UNITED STATES
                    SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C.  20549


                                FORM 10-QSB

(Mark One)

[X]  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

For the quarterly period ended          September 30, 2003
                              ____________________________________

                                     OR

[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from ____________ to _______________

Commission File Number:    033233
                        ___________


                              PFS BANCORP, INC.
______________________________________________________________________________
     (Exact name of small business issuer as specified in its charter)



     Indiana                                       35-2142534
____________________________________          ________________________________
(State or other jurisdiction of               (IRS Employer Identification No.)
incorporation or organization)



              Second & Bridgeway Streets, Aurora, Indiana  47001
______________________________________________________________________________
                   (Address of principal executive offices)


                                (812) 926-0631
______________________________________________________________________________
                         (Issuer's telephone number)


                                     N/A
______________________________________________________________________________
(Former name, former address and former fiscal year, if changed since last
report)


                    APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:
November 10, 2003 - 1,473,728 shares of common stock
_____________________________________________________


Transitional Small Business Disclosure Format (Check one):  Yes [ ] No [X]


                                  Page 1 of 19

                              INDEX

                                                                  Page
                                                                  ----
PART I    -    FINANCIAL INFORMATION

               Consolidated Statements of Financial Condition        3

               Consolidated Statements of Earnings                   4

               Consolidated Statements of Comprehensive Income       5

               Consolidated Statements of Cash Flows                 6

               Notes to Consolidated Financial Statements            8


               Management's Discussion and Analysis of
               Financial Condition and Results of
               Operations                                           12


PART II  -     OTHER INFORMATION                                    18

SIGNATURES                                                          19






                                  Page 2 of 19

                                PFS Bancorp, Inc.

               CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

                       (In thousands, except share data)
<TABLE>

                                                                September 30,  December 31,
     ASSETS                                                              2003          2002

                                                                       <c>           <c>
Cash and due from banks                                                $  966        $  819
Interest-bearing deposits in other financial institutions               5,125         4,406
                                                                      -------       -------
     Cash and cash equivalents                                          6,091         5,225

Investment securities designated as available for sale -  at market    11,872        15,142
Investment securities held to maturity - at amortized cost, which
  approximates market                                                     152           161
Loans receivable - net                                                 96,720        95,702
Office premises and equipment - at depreciated cost                     1,066         1,170
Real estate acquired through foreclosure                                  169           228
Federal Home Loan Bank stock - at cost                                    748           730
Accrued interest receivable                                               402           446
Prepaid expenses and other assets                                         150           176
Prepaid federal income taxes                                              139           -
Deferred federal income taxes                                             116            56
                                                                      -------       -------
     Total assets                                                    $117,625      $119,036
                                                                      =======       =======

     LIABILITIES AND SHAREHOLDERS' EQUITY

Deposits                                                             $ 89,837      $ 89,420
Advances from the Federal Home Loan Bank                                  -           1,000
Advances by borrowers for taxes and insurance                             111            80
Accrued interest payable                                                   13            26
Other liabilities                                                       1,074           883
Accrued federal income taxes                                              -              30
                                                                      -------       -------
     Total liabilities                                                 91,035        91,439

Shareholders' equity
  Preferred stock, 5,000,000 shares authorized, $.01 par value;
    no shares issued                                                      -             -
  Common stock - 10,000,000 shares authorized, $.01 par value;
    1,551,293 shares issued                                                16            16
  Additional paid-in capital                                           14,971        14,971
  Retained earnings - restricted                                       14,007        13,723
  Less 77,565 shares of treasury stock - at cost                       (1,282)          -
  Shares acquired by stock benefit plans                               (1,923)       (1,994)
  Accumulated other comprehensive income - unrealized gains on
    securities designated as available for sale, net of related
    tax effects                                                           801           881
                                                                      -------       -------
     Total shareholders' equity                                        26,590        27,597
                                                                      -------       -------
     Total liabilities and shareholders' equity                      $117,625      $119,036
                                                                      =======       =======
</TABLE>




                                     3

                             PFS Bancorp, Inc.

                  CONSOLIDATED STATEMENTS OF EARNINGS

                 (In thousands, except per share data)

<TABLE>
                                                                     Nine months ended  Three months ended
                                                                         September 30,       September 30,
                                                                       2003       2002     2003       2002

                                                                   <c>        <c>      <c>        <c>
Interest income
  Loans                                                              $4,022     $4,819   $1,293     $1,506
  Investment securities                                                 313        265       95        115
  Interest-bearing deposits and other                                    63        162       14         44
                                                                      -----      -----    -----      -----
     Total interest income                                            4,398      5,246    1,402      1,665

Interest expense
  Deposits                                                            1,517      2,264      449        726
  Borrowings                                                              2        -        -          -
                                                                      -----      -----    -----      -----
     Total interest expense                                           1,519      2,264      449        726
                                                                      -----      -----    -----      -----
     Net interest income                                              2,879      2,982      953        939

Provision for losses on loans                                            48         88      -           24
                                                                      -----      -----    -----      -----
     Net interest income after provision for
       losses on loans                                                2,831      2,894      953        915

Other operating income
   Loss on sale of investment securities                                (28)       -        -          -
   Gain on sale of repossessed property                                  10        -        -          -
   Other operating                                                      304        250      111         85
                                                                      -----      -----    -----      -----
     Total other operating income                                       286        250      111         85

General, administrative and other expense
  Employee compensation and benefits                                  1,152      1,059      375        377
  Occupancy and equipment                                               257        212       90         77
  Data processing                                                       167        289       64        110
  Federal deposit insurance premiums                                     39         43       13         14
  Other operating                                                       405        404      132        132
   Provision for losses on real estate acquired through foreclosure      39        -         39        -
                                                                      -----      -----    -----      -----
      Total general, administrative and other expense                 2,059      2,007      713        710
                                                                      -----      -----    -----      -----
      Earnings before income taxes                                    1,058      1,137      351        290

Income taxes
  Current                                                               455        517      146        177
  Deferred                                                              (19)       (36)       1        (37)
                                                                      -----      -----    -----      -----
     Total income taxes                                                 436        481      147        140
                                                                      -----      -----    -----      -----
     NET EARNINGS                                                    $  622     $  656   $  204     $  150
                                                                      =====      =====    =====      =====
     EARNINGS PER SHARE
       Basic                                                           $.45       $.45     $.15       $.10
                                                                      =====      =====    =====      =====
       Diluted                                                         $.45       $.45     $.15       $.10
                                                                      =====      =====    =====      =====
</TABLE>
                                     4

                             PFS Bancorp, Inc.

              CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

                              (In thousands)
<TABLE>
                                                                    Nine months ended  Three months ended
                                                                       September 30,       September 30,
                                                                      2003      2002     2003       2002

                                                                   <c>       <c>      <c>        <c>
Net earnings                                                          $622      $656     $204       $150

Other comprehensive income (loss), net of tax:
  Unrealized holding gains (losses) on securities during the period,
    net of taxes (benefits) of $(50), $(41), $(4) and $19 for the
    respective periods                                                 (98)      (79)      (7)        36

Reclassification adjustment for realized losses included in earnings,
  net of tax benefits of $10 in 2003                                    18       -        -          -
                                                                       ---       ---      ---        ---

Comprehensive income                                                  $542      $577     $197       $186
                                                                       ===       ===      ===        ===

Accumulated comprehensive income                                      $801      $803     $801       $803
                                                                       ===       ===      ===        ===
</TABLE>




























                                     5

                             PFS Bancorp, Inc.

                   CONSOLIDATED STATEMENTS OF CASH FLOWS

                   For the nine months ended September 30,
                              (In thousands)
<TABLE>
                                                                           2003         2002
<c>                                                                         <c>          <c>
Cash flows from operating activities:
  Net earnings for the period                                          $    622      $   656
  Adjustments to reconcile net earnings to net cash
  provided by (used in) operating activities:
    Amortization of deferred loan origination fees                          (48)         (51)
    Amortization of premiums and discounts on investment securities - net    62           46
    Depreciation                                                            133          100
    Provision for losses on loans                                            48           88
    Provision for losses on real estate acquired through foreclosure         39          -
    Amortization expense of stock benefit plan                               71          -
    Loss on sale of investment securities                                    28          -
    Gain on sale of repossessed assets                                      (10)         -
    Increase (decrease) in cash due to changes in:
      Accrued interest receivable                                            44          (56)
      Prepaid expenses and other assets                                      26          (80)
      Other liabilities                                                     191          216
      Accrued interest payable                                              (13)          (7)
      Income taxes
        Current                                                            (169)          50
        Deferred                                                            (19)         (36)
                                                                          -----          ---
          Net cash provided by operating activities                       1,005          926

Cash flows provided by (used in) investing activities:
  Purchase of investment securities designated as available for sale    (23,630)     (23,503)
  Proceeds from maturities and repayment of investment securities        23,669       15,271
  Proceeds from sale of investment securities                             3,029          -
  Loan principal repayments                                              27,266       21,527
  Loan disbursements                                                    (28,254)     (19,076)
  Purchase of Federal Home Loan Bank stock                                  (18)         (31)
  Purchase of office premises and equipment                                 (29)        (334)
  Proceeds from sale of real estate acquired through foreclosure            -             82
                                                                          -----        -----
          Net cash provided by (used in) investing activities             2,033       (6,064)

Cash flows provided by (used in) financing activities:
  Net increase in deposits                                                  417        2,520
  Proceeds from Federal Home Loan Bank advances                           2,500          -
  Repayment of Federal Home Loan Bank advances                           (3,500)         -
  Advances by borrowers for taxes and insurance                              31           42
  Shares acquired by stock benefit plan                                     -         (1,021)
  Purchase of treasury shares                                            (1,282)         -
  Dividends on common shares                                               (338)        (155)
                                                                          -----        -----
          Net cash provided by (used in) financing activities            (2,172)       1,386
                                                                          -----        -----
Net increase (decrease) in cash and cash equivalents                        866       (3,752)

Cash and cash equivalents at beginning of period                          5,225       13,854
                                                                          -----       ------
Cash and cash equivalents at end of period                             $  6,091      $10,102
                                                                          =====       ======
</TABLE>


                                     6

                              PFS Bancorp, Inc.

              CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

                   For the nine months ended September 30,
                               (In thousands)


                                                             2003        2002

Supplemental disclosure of cash flow information:
  Cash paid during the period for:
    Income taxes                                          $   649     $   458
                                                            =====       =====
    Interest on deposits and borrowings                   $ 1,532     $ 2,271
                                                            =====       =====
Supplemental disclosure of noncash investing activities:
  Unrealized losses on securities designated as available
    for sale, net of related tax effects                  $   (80)    $   (79)
                                                            =====       =====
  Transfers from loans to real estate acquired through
       foreclosure                                        $    -      $   259
                                                            =====       =====

































                                     7

                             PFS Bancorp, Inc.

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     For the nine and three months ended September 30, 2003 and 2002


1.  Basis of Presentation
    ---------------------
Mutual to Stock Conversion.  On October 11, 2001, PFS Bancorp, Inc.
(the "Company") completed the mutual-to-stock conversion (the
"Conversion") of Peoples Federal Savings Bank ("Peoples" or the
"Savings Bank"), and the sale of 1,520,875 shares of Company common
stock, par value $0.01 per share, at $10.00 per share ("Company
Common Stock") for total gross proceeds of $15.2 million.  The costs
of issuing the common stock were deducted from the sale proceeds of
the offering, resulting in total net proceeds from the offering
equaling approximately $14.6 million.  As an integral part of the
Conversion and in furtherance of the Savings Bank's commitment to
the communities that it serves, Peoples and the Company have
established a charitable foundation known as PFS Community
Foundation (the "Foundation") and contributed 30,418 shares of
Company Common Stock to the Foundation.  The Foundation provides
funding to support charitable causes and community development
activities which complement the Savings Bank's existing community
activities.  In addition, the Company established an employee stock
ownership plan ("ESOP") for the employees of the Company and Peoples
which became effective with the completion of the Conversion.

Financial Statement Presentation.  The Company was incorporated
under Indiana law in September 2001 by Peoples in connection with
the Conversion.  Upon consummation of the Conversion on October 11,
2001, the Company became the holding company for the Savings Bank.

The accompanying unaudited consolidated financial statements were
prepared in accordance with instructions for Form 10-QSB and,
therefore, do not include information or footnotes necessary for a
complete presentation of financial position, results of operations
and cash flows in conformity with accounting principles generally
accepted in the United States of America.  Accordingly, these
financial statements should be read in conjunction with the
financial statements and notes thereto of the Company for the year
ended December 31, 2002.  However, in the opinion of management, all
adjustments (consisting of only normal recurring accruals) which are
necessary for a fair presentation of the financial statements have
been included.  The results of operations for the nine and three
month periods ended September 30, 2003, are not necessarily
indicative of the results which may be expected for the entire year.

2.  Principles of Consolidation
    ---------------------------
The accompanying consolidated financial statements include the
accounts of the Company and its wholly-owned subsidiary, the Savings
Bank.  All significant intercompany items have been eliminated.

3.  Earnings Per Share
    ------------------
Basic earnings per share is computed based upon the weighted-average
common shares outstanding during the period less shares in the ESOP
that are unallocated and not committed to be released.  Weighted-
average common shares deemed outstanding gives effect to 97,336 and
109,503 unallocated ESOP shares as of September 30, 2003 and 2002,
respectively.  Diluted earnings per share is computed taking into
consideration common shares outstanding and the dilutive effect of
additional potential common shares issuable under the Company's
stock option plan.  The computations are as follows:


                                     8

                           PFS Bancorp, Inc.

      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

   For the nine and three months ended September 30, 2003 and 2002


3.  Earnings Per Share (continued)
    ------------------------------
<TABLE>
                                  For the nine months ended   For the three months ended
                                        September 30,                 September 30,
                                        2003      2002            2003       2002

                                  <c>        <c>             <c>        <c>
Weighted-average common shares
  outstanding (basic)                1,394,860  1,441,790       1,376,392  1,441,790
Dilutive effect of assumed exercise
  of stock options                       1,793        -             1,793        -
                                     ---------  ---------       ---------  ---------
Weighted-average common shares
  outstanding (diluted)              1,396,653  1,441,790       1,378,185  1,441,790
                                     =========  =========       =========  =========
</TABLE>

4.  Effects of Recent Accounting Pronouncements
    -------------------------------------------
In September 2002, the Financial Accounting Standards Board (the
"FASB") issued Statement of Financial Accounting Standards ("SFAS")
No. 146, "Accounting for Costs Associated with Exit or Disposal
Activities."  SFAS No. 146 provides financial accounting and
reporting guidance for costs associated with exit or disposal
activities, including one-time termination benefits, contract
termination costs other than for a capital lease, and costs to
consolidate facilities or relocate employees.  SFAS No. 146 is
effective for exit or disposal activities initiated after December
31, 2002.  Management adopted SFAS No. 146 effective January 1,
2003, without material effect on the Company's financial condition
or results of operations.

In December 2002, the FASB issued SFAS No. 148, "Accounting for
Stock-Based Compensation - Transition and Disclosure."  SFAS No. 148
amends SFAS No. 123, "Accounting for Stock-Based Compensation," to
provide alternative methods of transition for a voluntary change to
the fair value based method of accounting for stock-based employee
compensation.  In addition, SFAS No. 148 amends the disclosure
requirements of SFAS No. 123 to require prominent disclosures in
both annual and interim financial statements about the method of
accounting for stock-based employee compensation and the effect of
the method used on reported results.  SFAS No. 148 is effective for
fiscal years beginning after December 15, 2002.  The interim
disclosure provisions are effective for financial reports containing
financial statements for interim periods beginning after December
15, 2002.  Management adopted the disclosure provisions of SFAS No.
148 effective June 30, 2003.  SFAS No. 148 is not expected to have a
material effect on the Company's financial condition or results of
operations.

In January 2003, the FASB issued FASB Interpretation No. 46 ("FIN
46"), "Consolidation of Variable Interest Entities." FIN 46 requires
a variable interest entity to be consolidated by a company if that
company is subject to a majority of the risk of loss from the
variable interest entity's activities or entitled to receive a
majority of the entity's residual returns, or both. FIN 46 also
requires disclosures about variable interest entities that a company
is not required to consolidate, but in which it has a significant
variable interest. The consolidation requirements of FIN 46 apply
immediately to variable interest entities created after January 31,
2003. The consolidation requirements apply to existing entities in
the first fiscal year or interim period beginning after June 15,
2003. Certain of the disclosure requirements apply in all financial
statements issued after January 31, 2003, regardless of when the
variable interest entity was established. The Company adopted the
provisions of FIN 46 effective January 31, 2003, without material
effect on its financial statements.


                                     9

                            PFS Bancorp, Inc.

        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

    For the nine and three months ended September 30, 2003 and 2002


4.  Effects of Recent Accounting Pronouncements (continued)
    -------------------------------------------------------
In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement
133 on Derivative Instruments and Hedging Activities" which
clarifies certain implementation issues raised by constituents and
amends SFAS No. 133, "Accounting for Derivative Instruments and
Hedging Activities," to include the conclusions reached by the FASB
on certain FASB Staff Implementation Issues that, while inconsistent
with Statement 133's conclusions, were considered by the Board to be
preferable; amends SFAS No. 133's discussion of financial guarantee
contracts and the application of the shortcut method to an interest-
rate swap agreement that includes an embedded option and amends
other pronouncements.

The guidance in Statement 149 is effective for new contracts entered
into or modified after June 30, 2003 and for hedging relationships
designated after that date.

Management adopted SFAS No. 149 effective July 1, 2003, as required,
without material effect on the Company's financial position or
results of operations.

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and
Equity," which changes the classification in the statement of
financial position of certain common financial instruments from
either equity or mezzanine presentation to liabilities and requires
an issuer of those financial statements to recognize changes in fair
value or redemption amount, as applicable, in earnings.  SFAS No.
150 requires an issuer to classify certain financial instruments as
liabilities, including mandatorily redeemable preferred and common
stocks.

SFAS No. 150 is effective for financial instruments entered into or
modified after May 31, 2003 and, with one exception, is effective at
the beginning of the first interim period beginning after June 15,
2003 (July 1, 2003 as to the Company).  The effect of adopting SFAS
No. 150 must be recognized as a cumulative effect of an accounting
change as of the beginning of the period of adoption.  Restatement
of prior periods is not permitted.  Management adopted SFAS No. 150
effective July 1, 2003, as required, without material effect on the
Company's financial statements.

5.  Stock Option Plan
    -----------------
In April 2002, the Board of Directors adopted the PFS Bancorp,
Inc. Stock Option Plan (the "Plan") that provides for the issuance
of 152,088 shares of authorized but unissued shares of common stock
at fair value at the date of grant.  Options granted in June 2003
totaled 62,228 at an exercise price equal to fair value of $16.85.
The Plan provides that one-fifth of the options granted become
exercisable on each of the first five anniversaries of the date of
grant.  No options were granted in 2002.

The Company accounts for the Plan in accordance with SFAS No. 123,
"Accounting for Stock-Based Compensation," which contains a fair
value-based method for valuing stock-based compensation that
entities may use, which measures compensation cost at the grant date
based on the fair value of the award.  Compensation is then
recognized over the service period, which is usually the vesting
period.  Alternatively, SFAS No. 123 permits entities to continue to
account for stock options and similar equity instruments under
Accounting Principles Board ("APB") Opinion No. 25, "Accounting for
Stock Issued to Employees."  Entities that continue to account for
stock options using APB Opinion No. 25 are required to make pro
forma disclosures of net earnings and earnings per share, as if the
fair value-based method of accounting defined in SFAS No. 123 had
been applied.

                                     10

                            PFS Bancorp, Inc.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

      For the nine and three months ended September 30, 2003 and 2002


5.  Stock Option Plan (continued)
    -----------------------------
The Company applies APB Opinion No. 25 and related Interpretations
in accounting for the Plan.  Accordingly, no compensation cost had
been recognized for the Plan.  Had compensation cost for the Plan
been determined based on the fair value at the grant date for awards
under the Plan consistent with the accounting method utilized in
SFAS No. 123, the Company's net earnings and earnings per share
would have been reported as the pro forma amounts indicated below:

                                       Nine months ended    Three months ended
                                       September 30, 2003   September 30, 2003

Net earnings (In thousands)
                           As reported        $622                  $204
  Stock-based compensation, net of tax          (7)                   (7)
                                               ---                   ---
                             Pro-forma        $615                  $197
                                               ===                   ===
Earnings per share
 Basic                     As reported        $.45                  $.15
  Stock-based compensation, net of tax        (.01)                 (.01)
                                               ---                   ---
                             Pro-forma        $.44                  $.14
                                               ===                   ===
 Diluted                   As reported        $.45                  $.15
  Stock-based compensation, net of tax        (.01)                 (.01)
                                               ---                   ---
                             Pro-forma        $.44                  $.14
                                               ===                   ===

A summary of the status of the Plan as of and for the period ended September
30, 2003 is presented below:

                                                               Weighted-
                                                                average
                                                                exercise
                                                    Shares        price

Outstanding at beginning of period                     -         $   -
Granted                                             62,228         16.85
Exercised                                              -             -
Forfeited                                              -             -
                                                    ------         -----
Outstanding at end of period                        62,228       $ 16.85
                                                    ======         =====
Options exercisable at period-end                      -         $   -
                                                    ======         =====
Weighted-average fair value of options granted
  during the period                                              $  3.82
                                                                   =====

The following information applies to options outstanding at September 30, 2003:

Number outstanding                                     62,228
Range of exercise prices                               $16.85
Weighted-average exercise price                        $16.85
Weighted-average remaining contractual life        9.75 Years


                                     11

                            PFS Bancorp, Inc.

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


Discussion of Financial Condition Changes from December  31, 2002 to
September 30, 2003
--------------------------------------------------------------------
At September 30, 2003, the Company's assets totaled $117.6 million, a
decrease of $1.4 million, or 1.2%, compared to total assets at
December 31, 2002.  The decrease in assets was comprised primarily of
a $3.3 million decrease in investment securities.  Proceeds from
maturities, sales and repayments of investment securities were used to
purchase other investment securities, fund the Company's stock repurchase
and to repay borrowings.

Liquid assets (i.e. cash and interest-bearing deposits) increased by
$866,000, or 16.6%, over December 31, 2002 levels, to a total of $6.1
million at September 30, 2003.  Investment securities totaled $12.0
million at September 30, 2003, a decrease of $3.3 million, or 21.4%,
from December 31, 2002 levels.  The decrease resulted primarily from
maturities and sales of $23.7 million and $3.0 million, respectively,
which were partially offset by purchases totaling $23.6 million during
the nine month period.

Loans receivable increased by $1.0 million, or 1.1%, during the nine
month period ended September 30, 2003, to a total of $96.7 million.
Loan disbursements amounted to $28.3 million and were partially offset
by principal repayments of $27.3 million.  During the nine months ended
September 30, 2003, loan originations were comprised of $19.2 million
in loans secured by one- to four-family residential real estate, $4.5
million in loans secured by commercial and nonresidential real estate
and $4.6 million in consumer and other loans.

The allowance for loan losses totaled $748,000 and $764,000 at
September 30, 2003 and December 31, 2002, respectively.  Nonperforming
and impaired loans totaled $1.1 million and $901,000 at September 30,
2003 and December 31, 2002, respectively.  The allowance for loan
losses represented 68.6% and 84.8% of nonperforming and impaired loans
as of September 30, 2003 and December 31, 2002, respectively.  The
allowance represented approximately .77% and .80% of the total loan
portfolio at September 30, 2003 and December 31, 2002, respectively.
At September 30, 2003, nonperforming and impaired loans were comprised
of $1.0 million in loans secured by one- to four-family residential
real estate and $47,000 in commercial, consumer and other loans.
Management believes such loans are adequately collateralized and does
not presently expect to incur any material losses on such loans.
Although management believes that its allowance for loan losses at
September 30, 2003, was sufficient to cover known and inherent losses
in the loan portfolio based upon the available facts and
circumstances, there can be no assurance that additions to such
allowance will not be necessary in future periods, which could
adversely affect the Company's results of operations.

Deposits totaled $89.8 million at September 30, 2003, an increase of
$417,000, or .5%, over December 31, 2002 levels.  The growth in
deposits resulted primarily from management's efforts to achieve a
moderate rate of growth through marketing and pricing strategies.
Such increase was offset by the net reduction in Federal Home Loan Bank
advances of $1.0 million.

Shareholders' equity amounted to $26.6 million at September 30, 2003,
a decrease of $1.0 million, or 3.6%, from December 31, 2002 levels.
The decrease resulted primarily from the Company's $1.3 million
repurchase of its common stock for treasury through a 5% stock
repurchase program which was initiated and completed during the
quarter ending March 31, 2003.  The decrease was also attributable to
an $80,000 decline in unrealized gains on securities designated as
available for sale and payment of dividends of $338,000, which were
partially offset by net earnings of $622,000 and $71,000 of
amortization related to a distribution of shares in connection with
the Company's Recognition & Retention Plan.

Peoples is required to meet minimum capital standards promulgated by
the Office of Thrift Supervision ("OTS").  At September 30, 2003,
Peoples' regulatory capital was well in excess of the minimum capital
requirements.

                                     12

                             PFS Bancorp, Inc.

     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                  AND RESULTS OF OPERATIONS (CONTINUED)


Comparison of Operating Results for the Three-Month Periods Ended
September 30, 2003 and 2002
-----------------------------------------------------------------
General
-------
Net earnings for the three months ended September 30, 2003 amounted to
$204,000, an increase of $54,000, or 36.0%, compared to the $150,000
in net earnings reported for the three month period ended September
30, 2002.  The increase in earnings was due primarily to a $14,000, or
1.5%, increase in net interest income, a $26,000 increase in other
income and a $24,000 decrease in the provision for losses on loans,
which were partially offset by a $3,000 increase in general,
administrative and other expense and a $7,000 increase in  the
provision for income taxes.

Net Interest Income
-------------------
Total interest income amounted to $1.4 million for the three-month
period ended September 30, 2003, a decrease of $263,000, or 15.8%,
from the same period in 2002.  Interest income on loans totaled $1.3
million during the 2003 period, a decrease of $213,000, or 14.1%, from
the 2002 period.  This decline was due primarily to a 97 basis point
decrease in the weighted-average yield quarter to quarter, to 5.47%
for the quarter ended September 30, 2003, which was partially offset
by a $1.0 million increase in the average balance of loans outstanding
quarter to quarter.

Interest income on investment securities decreased by $20,000, or
17.4%, for the three months ended September 30, 2003, compared to the
same quarter in 2002. This decline was due primarily to a 61 basis
point decrease in the weighted-average yield quarter to quarter, to
2.99% for the quarter ended September 30, 2003, and a $74,000, or .6%,
decrease in the average balance outstanding.  Interest income on other
interest-bearing deposits decreased by $30,000, or 68.2%, during the
three months ended September 30, 2003, compared to the same period in
2002, due  primarily to a 68 basis point decrease in the weighted-
average yield, to .95% for the 2003 quarter and a $4.9 million, or
45.5%, decrease in the average balance outstanding for the three
months ended September 30, 2003.  Such decrease in the average balance
was primarily due to the use of such funds to originate loans.

Interest expense on deposits totaled $449,000 for the three month
period ended September 30, 2003, a decrease of $277,000, or 38.2%,
from the $726,000 recorded for the same period in 2002, due primarily
to a 114 basis point decrease in the weighted-average cost of
deposits, to 1.99% in the 2003 period.

The decrease in the level of yields on interest-earning assets and costs
of interest-bearing liabilities was due primarily to the overall decrease
in interest rates in the economy.

Provision for Losses on Loans
-----------------------------
As a result of an analysis of historical experience, the volume and
type of lending conducted by the Savings Bank, the status of past due
principal and interest payments, general economic conditions,
particularly as such conditions relate to the Savings Bank's market
area, and other factors related to the collectibility of the Savings
Bank's loan portfolio, management concluded that the allowance was
adequate and therefore did not record a provision for losses on loans
for the three month period ended September 30, 2003.  There can be no
assurance that the loan loss allowance will be sufficient to cover
losses on nonperforming assets in the future.

Other Income
------------
Other income totaled $111,000 for the three month period ended
September 30, 2003, an increase of $26,000, or 30.6%, over the same
period in 2002.  The increase in other income was due primarily to an
increase in service fees on checking accounts and ATM transactions and
late payment fees on loans.

                                     13

                             PFS Bancorp, Inc.

       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                 AND RESULTS OF OPERATIONS (CONTINUED)


Comparison of Operating Results for the Three-Month Periods Ended
September 30, 2003 and 2002 (continued)
-----------------------------------------------------------------
General, Administrative and Other Expense
-----------------------------------------
General, administrative and other expense totaled $713,000 for the
three months ended September 30, 2003, an increase of $3,000, or .4%,
compared to the same quarter in 2002.  This increase was due primarily
to a $39,000 provision for losses on real estate acquired through
foreclosure and a $13,000, or 16.9%, increase in occupancy and
equipment, which were partially offset by a $46,000, or 41.8%,
decrease in data processing expense.  The decrease in data processing
expense was directly related to increased costs associated with the
core system conversion in the third quarter ended September 30, 2002.
The increase in occupancy and equipment expense was due to additional
depreciation recorded as a result of the upgrade to computer equipment
during the third quarter of 2002.  The increase in the provision was
due to decreased values of acquired properties as a result of updated
appraisals.

Income Taxes
------------
The income tax provision totaled $147,000 for the three month period
ended September 30, 2003, an increase of $7,000, or 5.0%, compared to
the same quarter in 2002.  The income tax provision includes expense
for federal and Indiana state income tax.  The effective tax rates
were 41.9% and 48.3% for the three month periods ended September 30,
2003 and 2002, respectively.


Comparison of Operating Results for the Nine-Month Periods Ended
September 30, 2003 and 2002
----------------------------------------------------------------
General
-------
Net earnings for the nine months ended September 30, 2003, amounted to
$622,000, a decrease of $34,000, or 5.2%, compared to the $656,000 in
net earnings reported for the nine month period ended September 30,
2002.  The decrease in earnings was due primarily to a $103,000
decrease in net interest income and a $52,000 increase in general,
administrative and other expense, which were partially offset by a
$40,000 decrease in the provision for losses on loans, a $36,000
increase in other income, and a $45,000 decrease in the provision for
income taxes.

Net Interest Income
-------------------
Total interest income amounted to $4.4 million for the nine month
period ended September 30, 2003, a decrease of $848,000, or 16.2%,
from the same period in 2002.  Interest income on loans totaled $4.0
million during the 2003 period, a decrease of $797,000, or 16.5%, from
the 2002 period.  This decline was due primarily to a 117 basis point
decrease in the weighted-average yield period to period, to 5.62% for
the nine month period ended September 30, 2003, which was partially
offset by a $777,000 increase in the average balance of loans
outstanding period to period.

Interest income on investment securities increased by $48,000, or
18.1%, for the nine months ended September 30, 2003, compared to the
same period in 2002, due primarily to a $3.5 million, or 34.6%,
increase in the average balance outstanding period to period.
Interest income on other interest-bearing deposits decreased by
$99,000, or 61.1%, during the nine months ended September 30, 2003,
compared to the same period in 2002, due primarily to a 70 basis point
decrease in the weighted-average yield, to 1.22% for the 2003 period
and a $4.4 million, or 38.9%, decrease in the average balance
outstanding for the nine months ended September 30, 2003.  The increase
in the average balance of investment securities was primarily due
to the use of excess funds from interest-bearing deposits.


                                     14

                             PFS Bancorp, Inc.

        MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                    AND RESULTS OF OPERATIONS (CONTINUED)


Comparison of Operating Results for the Nine-Month Periods Ended
September 30, 2003 and 2002 (continued)
----------------------------------------------------------------
Net Interest Income (continued)
-------------------------------
Interest expense totaled $1.5 million for the nine month period ended
September 30, 2003, a decrease of $745,000, or 32.9%, from the $2.3
million recorded for the same period in 2002.  Interest expense on
deposits decreased by $747,000, or 33.0%, due primarily to a 103 basis
point decrease in the weighted-average cost of deposits, to 2.26% in
the 2003 period.  Interest expense on borrowings increased by $2,000,
as the Company had no borrowings outstanding during the 2002 period.

The decrease in the level of yields on interest-earning assets and
costs of interest-bearing liabilities was due primarily to the overall
decrease in interest rates in the economy.

Provision for Losses on Loans
-----------------------------
As a result of an analysis of historical experience, the volume and
type of lending conducted by the Savings Bank, the status of past due
principal and interest payments, general economic conditions,
particularly as such conditions relate to the Savings Bank's market
area, and other factors related to the collectibility of the Savings
Bank's loan portfolio, management elected to record a provision for
losses on loans totaling $48,000 for the nine-month period ended
September 30, 2003 compared to the $88,000 provision for the nine
month period ended September 30, 2002.  The current period provision
was predicated primarily upon a change in the loan portfolio mix,
including an increase in loans secured by nonresidential real estate
and the increase in the level of nonperforming loans during the
period.  The provision for the nine-month period ended September 30,
2002, was predicated upon the level of nonaccrual consumer loans and
related charge-offs of loans during the period.  There can be no
assurance that the loan loss allowance will be sufficient to cover
losses on nonperforming assets in the future.

Other Income
------------
Other income totaled $286,000 for the nine month period ended
September 30, 2003, an increase of $36,000, or 14.4%, over the same
period in 2002.  The increase in other income was due primarily to a
$10,000 gain recorded on the sale of repossessed property during the
nine month period ended September 30, 2003, and a $54,000, or 21.6%,
increase in other operating income.  Other operating income is
comprised primarily of service fees on checking accounts and ATM
transactions and late payment fees on loans.  These increases in other
income were partially offset by a $28,000 loss recorded on the sale of
investment securities during the nine month period ended September 30,
2003.

General, Administrative and Other Expense
-----------------------------------------
General, administrative and other expense totaled $2.1 million for the
nine months ended September 30, 2003, an increase of $52,000, or 2.6%,
compared to the same period in 2002.  This increase was due primarily
to a $93,000, or 8.8%, increase in employee compensation and benefits,
a $45,000, or 21.2%, increase in occupancy and equipment expense and a
$39,000 provision for losses on real estate acquired through
foreclosure, which were partially offset by a $122,000, or 42.2%,
decrease in data processing expense.  The increase in employee
compensation and benefits was due primarily to expense recognized in
connection with the Company's stock benefit plans, a 12.6% increase in
medical insurance premiums and normal merit increases.  The increase
in occupancy and equipment expense was due to additional depreciation
recorded as a result of the upgrade to computer equipment during the
third quarter of 2002.  The decrease in data processing expense was
due to the effects of the one-time conversion costs associated with
the upgrading of processing systems in 2002.  The increase in the
provision was due to decreased values of acquired properties as a
result of updated appraisals.

                                     15

                             PFS Bancorp, Inc.

          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                    AND RESULTS OF OPERATIONS (CONTINUED)


Comparison of Operating Results for the Nine-Month Periods Ended
September 30, 2003 and 2002 (continued)
----------------------------------------------------------------
Income Taxes
------------
The income tax provision totaled $436,000 for the nine month period
ended September 30, 2003, a decrease of $45,000, or 9.4%, compared to
the same period in 2002.  The decrease was due primarily to a $79,000,
or 6.9%, decrease in pre-tax earnings.  The income tax provision
includes expense for federal and Indiana state income tax.  The
effective tax rates were 41.2% and 42.3% for the nine month periods
ended September 30, 2003 and 2002, respectively.


Impact of Inflation and Changing Prices
---------------------------------------
The financial statements and related financial data presented herein
have been prepared in accordance with instructions to Form 10-QSB,
which require the measurement of financial position and operating
results in terms of historical dollars, without considering changes in
relative purchasing power over time due to inflation.

Unlike most industrial companies, virtually all of the Savings Bank's
assets and liabilities are monetary in nature.  As a result, interest
rates generally have a more significant impact on a financial
institution's performance than does the effect of inflation.


Forward-Looking Statements
--------------------------
This Form 10-QSB contains certain forward-looking statements and
information relating to the Company that are based on the beliefs of
management as well as assumptions made by and information currently
available to management.  In addition, in those and other portions of
this document, the words "anticipate," "believe," "estimate,"
"except," "intend," "should" and similar expressions, or the negative
thereof, as they relate to the Company or the Company's management,
are intended to identify forward-looking statements.  Such statements
reflect the current views of the Company with respect to future
looking events and are subject to certain risks, uncertainties and
assumptions.  Should one or more of these risks or uncertainties
materialize or should underlying assumptions prove incorrect, actual
results may vary from those described herein as anticipated, believed,
estimated, expected or intended.  The Company does not intend to
update these forward-looking statements.



















                                     16

                             PFS Bancorp, Inc.

       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                    AND RESULTS OF OPERATIONS (CONTINUED)


ITEM 3:  Controls and Procedures
         -----------------------
Our management evaluated, with the participation of our Chief
Executive Officer and Chief Financial Officer, the effectiveness of
our disclosure controls and procedures (as defined under Rules 13a-
15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of
the end of the period covered by this report.  Based on such
evaluation, our Chief Executive Officer and Chief Financial Officer
have concluded that our disclosure controls and procedures are
designed to ensure that information required to be disclosed by us in
the reports that we file or submit under the Securities and Exchange
Act of 1934 is recorded, processed, summarized and reported within the
time periods specified in the SEC's rules and regulations and are
operating in an effective manner.

No change in our internal control over financial reporting (as defined
in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of
1934) occurred during the most recent fiscal quarter that has
materially affected, or is reasonably likely to materially affect, our
internal control over financial reporting.

































                                     17

                              PFS Bancorp, Inc.
                                  PART II


ITEM 1.   Legal Proceedings
          -----------------
          Not applicable

ITEM 2.   Changes in Securities and Use of Proceeds
          -----------------------------------------
          Not applicable

ITEM 3.   Defaults Upon Senior Securities
          -------------------------------
          Not applicable

ITEM 4.   Submission of Matters to a Vote of Security Holders
          ---------------------------------------------------
          Not applicable

ITEM 5.   Other Information
          -----------------
          None.

ITEM 6.   Exhibits and Reports on Form 8-K
          --------------------------------

          (a) Exhibits:

             EX-31.1     Certification of Chief Executive Officer
                         pursuant to Rule 13a-14(a)/15d-14(a)

             EX-31.2     Certification of Chief Financial Officer
                         pursuant to Rule 13a-14(a)/15d-14(a)

             EX-32.1     Section 1350 Certification of the Chief
                         Executive Officer

             EX-32.2     Section 1350 Certification of the Chief
                         Financial Officer

          (b) Reports on Form 8-K:

             Date          Items and Description
             ----          ---------------------
          July 29, 2003  Item 9.  On July 29, 2003 the issuer
                         announced its results of operations for
                         the quarter ended June 30, 2003 in a
                         press release attached as Exhibit 99.1.
















                                     18

                              PFS Bancorp, Inc.

                                 SIGNATURES
                                 ----------

Pursuant to the requirements 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.





Date:   November 13, 2003           By: /s/ Mel E. Green
        -----------------               -------------------------------------
                                        Mel E. Green
                                        President and Chief Executive Officer



Date:   November 13, 2003           By: /s/ Stuart M. Suggs
        -----------------               -------------------------------------
                                        Stuart M. Suggs
                                        Chief Financial Officer, Vice
                                         President and Corporate Treasurer





























                                     19