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 December 31, 2002
                                               -----------------

                                       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
--------------------------------------------
(State or Other Jurisdiction of Incorporation or Organization)

                                                            04-2095007
                                                           ------------
                                                         (I.R.S. Employer
                                                       Identification No.)
221 West Aztec Avenue, Gallup, New Mexico
-----------------------------------------
(Address of Principal Executive Offices)
                                                              87301
                                                              -----
                                                            (Zip Code)

Issuer's Telephone Number, Including Area Code:           (505) 722-4361
                                                          --------------

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 January 21, 2003,  there were issued and outstanding  1,150,106  shares of
the registrant's Common Stock.

<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
               December 31, 2002 and June 30, 2002                                                      3

           Condensed Consolidated Statements of Earnings and Comprehensive Earnings
               Three months and six months ended December 31, 2002 and December 31, 2001.               4

           Condensed Consolidated Statements of Cash Flows
               Six months ended December 31, 2002 and December 31, 2001.                                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                                                                     15

                           PART II. OTHER INFORMATION

Item 4.    Submission of Matter to a Vote of Security Holders                                          16

Item 6.    Exhibits and Reports on Form 8-K                                                            16

           Signatures                                                                                  18

</TABLE>

                                        2
<PAGE>
                               GFSB Bancorp, Inc.

                        CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

<TABLE>
<CAPTION>
                                                              December 31,       June 30,
                                                                  2002             2002
                                                             -------------    -------------
<S>                                                        <C>              <C>
                                     ASSETS

Cash and due from banks                                      $   5,594,431    $   4,825,439
Interest-bearing deposits with banks                               781,531          826,052
Available-for-sale investment securities                        22,012,964       23,973,426
Available-for-sale mortgage-backed securities                   30,601,985       27,290,274
Held-to-maturity investment securities                           1,646,873        1,405,403
Stock of Federal Home Loan Bank, at cost, restricted             4,279,700        4,218,500
Loans receivable, net, substantially pledged                   142,459,166      139,748,188
Accrued interest and dividends receivable                        1,013,683        1,073,201
Premises and equipment                                           2,416,023        2,511,173
Other real estate and repossessed property                         241,094          150,642
Prepaid and other assets                                           176,534          122,771
                                                             -------------    -------------

        TOTAL ASSETS                                         $ 211,223,984      206,145,069
                                                             =============    =============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Transaction and NOW accounts                                 $  21,419,958    $  20,417,085
Savings and MMDA deposits                                       16,007,830       17,305,540
Time deposits                                                   74,222,726       72,626,849
Advances from Federal Home Loan Bank                            79,252,728       76,386,455
Repurchase agreements                                            1,129,962        1,234,857
Accrued interest payable                                           457,119          448,955
Advances from borrowers for taxes and insurance                    412,927          416,575
Accounts payable and accrued liabilities                           346,601          245,409
Deferred income taxes                                              597,631          568,728
Dividends declared and payable                                     121,557          110,506
Income taxes payable                                                18,492            1,168
                                                             -------------    -------------

        TOTAL LIABILITIES                                      193,987,531      189,762,127
                                                             -------------    -------------

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;  1,150,106 issued and outstanding
  at December 31, 2002 and June 30, 2002                           115,011          115,011
Additional paid-in-capital                                       2,821,214        2,761,251
Unearned ESOP stock                                               (175,606)        (207,926)
Retained earnings, substantially
  restricted                                                    13,125,481       12,420,358
Accumulated other comprehensive
  earnings                                                       1,350,353        1,294,248
                                                             -------------    -------------

        TOTAL STOCKHOLDERS' EQUITY                              17,236,453       16,382,942
                                                             -------------    -------------

        TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY           $ 211,223,984    $ 206,145,069
                                                             =============    =============
</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                  Six months ended
                                                                    December 31,                       December 31,
                                                           -------------------------------    --------------------------------
                                                               2002              2001             2002               2001
                                                           -------------------------------    --------------------------------
                                                           (Unaudited)        (Unaudited)     (Unaudited)        (Unaudited)
<S>                                                   <C>                <C>                  <C>           <C>
Interest income
           Loans receivable
                           Mortgage loans                $    2,111,982     $   2,176,818        4,247,677     $    4,320,978
                           Commercial loans                     332,932           323,645          664,412            676,911
                           Share and consumer loans             110,668           121,821          219,630            247,655
           Investment and mortgage-backed securities            563,759           790,043        1,201,818          1,583,413
           Other interest-earning assets                         37,178            34,396           69,984             79,397
                                                           -------------      ------------    -------------      -------------

                           TOTAL INTEREST EARNINGS            3,156,519         3,446,723        6,403,521          6,908,354

Interest expense
           Deposits                                             758,252         1,145,021        1,552,597          2,358,507
           Advances from Federal Home Loan Bank                 779,208           834,058        1,584,203          1,711,968
           Repurchase agreements                                  1,408             2,733            3,550             11,235
                                                           -------------      ------------    -------------      -------------

                           TOTAL INTEREST EXPENSE             1,538,868         1,981,812        3,140,350          4,081,710
                                                           -------------      ------------    -------------      -------------

                           NET INTEREST EARNINGS              1,617,651         1,464,911        3,263,171          2,826,644

Provision for loan losses                                        50,000                 -           75,000             50,007
                                                           -------------      ------------    -------------      -------------

                           NET INTEREST EARNINGS AFTER
                             PROVISION FOR LOAN LOSSES        1,567,651         1,464,911        3,188,171          2,776,637
                                                           -------------      ------------    -------------      -------------

Non-interest earnings
           Income from real estate operations                     1,550               900            3,750                900
           Miscellaneous income                                  11,717            10,123           23,882             22,710
           Net gains from sales of AFS securities                     -            10,000                -             10,000
           Net gains from sales of loans                         40,852             6,720           56,058             16,845
           Service charge income                                 92,720            71,735          191,499            141,741
                                                           -------------      ------------    -------------      -------------

                           TOTAL NON-INTEREST EARNINGS          146,839            99,478          275,189            192,196
                                                           -------------      ------------    -------------      -------------

Non-interest expense
           Compensation and benefits                            576,170           470,874        1,114,476            890,379
           FDIC insurance                                         4,598             4,847            8,927              9,607
           Insurance                                             12,193             8,790           24,482             17,577
           Stock services                                         5,109            13,361            9,053             15,974
           Occupancy                                            129,580            98,445          265,620            200,157
           Data processing                                       90,864            56,564          158,935            148,981
           Professional fees                                     32,506            20,473           66,153             67,354
           Advertising                                           36,062            19,528           71,775             40,361
           Stationary, printing and office supplies              42,900            25,236           87,729             54,581
           ATM expense                                           15,588            10,382           30,945             22,679
           Supervisory exam fees                                 13,900            12,684           27,800             28,242
           Postage                                               13,220            11,881           25,539             28,459
           Other                                                 96,343            56,667          173,399            125,258
                                                           -------------      ------------    -------------      -------------

                           TOTAL NON-INTEREST EXPENSE         1,069,033           809,732        2,064,833          1,649,609
                                                           -------------      ------------    -------------      -------------
</TABLE>
                                        4

<PAGE>

                                               GFSB Bancorp, Inc.

                                  CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
                                     AND COMPREHENSIVE EARNINGS - CONTINUED
<TABLE>
<CAPTION>

                                                                 Three months ended                  Six months ended
                                                              December 31,    December 31,       December 31,    December 31,
                                                           -------------------------------    --------------------------------
                                                               2002              2001             2002               2001
                                                           -------------------------------    --------------------------------
                                                           (Unaudited)        (Unaudited)     (Unaudited)        (Unaudited)

<S>                                                    <C>               <C>            <C>                <C>
                           EARNINGS BEFORE INCOME TAXES         645,457           754,657        1,398,527          1,319,224

Income tax expense
           Currently payable                                    219,876           266,626          461,343            440,314
           Deferred provision                                         -                 -                -                  -
                                                           -------------      ------------    -------------      -------------

                                                                219,876           266,626          461,343            440,314
                                                           -------------      ------------    -------------      -------------

                           NET EARNINGS                  $      425,581     $     488,031          937,184     $      878,910
                                                           =============      ============    =============      =============
Other Comprehensive Earnings
           Unrealized gain (loss), net of tax                    37,435          (114,145)          56,106             35,679
                                                           -------------      ------------    -------------      -------------
                           COMPREHENSIVE EARNINGS               463,016           373,886          993,290            914,589
                                                           =============      ============    =============      =============
Earnings per common share
           Basic                                         $         0.38              0.44             0.84               0.80
                                                           =============      ============    =============      =============
Weighted average number of common shares outstanding
           Basic                                              1,115,665         1,103,364        1,113,645          1,101,938
                                                           =============      ============    =============      =============
Earnings per common share
           Diluted                                                 0.37              0.43             0.81               0.77
                                                           =============      ============    =============      =============
Weighted average number of common shares outstanding
           Diluted                                            1,162,238         1,143,436        1,159,720          1,140,767
                                                           =============      ============    =============      =============
Comprehensive earnings per common share
           Basic                                                   0.42              0.34             0.89               0.83
                                                           =============      ============    =============      =============

           Diluted                                                 0.40              0.33             0.86               0.80
                                                           =============      ============    =============      =============

Dividends per share                                                0.11              0.10             0.21               0.19
                                                           =============      ============    =============      =============
</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>
                                                                       Six Months Ended
                                                                          December 31,
                                                                -------------------------------
                                                                     2002            2001
                                                                --------------  ---------------
                                                                  (Unaudited)    (Unaudited)
<S>                                                            <C>            <C>
Cash flows from operating activities
           Net earnings                                          $   937,184    $   878,910
           Adjustments to reconcile net earnings to
             net cash provided by operations
                     Deferred loan origination fees                 (139,099)      (215,510)
                     Gain on sale of loans and securities            (56,058)       (26,846)
                     Provision for loan losses                        75,000         50,007
                     Depreciation of premises and equipment          121,718        104,891
                     Amortization of investment and mortgage-
                       backed securities premiums                     39,757         96,793
                     Stock dividends on FHLB stock                   (61,200)       (61,500)
                     Release of ESOP stock                            92,282         76,335
                     Stock compensation                               15,374          8,325


           Net changes in operating assets and liabilities
                     Accrued interest and dividends receivable        59,518         68,104
                     Prepaid and other assets                       (118,323)        (5,000)
                     Accrued interest payable                          8,164        (35,341)
                     Accounts payable and accrued liabilities         85,818         63,591
                     Repurchase agreements                          (104,895)      (274,840)
                     Income taxes payable                             17,324       (194,686)
                     Dividends declared and payable                   11,051         10,939
                                                                 -----------    -----------

                               Net cash provided by
                               operating activities                  983,615        544,172
                                                                 -----------    -----------

Cash flows from investing activities
           Purchase of premises and equipment                        (26,568)      (998,650)
           Loan originations and principal
             repayment on loans, net                              (2,616,713)      (370,373)
           Principal payments on mortgage-backed
             securities                                            4,954,873      5,423,524
           Purchases of mortgage-backed securities                (8,272,674)    (5,130,469)
           Purchases of available-for-sale securities             (2,068,053)    (4,043,762)
           Maturities and proceeds from sale of
             available-for-sale securities                           785,000      1,310,000
           Principal payments on available-for-sale securities     3,292,388      1,055,759
           Purchases of hold-to-maturity securities                 (270,000)             -
           Principal payments on hold-to-maturity securities          31,000          5,000
           Purchase of FHLB stock                                          -        (49,000)
                                                                 -----------    -----------

                               Net cash used by
                               investing activities               (4,190,747)    (2,797,971)
                                                                 -----------    -----------
</TABLE>

                                                      6

<PAGE>

                                       GFSB Bancorp, Inc.

                   CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

                        Increase (decrease) in cash and cash equivalents

<TABLE>
<CAPTION>
                                                                      Six Months Ended
                                                                        December 31,
                                                              -------------------------------
                                                                    2002            2001
                                                              --------------   --------------
                                                                (Unaudited)      (Unaudited)
<S>                                                         <C>              <C>
Cash flows from financing activities
           Net increase in transaction accounts, passbook
             savings, money market accounts, and
             certificates of deposit                          $   1,301,040    $   2,798,245
           Net (decrease) increase in mortgage escrow funds          (3,648)           3,346
           Proceeds from FHLB advances                          200,425,000      291,654,462
           Repayments on FHLB advances                         (197,558,727)    (292,427,620)
           Dividends paid or to be paid in cash                    (232,062)        (218,520)
           Price paid for vested management bonus
              stock plan stock                                            -            5,550
                                                              -------------    -------------
                               Net cash provided by
                               financing activities               3,931,603        1,815,463
                                                              -------------    -------------

           Increase (decrease) in cash and cash equivalents         724,471         (438,336)

           Cash and cash equivalents at beginning of period       5,651,491        4,262,254
                                                              -------------    -------------

           Cash and cash equivalents at end of period         $   6,375,962        3,823,918
                                                              =============    =============

Supplemental disclosures of cash flow information
           Cash paid during the period for
                     Interest on deposits and advances        $   3,132,186    $   4,117,052
                     Income taxes                                   444,020          635,000

           Change in unrealized gain, net of deferred
             taxes on available-for-sale securities                  56,106           35,679

           Dividends declared not yet paid                          121,557          109,392
</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, 2002.

                                       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 savings and loan  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.

                                       9
<PAGE>

RESULTS OF OPERATIONS

COMPARISON OF OPERATING  RESULTS FOR QUARTER ENDED DECEMBER 31, 2002 COMPARED TO
QUARTER ENDED DECEMBER 31, 2001.

General

Net  earnings  for the quarter  ended  December  31, 2002  decreased  $62,000 to
$426,000 from $488,000 for the quarter ended  December 31, 2001. The decrease in
net earnings is primarily  attributable  to a $50,000  increase in the provision
for loan losses and a $259,000 increase in non-interest expense partially offset
by an  increase in net  interest  earnings of  $153,000,  a $47,000  increase in
non-interest  earnings,  and a $47,000  decrease in income tax  expense.  Please
refer to "Average Balance Sheets" for an analysis of the changes in net interest
earnings  for the quarter  ended  December  31,  2002  compared to the same 2001
period.

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 December 31, 2002               Quarter ended December 31, 2001
                                   ---------------------------------------      -----------------------------------------
                                   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)               $140,447        $2,556           7.28%       $130,071         $2,622           8.06%
Investment securities and
 mortgage-backed securities          51,160           564           4.41%         58,753            790           5.38%
Other interest-earning
  assets (2)                          5,392            37           2.74%          4,421             35           3.17%
                                 ----------     ---------                     ----------      ---------

Total interest-earning assets       196,999         3,157           6.41%        193,245          3,447           7.13%
                                                ---------                                     ---------
Non-interest-earning assets          11,522                                        6,671
                                 ----------                                   ----------

Total assets                       $208,521                                     $199,916
                                 ==========                                   ==========

Interest-bearing liabilities:
  Transaction accounts             $  8,626        $   17            .79%        $ 7,983          $ 18             .90%
  Passbook savings                    5,553            16           1.15%          4,422            14            1.27%
  Money market accounts              12,500            40           1.28%          9,819           103            4.20%
  Certificates of deposit            73,749           685           3.72%         78,885         1,010            5.12%
  Other liabilities (3)              79,676           781           3.92%         72,357           837            4.63%
                                 ----------     ---------                     ----------     ---------
Total interest-bearing
   liabilities                      180,104         1,539           3.42%        173,466         1,982            4.57%
                                                ---------                                   ---------
Non-interest bearing
   liabilities                       11,343                                       10,724
                                 ----------                                   ----------

Total liabilities                   191,447                                      184,190

Stockholders' equity                 17,074                                       15,726
                                 ----------                                   ----------
Total liabilities and
  stockholders' equity             $208,521                                     $199,916
                                 ==========                                   ==========
Net interest income                                $1,618                                      $1,465
                                                =========                                   =========
Interest rate spread (4)                                            2.99%                                         2.56%
                                                               ==========                                    ==========
Net yield on interest-
  earning  assets (5)                                               3.29%                                         3.03%
                                                               ==========                                    ==========
Ratio of average interest-
Earning assets to average
interest-bearing  liabilities                                       1.09X                                         1.11X
                                                               ==========                                    ==========
</TABLE>

                                       10
<PAGE>

(1)  Average balances include non-accrual loans.
(2)  Includes interest-bearing deposits in other financial institutions.
(3)  Other liabilities include FHLB advances and Repurchase agreements.
(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.

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 December 31, 2002 vs. 2001
                                                       Increase (Decrease)
                                                              Due to
                                            ----------------------------------------
                                                             Rate/
                                                 Volume     Rate   Volume      Net
                                                 ------     ----   ------      ---
                                                      (Dollars in Thousands)
<S>                                             <C>      <C>      <C>      <C>
Interest income:
  Loans receivable                                $ 209    $(254)   $ (21)   $ (66)
  Mortgage-backed securities and
     investment securities                         (102)    (142)      18     (226)
  Other interest-earning  assets                      8       (5)      (1)       2
                                                  -----    -----    -----    -----

    Total interest-earning assets                   115     (401)      (4)    (290)

Interest expense:

  Transaction accounts                                1       (2)       0       (1)
  Savings accounts                                    4       (1)      (1)       2
  Money markets                                      28      (72)     (19)     (63)
  Certificates of deposit                           (66)    (276)      17     (325)
  Other liabilities                                  85     (128)     (13)     (56)
                                                  -----    -----    -----    -----
   Total interest-bearing liabilities                52     (479)     (16)    (443)
                                                  -----    -----    -----    -----

Net change in interest income                     $  63    $  78    $  12    $ 153
                                                  =====    =====    =====    =====
</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 $50,000 for the quarter ended December 31, 2002.
No provision for loan loss was made for the quarter ended December 31, 2001. The
increase in the provision for loan losses for the current three-month period was
primarily 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 $47,000 or 47.6% to $147,000 for the
quarter ended  December 31, 2002 from $99,000 for the quarter ended December 31,
2001. This increase was primarily due to an increase in service charge income of
$21,000,  an increase  in net gains from sales of loans of $34,000,  offset by a
$10,000 decrease in net gains from sales of available-for-sale  securities.  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  $259,000 or 32% to  $1,069,000  for the
quarter ended December 31, 2002 from $810,000 for the quarter ended December 31,
2001. The most  significant  changes in non-interest  expenses were increases in
compensation  and  benefits,  data  processing,  occupancy  costs,  advertising,
professional fees, stationary, printing and office supplies, and other operating
expenses,  offset by a decrease  in stock  services.  The  $105,000  increase in
compensation  and  benefits  expense  reflects  a $90,000  increase  in  general
salaries and benefits  expense  primarily due to the hiring of nine employees to
staff the Bank's new branch and general merit increases in administrative, other
employee  salaries and employee  health  insurance  expense.  Other increases in
compensation  and benefits  include $8,000 in expense  related to employee stock
compensation  plans and $8,000 in expense related to director fee  compensation.
Data processing increased $34,000 primarily due to higher service bureau expense
and higher other  processing  expenses for the quarter ending December 31, 2002.
Contributing to the increase in data processing is processing  costs  associated
with the growth in the  volume of deposit  and loan  accounts.  Occupancy  costs
increased  $31,000 due  primarily to increases in  depreciation  for  furniture,
fixtures, and equipment,  maintenance contract expense and other occupancy costs
associated  with  maintaining  the new  branch.  Advertising  expense  increased
$17,000 primarily due to the Bank's efforts to achieve growth in the Farmington,
New Mexico  market,  where the new branch is located.  Stationary,  printing and
office  supplies  increased  $18,000  primarily due to the purchase of forms and
supplies for the new branch.  Professional  fees increased $12,000 primarily due
to higher legal fees,  audit expense,  and accounting fees for the quarter ended
December 31, 2002. Other operating expenses increased $40,000,  primarily due to
higher  loan  expense,  other real  estate  owned  expense,  correspondent  bank
expense,  armored transit expense,  telephone  expense and organization dues and
subscriptions  expense  in the  quarter  ended  December  31,  2002.  The $8,000
decrease in stock  services for 2002 is primarily due to the absence of a $7,400
regulatory filing fee paid to the OTS in the quarter ended December 31, 2001.

                                       12
<PAGE>

RESULTS OF OPERATIONS

COMPARISON OF OPERATING RESULTS FOR THE SIX-MONTH PERIOD ENDED DECEMBER 31, 2002
COMPARED TO THE SIX-MONTH PERIOD ENDED DECEMBER 31, 2001.

General

Net income for the six months  ended  December  31,  2002  increased  $58,000 to
$937,000 compared to net income of $879,000 for the comparable  six-month period
in 2001.  The increase in net income was primarily the result of an increase net
interest  earnings  income of $437,000 and an $83,000  increase in  non-interest
earnings  partially  offset  by a $25,000  increase  in the  provision  for loan
losses,  a $415,000  increase in non-interest  expense and a $21,000 increase in
income tax expense.  Please refer to "Average Balance Sheets" for an analysis of
the change in net interest  earnings for the six months ended  December 31, 2002
compared to the same 2001 period.

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 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>
                                           Six-month period ended                        Six-month period ended
                                           -----------------------                       ----------------------
                                              December 31, 2002                             December 31, 2001
                                    --------------------------------------    ------------------------------------------

                                    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)               $139,545        $5,132           7.36%       $129,776         $5,246           8.08%
Investment securities and
 Mortgage-backed securities          52,017         1,202           4.62%         57,559          1,583           5.50%
Other interest-earning
  assets (2)                          5,198            70           2.69%          4,596             79           3.44%
                                 -----------    ----------                    -----------     ----------

Total interest-earning assets       196,760         6,404           6.51%        191,931          6,908           7.20%
Non-interest-earning assets          10,639                                        6,175
                                 -----------                                  -----------

Total assets                       $207,399                                     $198,106
                                 ===========                                 ============
Interest-bearing liabilities:
  Transaction accounts              $ 8,709          $ 35            .80%        $ 7,814          $ 43            1.10%
  Passbook savings                   12,583            33            .52%          4,548            29            1.28%
  Money market accounts              12,235            78           1.28%          9,699           206            4.25%
  Certificates of deposit            73,705         1,407           3.82%         78,229         2,079            5.32%
  Other liabilities (3)              76,061         1,587           4.18%         71,661         1,724            4.81%
                                 -----------    ----------                   -----------    ----------      -----------
Total interest-bearing
   liabilities                      183,293         3,140           3.43%        171,951         4,081            4.75%
Non-interest bearing
   liabilities                        7,225                                       10,670
                                 -----------                                  -----------

Total liabilities                   190,518                                      182,621

Stockholders' equity                 16,881                                       15,485
                                 -----------                                  -----------
Total liabilities and
  Stockholders' equity             $207,399                                     $198,106
                                 ===========                                  ===========

Net interest income                                $3,264                                       $2,827
                                                ==========                                   ==========
Interest rate spread (4)                                            3.08%                                         2.45%
                                                               ===========                                   ===========
Net yield on interest-
  earning  assets (5)                                               3.32%                                         2.95%
                                                               ===========                                   ===========
Ratio of average interest-
  earning assets to average
interest-bearing  liabilities                                       1.07X                                         1.12X
                                                               ===========                                   ===========
</TABLE>

                                       13
<PAGE>

(1)  Average balances include non-accrual loans.
(2)  Includes interest-bearing deposits in other financial institutions
(3)  Other liabilities include FHLB advances and Repurchase agreements
(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.

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.

                                             Six-month period ended
                                           December 31, 2002 vs. 2001
                                               Increase (Decrease)
                                                     Due to
                                      -----------------------------------
                                                          Rate/
                                       Volume     Rate   Volume      Net
                                       ------     ----   ------      ---
                                               (Dollars in Thousands)
Interest income:

  Loans receivable                      $ 395    $(467)   $ (42)   $(114)
  Mortgage-backed securities and
     investment securities               (152)    (253)      24     (381)
  Other interest-earning  assets           10      (17)      (2)      (9)
                                        -----    -----    -----    -----
    Total interest-earning assets         253     (737)     (20)    (504)
                                        -----    -----    -----    -----

Interest expense:

  Transaction accounts                      5      (12)      (1)      (8)
  Savings accounts                         51      (17)     (30)       4
  Money markets                            54     (144)     (38)    (128)
  Certificates of deposit                (120)    (587)      35     (672)
  Other liabilities                       106     (226)     (17)    (137)
                                        -----    -----    -----    -----
   Total interest-bearing liabilities      96     (986)     (51)    (941)
                                        -----    -----    -----    -----

Net change in interest income           $ 157    $ 249    $  31    $ 437
                                        =====    =====    =====    =====

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 $75,000 and $50,000 for the
six-month period ended December 31, 2002 and 2001, respectively. See "Comparison
of Operating Results for the quarter ended December 31, 2002 compared to quarter
ended December 31, 2001 - Provision for Losses on Loans."

Non-Interest Earnings

Total  non-interest  earnings  increased by $83,000 or 43.2% to $275,000 for the
six  months  ended  December  31,  2002 from  $192,000  for the six month  ended
December 31, 2001.  This  increase was  primarily  due to an increase in service
charge  income of  $50,000,  an  increase  in net gains  from  sales of loans of
$39,000,   offset  by  a  $10,000   decrease   in  net  gains   from   sales  of
available-for-sale   securities.  The  increase  in  service  charge  income  is
primarily  due to  increased  insufficient  fee  charges  collected  on NOW  and
checking accounts,


                                       14
<PAGE>
Non-Interest Expense

Total non-interest expense increased $415,000 or 25.2% to $2,065,000 for the six
months ended December 31, 2002 from $1,650,000 for the six months ended December
31, 2001. The most significant  changes in non-interest  expenses were increases
in compensation  and benefits,  data processing,  occupancy costs,  advertising,
stationary,  printing  and office  supplies,  ATM  expense  and other  operating
expenses,  offset by a decrease  in stock  services.  The  $224,000  increase in
compensation  and  benefits  expense  reflects  a $188,000  increase  in general
salaries and benefits  expense  primarily due to the hiring of nine employees to
staff the Bank's new branch and general merit increases in administrative, other
employee  salaries and employee  health  insurance  expense.  Other increases in
compensation  and benefits  include $20,000 in expense related to employee stock
compensation  plans and $17,000 in expense related to director fee compensation.
Data  processing  increased  $10,000  primarily due to an increase of $22,000 in
other processing expenses resulting from the processing cost associated with the
growth in the  volume of deposit  and loan  accounts,  offset by a  decrease  in
service bureau expense.  Service bureau expense was higher in the quarter ending
September 30, 2001 due to a change to a new service bureau  provider.  Occupancy
costs  increased   $65,000  due  primarily  to  increases  in  depreciation  for
furniture,  fixtures,  and  equipment,  maintenance  contract  expense and other
occupancy costs associated with maintaining the new branch.  Advertising expense
increased  $31,000  primarily due to the Bank's efforts to achieve growth in the
Farmington,  New Mexico  market,  where the new branch is  located.  Stationary,
printing and office supplies  increased $33,000 primarily due to the purchase of
forms and supplies  for the new branch.  ATM expense  increased  $8,000 due to a
change  in our  ATM  servicing  provider.  Other  operating  expenses  increased
$48,000, due primarily to higher loan expense,  other real estate owned expense,
correspondent  bank expense,  armored transit expense and telephone  expense for
the six months ended  December 31, 2002.  The $7,000  decrease in stock services
for 2002 is primarily due to the absence of a $7,400  regulatory filing fee paid
to the OTS in the quarter ended December 31, 2001.


Item 3.  CONTROLS AND PROCEDURES

(a) Evaluation of disclosure controls and procedures.  Based on their evaluation
    ------------------------------------------------
as of a date within 90 days of the filing date of this Quarterly  Report on Form
10-QSB,  the Registrant's  principal  executive officer and principal  financial
officer have concluded that the Registrant's  disclosure controls and procedures
(as defined in Rules 13a-14(c) and 15d-14(c)  under the Securities  Exchange Act
of 1934 (the "Exchange Act")) 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  controls.  There were no  significant  changes in the
     ------------------------------
Registrant's  internal  controls or in other  factors  that could  significantly
affect these controls subsequent to the date of their evaluation,  including any
corrective  actions  with  regard  to  significant   deficiencies  and  material
weaknesses.

                                       15
<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
         ---------------------------------------------------

The annual  meeting of the  stockholders  of the Company was held on October 28,
2002. At the meeting two directors  were elected for terms to expire in 2005 and
the appointment of Neff + Ricci,  LLP as the Company's  independent  accountants
was ratified.

The results of voting are shown for each matter considered.

Director election:

Nominees                  Votes for         Votes withheld

Vernon I. Hamilton         939,435              15,275
James Nechero, Jr.         938,994              15,716


Independent accountant ratification:

                           Votes for        Votes against     Abstentions

                            953,782               0               928


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****
             99.0   Certification pursuant to 18 U.S.C. Section 1350, as adopted
                    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

                                       16
<PAGE>


         --------------
         *        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)      Not applicable.

                                       17
<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: February 5, 2003           /s/Jerry R. Spurlin
                                 -----------------------------------------------
                                 Jerry R. Spurlin
                                 Assistant Secretary and Chief Financial Officer
                                 (Duly Authorized Representative and
                                 Principal Financial Officer)


                                       18
<PAGE>

                            SECTION 302 CERTIFICATION


     I, Richard C. Kauzlaric, certify that:

1.   I have reviewed this quarterly report on Form 10-QSB of GFSB Bancorp, Inc.:

2.   Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     (a)  designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during  the  period in which  this  quarterly
          report is being prepared;

     (b)  evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     (c)  presented  in  this  quarterly   report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's  other certifying  officer and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent functions):

     (a)  all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     (b)  any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6.   The  registrant's  other  certifying  officer and I have  indicated in this
     quarterly  report  whether  there  were  significant  changes  in  internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.



Date:  February 5, 2003                 /s/Richard C. Kauzlaric
                                        ----------------------------------------
                                        Richard C. Kauzlaric
                                        President


<PAGE>

                            SECTION 302 CERTIFICATION


     I, Jerry R. Spurlin, certify that:

1.   I have reviewed this quarterly report on Form 10-QSB of GFSB Bancorp, Inc.:

2.   Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report;

4.   The  registrant's  other  certifying  officer  and  I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     (a)  designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during  the  period in which  this  quarterly
          report is being prepared;

     (b)  evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     (c)  presented  in  this  quarterly   report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's  other certifying  officer and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent functions):

     (a)  all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     (b)  any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6.   The  registrant's  other  certifying  officer and I have  indicated in this
     quarterly  report  whether  there  were  significant  changes  in  internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.



Date:    February 5, 2003                       /s/Jerry R. Spurlin
                                                --------------------------------
                                                Jerry R. Spurlin
                                                Chief Financial Officer