 and received a rating of satisfactory.Transactions with AffiliatesGenerally, transactions between a savings bank or its subsidiaries and its affiliates are required to be on terms as favorable to the bank as transactions with non-affiliates.  In addition, certain of these transactions are restricted to a percentage of the bank's capital.  Affiliates of the Bank include the Company and any company which is under common control with the Bank.  In addition, a savings bank may not lend to any affiliate engaged in activities not permissible for a bank holding company or acquire the securities of most affiliates.  The Bank's subsidiaries are not deemed affiliates; however, the OTS has the discretion to treat subsidiaries of savings banks as affiliates on a case by case basis.
     Certain transactions with directors, officers or controlling persons are also subject to conflict of interest regulations enforced by the OTS.  These conflict of interest regulations and other statutes also impose restrictions on loans to such persons and their related interests.  Among other things, such loans must be made on terms substantially the same as for loans to unaffiliated individuals.Holding Company Regulation     The Company is a unitary savings and loan holding company subject to regulatory over-sight by the OTS.  As such, the Company is required to register and file reports with the OTS and is subject to regulation and examination by the OTS.  In addition, the OTS has enforcement authority over the Holding Company and its non-savings Bank subsidiary which also permits the OTS to restrict or prohibit activities that are determined to be a serious risk to the subsidiary savings Bank.
     As a unitary savings and loan holding company, the Company generally is not subject to activity restrictions.  If the Company acquires control of another savings bank as a separate subsidiary, it would become a multiple savings and loan holding company, and the activities of the company and any of its subsidiaries (other than the Bank or any other SAIF-insured savings bank) would become subject to such restrictions unless such other banks each qualify as a QTL and were acquired in a supervisory acquisition.
     If the Bank fails the QTL test, the Company must obtain the approval of the OTS prior to continuing after such failure, directly or through its other subsidiaries, any business activity other than those approved for multiple savings and loan holding companies or their subsidiaries.  In addition, within one year of such failure the Company must register as, and will become subject to, the restrictions applicable to bank holding companies.  The activities authorized for a bank holding company are more limited than are the activities authorized for a unitary or multiple savings and loan holding company.  See "Regulation-Qualified Thrift Lender Test".
     The Company must obtain approval from the OTS before acquiring control of any other SAIF-insured bank.  Such acquisitions are generally prohibited if they result in a multiple savings and loan holding company controlling savings banks in more than one state.  However, such interstate acquisitions are permitted based on specific state authorization or in a supervisory acquisition of a failing savings bank.Federal Securities LawThe common stock of the Company is registered with the SEC under the Securities Exchange Act of 1934, as amended (the "Exchange Act").  The Company is subject to the information, proxy solicitation, insider trading restrictions and other requirements of the SEC under the Exchange Act.
     Company stock held by persons who are affiliates (generally officers, directors and principal stockholders) of the Company may not be resold without registration or unless sold in accordance with certain resale restrictions.  If the Company meets specified current public information requirements, each affiliate of the Company is able to sell in the public market, without registration, a limited number of shares in any three-month period.Federal Reserve SystemThe Federal Reserve Board requires all depository institutions to maintain non-interest bearings reserves at specified levels against their transaction accounts (primarily checking, NOW and Super NOW checking accounts).  At June 30, 2001, the Bank was in compliance with these reserve requirements.  The balances maintained to meet the reserve requirements imposed by the Federal Reserve Board may be used to satisfy liquidity requirements that may be imposed by the OTS.  See "Regulation-Liquidity".
     Savings banks are authorized to borrow from the Federal Reserve Bank "discount window", but Federal Reserve Board regulations require banks to exhaust other reasonable alternative sources of funds, including FHLB borrowings, before borrowing from the Federal Reserve Bank.Federal Home Loan Bank SystemThe Bank is a member of the FHLB of Indianapolis, which is one of 12 regional FHLB's that administer the home financing credit function of savings banks.  Each FHLB serves as a reserve or central bank for its members within its assigned region.  It is funded primarily from proceeds derived from the sale of consolidated obligations of the FHLB system.  It makes loans to members (i.e. advances) in accordance with policies and procedures established by the board of directors of the FHLB.  These policies and procedures are subject to the regulation and oversight of the Federal Housing Finance Board.  All advances from the FHLB are required to be fully secured by sufficient collateral as determined by the FHLB.  In addition, all long-term advances are required to provide funds for residential home financing.
     As a member, the Bank is required to purchase and maintain stock in the FHLB of Indianapolis.  At June 30, 2001, the Bank had $1.8 million of FHLB stock, which was in compliance with this requirement.  During fiscal 2001 and prior years, the Bank

received substantial dividends on its FHLB stock.  The dividends averaged 8.2% for fiscal year 2001.  For the years ended June 30, 2001 and 2000, dividends paid by the FHLB of Indianapolis to the Bank totaled $126,000 and $116,000, respectively.
     Under federal law, the FHLB's are required to provide funds for the resolution of troubled savings Banks and to contribute to low and moderately priced housing programs through direct loans or interest subsidies or other advantages targeted for community investment and low and moderate-income housing projects.  These contributions have affected adversely the level of FHLB dividends paid and could continue to do so in the future.  A reduction in value of the Bank's FHLB stock may result in a corresponding reduction in the Bank's capital.Federal and State TaxationIn addition to the regular income tax, corporations, including savings banks such as the Bank, generally are subject to a minimum tax.  An alternative minimum tax is imposed at a minimum tax rate of 20% on alternative minimum taxable income, which is the sum of a corporation's regular taxable income (with certain adjustments) and tax preference items, less any available exemption.  The alternative minimum tax is imposed to the extent it exceeds the corporation's regular income tax and net operating losses can offset no more than 90% of alternative minimum taxable income.  For taxable years beginning after 1986 and before 1996, corporations, including savings Banks such as the Bank, are also subject to an environmental tax equal to 0.12% of the excess of alternative minimum taxable income for the taxable year (determined without regard to net operating losses and the deduction for the environmental tax) over $2 million.
     The Bank files federal income tax returns on a fiscal year basis using the accrual method of accounting.  The Company files consolidated federal income tax returns with the Bank and its subsidiaries.  Savings banks, such as the Bank, that file federal income tax returns as part of a consolidated group are required by applicable Treasury regulations to reduce their taxable income for purposes of computing the percentage bad debt deduction for losses attributable to activities of the non-savings bank members of the consolidated group that are functionally related to the activities of the savings bank member.
     The Bank has not been audited by the IRS with respect to federal income tax returns through June 30, 2001.  With respect to years examined by the IRS, either all deficiencies have been satisfied or sufficient reserves have been established to satisfy asserted deficiencies.  In the opinion of management, any examination of still open returns (including returns of subsidiaries and predecessors of, or entities merged into, the Bank) would not result in a deficiency which could have a material adverse effect on the financial condition of the Bank and its consolidated subsidiaries.
     Indiana Taxation.  The Company and the Bank are subject to an 8.5% franchise tax, imposed by the State of Indiana, on the net income of financial (including thrift) institutions, exempting them from the current gross income, supplemental net income and intangible taxes.  Net income for franchise tax purposes will constitute federal taxable income before net operating loss deductions and special deductions, adjusted for certain items, including Indiana income taxes, charitable contributions, tax exempt interest and bad

debt.  Other applicable Indiana taxes include sales, use and property taxes.
     Delaware Taxation.  As a Delaware holding company, the Company is exempt from Delaware corporate income tax but is required to file an annual report with and pay an annual fee to the State of Delaware.  The Company is also subject to an annual franchise tax imposed by the State of Delaware.Item 2. Description of Property     The Bank conducts its business through its main office and two branch offices located in South Bend, Indiana.  The following table sets forth information relating to each of the Bank's offices as of June 30, 2001.  The total net book value of the Bank's premises and equipment (including land, buildings and leasehold improvements and furniture, fixtures and equipment) at June 30, 2001 was approximately $1,825,000.  See Note 5 of the "Notes to Consolidated Financial Statements".

|Location                                                | Year
Leasedor Acquired | Total
Approximate
SquareFootage | Net Book Value atJune 30, 2000
|------------------------------------------------------- | ---------------------- | ------------------------------- | ------------------------------
|                                                        |                        |                                 | (In Thousands)                
|Main Office:                                            |                        |                                 |                               
|2930 West Cleveland Road
     South Bend, Indiana 46628 | 1995                   | 10,080                          | $1,419                        
|Branch Offices:                                         |                        |                                 |                               
|4606 W. Western Ave.
     Belleville Shopping Center    | 1978                   | 1,600                           | $  -0-                        
|                                                        |                        |                                 |                               
|740 S. Walnut Street                                    | 1952                   | 1,900                           | $   11                        

Sobieski Bank believes that its current facilities including its main office facilities are adequate to meet the present and foreseeable needs of the Bank and the Company.
     The Bank maintains an on-line database with a service bureau servicing financial institutions.  The net book value of the data processing and computer equipment utilized by the Bank at June 30, 2001 was $119,000.Item 3.  Legal Proceedings
     The Company and Sobieski Bank are involved, from time to time, as plaintiff or defendant in various legal actions arising in the normal course of their businesses.  While the ultimate outcome of these proceedings cannot be predicted with certainty, it is the opinion of management, after consultation with counsel representing Sobieski Bank and the Company in the proceedings, that the resolution of these proceedings should not have a material effect on the Company's financial position or results of operations on a consolidated basis.

Item 4.  Submission of Matters to a Vote of Security Holders
     No matter was submitted to a vote of security holders, through the solicitation of proxies or otherwise, during the quarter ended June 30, 2001.
                                                         PART II
Item 5.  Market for common equity and Related Stockholder Matters
     Page 48 of the attached 2001 Annual Report to Stockholders is herein incorporated by reference.Item 6.  Management's Discussion and Analysis of Financial Condition and Results of              Operation
     Pages 6 to 15 of the attached 2001 Annual Report to Stockholders are herein incorporated by reference.Item 7.  Financial Statements
     The following pages of the attached 2001 Annual Report to Stockholders are herein incorporated by reference.



|Report of Independent Accountants                                                                        | Page 16   
|-------------------------------------------------------------------------------------------------------- | ----------
|Consolidated Statements of Financial Condition at 
   June 30, 2001 and 2000                             | Page 17   
|Consolidated Statement of Income for the years
   ended June 30, 2001 and 2000                           | Page 18   
|Consolidated Statements of Comprehensive Income for
   years ended June 30, 2001 and 2000                | Page 19   
|Consolidated Statements of Changes in Stockholders' Equity
   for the years ended June 30, 2001 and 2000 | Page 20   
|Consolidated Statements of Cash Flows for the years
   ended June 30, 2001 and 2000                      | Page 21-22
|Notes to Consolidated Financial Statements                                                               | Page 23-47

Item 8.  Changes in and Disagreements with Accountants on Accounting and Financial              Disclosure     The information required by Item 304 of regulation S-B (regarding the change in the Company's accountants) was previously reported in a current report on Form 8-K filed on April 26, 2000.

Item 9.  Directors, Executive Officers, Promoters and Control Persons; Compliance              with Section 16(a) of the Exchange ActDirectors     Information concerning directors of the Company is incorporated herein by reference from the Company's definitive Proxy Statement for the 2001 Annual Meeting of Shareholders, a copy of which has been filed with the Securities and Exchange Commission.Executive Officers
     Information concerning the executive officers of the Company is incorporated herein by reference from "Executive Officers of the Company" contained in Part I of this Form 10-KSB.Section 16(a) Beneficial Ownership Reporting Compliance     Section 16(a) of the Exchange Act requires the Company's officers and directors, and persons owning more than 10% of a registered class of the Company's equity securities, to file periodic reports of ownership and changes in ownership with the Securities and Exchange Commission and to provide the Company with copies of such reports.  Based soley upon information provided to the Company by the directors and officers subject to Section 16(a), all Section 16(a) filing requirements applicable to such persons were complied with during fiscal 2001.Item 10.  Executive Compensation     Information concerning executive compensation is incorporated herein by reference from the Company's definitive Proxy Statement for the 2001 Annual Meeting of Shareholders, a copy of which has been filed with the Securities and Exchange Commission.Item 11.  Security Ownership of Certain Beneficial Owners and Management     Information concerning security ownership of certain beneficial owners and management is incorporated herein by reference from the Company's definitive Proxy Statement for the 2001 Annual Meeting of Shareholders, a copy of which has been filed with the Securities and Exchange Commission.Item 12.  Certain Relationship and Related Transactions     Information concerning certain relationships and transactions is incorporated herein by reference from the Company's definitive Proxy Statement for the 2001 Annual Meeting of Shareholders, a copy of which has been filed with the Securities and Exchange Commission.

Item 13.  Exhibits and Reports on Form 8-K               (a)  Exhibits:

|Regulation S-BExhibit Number | Document | Reference to
Prior Filing or
Exhibit NumberAttached Hereto                  
|---------------------------- | -------- | ----------------------------------------------------------------------------
|2                            |          | Plan of Acquisition, Reorganization, Arrangement,
Liquidation or Succession 
|4.1                          |          | Certificate of Incorporation                                                
|4.2                          |          | Bylaws                                                                      
|9                            |          | Voting Trust Agreement                                                      
|10                           |          | Executive Compensation Plans and Arrangements:                              
|                             |          | Employee Stock Ownership Plan                                               
|                             |          | Stock Option and Incentive Plan                                             
|                             |          | Recognition and Retention Plan                                              
|                             |          | Sobieski Bancorp, Inc. Fee Continuation Plan for
          Retired Directors
|                             |          | Sobieski Bank Bank Fee
          Continuation Plan for Retired Directors    
|                             |          | Sobieski Bank Bank
          Supplemental Executive Retirement Plan         
|                             |          | Employment contract with Thomas F. Gruber                                   
|11                           |          | Statement re: computation of per share earnings                             
|13                           |          | Annual Report to Security Holders                                           
|16                           |          | Letter re: change in certifying accountant                                  
|18                           |          | Letter re: change in accounting principles                                  
|21                           |          | Subsidiaries of Registrant                                                  
|22                           |          | Published report regarding matter submitted to vote                         
|23                           |          | Consent of Crowe, Chizek and Company LLP                                    
|24                           |          | Power of Attorney                                                           
|                             |          |                                                                             

_______________

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

|                                                                                                                                                                                                              | SOBIESKI BANCORP, INC.                                                                                           
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------
|Date: September 24, 2001                                                                                                                                                                                      | By: /s/Thomas F. Gruber                                                                                          
|                                                                                                                                                                                                              | Thomas F. Gruber
        (President and Chief Executive
        Officer)
        (Duly Authorized Representative)
|Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
|                                                                                                                                                                                                              |                                                                                                                  
|/s/Robert J. UrbanskiRobert J. Urbanski, Chairman of the Board                                                                                                                                                | /s/Joseph A. GornyJoseph A. Gorny, Director                                                                      
|Date: September 24, 2001                                                                                                                                                                                      | Date: September 24, 2001                                                                                         
|                                                                                                                                                                                                              |                                                                                                                  
|/s/Joseph F. NagyJoseph F. Nagy, Director                                                                                                                                                                     | /s/Leonard J. DobosiewiczLeonard J. Dobosiewicz, Director                                                        
|Date: September 24, 2001                                                                                                                                                                                      | Date: September 24, 2001                                                                                         
|                                                                                                                                                                                                              |                                                                                                                  
|/s/Richard J. CullarRichard J. Cullar, Director                                                                                                                                                               | /s/Arthur Skale                                                                                                  
|Arthur Skale, Chief Financial Officer                                                                                                                                                                        
|Date: September 24, 2001                                                                                                                                                                                      | (Principal Financial and Accounting                                                                              
|                                                                                                                                                                                                              | Officer)                                                                                                         
|                                                                                                                                                                                                              | Date: September 24, 2001                                                                                         
|/s/Thomas F. GruberThomas F. Gruber, President and 
Chief Executive Officer and Director(Principal Executive Officer)                                                                                         |                                                                                                                  
|Date: September 24, 2001                                                                                                                                                                                      |                                                                                                                  

INDEX TO EXHIBITS

|13 |  | Annual Report to Security Holders       
|-- |  | ----------------------------------------
|21 |  | Subsidiaries of the Registrant          
|23 |  | Consent of Crowe, Chizek and Company LLP

Exhibit 13

Exhibit 21

SUBSIDIARIES OF THE REGISTRANT

|Parent                 | Subsidiary    | State ofIncorporation | Percentageof Ownership
|---------------------- | ------------- | --------------------- | ----------------------
|Sobieski Bancorp, Inc. | Sobieski Bank | United States         | 100%                  

Exhibit 23

Consent of Independent Auditors

We hereby consent to the incorporation by reference in the Registration Statements of Sobieski Bancorp, Inc. on Forms S-8 (Registration No. 333-40983 and Registration No. 333-40985) of our report dated August 16, 2001 on the consolidated financial statements of Sobieski Bancorp, Inc., which report is included in the 2001 Annual Report on Form 10-KSB of Sobieski Bancorp, Inc.
                                                                                         /s/Crowe, Chizek and Company LLP
South Bend, Indiana

September 24, 2001