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


                                   FORM 10-QSB


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

                For the quarterly period ended September 30, 2003
                                               ------------------

                                       OR

            [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                            THE EXCHANGE ACT OF 1934

            For the transition period from          to
                                           --------    --------

                         Commission file number: 0-25854


                               GFSB BANCORP, INC.
                 ----------------------------------------------
                 (Name of Small Business Issuer in its Charter)


Delaware                                                         04-2095007
--------------------------------------------                 -------------------
(State or Other Jurisdiction of Incorporation                 (I.R.S. Employer
or Organization)                                             Identification No.)



221 West Aztec Avenue, Gallup, New Mexico                           87301
----------------------------------------                         ----------
(Address of Principal Executive Offices)                         (Zip Code)

Issuer's Telephone Number, Including Area Code:                (505) 726-6500
                                                               --------------

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days.
                     Yes    |X|        No
                          -------          ------

As of October 31, 2003,  there were issued and outstanding  1,146,270  shares of
the registrant's Common Stock.

Transitional Small Business Disclosure format:
                     Yes               No    [X]
                          -------          ------

<PAGE>

                               GFSB Bancorp, Inc.


                                      Index
<TABLE>
<CAPTION>
                                                                                      Page No.
                                                                                      --------

                          PART I. FINANCIAL INFORMATION
<S>      <C>                                                                          <C>
Item 1.    Condensed Consolidated Financial Statements:

           Condensed Consolidated Statements of Financial Condition
               September 30, 2003 and June 30, 2003                                       3

           Condensed Consolidated Statements of Earnings and Comprehensive Earnings
               Three months ended September 30, 2003 and September 30, 2002               4

           Condensed Consolidated Statements of Cash Flows
               Three months ended September 30, 2003 and September 30, 2002               6

           Notes to Condensed Consolidated Financial Statements                           8

Item 2.    Management's Discussion and Analysis or Plan of Operation                      9

Item 3.    Controls and Procedures                                                       12

                           PART II. OTHER INFORMATION

Item 1.    Legal Proceedings                                                             13

Item 2.    Changes in Securities and Use of Proceeds                                     13

Item 3.    Defaults Upon Senior Securities                                               13

Item 4.    Submission of Matters to a Vote of Security Holders                           13

Item 5.    Other Information                                                             13

Item 6.    Exhibits and Reports on Form 8-K                                              13

           Signatures                                                                    14

</TABLE>
                                        2

<PAGE>

                                            GFSB Bancorp, Inc.

                        CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
                                                                               September 30,       June 30,
                                                                                   2003              2003
                                                                             ----------------   ----------------
                                                                                (Unaudited)
                                                       ASSETS
<S>                                                                          <C>              <C>
Cash and due from banks                                                        $   7,597,145    $   6,785,410
Interest-bearing deposits with banks                                                 673,112          466,948
Available-for-sale investment securities                                          33,396,255       29,279,417
Available-for-sale mortgage-backed securities                                     33,822,894       38,517,103
Held-to-maturity investment securities                                               675,998          675,997
Stock of Federal Home Loan Bank, at cost, restricted                               4,354,600        4,332,800
Loans receivable, net, substantially pledged                                     157,001,450      146,264,291
Loans held-for-sale                                                                  455,095          132,000
Accrued interest and dividends receivable                                            950,616          844,722
Premises and equipment                                                             2,420,314        2,313,815
Other real estate and repossessed property                                           213,953          213,953
Prepaid and other assets                                                             180,545          128,197
                                                                               -------------    -------------
        TOTAL ASSETS                                                           $ 241,741,977      229,954,653
                                                                               =============    =============

                                        LIABILITIES AND STOCKHOLDERS' EQUITY

Transaction and NOW accounts                                                   $  27,727,669    $  24,937,782
Savings and MMDA deposits                                                         20,143,641       17,264,978
Time deposits                                                                     89,244,915       87,556,558
Advances from Federal Home Loan Bank                                              77,973,409       76,641,834
Other secured borrowings                                                           6,095,576        3,657,911
Repurchase agreements                                                                811,228          584,902
Accrued interest payable                                                             522,682          515,872
Advances from borrowers for taxes and insurance                                      567,392          365,193
Accounts payable and accrued liabilities                                             288,481          250,015
Deferred income taxes                                                                211,382          312,796
Dividends declared and payable                                                       122,467          122,467
Income taxes payable                                                                 216,298                -
                                                                               -------------    -------------
        TOTAL LIABILITIES                                                        223,925,140      212,210,308
                                                                               -------------    -------------

COMMITMENTS AND CONTINGENCIES                                                              -                -

STOCKHOLDERS' EQUITY
Preferred stock, $.10 par value, 500,000
  shares authorized;  no shares issued or
  outstanding                                                                              -                -
Common stock, $.10 par value, 1,500,000
  shares authorized;  1,146,270 issued and outstanding
  at September 30, 2003 and June 30, 2003                                            114,627          114,627
Additional paid-in-capital                                                         2,900,389        2,853,446
Unearned ESOP stock                                                                 (121,847)        (139,882)
Retained earnings, substantially
  restricted                                                                      13,837,799       13,633,421
Accumulated other comprehensive
earnings                                                                           1,085,869        1,282,733
                                                                               -------------    -------------
        TOTAL STOCKHOLDERS' EQUITY                                                17,816,837       17,744,345
                                                                               -------------    -------------
        TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                             $ 241,741,977    $ 229,954,653
                                                                               =============    =============
</TABLE>

See notes to condensed consolidated financial statements.

                                        3
<PAGE>
                               GFSB Bancorp, Inc.

                  CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
                           AND COMPREHENSIVE EARNINGS

<TABLE>
<CAPTION>
                                                                 Three months ended
                                                                    September 30,
                                                               -------------------------
                                                                   2003           2002
                                                                ----------   ----------
                                                                (Unaudited)  (Unaudited)
<S>                                                           <C>          <C>
Interest income
             Loans receivable
                                Mortgage loans                  $2,045,024   $2,135,694
                                Commercial loans                   328,838      331,480
                                Share and consumer loans           108,569      108,963
             Investment and mortgage-backed securities             499,202      638,059
             Other interest-earning assets                          25,473       32,805
                                                                ----------   ----------

                                TOTAL INTEREST EARNINGS          3,007,106    3,247,001

Interest expense
             Deposits                                              753,160      794,345
             Advances from Federal Home Loan Bank                  705,638      804,994
             Repurchase agreements                                     104        2,142
                                                                ----------   ----------

                                TOTAL INTEREST EXPENSE           1,458,902    1,601,481
                                                                ----------   ----------

                                NET INTEREST EARNINGS            1,548,204    1,645,520

Provision for loan losses                                           60,000       25,000
                                                                ----------   ----------

                                NET INTEREST EARNINGS AFTER
                                  PROVISION FOR LOAN LOSSES      1,488,204    1,620,520
                                                                ----------   ----------

Non-interest earnings
             Income from real estate operations                      2,200        2,200
             Miscellaneous income                                   13,681       12,165
             Net gains from sales of loans                          10,784       15,206
             Service charge income                                 170,548       98,779
                                                                ----------   ----------

                                TOTAL NON-INTEREST EARNINGS        197,213      128,350
                                                                ----------   ----------

Non-interest expense
             Compensation and benefits                             586,123      538,306
             FDIC insurance                                          4,730        4,329
             Insurance                                              13,208       12,288
             Stock services                                          6,584        3,944
             Occupancy                                             134,827      136,040
             Data processing                                        89,484       68,072
             Professional fees                                      45,570       33,648
             Advertising                                            57,050       35,713
             Stationary, printing and office supplies               30,905       44,828
             ATM expense                                            14,578       15,357
             Supervisory exam fees                                  14,585       13,900
             Postage                                                19,286       12,319
             Other                                                 100,475       77,055
                                                                ----------   ----------

                                TOTAL NON-INTEREST EXPENSE       1,117,405      995,799
                                                                ----------   ----------

</TABLE>
                                        4
<PAGE>

                               GFSB Bancorp, Inc.

                  CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
                     AND COMPREHENSIVE EARNINGS - CONTINUED

<TABLE>
<CAPTION>
                                                                    Three months ended
                                                                       September 30,
                                                                -------------------------------
                                                                   2003               2002
                                                               -----------          -----------
                                                                (Unaudited)          (Unaudited)
<S>                                                           <C>                  <C>
                                EARNINGS BEFORE INCOME TAXES       568,012              753,071

Income tax expense
             Currently payable                                     241,167              241,468
             Deferred provision                                          -                    -
                                                               -----------          -----------
                                                                   241,167              241,468
                                                               -----------          -----------
                                NET EARNINGS                   $   326,845          $   511,603
                                                               ===========          ===========


Other Comprehensive Earnings
             Unrealized (loss) gain, net of tax                   (196,863)              18,671
                                                               -----------    -----------------
                                COMPREHENSIVE EARNINGS             129,982              530,274
                                                               ===========          ===========


Earnings per common share
             Basic                                             $      0.29                 0.46
                                                               ===========          ===========

Weighted average number of common shares outstanding
             Basic                                               1,121,733            1,112,130
                                                               ===========          ===========

Earnings per common share
             Diluted                                                  0.28                 0.44
                                                               ===========          ===========

Weighted average number of common shares outstanding
             Diluted                                             1,169,955            1,156,063
                                                               ===========          ===========


Comprehensive earnings per common share
             Basic                                                    0.12                 0.48
                                                               ===========          ===========
             Diluted                                                  0.11                 0.46
                                                               ===========          ===========
Dividends per share                                                   0.11                 0.10
                                                               ===========          ===========
</TABLE>
See notes to condensed consolidated financial statements.

                                        5

<PAGE>
                               GFSB Bancorp, Inc.

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                Increase (decrease) in cash and cash equivalents

<TABLE>
<CAPTION>
                                                                          Three months ended
                                                                             September 30,
                                                                     ----------------------------
                                                                         2003            2002
                                                                     ------------    ------------
                                                                       (Unaudited)     (Unaudited)
<S>                                                                <C>             <C>
Cash flows from operating activities
           Net earnings                                              $    326,845    $    511,603
           Adjustments to reconcile net earnings to
             net cash provided by operations
                     Deferred loan origination fees                      (158,702)        (55,277)
                     Gain on sale of loans                                (10,784)        (15,206)
                     Provision for loan losses                             60,000          25,000
                     Depreciation of premises and equipment                72,619          71,665
                     Amortization of investment and mortgage-
                       backed securities premiums                         147,273         (11,094)
                     Stock dividends on FHLB stock                        (21,800)        (31,800)
                     Release of ESOP stock                                 57,356          45,803
                     Stock compensation under management stock
                        bonus plan                                          9,706           7,687

           Net changes in operating assets and liabilities
                     Accrued interest and dividends receivable           (105,894)         30,331
                     Prepaid and other assets                             (52,349)        (37,142)
                     Accrued interest payable                               6,810          27,398
                     Accounts payable and accrued liabilities              28,760             (98)
                     Income taxes payable                                 216,298         242,168
                                                                     ------------    ------------
                               Net cash provided by
                               operating activities                       576,138         811,038
                                                                     ------------    ------------
Cash flows from investing activities
           Purchase of premises and equipment                            (179,118)        (17,327)
           Loan originations and principal
             repayment on loans, net                                  (11,803,750)       (933,778)
           Change in secured borrowings                                 2,437,665        (495,062)
           Proceeds from the sale of loans                                852,982         918,178
           Principal payments on mortgage-backed securities             5,396,403       2,291,281
           Principal payments on available-for-sale securities            439,976       1,649,872
           Purchases of mortgage-backed securities                       (979,375)     (3,141,114)
           Purchases of available-for-sale securities                  (5,225,184)        (22,358)
           Maturities and proceeds from sale of available-for-sale
             securities                                                   500,000          85,000
                                                                     ------------    ------------
                               Net cash (used) provided by
                               investing activities                    (8,560,401)        334,692
                                                                     ------------    ------------
</TABLE>

                                        6
<PAGE>

                               GFSB Bancorp, Inc.

           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

                Increase (decrease) in cash and cash equivalents

<TABLE>
<CAPTION>
                                                                           Three months ended
                                                                             September 30,
                                                                     ------------------------------
                                                                          2003            2002
                                                                     -------------    -------------
                                                                        (Unaudited)      (Unaudited)
<S>                                                                <C>              <C>
Cash flows from financing activities
           Net increase in transaction accounts, passbook savings,   $   7,356,907    $   3,704,270
             money market accounts, and certificates of deposit
           Repurchase agreements                                           226,326          375,317
           Net increase in mortgage escrow funds                           202,199          176,997
           Proceeds from FHLB advances                                 523,764,296       91,986,387
           Repayments on FHLB advances                                (522,432,721)     (96,659,386)
           Dividends paid or to be paid in cash                           (122,467)        (110,506)
           Price paid for vested management bonus
              stock plan stock                                               7,622                -
                                                                     -------------    -------------
                               Net cash provided (used) by
                               financing activities                      9,002,162         (526,921)
                                                                     -------------    -------------

           Increase in cash and cash equivalents                         1,017,899          618,809

           Cash and cash equivalents at beginning of period              7,252,358        5,651,491
                                                                     -------------    -------------

           Cash and cash equivalents at end of period                $   8,270,257        6,270,300
                                                                     =============    =============
Supplemental disclosures of cash flow information
           Cash paid during the period for
                     Interest on deposits and advances               $   1,452,092    $   1,574,084
                     Income taxes                                           24,869                -

           Change in unrealized gain, net of deferred
             taxes on available-for-sale securities                       (196,863)          18,671

           Dividends declared not yet paid                                 122,467          110,506

</TABLE>

See notes to condensed consolidated financial statements.

                                        7
<PAGE>

                               GFSB BANCORP, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)

         1.  The  accompanying   unaudited  condensed   consolidated   financial
statements were in accordance with instructions for Form 10-QSB and therefore do
not  include  all  disclosure  necessary  for a  complete  presentation  of  the
consolidated  financial  statements in  conformity  with  accounting  principles
generally  accepted in the United States of America.  However,  all adjustments,
which are, in the opinion of management,  necessary for the fair presentation of
the interim financial statements have been included. All such adjustments are of
a normal recurring nature. The condensed consolidated statements of earnings and
comprehensive  earnings are not necessarily  indicative of results, which may be
expected for the entire year, or for any other interim period.

Certain information and footnote  disclosures normally included in the financial
statements prepared in accordance with accounting  principles generally accepted
in the United States of America have been  condensed or omitted  pursuant to the
rules and regulations of the Securities and Exchange Commission. It is suggested
that these condensed unaudited financial  statements be read in conjunction with
the Form 10-KSB for the year ended June 30, 2003.

                                       8

<PAGE>

Item 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

General

The  Private  Securities  Litigation  Reform Act of 1995  contains  safe  harbor
provisions regarding forward-looking  statements.  When used in this discussion,
the words  "believes",  "anticipates",  "contemplates",  "expects",  and similar
expressions are intended to identify forward-looking statements. Such statements
are subject to certain risks and uncertainties  which could cause actual results
to differ materially from those projected. Those risks and uncertainties include
changes in interest  rates,  risks  associated with the ability to control costs
and  expenses,  general  economic  conditions.  We  undertake no  obligation  to
publicly  release  the  results  of  any  revisions  to  those  forward  looking
statements which may be made to reflect events or  circumstances  after the date
hereof or to reflect the occurrence of unanticipated events.

Overview

GFSB  Bancorp,  Inc. is a bank  holding  company  headquartered  in Gallup,  New
Mexico,  which provides a full range of deposits and  traditional  mortgage loan
products  through its wholly owned banking  subsidiary,  Gallup Federal  Savings
Bank. All references refer  collectively to the Company and the Bank, unless the
context indicates otherwise.


RESULTS OF OPERATIONS

COMPARISON OF OPERATING RESULTS FOR QUARTER ENDED SEPTEMBER 30, 2003 COMPARED TO
QUARTER ENDED SEPTEMBER 30, 2002.

General

Net earnings for the three months ended September 30, 2003 decreased $185,000 to
$327,000  from  $512,000  for the three  months ended  September  30, 2002.  The
decrease in net earnings is primarily  attributable to a $35,000 increase in the
provision for loan losses,  a $121,000  increase in  non-interest  expense and a
$97,000 decrease in net interest earnings partially offset by a $69,000 increase
in  non-interest  earnings.  Please  refer to  "Average  Balance  Sheets" for an
analysis of the changes in net  interest  earnings  for the three  months  ended
September 30, 2003 compared to the same 2002 period.

                                       9
<PAGE>

Average Balance Sheets

The  following  table sets forth certain  information  relating to the Company's
average  balance sheet and reflects the average yield on assets and average cost
of  liabilities  for the periods  indicated and the average annual yields earned
and rates paid. Average balances are derived from month-end balances. Management
does not believe that the use of  month-end  balances  instead of daily  average
balances has caused any material differences in the information presented.

<TABLE>
<CAPTION>
                                     Quarter ended September 30, 2003              Quarter ended September 30, 2002
                                  ---------------------------------------       ----------------------------------------
                                    Average                    Average           Average                      Average
                                    Balance      Interest     Yield/Cost         Balance       Interest      Yield/Cost
                                    -------      --------     ----------         -------       --------      ----------
                                    (Dollars in Thousands)                        (Dollars in Thousands)
<S>                              <C>             <C>              <C>         <C>              <C>              <C>
Interest-earning assets:
Loans receivable (1)               $153,141        $2,482           6.48%       $144,108         $2,576           7.15%
Investment securities and
 mortgage-backed securities          67,677           499           2.95%         51,768            638           4.93%
Other interest-earning
  assets (2)                          4,716            25           2.12%          5,150             33           2.56%
                                   --------        -------                      --------         ------

Total interest-earning assets       225,534         3,006           5.33%        201,026          3,247           6.46%
                                                   ------                                        ------
Non-interest-earning assets          11,044                                        8,835
                                   --------                                     --------

Total assets                       $236,578                                     $209,861
                                   ========                                     ========


Interest-bearing liabilities:
  Transaction accounts             $  9,838        $   10            .41%       $  8,747         $   18            .82%
  Passbook savings                    6,422            16           1.00%          5,440             17           1.25%
  Money market accounts              11,844            25            .84%         12,235             37           1.21%
  Certificates of deposit            88,718           701           3.16%         73,533            722           3.93%
  Other liabilities (3)              84,367           706           3.35%         78,819            807           4.10%
                                   --------        ------                       --------         ------
Total interest-bearing
   liabilities                      201,189         1,458           2.90%        178,774          1,601           3.58%
                                                   ------                                        ------
Non-interest bearing
   liabilities                       17,792                                       14,407
                                   ---------                                    --------
Total liabilities                   218,981                                      193,181

Stockholders' equity                 17,597                                       16,680
                                   ---------                                    --------
Total liabilities and
  stockholders' equity             $236,578                                     $209,861
                                   =========                                    ========

Net interest earnings                              $1,548                                        $1,646
                                                   ======                                        ======
Interest rate spread (4)                                            2.43%                                         2.88%
                                                                    ====                                          ====

Net yield on interest-                                              2.75%                                         3.28%
  earning  assets (5)
                                                                    ====                                          ====
Ratio of average interest-
Earning assets to average
interest-bearing  liabilities                                       1.12X                                         1.12X
                                                                    ====                                          ====
</TABLE>

(1)  Average balances include non-accrual loans.
(2)  Includes interest-bearing deposits in other financial institutions.
(3)  Other liabilities  include FHLB advances,  repurchase  agreements and other
     secured borrowings.
(4)  Interest-rate spread represents the difference between the average yield on
     interest-earning   assets  and  the   average   cost  of   interest-bearing
     liabilities.
(5)  Net yield on interest - earning assets  represents net interest income as a
     percentage of average interest-earning assets.

                                       10

<PAGE>

Borrowings

         The Company may obtain  advances  from the FHLB of Dallas to supplement
its supply of lendable funds.  Advances from the FHLB are typically secured by a
pledge of the  Company's  stock in the FHLB,  a portion of the  Company's  first
mortgage  loans and certain other assets.  Each FHLB credit  program has its own
interest  rate,  which may be fixed or variable,  and range of  maturities.  The
Company,  if the need arises,  may also access the Federal Reserve Bank discount
window to supplement its supply of lendable funds and to meet deposit withdrawal
requirements.  At June 30, 2003 and September 30, 2003, borrowings with the FHLB
totaled  $76,641,834 and  $77,973,409,  respectively.  The approximate  weighted
average  rate  paid on  borrowings  was  4.01%  and  3.56% at June 30,  2003 and
September 30, 2003, respectively.  In the Company's Annual Report on Form 10-KSB
for the fiscal  year ended June 30,  2003,  the  weighted  average  rate paid on
borrowings was incorrectly reported as 1.54%.

Rate/Volume Analysis

The table below sets forth  certain  information  regarding  changes in interest
income and interest expense of the Company for the periods  indicated.  For each
category   of   interest-earning   assets  and   interest-bearing   liabilities,
information is provided on changes  attributable to (i) changes in volume;  (ii)
changes in rates; (iii) changes in rate-volume.  The changes attributable to the
combined  impact of volume and rate have been allocated  proportionately  to the
changes due to volume and the changes due to rate.

<TABLE>
<CAPTION>
                                               Quarter ended September 30, 2003 vs. 2002
                                                          Increase (Decrease)
                                                                 Due to
                                                   ---------------------------------
                                                                       Rate/
                                                   Volume     Rate    Volume     Net
                                                   ------     ----    ------     ---
                                                       (Dollars in Thousands)
<S>                                               <C>      <C>      <C>      <C>
Interest income:
  Loans receivable                                  $ 161    $(241)   $ (14)   $ (94)
  Mortgage-backed securities and
     investment securities                            196     (256)     (79)    (139)
  Other interest-earning  assets                       (3)      (6)       1       (8)
                                                    -----    -----    -----    -----
    Total interest-earning assets                     354     (503)     (92)    (241)

Interest expense:

  Transaction accounts                                  2       (9)      (1)      (8)
  Savings accounts                                      3       (3)      (1)      (1)
  Money markets                                        (1)     (11)       -      (12)
  Certificates of deposit                             149     (141)     (29)     (21)
  Other liabilities                                    56     (147)     (10)    (101)
                                                    -----    -----    -----    -----

   Total interest-bearing liabilities                 209     (311)     (41)    (143)
                                                    -----    -----    -----    -----

Net change in interest income                       $ 145    $(192)   $ (51)   $ (98)
                                                    =====    =====    =====    =====
</TABLE>
                                       11
<PAGE>

Provision for Losses on Loans

The Company  maintains  an  allowance  for loan losses  based upon  management's
periodic evaluation of known and inherent risks in the loan portfolio, past loss
experience,  adverse  situations that may affect the borrower's ability to repay
loans,  estimated  value of the  underlying  collateral and current and expected
market  conditions.  The provision for loan loss was $60,000 and $25,000 for the
periods  ended  September 30, 2003 and 2002,  respectively.  The increase in the
provision for loan losses for the current  three-month  period was the result of
loan growth in commercial and commercial  real estate loans,  which tend to have
greater  credit  risk than  residential  real  estate  loans.  While the Company
maintains its allowance for losses at a level which it considers to be adequate,
there can be no assurance  that further  additions  will not be made to the loss
allowances and that such losses will not exceed the estimated amounts.

Non-Interest Earnings

Total  non-interest  earnings  increased by $69,000 or 53.7% to $197,000 for the
quarter ended  September 30, 2003 from $128,000 for the quarter ended  September
30, 2002.  This  increase  was  primarily  due to an increase in service  charge
income of $72,000  partially  offset by a  decrease  of $4,000 in net gains from
sales of loans.  The  increase  in service  charge  income is  primarily  due to
increased insufficient fee charges collected on NOW and checking accounts.

Non-Interest Expense

Total  non-interest  expense  increased  $121,000 or 12.2% to $1,117,000 for the
quarter ended  September 30, 2003 from $996,000 for the quarter ended  September
30, 2002. The increase in  non-interest  expense was primarily  attributable  to
increases in compensation  and benefits,  data  processing,  professional  fees,
advertising, postage and other operating expenses partially offset by a decrease
in  stationary,   printing  and  office   supplies.   The  $48,000  increase  in
compensation  and benefits for the period ended  September 30, 2003 is primarily
attributable to a $33,000  increase in general  salaries and benefits due to the
hiring of two additional employees,  general salary increases,  and increases in
the cost of employee  health  insurance and  retirement  benefits and $14,000 in
expense  associated  with employee stock  compensation  plans.  Data  processing
increased  $21,000  primarily  due to increases in expenses  resulting  from the
processing cost  associated  with the growth in the volume of deposit  accounts,
statement  processing,  servicing  for the online  home  banking  system and the
service of transaction  items.  Advertising  expense increased $21,000 primarily
due to  efforts  to achieve  growth in the  Gallup  and  Farmington,  New Mexico
market.  In addition,  other operating  expenses  increased $23,000 and expenses
associated with Stationary,  printing and office supplies decreased $14,000,  as
such  expenses  were  attributable  to the March 2002 opening of the  Farmington
branch.

Item 3.  CONTROLS AND PROCEDURES

          (a)  Evaluation of disclosure controls and procedures.  Based on their
               evaluation of the Company's  disclosure  controls and  procedures
               (as defined in Rules 13a-15(e) under the Securities  Exchange Act
               of 1934 (the "Exchange Act")), the Company's  principal executive
               officer and the principal  financial  officer have concluded that
               as of the end of the period covered by this  Quarterly  Report on
               Form 10-QSB such disclosure controls and procedures are effective
               to  ensure  that  information  required  to be  disclosed  by the
               Company in reports  that it files or submits  under the  Exchange
               Act is recorded,  processed,  summarized and reported  within the
               time periods  specified  in  Securities  and Exchange  Commission
               rules and forms.

          (b)  Changes in internal control over financial reporting.  During the
               quarter  under  report,  there  was no  change  in the  Company's
               internal  control over  financial  reporting  that has materially
               affected,  or is  reasonably  likely to  materially  affect,  the
               Company's internal control over financial reporting.

                                       12
<PAGE>

PART II.  OTHER INFORMATION
--------  -----------------


Item 1.  Legal Proceedings
         -----------------

                  Not applicable.

Item 2.  Changes in Securities and Use of Proceeds
         -----------------------------------------

                  Not applicable.

Item 3.  Defaults Upon Senior Securities
         -------------------------------

                  Not applicable.

Item 4.  Submission of Matters to a Vote of Security Holders
         ---------------------------------------------------

                  Not applicable.

Item 5.  Other Information
         -----------------

                  Not applicable.

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

         (a) List of Exhibits

             3.1     Certificate of Incorporation of GFSB Bancorp, Inc.*
             3.2     Bylaws of GFSB Bancorp, Inc.*
             10.1    1995 Stock Option Plan**
             10.2    Management Stock Bonus Plan**
             10.3    Form of Directors Deferred Compensation Agreement
                       between the Bank and Directors***
             10.4    Form of Directors Stock Compensation Plan between
                       the Company and Directors of the Company***
             10.5    2000 Stock Option Plan****
             31      Certification Pursuant to Section 302 of the Sarbanes-
                       Oxley Act of 2002
             32      Certification pursuant to Section 906 of the Sarbanes-
                       Oxley Act of 2002

         --------------
         *        Incorporated herein by reference to exhibits  3(i)(Certificate
                  of  Incorporation)   and  3(ii)(Bylaws)  to  the  Registration
                  Statement on Form S-1 of the  Registrant  (File No.  33-90400)
                  initially filed with the Commission on March 17, 1995.

         **       Incorporated by reference to the identically numbered exhibits
                  of the Annual  Report on Form 10-KSB for the fiscal year ended
                  June 30, 1997 (File No. 0-25854) filed with the SEC.

         ***      Incorporated by reference to the identically numbered exhibits
                  of the  Quarterly  Report on Form 10-QSB for the quarter ended
                  March 31, 2000 filed with the SEC.

         ****     Incorporated  by  reference  to the  Proxy  Statement  for the
                  Annual Meeting of  Stockholders  on October 27, 2000 and filed
                  with the SEC on September 25, 2000.

          (b)  The  Company  filed a  report  on Form  8-K on  August  15,  2003
               pursuant to items 7 and 12 to report  earnings for the year ended
               June 30, 2003.

                                       13
<PAGE>

SIGNATURES

In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.

                                 GFSB BANCORP, INC.


Date:     November 7,  2003      /s/Jerry R. Spurlin
          -----------------      -----------------------------------------------
                                 Jerry R. Spurlin
                                 Assistant Secretary and Chief Financial Officer
                                 (Duly Authorized Representative and
                                 Principal Financial Officer)

                                       14