x Annual report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934



Commission File Number: 0-22269







|Louisiana                         | 72-1341014              
|--------------------------------- | ------------------------
|(State or Other Jurisdiction      | (IRS Employer ID Number)
|of Incorporation or Organization) |                         









Registrant's Telephone Number: (504) 457-6220







Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 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
|----- | --

Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will
not be contained, to the best of the Registrants knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. x

Indicate by check mark whether the registrant is an accelerated
filer (as defined in Exchange Act Rule 12b-2)



|Yes | No x
|--- | ----





As of June 28, 2002, there were 1,611,386 shares of the Registrants
common stock, par value $.01 per share, issued and outstanding.
The aggregate market value of such stock, excluding the shares
held by all directors, officers and affiliates of the Registrant,
was $19.8 million at June 28, 2002 based on the per common share
price at closing of $18.01 on that date.

DOCUMENTS INCORPORATED BY REFERENCE

Listed hereunder are the following documents which have been
incorporated by reference and the Part of the Form 10-K into which
the document is incorporated.



|(1) | Portions of the Annual Report to Shareholders for the fiscal
    year ended December 31, 2002 are incorporated into Part II, Items
    5 through 9, and Part IV, Item 15.                                              
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Portions of the definitive proxy statement for the 2003 Annual
    Meeting of Shareholders to be filed within 120 days of the Registrants
    fiscal year end are incorporated into Part III, Items 10 through
    13.



Item 1. BUSINESS

In addition to historical information, this Annual Report on
Form 10-K includes certain "forward-looking statements,"
as defined in the Securities Act of 1933 and the Securities Exchange
Act of 1934, based on current management expectations. The Companys
actual results could differ materially from those management expectations.
Such forward-looking statements include statements regarding the
Companys intentions, beliefs or current expectations as
well as the assumptions on which such statements are based. Stockholders
and potential stockholders are cautioned that any such forward-looking
statements are not guarantees of future performance and involve
risks and uncertainties, and that actual results may differ materially
from those contemplated by such forward-looking statements. Factors
that could cause future results to vary from current management
expectations include, but are not limited to, general economic
conditions, legislative and regulatory changes, monetary and fiscal
policies of the federal government, changes in tax policies, rates
and regulations of federal, state and local tax authorities, changes
in interest rates, deposit flows, the cost of funds, demand for
loan products, demand for financial services, competition, changes
in the quality or composition of the Companys loan and investment
portfolios, changes in accounting principles, policies or guidelines,
and other economic, competitive, governmental and technological
factors affecting the Companys operations, markets, products,
services and fees. The Company undertakes no obligation to update
or revise any forward-looking statements to reflect changed assumptions,
the occurrence of unanticipated events or changes to future operating
results over time.

General

GS Financial Corp. (the "Company") was incorporated
under Louisiana law on December 24, 1996 as a thrift holding company.
The Company commenced operations on April 1, 1997 upon the completion
of its initial public offering of common stock, which trades on
the Nasdaq National Market under the symbol "GSLA."
On that date the Companys wholly owned subsidiary, Guaranty
Savings and Homestead Association (the "Association")
was converted from a Louisiana chartered mutual savings and loan
association to a Louisiana chartered stock savings and loan association.
This was accomplished through the offer and sale of common stock
by the Company to certain depositors, employees, officers and
directors of the Association as well as the GS Financial Employee
Stock Ownership Plan (the "ESOP"). The Company simultaneously
used a portion of the proceeds of its sale of common stock to
acquire 100% of the stock of the Association.

The Company's principal business is conducted through the Association.
Guaranty Savings and Homestead Association was founded in New
Orleans, Louisiana in 1937 as a mutual savings and loan association.
The Associations unconsolidated assets at December 31, 2002
totaled $207.1 million and comprise 98.6% of the total consolidated
assets of the Company. The Association provides financial services
primarily to individuals, mainly through the origination of mortgage
loans on 1-4 family residences. The Association accepts deposits
in the form of passbook savings, certificates of deposit, demand
deposit accounts and individual retirement accounts. The Association
also invests in short and long term liquid investments such as
US Treasury and Agency securities, mortgage backed securities,
overnight Federal Funds, money market investments and qualified
thrift grade mutual funds. The balance of the consolidated assets
includes $2.1 million in similar short and long-term liquid investments,
and $.8 million in fixed assets held exclusively at the Company
level.

Regulation

The Companys primary regulator is the Office of Thrift
Supervision ("OTS"). The OTS regulates all thrifts and
thrift holding companies whose deposits are insured by the Savings
Association Insurance Fund ("SAIF") which is administered
by the Federal Deposit Insurance Corporation ("FDIC").
The Company, by virtue of its state charter is also subject to
the rules and regulations of the Louisiana Office of Financial
Institutions ("OFI"). These two agencies currently examine
the Company approximately every 18 months on an individual basis,
relying on the examination report of the other agency on cycles,
alternating when it is not their year to examine the Association.
The nature of such examinations includes safety and soundness
issues as well as compliance with applicable laws and regulations.
The Association and Company were last examined by the OTS as of
June 30, 2002.

As a public registrant the Company is subject to the rules
and regulations of the Securities and Exchange Commission ("SEC").
The Company also is subject to the rules of the NASDAQ Stock Market.

The Association has been a member of the Federal Home Loan
Bank of Dallas ("FHLB") since 1937. The Federal Home
Loan Bank System is comprised of 12 regional banks which serve
thrifts and banks by offering investment opportunities and sources
of funds.

Lending Activities

Loan Portfolio Composition. The following table sets
forth the composition of the Companys loan portfolio by
type of loan at the dates indicated (in thousands):





|                   |                        |                         |       | At December 31,
|------------------ | ---------------------- | ----------------------- | ----- | ---------------
|                   |                        |                         |       | 2002           
|Real Estate Loans: |                        |                         |       |                
|                   | One to Four            |                         |       |                
|                   |                        | Family Residential      | $     | 57,502         
|                   | FHA and VA             |                         | 1     |                
|                   | Construction           |                         | 1,263 |                
|                   | Commercial Real Estate |                         | 8,672 |                
|                   | Other                  |                         | 9,451 |                
|                   |                        |                         |       | ---------      
|                   |                        | Total Real Estate Loans |       | 76,889         
|                   |                        |                         |       |                
|Consumer Loans:    |                        |                         |       |                
|                   | Second Mortgage        |                         | 7     |                
|                   | Loans on Deposits      |                         | 396   |                
|                   |                        |                         |       | ---------      
|                   |                        | Total Consumer Loans    |       | 403            
|                   |                        |                         |       |                
|Commercial Loans   |                        | 1,515                   |       | 683            
|                   |                        |                         |       | ---------      
|                   |                        | Total Loans             |       | 78,807         
|                   |                        |                         |       |                
|Allowance for      |                        |                         |       |                
|                   | Loan Losses            |                         | (483) |                
|                   |                        |                         |       |                
|Net Deferred Loan  |                        |                         |       |                
|                   | Origination Costs      |                         | 10    |                
|                   |                        |                         |       | ---------      
|Net Loans          | $                      | 78,334                  | $     | 81,611         
|                   |                        |                         |       | =====          

Contractual Term to Final Maturities.The following
table sets forth certain information as of December 31, 2002 regarding
the dollar amount of loans maturing in the Companys portfolio,
based on the contractual date of the loans final maturity,
before giving effect to net items. Demand loans and loans having
no stated maturity are reported as due in one year or less. The
amounts shown below do not reflect normal principal amortization;
rather, the balance of each loan outstanding at December 31, 2002
is shown in the appropriate year of the loans final maturity.
The actual maturity of loans varies primarily on prepayments which
to a large extent depends on market interest rates. In general,
if prevailing market rates fall below those of the portfolio,
prepayments accelerate. Conversely, if market interest rates increase
above portfolio rates early pay-offs tend to decrease.



Fixed rate loans receivable as of December 31, 2002 are scheduled
to mature and adjustable rate loans are scheduled to re-price
as follows (in thousands):



|                            |              |       | Under 
    One 
    Year | One to 
    Five 
    Years | Over Five to Ten Years | Over 
    10 
    Years | Total 
|--------------------------- | ------------ | ----- | ------------------------ | --------------------------- | ---------------------- | ----------------------- | ------
|                            |              |       | ------                   |                             | ------                 |                         | ------
|Loans Secured by 1-4 Family |              |       |                          |                             |                        |                         |       
|                            | Residential: |       |                          |                             |                        |                         |       
|                            | Fixed Rate   | $     | 71                       | $                           | 1,184                  | $                       | 6,698 
|Other Loans Secured by      |              |       |                          |                             |                        |                         |       
|                            | Real Estate: |       |                          |                             |                        |                         |       
|                            | Fixed Rate   |       | -                        |                             | 14,236                 |                         | 5,158 
|Commercial Fixed Rate       |              | 1,146 |                          | -                           |                        | 369                     |       
|All Other Loans             |              | 396   |                          | -                           |                        | -                       |       
|                            |              |       | ------                   |                             | ------                 |                         | ------
|                            |              | $     | 1,613                    | $                           | 15,420                 | $                       | 12,225
|                            |              |       | =====                    |                             | =====                  |                         | ===== 

Loan Origination Activity. The table below sets forth
the Companys total loan origination and reduction experience
during the periods indicated. Historically, the Company has not
purchased or sold any loans.



|                                  |                        |        | For the Years ended December 31,
|--------------------------------- | ---------------------- | ------ | --------------------------------
|                                  |                        |        | 2002                            
|                                  |                        |        | -------                         
|Loan Originations (in thousands): |                        |        |                                 
|                                  | 1-4 family residential | $      | 8,021                           
|                                  | Construction           |        | 2,143                           
|                                  | Commercial real estate |        | 4,503                           
|                                  | Consumer               |        | 364                             
|                                  | Commercial             |        | 2,049                           
|                                  | Other Real Estate      |        | 4,336                           
|                                  |                        |        | -------                         
|Total Loan Originations           |                        | 21,416 |                                 
|Loan principal                    |                        |        |                                 
|                                  | Repayments             |        | (24,557)                        
|Increase (decrease)               |                        |        |                                 
|                                  | due to other items     |        | (47)                            
|                                  |                        |        | -------                         
|Net increase(decrease) in         |                        |        |                                 
|                                  | Loan portfolio         | $      | (3,188)                         
|                                  |                        |        | ======                          

Real Estate Lending Standards and Underwriting Policies.
The lending activities of the Company are subject to written underwriting
standards and loan origination procedures established by the Company's
Board of Directors (the "Board") and Management. These
standards and procedures are incorporated into the Company's Underwriting
Standards and Lending Policy which are reviewed as needed by the
Board and Management. The underwriting standards dictate the manner
in which loan applications are accepted and processed. Such standards
are written to comply with all applicable laws and regulations
including but not limited to Truth-In-Lending (Regulation Z) and
the Real Estate Settlement and Procedures Act ("RESPA").
These standards pertain to such issues as appraisal guidelines,
disclosure requirements, credit criteria, complete applications,
and title requirements. The Company requires appraisals from Board-approved
state licensed and certified appraisers who are on an approved
appraiser list maintained by Management. The lending policy establishes
the overall direction of the Company's lending activities within
the community and forms the basis for setting underwriting standards
which limit the Company's exposure to credit risk. Such factors
include loan amount, debt to income ratios, collateral, and acceptable
rates and terms.

Briefly stated, the loan process consists of applicants meeting
with loan personnel and providing pertinent documentation, including
but not limited to, requested loan amount, property description,
security offered as collateral, intended down payments and an
acceptable rate and term consistent with the Company's then current
lending policy. Upon receipt of a favorable credit report, an
appraisal is obtained with requisite documentation to support
the property's stated market value. Upon completion the loan package
is presented to the Loan Committee for consideration. All applicants
receive written notification of the Committees decision
to approve or deny the request. Approved loans are assigned to
one of the Company's approved attorneys for closing. Actions of
the Loan Committee are submitted to the Board of Directors for
consideration and ratification on a monthly basis.

Loan applications are accepted at all four of the Companys
full service branches and the loan production office in Ponchatoula
and forwarded to the Loan Committee which meets weekly. The Company
usually requires a title insurance policy on loans prior to closing.

The Companys conventional fixed rate mortgage loans on
1-4 family residential dwellings are offered with terms up to
30 years. Currently, the minimum cash down payment is 20% of the
lesser of purchase price or appraised value. The Company originates
and funds construction loans which subsequently convert to permanent,
fixed rate mortgage loans. During the construction period, the
company requires payment of interest only on the amount of principal
drawn.

In 2000, the Company began shifting some of its lending activity
towards the commercial market to diversify and enhance the products
and services offered to its customers and add higher yielding
loans to the overall portfolio than current market rates on residential
mortgage loans. Commercial loans typically carry higher yields
and associated risk than loans on 1-4 family dwellings. The Company
offers mortgage loans on multifamily residential dwellings, commercial
real estate and vacant ground. The Company also offers commercial
asset based loans secured by non-real estate collateral such as
inventory and accounts receivable. The Company has a special commercial
loan committee to evaluate such applications.



During 2002 and 2001, the Company was able to originate approximately
$8.7 and $8.0 million of non-residential loans, respectively.
These loans are secured mainly by multifamily and commercial real
estate. The Company applies similar underwriting standards to
its commercial loans with particular attention paid to cash flow
analysis of the underlying business entity and debt coverage ratios.
Commercial loan documentation procedures differ from residential
lending requirements on a case-by-case basis.

Loans are available to depositors of the Company secured by
passbook savings or certificates of deposit at a rate of 2 percentage
points above the savings rate up to 90% of the face amount of
a certificate of deposit or 90% of the current available balance
of a passbook. The minimum amount on such loans is $1,000 and
these loans are payable on demand subject to 30 days notice.

Asset Quality

General. The Company has adopted an asset classification
policy which is designed to draw attention to assets before collection
becomes a problem, thus maintaining the quality of the Companys
investment as an interest-earning asset. The policy also insures
the accurate reporting of the Companys assets from a valuation
standpoint.

All of the Companys loans are reviewed on a quarterly
basis. Payment histories as well as the value of the underlying
collateral are reviewed and assessed in light of several risk
factors. The state of the local economy factors into the evaluation
process. A healthy economy is characterized by low unemployment
which usually leads to strong real estate markets and the maintenance
or appreciation of underlying collateral values. Current interest
rates and expectations of the movement thereof is also a significant
risk factor. Low or falling interest rates can act to stimulate
local real estate markets while also increasing prepayment speeds
on existing assets. Rising or high interest rates usually slows
down payments. The level of credit concentration the customer
has with the Company is also a risk factor. Other risk factors
include environmental factors which could impair the value of
the underlying collateral of an asset or changes in federal and
state regulations which might reduce the ability of the Company
to collect all of the principal and interest owed to the Company.

The Company maintains a "Watch List" of loans, which
is part of managements internal asset classification system.
The watch list identifies assets classified as "substandard,"
"doubtful" or "loss," pursuant to OTS regulations.
Assets displaying tendencies which might hinder full collection
of principal are classified as substandard. Such tendencies include
but are not limited to late payments on loans or deterioration
of the underlying collateral. Those loans classified substandard,
for which a specific potential for loss has been identified, are
considered "special assets."

Loan collection efforts in the form of past due notices commence
when loan payments are more than 15 days past due. Once a loan
reaches 30 days past due status, the Companys collection
manager initiates personal contact with the borrower. When a loan
becomes 90 days past due, the Company initiates foreclosure proceedings.
At this point, loans are placed on non-accrual status. All interest
and late charges due on such loans are reversed in the form of
reserves for uncollectible interest and late charges.

Real estate acquired by the Company through foreclosure is
classified as foreclosed real estate until such time as the property
is sold. All such assets are booked at the lower of appraised
value or cost which includes all principal, escrow overdrafts
and attorney fees. All foreclosed real estate is considered substandard.

Delinquent Loans and Non-Performing Assets. The following
tables set forth the Companys delinquent loans and non-performing
assets as of the dates indicated. Balances are indicative of the
total principal balances of such loans rather than the actual
principal past due based on the number of payments past due. The
Company had no loans 90 plus days delinquent and still accruing
in the table below. At December 31 of the five years presented,
predominantly all of the Associations delinquent loans and
non performing assets were either repossessed 1-4 family residential
dwellings or loans secured by 1-4 family residential dwellings.













|                       |   | At December 31,
|---------------------- | - | ---------------
|                       |   | 2002           
|                       |   | -----          
|30-89 Days             | $ | 2,931          
|90+ Days               |   | 651            
|                       |   | -----          
|Total Delinquent Loans | $ | 3,582          
|                       |   | ====           









|                            |                     |     | At December 31,
|--------------------------- | ------------------- | --- | ---------------
|                            |                     |     | 2002           
|                            |                     |     | -----          
|90+ Day Delinquent Loans    | $                   | 651 | $              
|Foreclosed Real Estate      |                     | -   |                
|                            |                     |     | -----          
|Total Non Performing Assets | $                   | 651 | $              
|                            |                     |     | ===            
|Non Performing Loans as     |                     |     |                
|                            | a % of Total Loans  |     | .83%           
|Non Performing Assets as    |                     |     |                
|                            | a % of Total Assets |     | .31%           



Classified Assets.At December 31, 2002, 2001 and 2000,
the Companys total classified assets amounted to $1.8 million.
All such classified loans at each of these dates were secured
by first liens on one-to-four family residential dwellings.

Allowance for Loan Loss. The allowance for loan loss
("ALL") is calculated by assessing the need for specific
reserves on identified problem credits (see special assets in
the previous paragraph) in addition to using historical and economic
based percentages on certain classifications of homogeneous loans
to arrive at an overall ALL. These categories are based on the
type of underlying collateral such as commercial or residential
real estate while still other categories are based on the nature
of the loan such as construction verses permanent financing. At
December 31, 2002, the ALL was allocated as follows:



GS Financial Corp.

Allocation of the Allowance for Loan Losses



|                                             | At December 31,          
|-------------------------------------------- | -------------------------
|Allowance at
    End of PeriodApplicable to: | 2002                     
|Amount                                       | Percent
    of TotalLoans
|One to Four Family Residential               | $ 217                    
|FHA and VA                                   | -                        
|Construction                                 | 5                        
|Commercial Real Estate                       | 115                      
|Other Real Estate                            | 126                      
|Second Mortgage                              | -                        
|Loans on Deposits                            | -                        
|Commercial Loans                             | 20                       
|                                             |                          
|TOTAL                                        | $ 483                    
|                                             | ====                     

During 2002, the ALL increased even though the loan portfolio
decreased in size. The increase in ALL was not due to any deterioration
of collateral, downturn in the economy or other negative factor.
The change in the mix of the loan portfolio dictated the increase.
At December 31, 2001, non-residential loans comprised approximately
13% of the entire portfolio, as compared to approximately 25%
at December 31, 2002. These loans are primarily mortgage loans
secured by multifamily residential dwellings or commercial real
estate. Non-residential loans typically carry more risk than residential
loans, and under the Companys valuation calculation, are
assessed higher valuation allowances than residential loans.



LOAN LOSS EXPERIENCE

Provisions for loan losses are charged to earnings to bring
the total ALL to a level considered appropriate by management.
Losses are incurred via foreclosure, deterioration of the underlying
collateral, inability of the customer to repay the loan or other
means. These losses are charged against the ALL. The ALL is evaluated
throughout the year and provisions to increase or reductions to
reduce the allowance to the appropriate level deemed by management
are recorded when necessary. Charge-offs reduce the allowance
while recoveries increase the allowance during the quarter. Management
assesses the ALL accordingly and establishes additional provisions
to bring the ALL to an appropriate level. The appropriate level
of the ALL is determined by managements estimation of the
amount of loss associated with loans considered to be impaired
in accordance with SFAS 114, "Accounting by Creditors for
Impairment of a Loan," as well as managements estimate
of loss associated with the remaining portfolio. Historical analysis
of factors such as number of foreclosures, level of delinquencies
and amount of charge-offs as well as other factors such as local
and national economic conditions help management set both the
formula used to calculate the ALL for the remaining loan portfolio
as well as an appropriate level for the ALL overall.

The following table sets forth the Companys loan loss
experience for the years presented. All of the charge-offs and
provisions in the following table were on first mortgages of one-to-four
family dwellings. An analysis of the allowance for loan loss is
as follows (dollars in thousands):



|                     |                        |        | Years Ended December 31,
|-------------------- | ---------------------- | ------ | ------------------------
|                     |                        |        | 2002                    
|                     |                        |        | -----                   
|Balance, Beginning   |                        |        |                         
|                     | of Year                | $      | 435                     
|Provision for Losses |                        | 48     |                         
|Loans Charged Off    |                        | -      |                         
|Recoveries           |                        | -      |                         
|                     |                        |        | -----                   
|Balance, End of Year | $                      | 483    | $                       
|                     |                        |        | ====                    
|Allowance for Loan   |                        |        |                         
|                     | Losses as a % of       |        |                         
|                     | Total Loans Receivable | .62%   | .53%                    
|Allowance for Loan   |                        |        |                         
|                     | Losses as a % of       |        |                         
|                     | Non Performing Loans   | 74.16% | 174.80%                 

Mortgage-Backed Securities

The Company has invested in a portfolio of fixed-rate, mortgage-backed
securities that are issued or guaranteed by the Government National
Mortgage Association ("GNMA.") GNMA securities represent
direct obligations of the Federal government. Because of this,
these securities are considered high quality investments with
minimal credit risks. The guaranteed aspect of these investments
results in yields slightly less than the actual yields on the
underlying mortgage loans.

Mortgage-backed securities represent participating interests
in pools of first mortgage loans originated and serviced by their
prospective issuers. Principal and interest payments of the underlying
mortgage loans are passed through intermediaries, including but
not limited to the issuing agencies, on to investors such as GS
Financial Corp.

The Company invests in mortgage-backed securities with terms
varying from 5 to 30 years. These securities are subject to variations
in cash flow and yield due to the prepayment rates of the underlying
mortgage loans. All such mortgage-backed securities meet the requirements
of qualified thrift investments as later defined.

All of the Companys mortgage-backed securities are classified
as available-for-sale pursuant to SFAS 115. During 2000 and 2001,
the Company largely divested itself of mortgage-backed securities
in order to provide liquidity for additional investment in CMOs
which provide more attractive yields and terms to the Company.

The following table sets forth the composition of the Companys
mortgage-backed securities portfolio at each of the dates indicated
(in thousands):

MORTGAGE-BACKED SECURITIES



|At December 31, 2002: |   | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair 
    Value
|--------------------- | - | -------------- | ---------------------- | ----------------------- | ---------------
|                      |   | ----------     |                        | ----------              |                
|Available for Sale:   |   |                |                        |                         |                
|GNMA                  | $ | 539            | $                      | 30                      | $              
|                      |   | -------        |                        | -------                 |                
|                      | $ | 539            | $                      | 30                      | $              
|                      |   | =====          |                        | =====                   |                
|                      |   |                |                        |                         |                
|At December 31, 2001: |   | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair 
    Value
|                      |   | ----------     |                        | ----------              |                
|Available for Sale:   |   |                |                        |                         |                
|GNMA                  | $ | 857            | $                      | 28                      | $              
|                      |   | -------        |                        | -------                 |                
|                      | $ | 857            | $                      | 28                      | $              
|                      |   | ====           |                        | ==                      |                

The following table sets forth the contractual maturities of
the mortgage-backed security portfolio as of December 31, 2002
(in thousands):

MORTGAGE-BACKED SECURITIES



|                                     | At December 31, 2002:              |   | Amortized Cost | Fair Value | Weighted Average Rate
|------------------------------------ | ---------------------------------- | - | -------------- | ---------- | ---------------------
|                                     |                                    |   | ---------      |            | ---------            
|Mortgage-Backed Securities Maturing: |                                    |   |                |            |                      
|                                     | In One Year or Less                | $ | -              | $          | -                    
|                                     | After One Year Through Five Years  |   | -              |            | -                    
|                                     | After Five Years Through Ten Years |   | -              |            | -                    
|                                     | After Ten Years                    |   | 539            |            | 569                  
|                                     |                                    |   | ------         |            | ------               
|                                     |                                    | $ | 539            | $          | 569                  
|                                     |                                    |   | ====           |            | ====                 











The following table sets forth the purchases, sales and principal
repayments of the Companys mortgage-backed securities during
the periods indicated (in thousands):

MORTGAGE-BACKED SECURITIES



|                           |                           |                  |       | 2002    |         | 2001    |          | 2000   
|-------------------------- | ------------------------- | ---------------- | ----- | ------- | ------- | ------- | -------- | -------
|                           |                           |                  |       | ------- |         | ------- |          | -------
|Mortgage-Backed Securities |                           |                  |       |         |         |        
|                           | Balance at January 1,     | $                | 857   | $       | 4,118   | $       | 16,743  
|                           | Purchases                 |                  | -     |         | -       |         | -       
|                           | Repayments                |                  | (311) |         | (925)   |         | (1,956) 
|                           | Sales (Net of Gains)      |                  | -     |         | (2,321) |         | (10,650)
|                           | Amortizations of Premiums |                  |       |         |         |         |         
|                           |                           | /Discounts (Net) |       | (7)     |         | (15)    |          | (19)   
|                           |                           |                  |       | ------- |         | ------- |          | -------
|                           | Balance at December 31,   | $                | 539   | $       | 857     | $       | 4,118   
|                           |                           |                  |       | ====    |         | ======  |          | ====== 
|                           | Weighted Average Yield    |                  | 7.09% |         | 6.54%   |         | 6.68%   

Investment Securities

The Company invests in United States Treasury issued investments,
FHLMC common and preferred stock, and several mutual funds for
which the underlying collateral is comprised of mortgage-based
products, United States Treasury Obligations and various money-market
investments. These mutual funds provide the Company with an investment
with one-day availability which offer yields over and above traditional
overnight investments. The investment policy of the Company strives
to maintain a liquid, conservative portfolio of investments, keeping
in mind the cash flow and investment needs of the Company. The
Companys investment portfolio is classified as available-for-sale
in accordance with SFAS 115.

Interest rates dictate many of the investment decisions and
policies of the Company. It is the policy of the Company not to
engage in speculative purchasing, selling or trading of investments,
however, certain profits may be taken from time to time on the
sale of investments. When interest rate spreads reach acceptable
levels the Company may utilize leveraged purchasing of investment
securities. Also, when anticipated earnings permit, certain portfolio
adjustments may be made to enhance the overall portfolio yield
even though losses may be recognized in doing so.



INVESTMENT SECURITIES

Securities available-for-sale consist of the following (in
thousands):



|At December 31, 2002:      |                      | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair 
    Value
|-------------------------- | -------------------- | -------------- | ---------------------- | ----------------------- | ---------------
|                           |                      |                | ----------             |                         | ----------     
|U. S. Government           |                      |                |                        |                         |                
|                           | and Federal Agencies | $              | 801                    | $                       | 116            
|Adjustable Rate            |                      |                |                        |                         |                
|                           | Mortgage Mutual Fund |                | 31,924                 |                         | 39             
|Intermediate               |                      |                |                        |                         |                
|                           | Mortgage Mutual Fund |                | 412                    |                         | 7              
|FHLMC Common Stock         |                      | 16             |                        | 929                     |                
|FHLMC Preferred Stock      |                      | 19,846         |                        | 1,001                   |                
|                           |                      |                | -------                |                         | -------        
|                           |                      | $              | 52,999                 | $                       | 2,092          
|                           |                      |                | ======                 |                         | =====          
|                           |                      |                |                        |                         |                
|At December 31, 2001:      |                      | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair 
    Value
|                           |                      |                | ----------             |                         | ----------     
|U. S. Government           |                      |                |                        |                         |                
|                           | and Federal Agencies | $              | 801                    | $                       | 85             
|Adjustable Rate            |                      |                |                        |                         |                
|                           | Mortgage Mutual Fund |                | 12,481                 |                         | 32             
|Ultra Short Term           |                      |                |                        |                         |                
|Mutual Fund                |                      | 4,255          |                        | -                       |                
|Intermediate               |                      |                |                        |                         |                
|                           | Mortgage Mutual Fund |                | 394                    |                         | 3              
|FHLMC Common Stock         |                      | 16             |                        | 1,031                   |                
|FHLMC Preferred Stock      |                      | 16,224         |                        | 326                     |                
|Equity Investments  Other |                      | 173            |                        | 3                       |                
|                           |                      |                | -------                |                         | -------        
|                           |                      | $              | 34,344                 | $                       | 1,480          
|                           |                      |                | =====                  |                         | =====          



The following table sets forth the amount of investment securities
which mature during each of the periods indicated at December
31, 2002:

INVESTMENT SECURITIES



|                      |                                    | Securities        
|--------------------- | ---------------------------------- | ------------------
|                      |                                    | Available-for-Sale
|At December 31, 2002: |                                    | Amortized Cost    
|                      |                                    |                   
|Amounts Maturing in:  |                                    |                   
|                      | In One Year or Less                | $                 
|                      | After One Year Through Five Years  |                   
|                      | After Five Years Through Ten Years |                   
|                      |                                    |                   
|                      |                                    | $                 
|                      |                                    |                   

COLLATERALIZED MORTGAGE OBLIGATIONS

Currently, the Companys investment in Collateralized
Mortgage Obligations (CMOs) is limited to Real Estate Mortgage
Investment Conduits (REMICs). A REMIC is a pass through
investment created under the Tax Reform Act of 1986 to issue multiple
class mortgage-backed securities. The Companys investment
in REMICs is limited to those issued by FNMA, FHLMC, GNMA
and "AAA" rated non-governmental issuers. These are
defined to be within the 20% risk-weighted category for thrift
institutions. The contractual maturity of a REMIC is defined by
the latest maturity date of the underlying group of mortgage loans.
In terms of actual cash flow, the term or duration of the REMICs
purchased by the Company varies from 1 to 7 years. The cash flow
of these investments facilitates the operating needs of the Company.



The following table sets forth the composition of the Companys
portfolio of Collateralized Mortgage Obligations indicated (in
thousands):

COLLATERALIZED MORTGAGE OBLIGATIONS



|At December 31, 2002: |   | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair 
    Value
|--------------------- | - | -------------- | ---------------------- | ----------------------- | ---------------
|                      |   | ----------     |                        | ----------              |                
|Available-for-Sale:   |   |                |                        |                         |                
|FNMA                  | $ | 7,534          | $                      | 8                       | $              
|FHLMC                 |   | 19,404         |                        | 81                      |                
|GNMA                  |   | 1,601          |                        | -                       |                
|Other                 |   | 23,564         |                        | 898                     |                
|                      |   | -------        |                        | -------                 |                
|                      | $ | 52,103         | $                      | 987                     | $              
|                      |   | =====          |                        | =====                   |                

|At December 31, 2001: |   | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair 
    Value
|--------------------- | - | -------------- | ---------------------- | ----------------------- | ---------------
|                      |   | ----------     |                        | ----------              |                
|Available-for-Sale:   |   |                |                        |                         |                
|FNMA                  | $ | 1,283          | $                      | -                       | $              
|FHLMC                 |   | 13,702         |                        | 153                     |                
|Other                 |   | 35,810         |                        | 1,213                   |                
|                      |   | -------        |                        | -------                 |                
|                      | $ | 50,795         | $                      | 1,366                   | $              
|                      |   | =====          |                        | =====                   |                

Sources of Funds

General. The last two years the Company has experienced
a significant increase in retail deposits, due largely to investors
taking money out to the equity markets. The Company has also utilized
wholesale sources such as the FHLB which allows member institutions
such as the Company to borrow money at discounted costs.

Deposits. The Companys deposits are attracted
principally from within its market area. Many depositors are also
loan customers. The Company offers passbook savings, demand deposit
accounts, NOW accounts and certificates of deposit. Terms for
certificates vary from 6 months to 5 years while rates tend to
increase with term.



The following table shows the distribution of, and certain
other information relating to the Companys deposits. Deposit
account balances at December 31, 2002, 2001, and 2000 are summarized
as follows (in thousands):



|                 |          | Years Ending December 31,
|---------------- | -------- | -------------------------
|                 |          |                          
|                 |          |                          
|                 |          |                          
|                 |          |                          
|                 |          |                          
|Demand Deposit   |          |                          
|                 | Accounts | $                        
|Passbook Savings |          |                          
|                 | Accounts |                          
|Certificates of  |          |                          
|                 | Deposit  |                          
|                 |          |                          
|                 |          | $                        
|                 |          |                          

The following table sets forth the deposit cash flow of the
Company during the periods indicated (in thousands):



|                                    |                   | Years Ended December 31,
|----------------------------------- | ----------------- | ------------------------
|                                    |                   |                         
|                                    |                   |                         
|Increase (decrease) before          |                   |                         
|                                    | Interest Credited | $                       
|Interest Credited                   |                   | 2,167                   
|                                    |                   |                         
|Net increase (decrease) in deposits | $                 | 35,341                  

The Company attempts to price its deposit accounts to remain
generally competitive with other financial institutions in its
market area, while maintaining its traditional margins. Traditionally
the Company has relied on its passbook savings accounts as a core
deposit base. During 2001, the Company was able to establish a
portfolio of demand deposit accounts of approximately $8.0 million.
This was in line with the Company's goals to diversify and expand
the products and services offered to its customers. The Company
does not pay "jumbo" rates for deposits $100,000 and
over.

The principal methods used by the Company to attract deposits
include its emphasis on personal service, competitive interest
rates and convenient office locations. The Company does not advertise
for deposits outside of its primary market area. At December 31,
2002, the Company had no deposits that were obtained through deposit
brokers.

The following table presents the amount of certificates of
deposit at December 31, 2002 which mature during the periods indicated
(in thousands).



|                              |                        |        | Amount  | Percent
|----------------------------- | ---------------------- | ------ | ------- | -------
|                              |                        |        | ------- | -------
|Certificate Accounts Maturing |                        |        |        
|                              | Under 12 months        | $      | 47,695  | 69.92% 
|                              | 12 months to 24 months |        | 8,981   | 13.17% 
|                              | 24 months to 36 months |        | 11,428  | 16.75% 
|                              | 36 months to 48 months |        | 35      | 0.05%  
|                              | 48 months to 60 months |        | 74      | 0.11%  
|                              |                        |        | ------  | -----  
|Total Certificates            | $                      | 68,213 | 100.00%
|                              |                        |        | =====   | ====== 

The following table sets forth the maturities of the Companys
deposits of $100,000 or more at December 31, 2002 by time remaining
to maturity (in thousands).

DEPOSITS $100,000 AND OVER

(in thousands)



|Maturing in 3 months or less     | $ | 8,918 
|-------------------------------- | - | ------
|Maturing in 3 to 6 months        |   | 3,282 
|Maturing in 6 months to 1 year   |   | 2,485 
|Maturing in 1 to 2 years         |   | 510   
|Maturing in 2 to 3 years         |   | 2,173 
|                                 |   | ------
|Total Deposits $100,000 and over | $ | 17,368
|                                 |   | ===== 



Borrowings. During 2002 the Company obtained advances
from the FHLB, as part of a leveraged investment program. The
Company borrows the funds which are subsequently reinvested in
mortgage-backed securities, collateralized mortgage obligations
and other investments which earn interest at a rate greater than
the rate charged on the advances. The advances consist of fully
amortizing and balloon advances which mature between January,
2003 and June, 2008. A summary of the advances by maturity and
interest rate are detailed as follows (in thousands):



|                     |   |            | Weighted  
|-------------------- | - | ---------- | ----------
|Maturing in the Year |   |            | Average   
|Ending December 31,  |   | Amount     | Rate      
|-------------------  |   | ---------- | ----------
|2003                 | $ | 27,453     | 5.51%     
|2004                 |   | 6,226      | 5.56%     
|2005                 |   | 9,537      | 5.97%     
|2006                 |   | 6,131      | 5.55%     
|2007                 |   | 5,514      | 5.63%     
|Thereafter           |   | 11,531     | 5.44%     
|                     |   | ---------  |           
|                     | $ | 66,392     |           

The maximum amount of advances outstanding at any month-end
during 2002 was $79.3 million. The average balance outstanding
during 2002 was $72.1 million.



Treasury Stock

Since 1998, the Company has been repurchasing shares of its
common stock. The following table summarizes the repurchase of
shares of its common stock by year:



|GS Financial Corp.      
|------------------------
|Common Stock Repurchases
|                        
|                        
|Year                    
|------                  
|1998                    
|1999                    
|2000                    
|2001                    
|2002                    
|                        
|Total                   
|                        

All purchases were open market transactions and most were at
a discount to book value.







Subsidiaries

Guaranty Savings and Homestead Association is a wholly-owned
subsidiary of the Company. The Company has no other subsidiaries.

Competition

Guaranty Savings and Homestead Association faces significant
competition both in attracting deposits and in originating loans.
Its most direct competition for loans and deposits has come from
commercial banks, credit unions, other savings and loans and mortgage
brokers located in the metropolitan New Orleans market. The Association
also competes for investors funds with short-term money
market mutual funds and issuers of corporate and government securities.
Guaranty Savings and Homestead Association does not rely on any
individual group or entity for a material portion of its deposits
or loan portfolio. The Associations primary factors in competing
in the loan and deposit markets are its efficient personal service
and attractive interest rates and terms.

Employees

The Association had 40 full-time employees at December 31,
2002. None of these employees are represented by a collective
bargaining agreement. Guaranty Savings and Homestead Association
believes that it enjoys excellent relations with its personnel.

Regulation

Set forth below is a brief description of certain laws and
regulations which are applicable to the Company and Guaranty Savings
and Homestead Association. The description of these laws and regulations,
as well as descriptions of laws and regulations contained elsewhere
herein, does not purport to be complete and is qualified in its
entirety by reference to applicable laws and regulations.

The Company

General. The Company, as a savings and loan holding
company within the meaning of the Home Owners Loan Act,
as amended ("HOLA"), is registered with and subject
to OTS regulations, examinations, supervision and reporting. As
a subsidiary of a savings and loan holding company, Guaranty Savings
and Homestead Association is subject to certain restrictions in
its dealings with the Company and any affiliates thereof.

Activities Restrictions. There are generally no restrictions
on the activities of a savings and loan holding company which
holds only one subsidiary savings institution. However, if the
Director of the OTS determines that there is reasonable cause
to believe that the continuation by a savings and loan holding
company of an activity constitutes a serious risk to the financial
safety, soundness or stability of its subsidiary savings institution,
the Director may impose such restrictions as deemed necessary
to address such risk, including limiting (i) payment of dividends
by the savings institution; (ii) transactions between the savings
institution and its affiliates; and (iii) any activities of the
savings institution that might create a serious risk that the
liabilities of the holding company and its affiliates may be imposed
on the savings institution. Notwithstanding the above rules as
to permissible business activities of unitary savings and loan
holding companies, if the savings institution subsidiary of such
a holding company fails to meet the qualified thrift lender ("QTL")
test, as discussed under "- The Association  Qualified
Thrift Lender Test," then such unitary holding company also
shall become subject to the activities restrictions applicable
to multiple savings and loan holding companies and, unless the
savings institution re-qualifies as a QTL within one year thereafter,
shall register as, and become subject to the restrictions applicable
to, a bank holding company. See "- The Association 
Qualified Thrift Lender Test."

If the Company were to acquire control of another savings institution,
other than through merger or other business combination with Guaranty
Savings, the Company would thereupon become a multiple savings
and loan holding company. Except where such acquisition is pursuant
to the authority to approve emergency thrift acquisitions and
where each subsidiary savings institution meets the QTL test,
as set forth below, the activities of the Company and any of its
subsidiaries (other than Guaranty Savings or other subsidiary
savings institutions) would thereafter be subject to further restrictions.
Among other things, no multiple savings and loan holding company
or subsidiary thereof which is not a savings institution shall
commence or continue for a limited period of time after becoming
a multiple savings and loan holding company or subsidiary thereof
any business activity, other than: (i) furnishing or performing
management services for a subsidiary savings institution; (ii)
conducting an insurance agency or escrow business; (iii) holding,
managing, or liquidating assets owned by or acquired from a subsidiary
savings institution; (iv) holding or managing properties used
or occupied by a subsidiary savings institution; (v) acting as
trustee under deeds of trust; (vi) those activities authorized
by regulation as of March 5, 1987 to be engaged in by multiple
savings and loan holding companies; or (vii) unless the Director
of the OTS by regulation prohibits or limits such activities for
savings and loan holding companies. Those activities described
in clause (vii) above also must be approved by the Director of
the OTS prior to being engaged in by a multiple savings and loan
holding company.

Limitations on Transactions with Affiliates. Transactions
between savings institutions and any affiliate are governed by
Sections 23A and 23B of the Federal Reserve Act. An affiliate
of a savings institution is any company or entity which controls,
is controlled by or is under common control with the savings institution.
In a holding company context, the parent holding company of a
savings institution (such as the Company) and any companies which
are controlled by such parent holding company are affiliates of
the savings institution. Generally, Sections 23A and 23B (i) limit
the extent to which the savings institution or its subsidiaries
may engage in "covered transactions" with any one affiliate
to an amount equal to 10% of such institutions capital stock
and surplus, and contain an aggregate limit on all such transactions
with all affiliates to an amount equal to 20% of such capital
stock and surplus and (ii) require that all such transactions
be on terms substantially the same, or at least as favorable,
to the institution or subsidiary as those provided to a non-affiliate.
The term "covered transaction" includes the making of
loans, purchase of assets, issuance of guarantee and other similar
transactions. In addition to the restrictions imposed by Sections
23A and 23B, no savings institution may (i) loan or otherwise
extend credit to an affiliate, except for any affiliate which
engages only in activities which are permissible for bank holding
companies, or (ii) purchase or invest in any stocks, bonds, debentures,
notes or similar obligations of any affiliate, except for affiliates
which are subsidiaries of the savings institution.

In addition, Sections 22(h) and (g) of the Federal Reserve
Act place restrictions on loans to executive officers, directors
and principal stockholders. Under Section 22(h), secured loans
to a director, an executive officer and to a greater than 10%
stockholder of a savings institution, and certain affiliated interest
of either, may not exceed, together with all other outstanding
loans to such person and affiliated interests, the savings institutions
loans to one borrower limit (generally equal to 25% of the institutions
unimpaired capital and surplus). Section 22(h) also requires that
loans to directors, executive officers and principal stockholders
be made on terms substantially the same as offered in comparable
transactions to other persons unless the loans are made pursuant
to a benefit or compensation program that (i) is widely available
to employees of the institution and (ii) does not give preference
to any director, executive officer or principal stockholder, or
certain affiliated interests of either, over other employees of
the savings institution. Section 22(h) also requires prior Board
approval for certain loans. In addition, the aggregate amount
of extensions of credit by a savings institution to all insiders
cannot exceed the institutions unimpaired capital and surplus.
Furthermore, Section 22(g) places additional restrictions on loans
to executive officers. At December 31, 2002 Guaranty Savings was
in compliance with the above restrictions.

Restrictions on Acquisitions. Except under limited circumstances,
savings and loan holding companies are prohibited from acquiring,
without prior approval of the Director of the OTS, (i) control
of any other savings institution or savings and loan holding company
or substantially all the assets thereof or (ii) more than 5% of
the voting shares of a savings institution or holding company
thereof which is not a subsidiary. Except with the prior approval
of the Director of the OTS, no director or officer of a savings
and loan holding company or person owning or controlling by proxy
or otherwise more than 25% of such companys stock, may acquire
control of any savings institution, other than a subsidiary savings
institution, or of any other savings and loan holding company.

The Director of the OTS may only approve acquisitions resulting
in the formation of a multiple savings and loan holding company
which controls savings institutions in more than one state if
(i) the multiple savings and loan holding company involved controls
a savings institution which operated a home or branch office located
in the state of the institution to be acquired as of March 5,
1987; (ii) the acquirer is authorized to acquire control of the
savings institution pursuant to the emergency acquisition provisions
of the Federal Deposit Insurance Act ("FDIA"); or (iii)
the statutes of the state in which the institution to be acquired
is located specifically permit institutions to be acquired by
the state-chartered institutions or savings and loan holding companies
located in the state where the acquiring entity is located (or
by a holding company that controls such state-chartered savings
institutions).

Under the Bank Holding Company Act of 1956, the Federal Reserve
Bank ("FRB") is authorized to approve an application
by a bank holding company to acquire control of a savings institution.
In addition, a bank holding company that controls a savings institution
may merge or consolidate the assets and liabilities of the savings
institution with, or transfer assets and liabilities to, any subsidiary
bank which is a member of the Bank Insurance fund with the approval
of the appropriate federal banking agency and the FRB. As a result
of these provisions, there have been a number of acquisitions
of savings institutions by bank holding companies in recent years.

Federal Securities Laws. The Companys common stock
is registered with the SEC under the Securities and Exchange Act
of 1934 ("Exchange Act"). The Company is subject to
the information, proxy solicitation, insider trading restrictions
and other requirements under the Exchange Act.

Sarbanes-Oxley Act of 2002On July 30, 2002, the President
signed into law the Sarbanes-Oxley Act of 2002 implementing legislative
reforms intended to address corporate and accounting fraud. In
addition to the establishment of a new accounting oversight board
which will enforce auditing, quality control and independence
standards and will be funded by fees from all publicly traded
companies, the bill restricts provision of both auditing and consulting
services by accounting firms. To ensure auditor independence,
any non-audit services being provided to an audit client will
require preapproval by the company's audit committee members.
In addition, the audit partners must be rotated. The bill requires
chief executive officers and chief financial officers, or their
equivalent, to certify to the accuracy of periodic reports filed
with the SEC, subject to civil and criminal penalties if they
knowingly or willfully violate this certification requirement.
In addition, under the Act, counsel will be required to report
evidence of a material violation of the securities laws or a breach
of fiduciary duty by a company to its chief executive officer
or its chief legal officer, and, if such officer does not appropriately
respond, to report such evidence to the audit committee or other
similar committee of the board of directors or the board itself.

Longer prison terms will also be applied to corporate executives
who violate federal securities laws, the period during which certain
types of suits can be brought against a company or its officers
has been extended, and bonuses issued to top executives prior
to restatement of a company's financial statements are now subject
to disgorgement if such restatement was due to corporate misconduct.
Executives are also prohibited from insider trading during retirement
plan "blackout" periods, and loans to company executives
are restricted. In addition, a provision directs that civil penalties
levied by the SEC as a result of any judicial or administrative
action under the Act be deposited to a fund for the benefit of
harmed investors. The Federal Accounts for Investor Restitution
("FAIR") provision also requires the SEC to develop
methods of improving collection rates. The legislation accelerates
the time frame for disclosures by public companies, as they must
immediately disclose any material changes in their financial condition
or operations. Directors and executive officers must also provide
information for most changes in ownership in a companys
securities within two business days of the change.

The Act also increases the oversight of, and codifies certain
requirements relating to audit committees of public companies
and how they interact with the company's "registered public
accounting firm" ("RPAF"). Audit Committee members
must be independent and are barred from accepting consulting,
advisory or other compensatory fees from the issuer. In addition,
companies must disclose whether at least one member of the committee
is a "financial expert" (as such term will be defined
by the SEC) and if not, why not. Under the Act, a RPAF is prohibited
from performing statutorily mandated audit services for a company
if such company's chief executive officer, chief financial officer,
comptroller, chief accounting officer or any person serving in
equivalent positions has been employed by such firm and participated
in the audit of such company during the one-year period preceding
the audit initiation date. The Act also prohibits any officer
or director of a company or any other person acting under their
direction from taking any action to fraudulently influence, coerce,
manipulate or mislead any independent public or certified accountant
engaged in the audit of the company's financial statements for
the purpose of rendering the financial statement's materially
misleading. The Act also requires the SEC to prescribe rules requiring
inclusion of an internal control report and assessment by management
in the annual report to shareholders. The Act requires the RPAF
that issues the audit report to attest to and report on management's
assessment of the companys internal controls. In addition,
the Act requires that each financial report required to be prepared
in accordance with (or reconciled to) generally accepted accounting
principles and filed with the SEC reflect all material correcting
adjustments that are identified by a RPAF in accordance with generally
accepted accounting principles and the rules and regulations of
the SEC.

The Association

General. As a Louisiana chartered stock savings and
loan association, the OFI is the Associations chartering
authority, and the OTS serves as the Associations primary
regulator. As such, the OFI and the OTS have extensive authority
over the operations of Louisiana-chartered savings institutions.
The Association is subject to periodic examinations and is required
to file monthly, quarterly and annual reports with either or both
parties. The investment and lending authority of savings institutions
are prohibited from engaging in any activities not permitted by
such laws and regulations. Such regulation and supervision is
primarily intended for the protection of depositors.

Insurance of Accounts. The deposits of Guaranty Savings
and Homestead Association are insured to the maximum permitted
by the SAIF, which is administered by the FDIC, and are backed
by the full faith and credit of the U.S. Government. As insurer,
the FDIC is authorized to conduct examinations of, and to require
reporting by, FDIC-insured institutions. It also may prohibit
any FDIC-insured institution from engaging in any activity the
FDIC determines by regulation or order to pose a serious threat
to the FDIC. The FDIC also has the authority to initiate enforcement
actions against savings institutions, after giving the OTS an
opportunity to take such action.

The FDIC may terminate the deposit insurance of any insured
depository institution, including Guaranty Savings and Homestead
Association, if it determines after a hearing that the institution
has engaged or is engaging in unsafe or unsound practices, is
in an unsafe or unsound condition to continue operations, or has
violated any applicable law, regulation, order or any condition
imposed by an agreement with the FDIC. It also may suspend deposit
insurance temporarily during the hearing process for the permanent
termination of insurance, if the institution has no tangible capital.
If insurance of accounts is terminated, the accounts at the institution
at the time of the termination, less subsequent withdrawals, shall
continue to be insured for a period of six months to two years,
as determined by the FDIC. Management is aware of no existing
circumstances which would result in termination of the Associations
deposit insurance.

Regulatory Capital Requirements. Federally insured savings
institutions are required to maintain minimum levels of regulatory
capital. Pursuant to the Financial Institutions Reform, Recovery
and Enforcement Act of 1989 ("FIRREA"), the OTS has
established capital standards applicable to all savings institutions.
These standards generally must be as stringent as the comparable
capital requirements imposed on national banks. The OTS also is
authorized to impose capital requirements in excess of these standards
on individual institutions on a case-by-case basis.

Current OTS capital standards require savings institutions
to satisfy three different capital requirements. Under these standards,
savings institutions must maintain tangible capital (1.5%), core
capital (3.0%), and risk based capital (8.0%). Core capital includes
generally recognized capital such as common stockholders
equity and retained earnings plus other items such as qualifying
goodwill. Tangible capital is essentially the same but does not
include qualifying supervisory goodwill. At December 31, 2002
the Association had no goodwill or other intangible assets which
are deducted in computing its tangible capital.

In determining risk-based capital, a savings institution is
allowed to include both core capital and supplementary capital.
Assets are assigned to particular risk-weighted categories and
subsequently multiplied by that particular percentage (cash and
US Treasury and Agency securities equal 0%, 20% for high quality
mortgage-backed securities including those issued by US Government
Agencies and "AAA" rated private companies, state and
local obligations, claims on FHLBs and claims on domestic
depository institutions, 50% for single family mortgage loans
and 100% for all other loans and investments). The sum of these
calculations becomes the total of risk-weighted assets which are
then used to calculate the Associations risk-based capital
ratio.

At December 31, 2002, Guaranty Savings exceeded all of its
regulatory capital requirements, with tangible, core and risk-
based capital ratios of 13.79%, 13.79% and 25.05% respectively.

Liquidity Requirements. During 2001, the OTS adopted
a final rule removing formal regulation requiring savings institutions
to maintain an average daily balance of liquid assets equal to
four percent of its average daily balance of net withdrawable
deposit accounts and borrowings payable in one year or less commonly
referred to as its liquidity base. The Association does maintain
a formal policy of providing for sufficient liquidity to ensure
its safe and sound operation. This includes being able to meet
its daily financial obligations including but not limited to loan
disbursements, savings withdrawals, payment of cash dividends
and operating expenses of the Association. The cash position of
the Association is managed through monitoring and maintaining
certain levels of cash on hand, overnight Federal Funds Sold and
other short-term liquid assets.

Capital Distributions. A savings institution that before
and after the proposed distribution would at least be adequately
capitalized may make capital distributions during any calendar
year equal to net income for the applicable calendar year plus
net income for the prior two years less any capital distribution
in those prior periods. Failure to meet minimum capital requirements
will result in further restriction on capital distributions, including
possible prohibition without explicit OTS approval.

In order to make distributions under this safe harbor, institutions
which are subsidiaries of savings and loan holding companies must
submit 30 day written notice to the OTS prior to making the distribution.
The OTS may object to the distribution during the 30-day period
based on safety and soundness concerns.

Community Reinvestment. Under the Community Reinvestment
Act of 1977, as amended ("CRA"), as implemented by OTS
regulations, a savings institution has a continuing and affirmative
obligation consistent with its safe and sound operation to help
meet the credit needs of its entire community, including low and
moderate income neighborhoods. The CRA does not establish specific
lending requirements or programs for financial institutions nor
does it limit an institutions discretion to develop the
types of products and services that it believes are best suited
to its particular community, consistent with the CRA. The CRA
requires the OTS, in connection with its examination of a savings
institution, to assess the institutions record of meeting
the credit needs of its community and to take such record into
account in its evaluation of certain applications by such institution.
The CRA requires public disclosure of an institutions CRA
rating and requires the OTS to provide a written evaluation of
an institutions CRA performance utilizing a rating system
which identifies four levels of performance that may describe
an institutions record of meeting community needs: outstanding,
satisfactory, needs to improve and substantial noncompliance.
The CRA also requires all institutions to make public disclosure
of their CRA ratings. The Associations current CRA rating
is satisfactory.

Qualified Thrift Lender Test. The Qualified Thrift Lender
(QTL) Test measures the Associations level of qualified
thrift investments compared to its total portfolio assets (total
assets less intangibles, property used by a savings association
in its business and liquidity investments in an amount not to
exceed 20% of assets). Generally, qualified thrift investments
("QTIs") are residential housing related assets.
The Internal Revenue Service (IRS) requires a savings institution
to have at least 65% of its assets in QTIs to qualify for
tax treatment as a building and loan association. At December
31, 2002, 88.4% of the Associations assets were invested
in QTIs which was in excess of the 65% required to qualify
the Association under the QTL test.

Federal Home Loan Bank System. Guaranty Savings and
Homestead Association is a member of the FHLB of Dallas. Each
FHLB serves as a reserve or central bank for its members within
its assigned region. It is funded primarily from proceeds derived
from the sale of FHLB agency issued obligations. As a member,
the Association is required to maintain stock in the FHLB of Dallas
in an amount equal to at least 1% of its aggregate unpaid residential
mortgage loans, home purchase contracts or similar obligations
at the beginning of each year or 5% of its advances from the FHLB
of Dallas, whichever is greater. At December 31, 2002, Guaranty
Savings and Homestead Association had $5.5 million in FHLB stock,
which was in compliance with this requirement.



Federal Taxation

General. The Company and the Association are subject
to the generally applicable corporate tax provisions of the Internal
Revenue Code (the "Code"), and the Association is subject
to certain additional provisions of the Code which apply to thrifts
and other types of financial institutions. The following discussion
of federal taxation is intended only to summarize certain pertinent
federal income tax matters relevant to the taxation of the Company
and the Association and is not a comprehensive discussion of the
tax rules applicable to the Company and the Association.

Year. The Company files a consolidated federal tax return
on the basis of a calendar year ending on December 31.

Bad Debt Reserves. A small financial institution (one
with an adjusted basis of assets of less than $500 million), such
as the Association, is required in tax years beginning after 1995
to determine additions to its bad debt reserves under the experience
method. Under the experience method, the deductible annual addition
to the institutions bad debt reserves is the amount necessary
to increase the balance of the reserve at the close of the taxable
year to the greater of (a) the amount which bears the same ratio
to loans outstanding at the close of the taxable year as the total
net bad debts sustained during the current and five preceding
taxable years bear to the sum of loans outstanding at the close
of the same six years, or (b) the lower of (i) the balance of
the reserve account at the close of the Associations "base
year," which was its tax year ended December 31, 1987, or
(ii) if the amount of loans outstanding at close of the taxable
year is less than the amount of loans outstanding at the close
of the base year, the amount which bears the same ratio to loans
outstanding at the close of the taxable year as the balance of
the reserve at the close of the base year bears to the amount
of loans outstanding at the close of the base year.

In 1996, the Association was required to change its method
of computing its bad debt deduction from other methods previously
allowable to the experience method. As a result of the change
in law, the Association is required to include an amount into
taxable income over a six-year period beginning in 1998. The amount
required to be included in taxable income is the difference between
its bad debt reserves at December 31, 1995, as determined under
previously allowable bad debt methods, and the reserve allowable
under the experience method at December 31, 1995. The amount to
be included in the Associations taxable income over the
six-year period beginning with 1998 is $145,346, or $24,224 per
year.

At December 31, 2002, the federal income tax reserves of the
Association included $3.8 million for which no federal income
tax has been provided. Because of these federal income tax reserves
and the liquidation account to be established for the benefit
of certain depositors of the Association in connection with the
conversion of the Association to stock form, the retained earnings
of the Association are substantially restricted.

Distributions. If the Association were to distribute
cash or property to its sole stockholder, and the distribution
was treated as being from its accumulated bad debt reserves, the
distribution would cause the Association to have additional taxable
income. A distribution is deemed to have been made from accumulated
bad debt reserves to the extent that (a) the reserves exceed the
amount that would have been accumulated on the basis of actual
loss experience, and (b) the distribution is a "non-qualified
distribution." A distribution with respect to stock is a
non- qualified distribution to the extent that, for federal income
tax purposes, (i) it is in redemption of shares, (ii) it is pursuant
to a liquidation of the institution, or (iii) in the case of a
current distribution, together will all other such distributions
during the taxable year, it exceeds the institutions current and
post-1951 accumulated earnings and profits. The amount of additional
taxable income created by a non-qualified distribution is an amount
that when reduced by the tax attributable to it is equal to the
amount of the distribution.

Minimum Tax. The Internal Revenue Code imposes an alternative
minimum tax at a rate of 20% on corporations with average annual
gross receipts in excess of $7.5 million for the prior three tax
years. Average annual gross receipts of the Company is in excess
of $7.5 million and as a result, the Company is subject to the
provisions of the alternative minimum tax provisions of the Code.
The alternative minimum tax generally applies to a base of regular
taxable income plus certain tax preferences ("alternative
minimum taxable income" or "AMTI") and is payable
to the extent such AMTI is in excess of an exemption amount. The
Code provides items of tax preference including (a) tax exempt
interest on newly issued (generally, issued after August 8, 1986)
private activity bonds other than certain qualified bonds, (b)
certain accelerated depreciation amounts and (c) 75% of the excess
if any of (i) adjusted current earnings as defined in the Code,
over (ii) AMTI (defined without regard to this preference and
prior to reduction by net operating losses).

Net Operating Loss Carryovers. A financial institution
may carry back net operating losses ("NOLs") to the
preceding two taxable years and forward to the succeeding 20 taxable
years. This provision applies to losses incurred in taxable years
beginning after 1986. At December 31, 2002, the Association had
no NOL carry-forwards for federal income tax purposes.

Capital Gains and Corporate Dividends-Received Deduction.
Corporate net capital gains are taxed at a maximum rate of 35%.
The corporate dividends-received deduction is 80% in the case
of dividends received from 20% or more owned corporations with
which a corporate recipient does not file a consolidated tax return.
Corporations which own less than 20% of the stock of a corporation
distributing a dividend may deduct only 70% of dividends received
or accrued on their behalf. However, a corporation may deduct
100% of dividends from a member of the same affiliated group of
corporations.

Other Matters. Federal legislation is introduced from
time to time that would limit the ability of individuals to deduct
interest paid on mortgage loans. Individuals are currently not
permitted to deduct interest on consumer loans. Significant increases
in tax rates or further restrictions on the deductibility of mortgage
interest could adversely affect the Association. The Companys
federal income tax returns for the tax years ended December 31,
1999 forward are open under the statute of limitations and are
subject to review by the IRS.

State Taxation

Any non-banking subsidiaries of the Association ( as well as
the Company) are subject to the Louisiana Corporation Income Tax
based on their Louisiana taxable income, as well as franchise
taxes. The Corporation Income Tax applies at graduated rates from
4% upon the first $25,000 of Louisiana taxable income to 8% on
all Louisiana taxable income in excess of $200,000. For these
purposes, "Louisiana taxable income" means net income
which is earned within or derived from sources within the State
of Louisiana, after adjustments permitted under Louisiana law
including a federal income tax deduction and an allowance for
net operating losses, if any. As a stock thrift, the Association
is subject to the Louisiana Shares Tax. The formula for deriving
the assessed value is to; (a) calculate 15% of the sum of 20%
of the companys capitalized earnings, plus (b) 80% of the
companys taxable stockholders equity, and to subtract
from that figure 50% of the companys real and personal property
assessment. Various items may also be subtracted in calculating
a companys capitalized earnings.

Franchise Tax

The Company is also subject to the Louisiana franchise tax,
which is imposed upon equity and certain borrowings (the franchise
base) at a rate of $3 for every $1,000 of franchise base. Financial
institution holding companies are allowed to reduce the franchise
base to the extent of investments in and advances to subsidiary
financial institutions.

Item 2. PROPERTIES

The following table sets forth certain information relating
to the Companys offices at December 31, 2002. All properties
are owned by the Company. All amounts are in thousands.



|                                   |   | Net    |   |         
|---------------------------------- | - | ------ | - | --------
|                                   |   | Book   |   | Total   
|Location                           |   | Value  |   | Deposits
|----------                         |   | ------ |   | ------- 
|3798 Veterans Blvd., Metairie      | $ | 1,735  | $ | 69,942  
|1700 Veterans Blvd., Metairie      |   | 529    | $ | 12,278  
|2111 N. Causeway Blvd., Mandeville |   | 298    |   | 10,528  
|3915 Canal St., New Orleans        |   | 229    |   | 13,761  
|                                   |   | -----  |   | ------  
|                                   | $ | 2,791  | $ | 106,509 
|                                   |   | =====  |   | ======  



Item 3. LEGAL PROCEEDINGS

The Company and the Association are not involved in any pending
legal proceedings other than nonmaterial legal proceedings occurring
in the ordinary course of business.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There were no matters submitted to security holders during
the quarter ending December 31, 2002.



Item 5. MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS

The information required herein, to the extent applicable,
is incorporated by reference from page 2 of the Registrants
2002 Annual Report to Stockholders ("Annual Report").



Item 6. SELECTED FINANCIAL DATA

The information required herein is incorporated by reference
from pages 3 to 4 of the Registrants Annual Report.

Item 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

The information required herein is incorporated by reference
from pages 4 to 12 of the Registrants Annual Report.

Item 7a QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET

RISK

The information required herein is incorporated by reference
from pages 12 to 17 of the Registrants Annual Report.

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The information required herein is incorporated by reference
from pages 18 to 56 of the Registrants Annual Report.

Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE

Not applicable



Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information required herein is incorporated by reference
from pages 2-4 of the Registrants definitive proxy statement
for the 2003 Annual Meeting of Stockholders ("Proxy Statement").

Item 11. EXECUTIVE COMPENSATION

The information required herein is incorporated by reference
from pages 7-9 of the Registrants Proxy Statement.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT.

The information required herein by Item 403 of Regulation S-K
is incorporated by reference from pages 5-6 of the Registrants
Proxy Statement.







Equity Compensation Plan Information.The following
table sets forth certain information for all equity compensation
plans and individual compensation arrangements (whether with employees
or non-employees, such as directors), in effect as of December
31, 2002.



|Plan Category                                                   | Number of Shares to be issued upon
    the Exercise of Outstanding Options,

    Warrants and Rights | Weighted-Average Exercise Price of
    Outstanding Options | Number of Shares Remaining Available

    for Future Issuance (Excluding Shares

    Reflected in the First Column)
|--------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------- | ---------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------
|                                                                |                                                                                                      |                                                            |                                                                                                                    
|Equity
    Compensation Plans

    Approved by Security Holders | 275,076                                                                                              | $17.18                                                     | 68,774                                                                                                             
|Equity Compensation Plans Not

    Approved by Security Holders | --                                                                                                   | --                                                         | --                                                                                                                 
|Total                                                           | 275,076                                                                                              | $17.18                                                     | 68,774                                                                                                             
|                                                                |                                                                                                      |                                                            |                                                                                                                    

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required herein is incorporated by reference
from page 2 and page 9 of the Registrants Proxy Statement.



Part IV.

Item 14. CONTROLS AND PROCEDURES

Under the supervision and with the participation of the Companys
management, including its chief executive officer and chief financial
officer, the Company has evaluated the effectiveness of the design
and operation of its disclosure controls and procedures within
90 days of the filing date of this annual report, and based on
their evaluation, the Companys chief executive officer and
chief financial officer have concluded that these controls and
procedures are effective. There were no significant changes in
our internal controls or in other factors that could significantly
affect these controls subsequent to the date of their evaluation.

Disclosure controls and procedures are our controls and other
procedures that are designed to ensure that information required
to be disclosed by the Company in the reports that it files or
submits under the Exchange Act is recorded, processed, summarized
and reported, within the time periods specified in the Securities
and Exchange Commissions rules and forms. Disclosure controls
and procedures include, without limitation, controls and procedures
designed to ensure that information required to be disclosed by
the Company in the reports that it files under the Exchange Act
is accumulated and communicated to the Companys management,
including its chief executive officer and chief financial officer,
as appropriate to allow timely decisions regarding required disclosure.

Item 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
ON





|(a) | Documents filed as part of this Report.
|--- | ---------------------------------------

|(1) | The following financial statements are incorporated by            
|--- | ------------------------------------------------------------------
|    | reference from Item 8 hereof (see Exhibit 13):                    
|    | Report of Independent Auditors                                    
|    | Consolidated Balance Sheets as of December 31, 2002 and 2001      
|    | Consolidated Statements of Income for the Fiscal Periods          
|    | Ended December 31, 2002, 2001 and 2000                            
|    | Consolidated Statements of Changes in Shareholders Equity
    for
|    | the Fiscal Periods Ended December 31, 2002, 2001 and 2000         
|    | Consolidated Statements of Cash Flows for the Fiscal Periods      
|    | Ended December 31, 2002, 2001 and 2000                            
|    | Notes to Consolidated Financial Statements                        

|(2) | All schedules for which provision is made in the applicable                                                                                                                                                                                    
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | accounting regulation of the SEC are omitted because of the absence
    of conditions under which they are required or because the required
    information is included in the consolidated financial statements
    and related notes thereto.

|(3) | The following exhibits are filed as part of this form 10-K, and
    this
|--- | ------------------------------------------------------------------------
|    | list includes the Exhibit Index.                                        







|3.1*   | Articles of Incorporation of GS Financial Corp.                            
|------ | ---------------------------------------------------------------------------
|3.2*   | Bylaws of GS Financial Corp.                                               
|4.1*   | Stock Certificate of GS Financial Corp.                                    
|10.1** | GS Financial Corp. Stock Option Plan                                       
|10.2** | GS Financial Corp. Recognition and Retention Plan and Trust                
|.      | Agreement for Employees and Non-Employee Directors                         
|10.3*  | Employment Agreement among GS Financial Corp. Guaranty Savings
    and     
|       | Homestead Association and Donald C. Scott Dated February 13,
    1997      
|10.4*  | Employment Agreement among GS Financial Corp. Guaranty Savings
    and     
|       | Homestead Association and Bruce A. Scott Dated February 13, 1997           
|13.0   | 2002 Annual Report to Stockholders                                         
|21.0   | Subsidiaries of the Registrant - Reference is made to                      
|       | Item 1 "Business-Subsidiaries" for the required information                
|23.0   | Consent of LaPorte, Sehrt, Romig & Hand                                    
|99.1   | Certification of Chief Executive Officer pursuant to Section
    906 of the
|       | Sarbannes-Oxley Act of 2002                                                
|99.2   | Certification of Chief Financial Officer pursuant to Section
    906 of the
|       | Sarbannes-Oxley Act of 2002                                                

* Incorporated herein by reference from the Registration Statement
on Form SB-2 (Registration number 333-18841) filed by the Registrant
with the SEC on December 26, 1996, as subsequently amended.

** Incorporated herein by reference from the definitive proxy
statement, dated September 16, 1997, filed by the Registrant with
the SEC (Commission File No. 000-22269)





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





|March 25, 2003 | By: | /s/ Donald C. Scott
    -------------------
    Donald C. Scott
    Chairman of the Board, President
    And Chief Executive Officer
|-------------- | --- | ------------------------------------------------------------------------------------------------------------------------------------



Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following persons
on behalf of the Registrant and in the capacities and on the dates
indicated.



|Name and Signature                                                          | Title                                                                                          | Date Signed   
|--------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------- | --------------
|/s/ Donald C. Scott
    -------------------
    Donald C. Scott             | Chairman of the Board, President and Chief Executive Officer
    (principal executive officer) | March 25, 2003
|/s/ Bruce A. Scott
    -------------------
    Bruce A. Scott               | Executive Vice President and Director                                                          | March 25, 2003
|/s/ Glenn R. Bartels
    -------------------
    Glenn R. Bartels           | Controller (principal financial and accounting officer)                                        | March 25, 2003
|/s/ J. Scott Key 
    -------------------
    J. Scott Key                  | Director                                                                                       | March 25, 2003
|/s/ M.D. Paine, Jr.
    -------------------
    M.D. Paine, Jr.             | Director                                                                                       | March 25, 2003
|/s/ Bradford A. Glazer
    -------------------
    Bradford A. Glazer       | Director                                                                                       | March 25, 2003
|/s/ Stephen L. Cory
    -------------------
    Stephen L. Cory             | Director                                                                                       | March 25, 2003
|/s/ Albert J. Zahn, Jr.
    -------------------
    Albert J. Zahn, Jr.     | Director                                                                                       | March 25, 2003
|/s/ Kenneth B. Caldcleugh
    -------------------
    Kenneth B. Caldcleugh | Director                                                                                       | March 25, 2003



















































































I, Donald C. Scott, Chairman of the Board and Chief Executive
Officer of GS Financial Corp., certify that:





|Date: March 25, 2003 | /s/Donald C. Scott       
|-------------------- | -------------------------
|                     | ----------------------   
|                     | Donald C. Scott          
|                     | Chairman of the Board and
|                     | Chief Executive Officer  



I, Glenn R. Bartels, Chief Financial Officer of GS Financial
Corp., certify that:





|Date: March 25, 2003 | /s/Glenn R. Bartels    
|-------------------- | -----------------------
|                     | ---------------------- 
|                     | Glenn R. Bartels       
|                     | Chief Financial Officer

Exhibit 23.0

INDEPENDENT AUDITORS CONSENT

We consent to the incorporation by reference in the Registration
Statement of GS Financial Corp. on Form S-8 (Registration No.
333-70905) of our report dated January 10, 2003, incorporated
by reference in this Annual Report on Form 10-K of GS Financial
Corp. for the year ended December 31, 2002.







/s/ Laporte, Sehrt, Romig & Hand

Laporte, Sehrt, Romig & Hand

Metairie, Louisiana
March 20, 2003

Exhibit 99.1









I, Donald C. Scott, Chairman of the Board and Chief Executive
Officer of GS Financial Corp. (the "Company"), hereby
certify, pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, 18 U.S.C. Section 1350, that:



By: /s/ Donald C. Scott

Donald C. Scott

Chairman of the Board and

Chief Executive Officer

Date: March 25, 2003













Exhibit 99.2











I, Glenn R. Bartels, Chief Financial Officer of GS Financial
Corp. (the "Company"), hereby certify, pursuant to Section
906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350,
that:



By: /s/ Glenn R. Bartels

Glenn R. Bartels

Chief Financial Officer

Date: March 25, 2003

















































Exhibit 13



February 1, 2003

TO OUR STOCKHOLDERS

It was a tumultuous year for financial markets. Aversion to
risk based investments caused a tremendous amount of liquidity
in the market. This in turn, brought about some of the lowest
savings and mortgage rates in years.

Corporate governance became the new regulatory mantra. The
reverberations have been felt in board rooms across the nation;
causing boards of directors to re-examine rules for accounting,
disclosure of financial information, and fiduciary responsibility
to shareholders. Our focus has always been founded in doing what
is in the best interest of our shareholders and will remain so.

Despite the limited long-term investment opportunities in 2002
at rates deemed acceptable over the long term, net interest income
increased year over year. The increase in non-interest expense
is largely attributable to our continued branch expansion and
the addition of qualified personnel. Our commercial lending program
continues to successfully enhance interest income, as well as
broadening our lending and checking account opportunities.

We continue to review our business strategy for opportunities
that will enhance shareholder value, including the share repurchase
program as funds and market conditions warrant.

Our promise to you, the shareholder, has always been and will
continue to be that we will endeavor to enhance the value of the
Company, while doing our best to minimize risk.

Sincerely,



/s/ Donald C. Scott

-------------------

Donald C. Scott

President and Chairman of the Board

The Company

GS Financial Corp. (the "Company") is a thrift holding
company which was organized and incorporated under the laws of
the State of Louisiana on December 24, 1996. The Companys
primary business is conducted through its wholly owned subsidiary,
Guaranty Savings and Homestead Association (the "Association"),
at its five locations in the metropolitan New Orleans area.









Market Information

GS Financial Corp.s common stock trades on The NASDAQ
Stock Market under the symbol GSLA. The Companys stock traded
in the range shown below. At December 31, 2002, the closing price
was $18.15 per share and there were approximately 560 shareholders
of record.



2002



|QUARTER ENDING     | HIGH     | LOW      | Cash Dividend
|------------------ | -------- | -------- | -------------
|------------------ | ------   | ------   | -------      
|March 31, 2002     | $ 15.500 | $ 14.700 | $.09         
|June 30, 2002      | 18.200   | 14.950   | $.09         
|September 30, 2002 | 18.400   | 17.650   | $.09         
|December 31, 2002  | 18.600   | 18.050   | $.09         

2001



|QUARTER ENDING     | HIGH     | LOW      | Cash Dividend
|------------------ | -------- | -------- | -------------
|------------------ | ------   | ------   | -------      
|March 31, 2001     | $ 15.000 | $ 14.563 | $.09         
|June 30, 2001      | 15.500   | 14.600   | $.09         
|September 30, 2001 | 15.500   | 15.000   | $.09         
|December 31, 2001  | 15.500   | 14.190   | $.09         

Notice of Annual Meeting

The Annual Meeting of Shareholders of GS Financial Corp. will
be held at the offices of Guaranty Savings and Homestead Association,
3798 Veterans Blvd., Metairie, Louisiana on Tuesday, April 22,
2003 at 10:00 a.m. CST.

Shareholder Services

Shareholders desiring to change the name, address or ownership
of stock, to report lost certificates, or to consolidate accounts
should contact our transfer agent:

Registrar and Transfer Company

10 Commerce Drive

Cranford, NJ 07016

1-800-368-5948

Investor Relations

Shareholders and others seeking financial information or copies
of the Companys publicly available financial information
should contact:

Amy Mashburn, Compliance Officer or, Glenn R. Bartels, Controller

GS Financial Corp.

3798 Veterans Blvd.

Metairie, LA 70002

(504) 457-6220





The following selected consolidated financial and other data
of the Company does not purport to be complete and should be read
in conjunction with, and is qualified in its entirety by, the
more detailed financial information, including the Consolidated
Financial Statements of the Company and Notes thereto, contained
elsewhere herein.



|(Dollars in Thousands, except per share data) | At December 31,                    
|--------------------------------------------- | -----------------------------------
|                                              |                                    
|Selected Financial Condition:                 |                                    
|                                              | Total Assets                       
|                                              | Cash and Cash Equivalents          
|                                              | Loans Receivable, Net              
|                                              | Investment Securities              
|                                              | Mortgage-Backed Securities         
|                                              | Collateralized Mortgage Obligations
|                                              | Deposit Accounts                   
|                                              | Borrowings                         
|                                              | Stockholders Equity               
|                                              |                                    
|Selected Operating Data:                      |                                    
|                                              | Interest Income                    
|                                              | Interest Expense                   
|                                              | Net Interest Income                
|                                              | Provision for Loan Losses          
|                                              | Net Interest Income After Provision
|                                              |                                    
|                                              | Non-Interest Income                
|                                              | Non-Interest Expense               
|                                              | Net Income Before Taxes            
|                                              | Income Tax Expense                 
|                                              | Net Income                         
|                                              | Net Income per share  Basic       
|                                              | Net Income per share  Diluted     
|                                              | Dividends declared per share       







|(Dollars in Thousands, except per share data) | At December 31,                             
|--------------------------------------------- | --------------------------------------------
|                                              |                                             
|Other Data:                                   |                                             
|Profitability                                 |                                             
|                                              | Average Yield Interest-Earning Assets       
|                                              | Average Rate on Interest-Bearing Liabilities
|                                              | Average Interest Rate Spread                
|                                              | Net Interest Margin                         
|                                              | Interest-Earning Assets as a % of Interest- 
|                                              | Bearing Liabilities                         
|                                              | Net Interest Income After Provision for Loan
|                                              | Loss as a % of Non-Interest Expense         
|                                              | Non-Interest Expense as a % of              
|                                              | Average Assets                              
|                                              | Return on Average Assets                    
|                                              | Return on Average Equity                    
|                                              |                                             
|Capital Ratio's:                              |                                             
|                                              | Average Equity as a % of Total Assets       
|                                              | Tangible Capital Ratio (Association alone)  
|                                              | Core Capital Ratio (Association alone)      
|                                              | Risk-Based Capital Ratio (Association alone)
|                                              |                                             
|Asset Quality Ratios:                         |                                             
|                                              | Non Performing Loans as a % of Total Loans  
|                                              | Non Performing Assets as a % of Total Assets
|                                              | Allowance for Loan Losses as a % of Total   
|                                              | Loans Receivable                            
|                                              | Allowance for Loan Losses as a % of Non     
|                                              | Performing Loans                            



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

The following discussion and analysis of the financial condition
and results of operations of GS Financial Corp. and its subsidiary,
for the years ended December 31, 2000 through 2002 is designed
to assist readers in their understanding of the Company. This
review should be read in conjunction with the audited consolidated
financial statements, accompanying footnotes and supplemental
financial data included herein.

FORWARD-LOOKING STATEMENTS

In addition to the historical information, this Annual Report
includes certain "forward-looking statements" based
on current management expectations. The Companys actual
results could differ materially, as defined in the Securities
Act of 1933 and the Securities Exchange Act of 1934, from those
management expectations. Such forward-looking statements include
statements regarding our intentions, beliefs or current expectations
as well as the assumptions on which such statements are based.
Stockholders and potential stockholders are cautioned that any
such forward-looking statements are not guarantees of future performance
and involve risks and uncertainties, and that actual results may
differ materially from those contemplated by such forward-looking
statements.



Factors that could cause future results to vary from current
management expectations include, but are not limited to, general
economic conditions, legislative and regulatory changes, monetary
and fiscal policies of the federal government, changes in tax
policies, rates and regulations of federal, state and local tax
authorities, changes in interest rates, deposit flows, the cost
of funds, demand for loan products, demand for financial services,
competition, changes in the quality or composition of the Companys
loan and investment portfolios, changes in accounting principles,
policies or guidelines, and other economic, competitive governmental
and technological factors affecting the Companys operations,
markets, products, services and fees.

The Company undertakes no obligation to update or revise any
forward-looking statements to reflect changed assumptions, the
occurrence of unanticipated events or changes to future operating
results over time.



ASSETS

General The Company's balance sheet was affected
for the second consecutive year by low interest rates and continued
uncertainty in the equity markets. With interest rates for mortgages
and mortgage-backed securities at thirty-year lows, the Companys
portfolio of mortgage loans and collateralized mortgage obligations
("CMOs") were particularly affected by prepayments caused
by the latest wave of home-owner re-financing, especially in the
second half of 2002. The Company did benefit from an inflow of
retail deposits. The end result was a significant increase in
cash and short-term investments for the Companys balance
sheet in 2002.

In summary, total assets increased 11% or $21.5 million to
$210.0 million at December 31, 2002, compared to $188.5 million
at December 31, 2001. Investment securities increased $19.3 million
to $55.1 million at December 31, 2002 an increase of 54% from
December 31, 2001, when investment securities totaled $35.8 million.
Retail deposits increased $ 35.3 million, or 50%, to $106.5 million
at December 31, 2002, compared to $71.2 million at December 31,
2001.

Cash and Cash Equivalents  Cash and cash equivalents
consist of cash on hand, deposits in interest and non-interest
bearing transaction accounts and overnight Federal Funds Sold.
At December 31, 2002, the Companys balances in such accounts
totaled $13.4 million. This represents an increase of 56% from
December 31, 2001 when such balances totaled $8.6 million. Due
to the decrease of interest rates, the Companys average
collected balance requirements were raised for its operating accounts,
thus contributing to the increase in balance of cash and cash
equivalents. Cash and cash equivalents represent balances sufficient
for the Company to meet its daily operations whether it be loan
disbursements, customer withdrawals, operating expenses or the
payment of cash dividends.

Loans Receivable, Net  Loans receivable, net,
decreased by $3.3 million, or 4%, from $81.6 million at December
31, 2001 compared to $78.3 million at December 31, 2002. The largest
decrease in the loan portfolio came in loans secured by one-to-four
family residential dwellings, which decreased $12.35 million from
December 31, 2001 to December 31, 2002. Non-residential mortgages
includes mortgage loans on multifamily dwellings and commercial
real estate. Non-residential mortgage loans increased $7.9 million
from $10.2 million at December 31, 2001, to $18.1 million at December
31, 2002. Commercial loans increased $.8 million from $.7 million
at December 31, 2001, compared to $1.5 million at December 31,
2002. Over the last two years, the primary focus of the Companys
lending activity has been in non-residential loans. This is reflected
in the Companys loan portfolio mix where 13.2% of its loans
were non-residential at December 31, 2001, compared to 24.9% non-residential
at December 31, 2002.



Investment Securities  Investment securities increased
from $35.8 million at December 31, 2001, to $55.1 million at December
31, 2002. This represents an increase of $19.3 million or 54%.
As of December 31, 2002, investment securities were comprised
of United States Treasury Notes, common and preferred stock issued
by the Federal Home Loan Mortgage Corporation ("FHLMC"),
an agency sponsored by the Federal government, and an investment
in two mortgage-based mutual funds. During 2002, the Company increased
its portfolio of FHLMC preferred stock by $3.6 million. The FHLMC
preferred stock contains call options varying from two to six
years and coupons ranging between 5% and 6%. The dividends from
the FHLMC preferred and common stock are 70% tax exempt. The Companys
investment in mortgage-based mutual funds increased by $15.2 million
during the year ended December 31, 2002. These funds carry one-day
availability and carry higher yields than overnight funds. Most
of the increase in investment securities was funded by repayments
of the Companys loan and CMO portfolios.

Mortgage-Backed Securities  Mortgage-backed securities
decreased $316,000 from $885,000 at December 31, 2001, to $569,000
at December 31, 2002. The decrease was due to principal repayments
of these instruments. At December 31, 2002 and 2001, all of the
Companys mortgage-backed securities were Government National
Mortgage Association ("GNMA") issued instruments. GNMA
securities represent direct obligations of the United States Government.

Collateralized Mortgage Obligations  The Companys
investment in CMOs consists of fixed-rate Real Estate Mortgage
Investment Conduits ("REMICs"). REMICs are multiple
class mortgage-backed securities whereby an underlying pool of
mortgages held by the issuer serves as collateral for the debt.
The Company has REMICs issued by the Federal National Mortgage
Association ("FNMA"), FHLMC and "AAA" rated
non-governmental issuers. The CMOs contain contractual maturities
up to thirty years. The expected life of these investments varies
from two to fifteen years. During 2002, declining mortgage rates
triggered rapid refinancing of the underlying mortgage loans.
During 2002, the Company received $73.0 million in such principal
repayments. This was offset by $73.6 million in new purchases.
Overall during 2002, CMOs increased $1 million from $52.1 million
at December 31, 2001, compared to $53.1 million at December 31,
2002.

LIABILITIES AND STOCKHOLDERS EQUITY

General  The Companys deposits, borrowings
and stockholders equity represent sources of funds for its
various investments and operating needs.

Deposits  The Companys deposits increased
$35.3 million, or 50%, from $71.2 million at December 31, 2001,
to $106.5 million at December 31, 2002. Passbook savings and certificate
of deposit accounts increased during 2002 while demand deposits
decreased.

Passbook Savings - During 2002, passbook savings accounts
increased $11.2 million to $31.2 million at December 31, 2002,
compared to $20.0 million at December 31, 2001. Most of the increase
occurred in the second half of 2002. This growth equated to a
56% increase. The Company believes that a significant reason for
many of the Companys new savings customers was due to individuals
who have liquidated their positions and withdrawn from the equity
markets.

Transaction Accounts - NOW accounts decreased $.8 million,
or 11%, to $7.1 million at December 31, 2002, compared to $7.9
million at December 31, 2001. These accounts are comprised of
interest-bearing NOW accounts as well as non-interest bearing
deposit accounts. Some of the decrease was attributed to NOW account
customers moving their funds to savings accounts which paid a
higher rate of interest.

Certificates of Deposit - Certificates of deposit increased
$25.0 million to $68.2 million at December 31, 2002. This represents
an increase of 57% compared to $43.2 million at December 31, 2001.
Again, many of the new customers represented investors transferring
money from the equity markets. One year certificates increased
$11.7 million while certificates varying in term from 2.5 to 5
years increased $10.3 million.



Borrowings  The Companys borrowings consist
of advances from the Federal Home Loan Bank of Dallas. These advances
consist of fully amortizing loans, balloon loans and interest
only loans. The Companys borrowings decreased from $79.3
million at December 31, 2001 to $66.4 million at December 31,
2002. The $12.9 million change represented a decrease of 16% and
was due to regularly scheduled principal payments.

Stockholders Equity  Stockholders
equity decreased from $35.4 million at December 31, 2001 to $34.4
million at December 31, 2002. The decrease was due to the net
effect of the following events:



|Purchase of Treasury Stock             | ( $2.5 million)  
|-------------------------------------- | -----------------
|2002 Net Income                        | 1.2 million      
|Cash Dividends Paid                    | ( .5 million)    
|Distribution of RRP Stock              | .1 million       
|Distribution of ESOP Stock             | .5 million       
|Increase in Other Comprehensive Income | .2 million       
|                                       | -----------------
|NET CHANGE                             | ( $1.0 million)  
|                                       | ==========       

Treasury Stock  During 2002, the Company repurchased
142,201 shares of its common stock for $2.5 million, or an average
price of $17.68 per share. Since the inception of its stock buyback
program in 1998, the Company has repurchased 1,917,539 shares
of its common stock at an average price of $14.44 per common share,
or a total of $27.7 million. At December 31, 2002, the book value
was $22.60 per common share. This compares to a book value of
$21.29 per common share at December 31, 2001.













COMPARISON OF RESULTS OF OPERATIONS

General  The Company reported net income of $1.2
million, $1.6 million and $1.2 million for the years ended December
31, 2002, 2001, and 2000, respectively. The results for 2002 reflected
an increase in net interest income offset by a decrease in non-interest
income and an increase in non-interest expense. The Companys
net interest margin increased in 2002 as a result of the Companys
liabilities re-pricing more rapidly than its assets in a falling
rate environment. The results for 2001 were affected primarily
by a falling interest rate environment while interest rates rose
slightly in 2000. The results for 2001 included gains on the sale
of investment securities of $607,000 while the results for 2002
included $20,000 of gains on sale of investment securities. During
2000, the Company experienced a net loss on the sale of investment
securities totaling ($146,000). Earnings per share were $ .86
in 2002 compared to $1.04 in 2001 and $.60 in 2000.

Interest Income  Interest income decreased from
$13.1 million for the twelve months ended December 31, 2001 to
$12.4 million for the twelve months ended December 31, 2002, a
decline of $.7 million, or 5%. This compares to $11.3 million
in 2000. Average earning assets were $191.3 million in 2002 which
yielded 6.5%. For the twelve months ended December 31, 2001, average
earning assets were $184.0 million which yielded 7.1%. In 2000,
the Companys earning assets averaged $151.7 million and
yielded 7.42%. Falling interest rates caused many consumers to
refinance their home mortgage loans during 2002. The effect of
this was to accelerate the repayment of many of the Companys
loans and CMOs. The cash received from these repayments was primarily
invested in short-term investments with lower yields.

The yield on loans receivable was unchanged from 2001 to 2002
at 7.85%, compared to 7.96% in 2000. Despite declining mortgage
loan rates in 2002, the Companys ability to maintain the
same yield in 2002 as in 2001 was due to the continued growth
of its non-residential loan portfolio. At December 31, 2000, the
Company held $3.1 million in non-residential loans or 4% of its
entire portfolio. During 2001 the Company added $8 million in
non-residential loans to bring the total to $11.1 million or 14%
of its entire portfolio. At December 31, 2002, the Companys
total of non-residential loans totaled $20.0 million or 25% of
its loan portfolio. These loans, consisting primarily of mortgage
loans secured by multifamily and commercial real estate, typically
carry higher yields than residential mortgage loans. Average loans
receivable in 2002 were $81.5 million, compared to $76.3 million
in 2001 and $72.7 million in 2000.

Interest income on securities increased $.4 million, or 28%,
from $1.4 million for the twelve months ended December 31, 2001,
compared to $1.8 million for the twelve months ended December
31, 2002. This compares to $.4 million for the twelve months ended
December 31, 2000. The average balance of investment securities
was $44.1 million with an average yield of 4.1% for the twelve
months ended December 31, 2002. For the twelve months ended December
31, 2001, average investment securities were $25.0 million and
yielded 5.4 %. In 2000, the average balance of investment securities
was $7.4 million which yielded 5.71%. The underlying mix of the
Companys portfolio of investment securities changed as the
amount invested in short term mortgage based mutual funds approximately
doubled from 2001 to 2002. These investments typically re-price
monthly, thus causing their yields to fall during 2002. As of
December 31, 2002, the yield of these funds was approximately
2.5%.







AVERAGE BALANCES, NET INTEREST INCOME, YIELDS EARNED AND RATES
PAID

The following table represents for the periods indicated the
total dollar amount of interest income from average interest-earning
assets and the resultant yields, as well as the interest expense
on average interest-bearing liabilities, expressed both in dollars
and rates, and the net interest margin. The table does not reflect
any effect of income taxes.



|                             |                                    | For the Years Ended December 31,
|---------------------------- | ---------------------------------- | --------------------------------
|                             |                                    | 2002                            
|(Dollars in Thousands)       | Average                            |                                 
|                             |                                    | Balance                         
|Interest Earning Assets      |                                    |                                 
|                             | Loans Receivable                   | 81,463                          
|                             | Mortgage Backed Securities         | 677                             
|                             | Investment Securities              | 44,145                          
|                             | Collateralized Mortgage            | 53,817                          
|                             |                                    | Obligations                     
|                             | Other Interest Earning Assets      | 11,244                          
|                             | Total Interest Earning Assets      | 191,346                         
|                             | Non Interest Earning Assets        | 5,370                           
|                             | TOTAL ASSETS                       | 196,716                         
|                             |                                    |                                 
|Interest Bearing Liabilities |                                    |                                 
|                             | Passbooks Deposits                 | 26,819                          
|                             | Interest Bearing Checking          | 6,569                           
|                             | Certificates of Deposits           | 53,113                          
|                             | Borrowings                         | 72,056                          
|                             | Total Interest Bearing Liabilities | 158,557                         
|                             | Non Interest Bearing Liabilities   | 3,011                           
|                             | TOTAL LIABILITIES                  | 161,568                         
|                             | Stockholders Equity               | 35,148                          
|                             | TOTAL LIABILITIES AND              |                                 
|                             |                                    | STOCKHOLDERS EQUITY            
|                             |                                    |                                 
|Net Interest Earning Assets  | 32,789                             |                                 
|Net Interest Income          |                                    | 5,629                           
|Net Interest Spread          |                                    |                                 
|Net Interest Margin          |                                    |                                 



Interest on mortgage-backed securities decreased $42,000 during
the twelve months ended December 31, 2002 to $48,000, compared
to $90,000 for the twelve months ended December 31, 2001. This
compares to $800,000 for the twelve months ended December 31,
2000. The yield of the Companys mortgage-backed securities
increased in 2002 to 7.1% compared to 6.5% in 2001. The increase
in the yield was due to a decrease in the prepayments of these
instruments with a subsequent decrease in the amortization of
premiums related to these instruments. During 2000, the Companys
mortgage-backed securities yielded 6.68%. The average balance
of mortgage-backed securities was $.7 million, $1.4 million and
$12.0 million in 2002, 2001 and 2000, respectively.

Interest income from CMOs decreased from $5.1 million for the
twelve months ended December 31, 2001, to $3.9 million for the
twelve months ended December 31, 2002. For the twelve months ended
December 31, 2000, interest income from CMOs was $3.8 million.
For the twelve months ended December 31, 2002, the average balance
of CMOs was $53.8 which yielded 7.3%. For the twelve months ended
December 31, 2001 the average balance of CMOs was $68.9 million
which yielded 7.5%. The Company s CMOs yielded 7.15% on
an average balance of $53.1 million for the twelve months ended
December 31, 2000.

Interest income from other interest-earning assets consist
of dividends on Federal Home Loan Bank ("FHLB") stock
and interest earned on Federal Funds Sold and interest-bearing
deposits in other financial institutions. During the twelve months
ended December 31, 2002, interest income from other interest earning
assets decreased $277,000 to $252,000, compared to $529,000 for
the twelve months ended December 31, 2001. The average balance
of other interest-earning assets was $11.2 million which yielded
2.2% for the twelve months ended December 31, 2002. For the twelve
months ended December 31, 2001, the average balance of other interest
earning assets was $12.4 million which yielded 4.26%. The decrease
in yield was a direct result of falling interest rates. For the
twelve months ended December 31, 2000, the average balance of
other interest-earning assets was $6.4 million which yielded 7.02%.



The following table shows the extent to which changes in interest
rates and changes in volume of interest-related assets and liabilities
affected interest income and expense during 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 multiplied by prior year rate and (ii) changes
in rate multiplied by prior year volume. The combined effect of
changes in both rate and volume has been allocated proportionately
to the change due to rate and the change due to volume.











|                       | 12/31/01 to 12/31/02          | 12/31/00 to 12/31/01
|---------------------- | ----------------------------- | --------------------
|                       | Rate                          | Volume              
|Interest Income        |                               |                     
|                       | Loans Receivable              | $ -                 
|                       | Mortgage-backed Securities    | 8                   
|                       | Investment Securities         | (400)               
|                       | CMO's                         | (86)                
|                       | Other-Interest Earning Assets | (251)               
|                       |                               |                     
|Total                  | (729)                         | 62                  
|                       |                               |                     
|Interest Expense       |                               |                     
|                       | Passbook Savings              | (79)                
|                       | Interest-Bearing Checking     | (90)                
|                       | Certificates of Deposit       | (651)               
|                       | Borrowings                    | (113)               
|                       |                               |                     
|Total                  | (933)                         | (88)                
|                       |                               |                     
|Increase/(Decrease) in |                               |                     
|                       | Net Interest Income           | $ 204               
|                       |                               | ===                 

Interest Expense  Interest expense decreased $1.0
million for the twelve months ended December 31, 2002 to $6.8
million compared to $7.8 million for the twelve months ended December
31, 2001. Average interest-bearing liabilities was $158.6 million
which cost 4.3% for the twelve months ended December 31, 2002.
For the twelve months ended December 31, 2001, average total interest
bearing liabilities were $149.8 million which cost 5.2%. The decrease
in the Companys overall cost of funds from 2001 to 2002
was primarily due to a reduction in the average balance of FHLB
advances, which typically cost more than retail deposits, and
the downward re-pricing of the Companys existing retail
deposits. In 2000, average interest-bearing liabilities of $112.1
million cost the Company 5.24%.

Interest Expense on Deposits - Interest expense on deposits
was $2.8 million for twelve months ended December 31, 2002 and
2001 and $2.7 million for the twelve months ended December 31,
2000. While the average balance increased, the overall cost decreased
due to the continuing reduction of the average rates paid. The
average balance of deposits for the twelve months ended December
31, 2002 was $86.5 million which cost 3.2%. The average balance
of deposits for the twelve months ended December 31, 2001 was
$63.0 million which cost 4.5%. The average balance of deposits
for the twelve months ended December 31, 2000 was $58.1 million
and cost 4.59%.

Interest Expense on Transaction Accounts - Expense on
checking accounts (predominantly NOW accounts) was $132,000 for
the twelve months ended December 31, 2002 compared to $207,000
for the twelve months ended December 31, 2001. The average balance
of transaction accounts was $6.6 million in 2002 and cost 2.0
%. For 2001, such accounts carried an average balance of $5.8
million and cost 3.6%. The average balance of transaction accounts
was $1.0 million for the twelve months ended December 31, 2000
and cost 4.93%.

Interest Expense on Certificates of Deposit - Expense
on certificates of deposit decreased slightly in 2002 compared
to 2001. This was because a large percentage of the Companys
portfolio of certificates of deposit carry maturities of one year
or less, meaning many repriced in 2002 during a falling interest
rate environment. The average balance of certificates of deposit
was $53.1 million costing the Company $2.0 million, or 3.7%, for
the twelve months ended December 31, 2002. For the twelve months
ended December 31, 2001, the average balance of certificates of
deposit was $39.9 million, costing 5.3%. For the twelve months
ended December 31, 2000, the average balance of certificates of
deposit was $39.2 million, costing 5.35%.

Interest Expense on Passbook Savings  For the
twelve months ended December 31, 2002, the average balance of
passbook savings was $26.8 million and cost 2.5%. For the twelve
months ended December 31, 2001, the average balance of passbook
savings was $17.2 million which cost 3.0 %. For the twelve months
ended December 31, 2000, the average balance of passbook savings
was $18.0 million which cost 2.91 %.

Interest Expense on Borrowings Interest expense
on borrowings decreased $1.0 million for the twelve months ended
December 31, 2002 to $4.0 million, a decrease of 20%, compared
to $5.0 million for the twelve months ended December 31, 2001.
The average balance of borrowings was $72.1 million in 2002 which
cost 5.6%. For the twelve months ended December 31, 2001, the
average balance of borrowings was $86.8 million which cost 5.7%.
In 2000, average borrowings were $53.9 million which cost 5.95%.

Provision for Loan Losses -The Allowance for Loan Loss
("ALL") is closely monitored by management and provisions
to increase or reductions to the ALL to a level deemed appropriate
by management are made accordingly. Additional provisions are
necessary when either growth of the entire loan portfolio, changes
in the loan mix, or charge-offs drop the ALL below that level
deemed appropriate by management. Reductions occur due to a decline
in the size of the loan portfolio or when previously reserved-for
loans are paid down or collected in full.

The Company made provisions for loan losses of $48,000 in 2002
compared to $25,000 in 2001. The provision for loan loss in 2001
was mainly due to the continued growth of the loan portfolio.
The $48,000 provision for loan loss was related to a change in
the mix of the Companys loan portfolio. While the overall
balance of the loan portfolio was decreased from 2001 to 2002,
the percentage of non-residential loans increased. The Companys
non-residential loans consist of commercial term loans and lines
of credit, the mortgage loans secured by multifamily dwellings
and commercial real estate. These loans typically carry more risk
than loans secured by one-to-four family residences. Accordingly,
non-residential loans are assigned a higher allowance than the
Companys residential loans in the overall calculation of
the ALL. At December 31, 2002, approximately 25% of the Companys
loan portfolio was comprised of non-residential loans compared
to 13% at December 31, 2001.



For the twelve months ended December 31, 2002, the Company
had no loan charge-offs. During the twelve months ended December
31, 2001, the Company had $10,000 in loan charge-offs. The provision
for loan losses reflects managements evaluation of the underlying
credit risk of the Companys loan portfolio to adequately
provide for probable loan losses inherent in the loan portfolio
as of the balance sheet date. As of December 31, 2002, the ALL
as a percent of the entire loan portfolio was .62% while the ratio
in 2001 was .53%. The ALL as a percentage of non-performing loans
was 74% at December 31, 2002, compared to 175% at December 31,
2001. Future additions to the ALL will be dependent on a number
of factors including the performance of the Companys loan
portfolio, specifically in terms of delinquencies, foreclosures
and charge-offs. Other factors considered in establishing the
ALL include the local economy, inflation, and changes in interest
rates and the effect of such changes on real estate values. Management
believes that the ALL was adequate at December 31, 2002.

Non-Interest Income - Non-interest income for the twelve
months ended December 31, 2002, was $102,000, compared to $634,000
for the twelve months ended December 31, 2001. Non-interest income
is comprised of two components, gain or losses from the sale of
investments, and service charges. In 2001, the Company realized
net gains on the sale of investment securities of $607,000, primarily
from the sale of FHLMC common stock, compared to $20,000 in gains
from the sale of other equity investments in 2002. In 2000, the
Company had net losses of ($146,000) primarily from the sale of
$10 million of mortgage-backed securities. Fee income is made
up primarily of service charges on transaction accounts as well
as ATM fees. Fee income was $82,000, $27,000 and $11,000 in 2002,
2001 and 2000, respectively.

Non-Interest Expenses  Non-interest expenses increased
from $3.7 million for the twelve months ended December 31, 2001,
to $4.2 million for the twelve months ended December 31, 2002.
This compares to $3.4 million for the twelve months ended December
31, 2000. The increase was attributable to compensation and benefits,
occupancy expense and ad valorem taxes. During 2002, the Company
opened another full service branch office. This increased expenses
such as utilities, telephone and office supplies. Also during
2002, the Company increased its staff by four employees. The cost
of the Companys ESOP also increased from 2001 to 2002 due
to the increase in market value of the Companys stock. The
Companys increase in ad valorem taxes was attributable to
the increase in Louisiana Bank Shares tax paid by the Association.
There was a substantial increase in the tax rate in 2002 and an
increase in the Companys basis, which approximates the shareholders
equity of the Association.







LIQUIDITY AND CAPITAL RESOURCES

Liquidity measures the Companys ability to meet its financial
commitments and obligations on a timely basis. These commitments
and obligations include loan disbursements, savings withdrawals
by customers, the payment of cash dividends, check clearings and
the daily operating expenses of the Company. Liquidity management
involves the daily monitoring of cash on hand, non-interest bearing
operating accounts, overnight Federal Funds Sold, short-term investments
and the Companys ability to convert these assets into cash
without incurring a loss. Monthly paydowns on mortgage loans,
mortgage-backed securities and CMOs are anticipated and channeled
to either cash on hand, overnight Federal Funds Sold or short-term
investments in order to meet the Companys demands and maximize
interest earned on these funds.

The Companys primary sources of funds are interest and
non-interest bearing customer deposits, advances from the Federal
Home Loan Bank and maturities of its existing investments including
mortgage loans, mortgage-backed securities, investment securities
and CMOs. The Company offers competitive interest rates in an
effort to maintain its core deposit base consisting of passbook
savings, checking accounts and certificates of deposit. The Company
does not utilize brokered deposits nor does it offer special rates
for "jumbo" deposits of $100,000 or more.

Guaranty Savings and Homestead Association, the Companys
wholly-owned subsidiary, is required to maintain regulatory capital
sufficient to meet all three of the regulatory capital requirements,
those being tangible capital (1.5%), core capital (3.0%), and
risk-based capital (8.0%). As of December 31, 2002, the Associations
tangible and core capital amounted to $28.1 million, or 13.8%
of adjusted total assets, while the Associations risk-based
capital was $28.6 million, or 25.1% of total adjusted risk-weighted
assets. The Company remains "well capitalized" under
the standards of the Office of Thrift Supervision ("OTS").

MARKET RISK ANALYSIS  ASSET LIABILITY MANAGEMENT

Qualitative Risk Analysis. The ability to maximize net
interest income is largely dependent upon the achievement of a
positive interest rate spread that could be sustained during fluctuations
in prevailing interest rates. Interest rate sensitivity is a measure
of the difference between amounts of interest-earning assets and
interest-bearing liabilities which either re-price or mature within
a given period of time. The difference or the interest rate re-pricing
"gap" provides an indication of the extent to which
an institutions interest rate spread will be affected by
changes in interest rates. A gap is considered positive when the
amount of interest-rate sensitive assets exceeds the amount of
interest-rate sensitive liabilities, and is considered negative
when the amount of interest-rate sensitive liabilities exceeds
the amount of interest-rate sensitive assets. Generally, during
a period of rising interest rates, a negative gap within shorter
maturities would adversely affect net interest income, while a
positive gap within shorter maturities would result in an increase
in net interest income. During a period of falling interest rates,
a negative gap within shorter maturities would result in an increase
in net interest income while a positive gap within shorter maturities
would have the opposite effect. As of December 31, 2002, the ratio
of the Associations cumulative one-year gap to total assets
was 36.8% and its ratio of interest-earning assets to interest-bearing
liabilities maturing or re-pricing within one year was 150.7%.
This compares to December 31, 2001, when the Associations
cumulative one-year gap to total assets was 27.8% and its ratio
of interest-earning assets to interest-bearing liabilities maturing
or re-pricing within one year was 154.4%. The sensitivity analysis
for 2002 and 2001 appears in the following tables on 13-16.

In order to minimize the potential for adverse effects of material
and prolonged increases in interest rates on the Associations
results of operations, the Association has adopted asset and liability
management policies including an interest rate risk policy to
better enable management to match the re-pricing and maturities
of its interest-earning assets and interest-bearing liabilities.
Monthly, management reviews the re-pricing gap on an internal
model specifically designed for the assets and liabilities currently
being held by the Association. On a quarterly basis, the entire
Board of Directors receives an interest rate risk report which
analyzes changes to the net portfolio value ("NPV").
The NPV is the difference between the market value of the Associations
assets and the market value of the Associations liabilities
and off balance sheet commitments. The Board reviews the internal
model and a standard thrift industry model prepared by the OTS
from the Associations quarterly Consolidated Maturity and
Rate Report.

The nature of thrifts such as Guaranty Savings and Homestead
Association lends itself to the creation of negative gaps over
the short term since the Association is invested primarily in
home mortgage loans varying in length usually from 15 to 25 years
while its longest term interest-bearing liabilities are five-year
certificates of deposit and several of its FHLB advances. Therefore
it is vital that the Association utilize its other investments
to offset in the short-term (12-month) horizon the substantial
negative re-pricing gap which arises from one to five years while
at the same time maximizing net interest income. This is why the
Association places much of its ready cash in short-term investments
such as mortgage-based mutual funds. These types of investments
provide the benefit of overnight availability while producing
yields approximately 150 basis points higher than overnight Federal
Funds Sold. The Association also places a high emphasis on cash
flows in its portfolio of CMOs. The duration of the Associations
CMOs varies from two to fifteen years. At present, due to the
large influx of cash and subsequent reinvestment in short-term
mutual funds during 2002, at December 31, 2002, the Association
was in a very positively gapped position over the twelve-month
horizon.

Quantitative Risk Analysis Presented below, as of December
31, 2002 is an analysis of Guaranty Savings & Homestead Associations
interest rate risk as measured by changes in NPV for instantaneous
and sustained parallel shifts in the yield curve, in 100 basis
point increments, up and down 300 basis points in accordance with
OTS regulations. Currently, due to the low level of interest rates,
the only downward shock capable of being applied is 100 basis
points. As illustrated in the tables below, NPV is more sensitive
to and may be more negatively impacted by falling rates than rising
rates. This position is opposite the traditional position of the
Association. Due to the high payoffs currently being experienced
by the Association in its portfolio of loans and CMOs, and due
to the significant balances in cash, cash equivalents, and short
term investments, the Association would benefit most from a rising
interest rate environment in terms of net interest income as well
as NPV. This is due to the large amount of assets which would
reprice sooner than the Associations liabilities.



|Change (in Basis Points) | Net Portfolio Value at December 31, 2002
    ------------------------
|------------------------ | ---------------------------------------------------------------------
|in Interest Rates        | $ Amount                                                             
|                         | (Dollars in Thousands)                                               
|+300                     | 36,092                                                               
|+200                     | 35,451                                                               
|+100                     | 34,765                                                               
|0                        | 34,017                                                               
|-100                     | 33,156                                                               

|Change (in Basis Points) | Net Portfolio Value at December 31, 2001
    ------------------------
|------------------------ | ---------------------------------------------------------------------
|in Interest Rates        | $ Amount                                                             
|                         | (Dollars in Thousands)                                               
|+300                     | 19,589                                                               
|+200                     | 23,459                                                               
|+100                     | 27,032                                                               
|0                        | 30,478                                                               
|-100                     | 34,175                                                               
|-200                     | 37,682                                                               
|-300                     | 41,090                                                               





The assumptions used by management to evaluate the vulnerability
of the Associations operations to changes in interest rates
in the tables above are based on assumptions utilized in the gap
tables on pages 13 - 16. Although management finds these assumptions
reasonable, the interest rate sensitivity of the Associations
assets and liabilities and the estimated effects of changes in
interest rates on the Associations net interest income and
NPV indicated in the above table could vary substantially if different
assumptions were used or actual experience differs from such assumptions.



SENSITIVITY ANALYSIS

The following table summarizes the anticipated maturities or
re-pricing of the Associations interest-earning assets and
interest-bearing liabilities as of December 31, 2002, based on
the information and assumptions set forth in the notes below.



|(Dollars in Thousands)                                                           | Within Three Months                       | Three to Twelve Months | More Than One Year 
    to Three Years | More 
    Than Three Years to Five Years | Over 
    Five 
    Years | Total   
|-------------------------------------------------------------------------------- | ----------------------------------------- | ---------------------- | -------------------------------------- | ---------------------------------------- | ------------------------- | --------
|Interest-Earning Assets:                                                         |                                           |                        |                                        |                                          |                           |         
|                                                                                 | Cash and interest-earning deposits        | $                      | 11,500                                 | $                                        | -                         | $       
|                                                                                 | U.S. Government and Agency Securities (1) |                        | -                                      |                                          | -                         |         
|                                                                                 | FHLMC and FHLB Stock                      |                        | 25,322                                 |                                          | -                         |         
|                                                                                 | Mortgage-based Mutual Funds               |                        | 30,955                                 |                                          | -                         |         
|                                                                                 | Mortgage Loans (1)                        |                        | 10,848                                 |                                          | 32,545                    |         
|                                                                                 | Commercial Loans (2)                      |                        | -                                      |                                          | 1,145                     |         
|                                                                                 | Collateralized Mortgage Obligations (1)   |                        | 27,304                                 |                                          | 25,189                    |         
|                                                                                 | Consumer Loans                            |                        | 396                                    |                                          | -                         |         
|TOTAL INTEREST-EARNING ASSETS                                                    |                                           | 106,325                |                                        | 58,880                                   |                           | 33,802  
|                                                                                 |                                           | ======                 |                                        | =====                                    |                           | =====   
|                                                                                 |                                           |                        |                                        |                                          |                           |         
|Interest Bearing Liabilities:                                                    |                                           |                        |                                        |                                          |                           |         
|                                                                                 | NOW Accounts                              |                        | 6,542                                  |                                          | -                         |         
|                                                                                 | Passbook Savings                          |                        | 31,117                                 |                                          | -                         |         
|                                                                                 | Certificates of Deposits (2)              |                        | 10,824                                 |                                          | 36,872                    |         
|                                                                                 | FHLB Advances (2)                         |                        | 9,977                                  |                                          | 14,287                    |         
|TOTAL INTEREST-EARNING LIABILITIES                                               | $                                         | 58,460                 | $                                      | 51,159                                   | $                         | 39,359  
|                                                                                 |                                           | =====                  |                                        | =====                                    |                           | =====   
|                                                                                 |                                           |                        |                                        |                                          |                           |         
|Excess/(Deficiency) of interest-earning                                          |                                           |                        |                                        |                                          |                           |         
|assets over interest-bearing liabilities                                         |                                           | $47,865                |                                        | $7,721                                   |                           | ($5,557)
|                                                                                 |                                           |                        |                                        |                                          |                           |         
|Cumulative Excess/(Deficiency) of interest-                                      |                                           |                        |                                        |                                          |                           |         
|earning assets over interest bearing liabilities                                 |                                           | $47,865                |                                        | $55,586                                  |                           | $50,029 
|                                                                                 |                                           |                        |                                        |                                          |                           |         
|Cumulative Excess/(Deficiency) of interest-                                      |                                           |                        |                                        |                                          |                           |         
|earning assets over interest bearing liabilities                                 |                                           |                        |                                        |                                          |                           |         
|as a percent of total assets                                                     |                                           | 23.11%                 |                                        | 26.84%                                   |                           | 24.16%  
|                                                                                 |                                           |                        |                                        |                                          |                           |         
|Ratio of interest-earning assets to interest-                                    |                                           |                        |                                        |                                          |                           |         
|bearing liabilities                                                              |                                           | 181.88%                |                                        | 115.09%                                  |                           | 85.88%  
|                                                                                 |                                           |                        |                                        |                                          |                           |         
|Ratio of cumulative interest-earning assets                                      |                                           |                        |                                        |                                          |                           |         
|to interest-bearing liabilities                                                  |                                           | 181.88%                |                                        | 150.71%                                  |                           | 133.58% 
|                                                                                 |                                           |                        |                                        |                                          |                           |         
|(1) Based on monthly payments received in the
    month ended December 31, 2002.
|(2) Based on contractual maturities                                              |                                           |                        |                                        |                                          |                           |         

















SENSITIVITY ANALYSIS

The following table summarizes the anticipated maturities or
re-pricing of the Associations interest-earning assets and
interest-bearing liabilities as of December 31, 2001, based on
the information and assumptions set forth in the notes below.



|(Dollars in Thousands)                                                                  | Within Three Months                       | Three to Twelve Months | More Than One Year 
    to Three Years | More 
    Than Three Years to Five Years | Over 
    Five 
    Years | Total  
|--------------------------------------------------------------------------------------- | ----------------------------------------- | ---------------------- | -------------------------------------- | ---------------------------------------- | ------------------------- | -------
|Interest-Earning Assets:                                                                |                                           |                        |                                        |                                          |                           |        
|                                                                                        | Cash and interest-earning deposits        | $                      | 8,141                                  | $                                        | -                         | $      
|                                                                                        | U.S. Government and Agency Securities (1) |                        | -                                      |                                          | -                         |        
|                                                                                        | FHLMC and FHLB Stock                      |                        | 22,901                                 |                                          | -                         |        
|                                                                                        | Mortgage-based Mutual Funds               |                        | 16,466                                 |                                          | -                         |        
|                                                                                        | Mortgage Loans (1)                        |                        | 4,844                                  |                                          | 14,532                    |        
|                                                                                        | Commercial Loans (2)                      |                        | 55                                     |                                          | 231                       |        
|                                                                                        | Collateralized Mortgage Obligations (1)   |                        | 17,788                                 |                                          | 34,318                    |        
|                                                                                        | Consumer Loans                            |                        | 254                                    |                                          | -                         |        
|TOTAL INTEREST-EARNING ASSETS                                                           |                                           | 70,449                 |                                        | 49,081                                   |                           | 38,754 
|                                                                                        |                                           | ======                 |                                        | =====                                    |                           | =====  
|                                                                                        |                                           |                        |                                        |                                          |                           |        
|Interest Bearing Liabilities:                                                           |                                           |                        |                                        |                                          |                           |        
|                                                                                        | NOW Accounts                              |                        | 7,666                                  |                                          | -                         |        
|                                                                                        | Passbook Savings                          |                        | 20,042                                 |                                          | -                         |        
|                                                                                        | Certificates of Deposits (2)              |                        | 8,621                                  |                                          | 23,864                    |        
|                                                                                        | FHLB Advances (2)                         |                        | 3,405                                  |                                          | 13,836                    |        
|TOTAL INTEREST-EARNING LIABILITIES                                                      | $                                         | 39,734                 | $                                      | 37,700                                   | $                         | 39,552 
|                                                                                        |                                           | =====                  |                                        | =====                                    |                           | =====  
|                                                                                        |                                           |                        |                                        |                                          |                           |        
|Excess/(Deficiency) of interest-earning                                                 |                                           |                        |                                        |                                          |                           |        
|assets over interest-bearing liabilities                                                |                                           | $30,715                |                                        | $11,381                                  |                           | ($798) 
|                                                                                        |                                           |                        |                                        |                                          |                           |        
|Cumulative Excess of interest-                                                          |                                           |                        |                                        |                                          |                           |        
|earning assets over interest bearing liabilities                                        |                                           | $30,715                |                                        | $42,097                                  |                           | $41,298
|                                                                                        |                                           |                        |                                        |                                          |                           |        
|Cumulative Excess of interest-                                                          |                                           |                        |                                        |                                          |                           |        
|earning assets over interest bearing liabilities                                        |                                           |                        |                                        |                                          |                           |        
|as a percent of total assets                                                            |                                           | 20.32%                 |                                        | 27.85%                                   |                           | 27.32% 
|                                                                                        |                                           |                        |                                        |                                          |                           |        
|Ratio of interest-earning assets to interest-                                           |                                           |                        |                                        |                                          |                           |        
|bearing liabilities                                                                     |                                           | 177.30%                |                                        | 130.19%                                  |                           | 97.98% 
|                                                                                        |                                           |                        |                                        |                                          |                           |        
|Ratio of cumulative interest-earning assets                                             |                                           |                        |                                        |                                          |                           |        
|to interest-bearing liabilities                                                         |                                           | 177.30%                |                                        | 154.36%                                  |                           | 135.30%
|                                                                                        |                                           |                        |                                        |                                          |                           |        
|(1) Based on average monthly payments for the
    three months ended December 31, 2001.
|(2) Based on contractual maturities                                                     |                                           |                        |                                        |                                          |                           |        









IMPACT OF INFLATION

The consolidated financial statements of the Company and notes
thereto, presented elsewhere herein, have been prepared in accordance
with GAAP, which require the measurement of financial position
and operating results in terms of historical dollars without considering
the change in the relative purchasing power of money over time
due to inflation. The impact of inflation is reflected in the
increased cost of the Companys operations. Unlike most industrial
companies, nearly all the assets and liabilities of the Company
are financial. As a result, interest rates have a greater impact
on the Companys performance than do the effects of general
levels of inflation. Interest rates do not necessarily move in
the same direction or to the same extent as the prices of goods
and services.

LaPorte, Sehrt, Romig and Hand



To The Board of Directors

GS Financial Corp. and Subsidiary







We have audited the accompanying consolidated balance sheets
of GS FINANCIAL CORP.and its wholly-owned subsidiary,GUARANTY SAVINGS AND HOMESTEAD ASSOCIATION as of December
31, 2002 and 2001, and the related consolidated statements of
income, comprehensive income, changes in stockholders equity,
and cash flows for each of the three years in the period ended
December 31, 2002. These financial statements are the responsibility
of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.



We conducted our audits in accordance with auditing standards
generally accepted in the United States of America. Those standards
require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.



In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated financial
position of GS FINANCIAL CORP.and its wholly-owned subsidiary,GUARANTY SAVINGS AND HOMESTEAD ASSOCIATION as of December
31, 2002 and 2001, and the consolidated results of their operations
and their cash flows for each of the three years in the period
ended December 31, 2002, in conformity with accounting principles
generally accepted in the United States of America.



/s/ LaPorte, Sehrt, Romig and Hand

--------------------------------------------

A Professional Accounting Corporation





January 10, 2003

Metairie, Louisiana

















A Professional Accounting Corporation

110 Veterans Blvd., Ste 200, Metairie, LA 70005-4958 (504)
835-5522 FAX (504)835-5535

724 East Boston Street Covington, LA 70433 (985) 892-5850 FAX
(985) 892-5956

E-Mail Address: laporte@laporte.com
Internet Address: http:/www.laporte.com/

Member of AICPA Division for CPA Firms-Private Companies Practice
Section and SEC Practice

Section, An Independently Owned Member of the RSM McGladrey
Network



|GS FINANCIAL CORP.                                     
|-------------------------------------------------------
|CONSOLIDATED BALANCE SHEETS                            
|(Dollars in Thousands)                                 
|                                                       
|ASSETS                                                 
|                                                       
|                                                       
|                                                       
|                                                       
|CASH AND CASH EQUIVALENTS                              
|                                                       
|                                                       
|                                                       
|                                                       
|                                                       
|                                                       
|Securities Available-for-Sale, at Fair Value           
|Mortgage-Backed Securities Available-for-Sale,         
|                                                       
|Collateralized Mortgage Obligations Available-for-Sale,
|                                                       
|Loans, Net                                             
|Accrued Interest Receivable                            
|Premises and Equipment, Net                            
|Real Estate Held-for-Investment, Net                   
|Stock in Federal Home Loan Bank, at Cost               
|Prepaid Income Tax                                     
|Deferred Charges                                       
|Other Assets                                           
|                                                       
|                                                       







|LIABILITIES AND STOCKHOLDERS' EQUITY
|------------------------------------
|                                    
|                                    
|                                    
|                                    
|LIABILITIES                         
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|STOCKHOLDERS' EQUITY                
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    





|GS FINANCIAL CORP.               
|---------------------------------
|CONSOLIDATED STATEMENTS OF INCOME
|(Dollars in Thousands)           
|                                 
|                                 
|                                 
|                                 
|                                 
|                                 
|INTEREST INCOME                  
|                                 
|                                 
|                                 
|                                 
|                                 
|                                 
|                                 
|                                 
|                                 
|INTEREST EXPENSE                 
|                                 
|                                 
|                                 
|                                 
|                                 
|NET INTEREST INCOME BEFORE       
|                                 
|                                 
|PROVISION FOR LOAN LOSSES        
|                                 
|NET INTEREST INCOME AFTER        
|                                 
|                                 
|NON-INTEREST INCOME              
|                                 
|                                 
|                                 
|                                 







|GS FINANCIAL CORP.                           
|---------------------------------------------
|CONSOLIDATED STATEMENTS OF INCOME (Continued)
|(Dollars in Thousands)                       
|                                             
|                                             
|                                             
|                                             
|                                             
|                                             
|NON-INTEREST EXPENSES                        
|                                             
|                                             
|                                             
|                                             
|                                             
|                                             
|                                             
|                                             
|                                             
|                                             
|                                             
|                                             
|                                             
|                                             
|                                             
|INCOME BEFORE INCOME TAX                     
|                                             
|                                             
|INCOME TAX EXPENSE                           
|                                             
|NET INCOME                                   
|                                             
|EARNINGS PER SHARE - BASIC                   
|                                             
|EARNINGS PER SHARE - DILUTED                 





|GS FINANCIAL CORP.                             
|-----------------------------------------------
|CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
|(Dollars in Thousands)                         
|                                               
|                                               
|                                               
|                                               
|                                               
|                                               
|NET INCOME                                     
|                                               
|OTHER COMPREHENSIVE INCOME,                    
|                                               
|                                               
|                                               
|                                               
|                                               
|                                               
|                                               
|                                               
|                                               
|COMPREHENSIVE INCOME                           
|                                               





|GS FINANCIAL CORP.                                            
|--------------------------------------------------------------
|CONSOLIDATED STATEMENTS OF CHANGES
    IN STOCKHOLDERS' EQUITY
|For The Years Ended December 31,
    2002, 2001 and 2000      
|(Dollars in Thousands)                                        
|                                                              
|                                                              
|                                                              
|                                                              
|BALANCES AT DECEMBER 31, 1999                                 
|                                                              
|Distribution of                                               
|                                                              
|                                                              
|ESOP Compensation                                             
|                                                              
|                                                              
|Purchase of Treasury Stock                                    
|                                                              
|Dividends Declared                                            
|                                                              
|Net Income - Year Ended                                       
|                                                              
|                                                              
|Other Comprehensive Income, Net of Applicable                 
|                                                              
|BALANCES AT DECEMBER 31, 2000                                 
|                                                              
|Distribution of                                               
|                                                              
|                                                              
|ESOP Compensation                                             
|                                                              
|                                                              
|Purchase of Treasury Stock                                    
|                                                              
|Dividends Declared                                            
|                                                              
|Net Income - Year Ended                                       
|                                                              
|                                                              
|Other Comprehensive Income, Net of Applicable                 
|                                                              
|BALANCES AT DECEMBER 31, 2001                                 
|                                                              
|Distribution of                                               
|                                                              
|                                                              
|ESOP Compensation                                             
|                                                              
|                                                              
|Purchase of Treasury Stock                                    
|                                                              
|Dividends Declared                                            
|                                                              
|Net Income - Year Ended                                       
|                                                              
|                                                              
|Other Comprehensive Income, Net of Applicable                 
|                                                              
|BALANCES AT DECEMBER 31, 2002                                 







|GS FINANCIAL CORP.                       
|-----------------------------------------
|CONSOLIDATED STATEMENTS OF CASH
    FLOWS
|(Dollars in Thousands)                   
|                                         
|                                         
|                                         
|                                         
|                                         
|                                         
|                                         
|                                         
|                                         
|                                         
|                                         
|                                         
|                                         
|                                         
|                                         
|                                         
|                                         
|                                         
|                                         
|                                         
|                                         
|                                         
|                                         
|                                         
|                                         
|                                         
|                                         
|                                         
|                                         
|                                         
|                                         
|                                         
|                                         
|                                         







|GS FINANCIAL CORP.                                   
|-----------------------------------------------------
|CONSOLIDATED STATEMENTS OF CASH
    FLOWS (continued)
|(Dollars in Thousands)                               
|                                                     
|                                                     
|                                                     
|2002                                                 
|CASH FLOWS FROM INVESTING ACTIVITIES                 
|                                                     
|                                                     
|                                                     
|                                                     
|                                                     
|                                                     
|                                                     
|                                                     
|                                                     
|                                                     
|                                                     
|                                                     
|                                                     
|                                                     
|                                                     
|                                                     
|                                                     
|                                                     
|                                                     
|                                                     
|                                                     
|                                                     









|GS FINANCIAL CORP.                                   
|-----------------------------------------------------
|CONSOLIDATED STATEMENTS OF CASH
    FLOWS (Continued)
|(Dollars in Thousands)                               
|                                                     
|                                                     
|                                                     
|                                                     
|                                                     
|                                                     
|CASH FLOWS FROM FINANCING ACTIVITIES                 
|                                                     
|                                                     
|                                                     
|                                                     
|                                                     
|                                                     
|                                                     
|                                                     
|                                                     
|NET INCREASE IN CASH AND                             
|                                                     
|                                                     
|CASH AND CASH EQUIVALENTS - Beginning of Year        
|                                                     
|CASH AND CASH EQUIVALENTS  End of Year              
|                                                     
|                                                     
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION     
|                                                     
|                                                     
|                                                     
|                                                     
|                                                     
|                                                     
|                                                     





NOTE A

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS

GS Financial Corp. (the Company) was organized as a Louisiana
corporation on December 24, 1996 for the purpose of becoming the
holding company of Guaranty Savings and Homestead Association
(the Association) in anticipation of converting the Association
from a Louisiana chartered mutual savings and loan association
to a Louisiana chartered stock savings and loan association. The
Association operates in the savings and loan industry and as such
provides financial services to individuals, corporate entities
and other organizations through the origination of loans and the
acceptance of deposits in the form of passbook savings, certificates
of deposit, and demand deposit accounts.



The Association is subject to competition from other financial
institutions, and is also subject to the regulations of certain
Federal and State agencies and undergoes periodic examinations
by those regulatory authorities.

PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements include
the accounts of the Company and its wholly-owned subsidiary, Guaranty
Savings and Homestead Association. In consolidation, significant
inter-company accounts, transactions, and profits have been eliminated.

BASIS OF FINANCIAL STATEMENT PRESENTATION

The financial statements have been prepared in conformity with
generally accepted accounting principles. In preparing the financial
statements, management is required to make estimates and assumptions
that affect the reported amounts of assets and liabilities as
of the date of the statement of financial condition and revenues
and expenses for the year. Actual results could differ significantly
from those estimates.

Material estimates that are particularly susceptible to significant
change relate to the determination of the allowance for losses
on loans and valuation of real estate acquired in connection with
foreclosures or in satisfaction of loans. Management independently
determines the allowance for losses on loans based on an evaluation
of the loan history and the condition of the underlying collateral.
In connection with the determination of the allowances for losses
on foreclosed real estate, management assesses the fair market
value or obtains independent appraisals for all properties.



While management uses available information to recognize losses
on loans and foreclosed real estate, future additions to the allowances
may be necessary based on changes in local economic conditions.
In addition, regulatory agencies, as an integral part of their
examination process, periodically review the Associations
allowances for losses on loans and foreclosed real estate. Such
agencies may require the Association to recognize additions to
the allowances based on their judgments about information available
to them at the time of their examination.

CASH AND CASH EQUIVALENTS

For the purposes of presentation in the consolidated statements
of cash flows, cash and cash equivalents include all cash and
amounts due from depository institutions, interest-bearing deposits
in other banks, and Federal Funds Sold.

INVESTMENT SECURITIES

Marketable securities are classified as available-for-sale
and are carried at fair value. Unrealized gains and losses on
securities available-for-sale are recognized as direct increases
or decreases in comprehensive income. The cost of securities sold
is recognized using the specific identification method. Premiums
and discounts are being amortized over the life of the securities
as a yield adjustment.

MORTGAGE-BACKED SECURITIES

Mortgage-backed securities represent participating interests
in pools of first mortgage loans originated and serviced by issuers
of the securities. Unrealized gains and losses on mortgage-backed
securities are recognized as direct increases or decreases in
comprehensive income. The cost of securities sold is recognized
using the specific identification method. Premiums and discounts
are being amortized over the life of the securities as a yield
adjustment.

COLLATERALIZED MORTGAGE OBLIGATIONS

Collateralized Mortgage Obligations (CMOs) are multiple
class mortgage-backed securities. An underlying pool of mortgages
held by the issuer serves as collateral for the debt obligations,
and principal and interest payments from the pool of mortgages
are used to retire the CMOs.

Currently, the Companys investment in CMOs is limited
to Real Estate Mortgage Investment Conduits (REMICs). A
REMIC is a pass-through investment vehicle created under the Tax
Reform Act of 1986 to issue multiple class mortgage-backed securities.

Currently, the Companys investment in REMICs is
limited to those issued by FNMA, FHLMC and "AAA" rated
non-governmental agencies. These are defined to be within the
20% risk-weighted category for thrift institutions. Prior to investing,
the Company receives a prospectus that includes the various cash
flow and interest rate risk scenarios possible for each bond.

Unrealized gains and losses on CMOs are recognized as
direct increases or decreases in comprehensive income. The cost
of securities sold is recognized using the specific identification
method. Premiums and discounts are being amortized over the life
of the securities as a yield adjustment.





LOANS

Loans are stated at unpaid principal balances, less the allowance
for loan losses and net deferred loan fees. Loan origination and
commitment fees, as well as certain direct origination costs,
are deferred and amortized as a yield adjustment over the contractual
lives of the related loans using the interest method.

Loans are placed on non-accrual when principal or interest
is delinquent for 90 days or more. Any unpaid interest previously
accrued on those loans is reversed from income, and thereafter
interest is recognized only to the extent of payments received.

A loan is considered impaired when, based on current information
and events, it is probable that a creditor will be unable to collect
all amounts due according to the contractual terms of the loan
agreement. Interest payments on impaired loans are typically applied
to principal unless collectibility of the principal amount is
fully assured, in which case interest is recognized on the cash
basis. Residential mortgage loans and consumer installment loans
are considered to be groups of smaller balance homogeneous loans
and are collectively evaluated for impairment and are not subject
to SFAS 114 measurement criteria.

The allowance for loan losses is maintained at a level that,
in managements judgment, is adequate to absorb probable
losses inherent in the loan portfolio. The amount of the allowance
is based on managements evaluation of the collectibility
of the loan portfolio, including the nature of the portfolio,
credit concentrations, trends in historical loss experience, specific
impaired loans, and economic conditions. The allowance is increased
by a provision for loan losses, which is charged to expense, and
reduced by charge-offs, net of recoveries. Changes in the allowance
relating to impaired loans are charged or credited to the provision
for loan losses.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost, less accumulated
depreciation computed principally on the straight-line and modified
accelerated cost recovery methods over the estimated useful lives
of the assets which range from 5 to 10 years for furniture and
equipment, and 31 to 39 years for buildings. Maintenance and repairs
are expensed as incurred, while major additions and improvements
are capitalized.

When these assets are retired or otherwise disposed of, the
cost and related accumulated depreciation or amortization are
removed from the accounts, and any resulting gain or loss is reflected
in income for the period.



FORECLOSED REAL ESTATE

Foreclosed real estate includes real estate acquired in settlement
of loans. At the time of foreclosure, foreclosed real estate is
recorded at the lower of the Associations cost or the assets
fair value, less estimated selling costs, which becomes the propertys
new basis. After foreclosure, valuations are periodically performed
by management and the real estate is carried at the lower of cost
or fair value less estimated selling costs. Costs incurred in
maintaining foreclosed real estate are included in income (loss)
on foreclosed real estate.

REAL ESTATE HELD-FOR-INVESTMENT

Real estate held-for-investment consists of a multi-suite office
building at a former branch location of the Association. The Company
leases two of the four suites to the Association which serves
as a branch office location. The remaining two suites are rented
by unrelated third parties.

INCOME TAXES

The Company and its wholly-owned subsidiary file a consolidated
Federal income tax return on a calendar year basis. Each entity
pays its pro rata share of income taxes in accordance with a written
tax-sharing agreement.

Income taxes are provided for the tax effects of the transactions
reported in the financial statements and consist of taxes currently
due plus deferred taxes related to differences between the basis
of assets and liabilities for financial and income tax reporting.
The deferred tax assets and liabilities represent the future tax
return consequences of those differences, which will either be
taxable or deductible when the assets and liabilities are recovered
or settled. Deferred tax assets are reduced by a valuation allowance
when, in the opinion of management, it is more likely than not
that some portion of the deferred tax asset will not be realized.
Deferred tax assets and liabilities are adjusted for the effect
of changes in tax laws and rates on the date of enactment.

While the Association is exempt from Louisiana income tax,
it is subject to the Louisiana Ad Valorem tax that is based on
stockholders equity and net income.

NON-DIRECT RESPONSE ADVERTISING COSTS

The Company expenses advertising costs as incurred. Advertising
costs were $101,000, $95,000 and $95,000 for the years ended December
31, 2002, 2001 and 2000, respectively.



Statement of Financial Accounting Standards No. 145 (SFAS 145),
"Rescission of FASB Statements No. 4, 44, and 64, Amendment
of FASB Statement No. 13, and Technical Corrections",
updates, clarifies, and simplifies existing accounting pronouncements
related to extinguishment of debt, accounting requirements for
the effects of transitions to the provisions of the Motor Carrier
Act of 1980, and accounting for certain lease modifications that
have economic effects similar to sale-leaseback transactions.
This statement is effective for financial statements issued for
fiscal years beginning after May 15, 2002. The adoption of this
pronouncement had no effect on the financial position and results
of operations of the Company

















Statement of Financial Accounting Standards No. 146 (SFAS 146),
"Accounting for Costs Associated with Exit or Disposal
Activities", a replacement of Emerging Issues Task Force
(EITF) No. 94-3. This statement provides accounting and reporting
standards for costs associated with exit or disposal activities
that were previously recognized at the date a Company committed
to an exit plan. This statement requires that a liability for
a cost associated with an exit or disposal activity be recognized
at fair value when the liability is incurred. This statement is
effective for exit or disposal activities that are initiated after
December 31, 2002. The adoption of this pronouncement is not expected
to have an effect on the financial position and results of operations
of the Company.



Statement of Financial Accounting Standards No. 147 (SFAS 147),
"Acquisitions of Certain Financial Institutions An
amendment of SFAS 72 and 144, and FASB Interpretation No. 9."
This statement provides accounting and reporting standards for
the application of the purchase method to all acquisitions of
financial institutions (including branch acquisitions that meet
the definition of a business), except transactions between two
or more mutual enterprises. Previously, any excess of the fair
value of liabilities assumed over the fair value of tangible and
identifiable intangible assets acquired was classified as an unidentifiable
intangible asset and subsequently amortized. This statement requires
that long-lived assets (including long-term customer relationship
intangible assets) to be held and used by an entity be reviewed
for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable and
requires a probability-weighted cash flow estimation approach,
and includes a "primary-asset" approach to determine
the cash flow estimation period. This statement is effective for
acquisitions on or after October 1, 2002. The adoption of this
pronouncement had no effect on the financial position and results
of operations of the Company.

Statement of Financial Accounting Standards No. 148 (SFAS 148),
"Accounting for Stock-Based Compensaton  Transition
and Disclosure An Amendment of FASB Statement No. 123,"
is effective for financial statements for fiscal years ending
after December 15, 2002 and is effective for financial reports
containing condensed financial statements for interim periods
beginning after December 15, 2002. This statement provides alternative
methods of transition for a voluntary change to the fair value
based method of accounting for stock-based employee compensation.
In addition, this statement amends the disclosure requirements
of Statement 123 to require prominent disclosures in both annual
and interim financial statements about the method of accounting
for stock-based employee compensation and the effect of the method
used on reported results. Adoption of this pronouncement had no
effect on the financial position and results of operations of
the Company.

NOTE B

INVESTMENT SECURITIES

Securities available-for-sale consist of the following (in
thousands):



|                         | December 31, 2002    |        | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair 
    Value
|------------------------ | -------------------- | ------ | -------------- | ---------------------- | ----------------------- | ---------------
|                         |                      |        | ----------     |                        | ----------              |                
|U. S. Government         |                      |        |                |                        |                         |                
|                         | and Federal Agencies | $      | 801            | $                      | 116                     | $              
|Adjustable Rate          |                      |        |                |                        |                         |                
|                         | Mortgage Mutual Fund |        | 31,924         |                        | 39                      |                
|Intermediate Mortgage    |                      |        |                |                        |                         |                
|                         | Mutual Fund          |        | 412            |                        | 7                       |                
|FHLMC Common Stock       |                      | 16     |                | 929                    |                         | -              
|FHLMC Preferred Stock    |                      | 19,846 |                | 1,001                  |                         | -              
|                         |                      |        | -------        |                        | -------                 |                
|                         |                      | $      | 52,999         | $                      | 2,092                   | $              
|                         |                      |        | =====          |                        | =====                   |                
|                         |                      |        |                |                        |                         |                
|                         | December 31, 2001    |        | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair 
    Value
|                         |                      |        | ----------     |                        | ----------              |                
|U. S. Government         |                      |        |                |                        |                         |                
|                         | and Federal Agencies | $      | 801            | $                      | 85                      | $              
|Adjustable Rate          |                      |        |                |                        |                         |                
|                         | Mortgage Mutual Fund |        | 12,481         |                        | 32                      |                
|Ultra Short-Term         |                      |        |                |                        |                         |                
|Mutual Fund              |                      | 4,255  |                | -                      |                         | 4              
|Intermediate             |                      |        |                |                        |                         |                
|                         | Mortgage Mutual Fund |        | 394            |                        | 3                       |                
|FHLMC Common Stock       |                      | 16     |                | 1,031                  |                         | -              
|FHLMC Preferred Stock    |                      | 16,224 |                | 326                    |                         | -              
|Equity Investments-Other |                      | 173    |                | 3                      |                         | -              
|                         |                      |        | -------        |                        | -------                 |                
|                         |                      | $      | 34,344         | $                      | 1,480                   | $              
|                         |                      |        | =====          |                        | =====                   |                



The following is a summary of maturities of securities available-for-sale
(in thousands):



|                     |                                    | December 31,
|-------------------- | ---------------------------------- | ------------
|                     |                                    | 2002        
|                     |                                    |             
|                     |                                    |             
|Amounts Maturing in: |                                    |             
|                     | In One Year or Less                |             
|                     | After One Year Through Five Years  |             
|                     | After Five Years Through Ten Years |             
|                     |                                    |             
|                     |                                    |             
|                     |                                    |             

The Company's investment in FHLMC common and preferred stock
represents an investment in securities which pay a stated rate
of interest quarterly of which 70% is exempt from Federal income
tax. This FHLMC preferred stock contains call options from 2004
to 2009.



In 2002, the Company sold $279,000 of other equity investments
and realized a gain of $20,000. In 2001, the Company sold 10,000
shares of FHLMC common stock at a gain of $623,000. The Company
also wrote down its investment in the Intermediate Mortgage Mutual
Fund $27,000 in 2001. During 2000, the Company realized losses
of $210,000 through the redemption of $2.6 million of its Intermediate
Mortgage Mutual Fund. The Company also sold 10,000 shares of FHLMC
common stock for $413,000, realizing a gain of $403,000.



At December 31, 2002 and 2001, three equity securities being
are carried at a cost of $77,000 and are included in Other Assets.
The cost of these securities approximates their fair value.





NOTE C

MORTGAGE-BACKED SECURITIES

Mortgage-backed securities consist of the following (in thousands):



|December 31, 2002   |   | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair 
    Value
|------------------- | - | -------------- | ---------------------- | ----------------------- | ---------------
|                    |   | ----------     |                        | ----------              |                
|Available for Sale: |   |                |                        |                         |                
|GNMA                |   | 539            |                        | 30                      |                
|                    |   | -------        |                        | -------                 |                
|                    | $ | 539            | $                      | 30                      | $              
|                    |   | =====          |                        | =====                   |                
|                    |   |                |                        |                         |                
|December 31, 2001   |   | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair 
    Value
|                    |   | ----------     |                        | ----------              |                
|Available for Sale: |   |                |                        |                         |                
|GNMA                | $ | 857            | $                      | 28                      | $              
|                    |   | -------        |                        | -------                 |                
|                    | $ | 857            | $                      | 28                      | $              
|                    |   | =====          |                        | =====                   |                

The amortized cost and fair value of mortgage-backed securities
at December 31, 2002 and 2001, by contractual maturity, are shown
below (in thousands). Expected maturities will differ from contractual
maturities because borrowers may have the right to call or prepay
obligations without call or prepayment penalties.



|                                     | December 31, 2002                  |   | Amortized Cost | Fair Value
|------------------------------------ | ---------------------------------- | - | -------------- | ----------
|                                     |                                    |   | ---------      |           
|Mortgage-Backed Securities Maturing: |                                    |   |                |           
|                                     | In One Year or Less                | $ | -              | $         
|                                     | After One Year Through Five Years  |   | -              |           
|                                     | After Five Years Through Ten Years |   | -              |           
|                                     | After Ten Years                    |   | 539            |           
|                                     |                                    |   | ------         |           
|                                     |                                    | $ | 539            | $         
|                                     |                                    |   | =====          |           

|                                     | December 31, 2001                  |   | Amortized Cost | Fair Value
|------------------------------------ | ---------------------------------- | - | -------------- | ----------
|                                     |                                    |   | ---------      |           
|Mortgage-Backed Securities Maturing: |                                    |   |                |           
|                                     | In One Year or Less                | $ | -              | $         
|                                     | After One Year Through Five Years  |   | -              |           
|                                     | After Five Years Through Ten Years |   | -              |           
|                                     | After Ten Years                    |   | 857            |           
|                                     |                                    |   | --------       |           
|                                     |                                    | $ | 857            | $         
|                                     |                                    |   | =====          |           

In 2001, the Company sold $2.3 million of mortgage-backed securities
at a net loss of $5,000. In 2000, the Company sold GNMA and FNMA
mortgage-backed securities with a book value of $10.6 million,
resulting in a loss of $337,000.





























































NOTE D

COLLATERALIZED MORTGAGE OBLIGATIONS

Collateralized Mortgage Obligations (CMOs) consist of
the following (in thousands):



|December 31, 2002   |   | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair 
    Value
|------------------- | - | -------------- | ---------------------- | ----------------------- | ---------------
|                    |   | ----------     |                        | ----------              |                
|Available-for-Sale: |   |                |                        |                         |                
|FNMA                | $ | 7,534          | $                      | 8                       | $              
|FHLMC               |   | 19,404         |                        | 81                      |                
|GNMA                |   | 1,601          |                        | -                       |                
|OTHER               |   | 23,564         |                        | 898                     |                
|                    |   | -------        |                        | -------                 |                
|                    | $ | 52,103         | $                      | 987                     | $              
|                    |   | =====          |                        | =====                   |                

|December 31, 2001   |   | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair 
    Value
|------------------- | - | -------------- | ---------------------- | ----------------------- | ---------------
|                    |   | ----------     |                        | ----------              |                
|Available-for-Sale: |   |                |                        |                         |                
|FNMA                | $ | 1,283          | $                      | -                       | $              
|FHLMC               |   | 13,702         |                        | 153                     |                
|OTHER               |   | 35,810         |                        | 1,213                   |                
|                    |   | -------        |                        | -------                 |                
|                    | $ | 50,795         | $                      | 1,366                   | $              
|                    |   | =====          |                        | =====                   |                

In 2001, the Company sold $2.7 million of collateralized mortgage
obligations at a gain of $16,000. At December 31, 2002 and 2001,
CMOs are classified as available-for-sale, and are reported
on the financial statements at their fair value. Also, all of
the CMOs held as of December 31, 2002 and 2001 have contractual
maturities of greater than ten years. There were no sales of CMOs
during 2002 or 2000.

CMOs with market values of $14,003,855 and $28,540,794
have been pledged as collateral towards the outstanding balance
of Advances from the Federal Home Loan Bank at December 31, 2002
and 2001, respectively.





NOTE E

LOANS

Loans at December 31, 2002 and 2001 are summarized as follows
(in thousands):



|                                                 |                        |                         |       | December 31,
|------------------------------------------------ | ---------------------- | ----------------------- | ----- | ------------
|                                                 |                        |                         |       | 2002        
|Loans Secured by First Mortgages on Real Estate: |                        |                         |       |             
|                                                 | One to Four            |                         |       |             
|                                                 |                        | Family Residential      | $     | 57,502      
|                                                 | FHA and VA             |                         | 1     |             
|                                                 | Construction           |                         | 1,263 |             
|                                                 | Commercial Real Estate |                         | 8,672 |             
|                                                 | Other                  |                         | 9,451 |             
|                                                 |                        |                         |       | ---------   
|                                                 |                        | Total Real Estate Loans |       | 76,889      
|                                                 |                        |                         |       |             
|Consumer Loans:                                  |                        |                         |       |             
|                                                 | Second Mortgage        |                         | 7     |             
|                                                 | Loans on Deposits      |                         | 396   |             
|                                                 |                        |                         |       | ---------   
|                                                 |                        | Total Consumer Loans    |       | 403         
|                                                 |                        |                         |       |             
|Commercial Loans                                 |                        | 1,515                   |       | 683         
|                                                 |                        |                         |       | ---------   
|                                                 |                        |                         |       | 78,807      
|                                                 |                        |                         |       |             
|Allowance for                                    |                        |                         |       |             
|                                                 | Loan Losses            |                         | (483) |             
|                                                 |                        |                         |       |             
|Net Deferred Loan                                |                        |                         |       |             
|                                                 | Origination Costs      |                         | 10    |             
|                                                 |                        |                         |       | ---------   
|Loans, Net                                       | $                      | 78,334                  | $     | 81,611      
|                                                 |                        |                         |       | =====       





An analysis of the allowance for loan losses as follows (in
thousands):



|                     |         |     | Years Ended December 31,
|-------------------- | ------- | --- | ------------------------
|                     |         |     | 2002                    
|                     |         |     | -----                   
|Balance, Beginning   |         |     |                         
|                     | of Year | $   | 435                     
|Provision for Losses |         | 48  |                         
|Loans Charged Off    |         | -   |                         
|Recoveries           |         | -   |                         
|                     |         |     | -----                   
|Balance, End of Year | $       | 483 | $                       
|                     |         |     | ====                    

Loans receivable as of December 31, 2002 are scheduled to mature
and adjustable rate loans are scheduled to re-price as follows
(in thousands):



|                            |              |       | Under 
    One 
    Year | One to 
    Five 
    Years | Six 
    to Ten Years | Over 
    10 
    Years | Total 
|--------------------------- | ------------ | ----- | ------------------------ | --------------------------- | --------------------- | ----------------------- | ------
|                            |              |       | ------                   |                             | ------                |                         | ------
|Loans Secured by 1-4 Family |              |       |                          |                             |                       |                         |       
|                            | Residential: |       |                          |                             |                       |                         |       
|Fixed Rate                  | $            | 71    | $                        | 1,184                       | $                     | 6,698                   | $     
|Other Loans Secured by      |              |       |                          |                             |                       |                         |       
|                            | Real Estate: |       |                          |                             |                       |                         |       
|Fixed Rate                  |              | -     |                          | 14,236                      |                       | 5,158                   |       
|Commercial Fixed Rate       |              | 1,146 |                          | -                           |                       | 369                     |       
|All Other Loans             |              | 396   |                          | -                           |                       | -                       |       
|                            |              |       | ------                   |                             | ------                |                         | ------
|                            |              | $     | 1,613                    | $                           | 15,420                | $                       | 12,225
|                            |              |       | =====                    |                             | =====                 |                         | ===== 

At December 31, 2002 and 2001, the Association had loans totaling
approximately $295,000 and $179,000, respectively, for which impairment
had been recognized. The allowance for loan losses related to
these loans totaled $49,000 and $56,000 at December 31, 2002 and
2001, respectively. The amount of interest income that would have
been recorded on loans in non-accrual status at December 31, 2002,
had such loans performed in accordance with their terms, was approximately
$34,000. Such interest foregone for the year ended December 31,
2001 was approximately $8,000.

In the ordinary course of business, the Association has and
expects to continue to have transactions, including borrowings,
with its officers and directors. In the opinion of management,
such transactions were on substantially the same terms, including
interest rates and collateral, as those prevailing at the time
of comparable transactions with other persons and did not involve
more than a normal risk of collectibility or present any other
unfavorable features to the Association.

Loans to such borrowers are summarized as follows (in thousands):



|                      |         |       | December 31,
|--------------------- | ------- | ----- | ------------
|                      |         |       | 2002        
|Balance, Beginning    |         |       |             
|                      | of Year | $     | 1,456       
|Additions             |         | 50    |             
|Payments and Renewals |         | (571) |             
|                      |         |       | ---------   
|Balance, End of Year  |         | 935   |             

The Associations lending activity is concentrated within
the metropolitan New Orleans area and surrounding parishes, with
its major emphasis in the origination of permanent single-family
dwelling loans. Such loans comprise the majority of the Associations
loan portfolio.



NOTE F

ACCRUED INTEREST RECEIVABLE

Accrued interest receivable at December 31, 2002 and 2001 consists
of the following (in thousands):



|                                    |   |     | December 31,
|----------------------------------- | - | --- | ------------
|                                    |   |     | 2002        
|Loans                               | $ | 345 | $           
|Mortgage-Backed Securities          |   | 4   |             
|Collateralized Mortgage Obligations |   | 269 |             
|Investments and Other               |   | 24  |             
|                                    |   |     | ------      
|Totals                              | $ | 642 | $           
|                                    |   |     | ====        





NOTE G

PREMISES AND EQUIPMENT

A summary of premises and equipment follows (in thousands):



|                                          |   | December 31,
|----------------------------------------- | - | ------------
|                                          |   | 2002        
|Land                                      | $ | 952         
|Buildings and Improvements                |   | 2,074       
|Furniture, Fixture and Equipment          |   | 735         
|                                          |   | ------      
|                                          |   | 3,761       
|Accumulated Depreciation and Amortization |   | (1,093)     
|                                          |   | ------      
|                                          | $ | 2,668       
|                                          |   | ====        



Depreciation expense for the years ended December 31, 2002,
2001 and 2000 was approximately $150,000, $139,000 and $137,000,
respectively.

NOTE H

FORECLOSED REAL ESTATE

A summary of the activity of the Foreclosed Real Estate account
follows (in thousands):



|                                                     |   | December 31,
|---------------------------------------------------- | - | ------------
|                                                     |   | 2002        
|Balance - Beginning of the Year                      | $ | -           
|Acquired in Settlement of Loans                      |   | 42          
|Costs Capitalized                                    |   | 3           
|Sales of Foreclosed Real Estate                      |   | (45)        
|Less: Allowance for Losses on Foreclosed Real Estate |   | -           
|                                                     |   | ------      
|                                                     | $ | -           
|                                                     |   | ===         

Expenses applicable to foreclosed real estate consists of operating
expenses, net of rental income. The Company incurred net expenses
associated with foreclosed real estate of approximately $-0- for
the year ended December 31, 2002. For the years ended December
31, 2002 and 2001, the Company recognized net income associated
with foreclosed real estate of approximately $-0- and $2,000,
respectively.





NOTE I

REAL ESTATE HELD-FOR-INVESTMENT

Real estate held-for-investment, which consists of a multi-suite
office building located on the property of a former branch location
of the Association, is summarized below (in thousands):



|                           |   | December 31,
|-------------------------- | - | ------------
|                           |   | 2002        
|Land                       | $ | 226         
|Buildings and Improvements |   | 320         
|                           |   | ------      
|                           |   | 546         
|Accumulated Depreciation   |   | (17)        
|                           |   | ------      
|                           | $ | 529         
|                           |   | ===         

Depreciation expense for each of the years ended December 31,
2002, 2001 and 2000 was $16,000, $1,000 and $2,000, respectively.
Depreciation expense during 2002 and 2001 was for the newly constructed
multi-suite office building that was placed into service in November,
2001. Depreciation expense for 2000 was for the former structure
located on the property. During 2000, the Company transferred
the remaining book value of the structure from Building and Improvements
to Land.

In 2002 the Company realized $49,000 in rental income from
this property. During 2001, the Company had $5,000 in such rental
income.









NOTE J

DEPOSITS

Deposit account balances at December 31, 2002 and 2001 are
summarized as follows (in thousands):





|                              | Weighted
    Average Rate at |      |      | Year Ended
    December 31, |  
|----------------------------- | ---------------------------- | ---- | ---- | --------------------------- | -
|                              | December 31,                 |      |      | 2002                        |  
|                              | 2002                         |      | 2001 |                             |  
|Balance by Interest Rate:     |                              |      |      |                             |  
|Demand Deposit                |                              |      |      |                             |  
|                              | Accounts                     | 1.83 | %    | 1.94                        | %
|Regular Savings               |                              |      |      |                             |  
|                              | Accounts                     | 2.28 | %    | 2.75                        | %
|Certificates of               |                              |      |      |                             |  
|                              | Deposit                      | 3.44 | %    | 4.34                        | %
|                              |                              |      |      |                             |  
|                              |                              |      |      |                             |  
|                              |                              |      |      |                             |  
|Certificate Accounts Maturing |                              |      |      |                             |  
|                              | Under 12 months              |      |      |                             | $
|                              | 12 months to 24 months       |      |      |                             |  
|                              | 24 months to 36 months       |      |      |                             |  
|                              | 36 months to 48 months       |      |      |                             |  
|                              | 48 months to 60 months       |      |      |                             |  
|                              |                              |      |      |                             |  
|                              |                              |      |      |                             |  
|                              |                              |      |      |                             |  

The aggregate amount of deposits with a minimum balance of
$100,000 was approximately $17,368,000 and $3,928,000 at December
31, 2002 and 2001, respectively.

Interest expense for each of the following periods is as follows
(in thousands):





|                 |   | Years EndedDecember 31,
|---------------- | - | -----------------------
|                 |   | 2002                   
|Certificates     | $ | 1,953                  
|NOW Accounts     |   | 132                    
|Passbook Savings |   | 677                    
|                 |   |                        
|                 | $ | 2,762                  

The Association held deposits of approximately $1,149,000 and
$653,000 for officers and directors at December 31, 2002 and 2001,
respectively.

NOTE K

ADVANCES FROM FEDERAL HOME LOAN BANK

Pursuant to collateral agreements with the Federal Home Loan
Bank (FHLB), advances are secured by a blanket floating lien on
first mortgage loans and certain pledged CMOs. Total interest
expense recognized in 2002, 2001 and 2000, respectively, was $4,042,000,
$4,982,000 and $3,209,000.





|Contract Rate  | Advance Total
|-------------- | -------------
|               |              
|4.00% to 4.99% | $            
|5.00% to 5.99% |              
|6.00% to 6.99% |              
|               | $            
|               |              



Maturities of Advances at December 31, 2002 for each of the
next five years are as follows (in thousands):



|Year Ending  |   |       
|------------ | - | ------
|December 31, |   | Amount
|2003         | $ | 27,453
|2004         |   | 6,226 
|2005         |   | 9,537 
|2006         |   | 6,131 
|2007         |   | 5,514 
|Thereafter   |   | 11,531
|             | $ | 66,392

NOTE L

INCOME TAX EXPENSE

The provision for income taxes for 2002, 2001 and 2000 consists
of the following (in thousands):



|                     |   | Years EndedDecember 31,
|-------------------- | - | -----------------------
|                     |   | 2002                   
|Current Tax Expense  | $ | 232                    
|Deferred Tax Expense |   | 86                     
|                     |   |                        
|                     | $ | 318                    

The provision for Federal income taxes differs from that computed
by applying Federal statutory rates to income (loss) before Federal
income tax expense, as indicated in the following analysis (in
thousands):



|                                     |   | Years EndedDecember 31,
|------------------------------------ | - | -----------------------
|                                     |   | 2002                   
|Expected Tax Provision at a 34% Rate | $ | 508                    
|Expected State Corporate Tax         |   | 2                      
|Effect of Tax Exempt Income          |   | (248)                  
|Employee Stock Ownership Plan        |   | 62                     
|Other                                |   | (6)                    
|                                     | $ | 318                    

Deferred tax liabilities have been provided for the temporary
differences related to unrealized gains on available-for-sale
securities, deferred loan costs, depreciation, the allowance for
loan losses, and non-cash Federal Home Loan Bank dividends. Deferred
tax assets have been provided for the temporary differences related
to the Companys Recognition and Retention Plan and Employee
Stock Ownership Plan, reserves for uncollected interest and late
charges, deferred loan fees, and the allowance for losses on foreclosed
real estate. The net deferred tax assets or liabilities in the
accompanying consolidated balance sheets include the following
components (in thousands):





|                    |                                |   | 2002 |   | 2001
|------------------- | ------------------------------ | - | ---- | - | ----
|Deferred Tax Assets |                                |   |      |  
|                    | Recognition and Retention Plan | $ | 13   | $ | 13  
|                    | Employee Stock Ownership Plan  |   | 43   |   | 87  
|                    | Other                          |   | 3    |   | 4   
|                    | Total Deferred Tax Assets      |   | 59   |   | 104 

|                                                      |                                |                               |       |       |      
|----------------------------------------------------- | ------------------------------ | ----------------------------- | ----- | ----- | -----
|Deferred Tax Liabilities                              |                                |                               |       |      
|                                                      | FHLB Stock Dividends           | $                             | 356   | $     | 302  
|                                                      | Market Value Adjustment to     |                               |       |       |      
|                                                      |                                | Available-for-Sale Securities |       | 1,045 |      
|                                                      | Allowance for Loan Losses      |                               | 156   |       | 183  
|                                                      | Other                          |                               | 74    |       | 59   
|                                                      | Total Deferred Tax Liabilities |                               | 1,631 |       | 1,494
|                                                      |                                |                               |       |       |      
|Deferred Tax Liabilities - Net of Deferred Tax Assets | $                              | 1,572                         | $     | 1,390
|                                                      |                                | ====                          |       | ==== 

Included in retained earnings at December 31, 2002 and 2001
is approximately $3,800,000 in bad debt reserves for which no
deferred Federal income tax liability has been recorded. These
amounts represent allocations of income to bad debt deductions
for tax purposes only. Reduction of these reserves for purposes
other than tax bad-debt losses or adjustments arising from carry-back
of net operating losses would create income for tax purposes,
which would be subject to the then-current corporate income tax
rate. The unrecorded deferred liability on these amounts was approximately
$1,292,000 for December 31, 2002 and 2001, respectively.

NOTE M

EMPLOYEE STOCK OWNERSHIP PLAN

During 1997, GS Financial Corp. instituted an employee stock
ownership plan (the "ESOP") that covers all employees
of Guaranty Savings and Homestead Association who have completed
one year of service and have attained the age of 21. The ESOP
purchased the statutory limit of eight percent of the shares offered
in the initial public offering of the Company (275,080 shares).
This purchase was facilitated by a loan from the Company to the
ESOP in the amount of $2,750,800. The loan is secured by a pledge
of the ESOP shares. The shares pledged as collateral are reported
as unearned ESOP shares in the balance sheets. The corresponding
note is to be paid back in 40 equal quarterly payments of $103,000
on the last business day of each quarter, beginning June 30, 1997
at the rate of 8.5%. The note payable and the corresponding note
receivable have been eliminated for consolidation purposes.

The Association may contribute to the plan, in the form of
debt service, at the discretion of its board of directors. Dividends
received on ESOP shares are either utilized to service the debt
or credited to participant accounts at the discretion of the trustees
of the Plan. Shares are released for allocation to plan participants
based on principal and interest payments of the note. Compensation
expense is recognized based on the number of shares allocated
to plan participants each year and the average market price of
the stock for the current year. Released ESOP shares become outstanding
for earnings per share computations.

As compensation expense is incurred, the Unearned ESOP Shares
account is reduced based on the original cost of the stock. The
difference between the cost and average market price of shares
released for allocation is applied to Additional Paid-in Capital.
ESOP compensation expense was approximately $465,000, $415,000
and $377,000 for the years ended December 31, 2002, 2001 and 2000,
respectively.

The ESOP shares as of December 31, 2002 and 2001 were
as follows:



|                                               |   | 2002    |   | 2001   
|---------------------------------------------- | - | ------- | - | -------
|Allocated Shares                               |   | 123,457 |   | 103,658
|Shares Released for Allocation                 |   | 28,132  |   | 28,132 
|Unreleased Shares                              |   | 108,319 |   | 136,451
|                                               |   |         |   |        
|Total ESOP Shares                              |   | 259,908 |   | 268,241
|                                               |   | ======  |   | ====== 
|Fair Value of Unreleased Shares (in thousands) | $ | 1,966   | $ | 2,039  
|                                               |   | ====    |   | ====   

Total ESOP shares decreased in 2002 and 2001 due to the liquidation
of shares for employees who terminated their employment in 2002
and 2001.





NOTE N

RECOGNITION AND RETENTION PLAN

On October 15, 1997, the Company established a Recognition
and Retention Plan (the "Plan") as an incentive to retain
personnel of experience and ability in key positions. The Company
approved a total of 137,540 shares of stock to be acquired for
the Plan, of which 125,028 shares have been allocated for distribution
to key employees and directors. As shares are acquired for the
Plan, the purchase price of these shares is recorded as unearned
compensation, a contra equity account. As the shares are distributed,
the contra equity account is reduced.

During 1998, by unanimous approval of the Plan participants,
the Plan was amended as a direct effort to reduce the Companys
expenses resulting from the Plan. Prior to the amendment to the
Plan, Plan share awards were earned by recipients at a rate of
20% of the aggregate number of shares covered by the Plan over
five years. The amended Plan stipulates that Plan share awards
are earned by recipients at a rate of 10% of the aggregate number
of shares covered by the plan over ten years. If the employment
of an employee or service as a non-employee director is terminated
prior to the tenth anniversary of the date of grant of Plan share
award for any reason (except for death, disability or retirement),
the recipient shall forfeit the right to any shares subject to
the award which have not been earned.

The total cost associated with the Plan is based on a per share
value of $12.50, the market price of the Companys stock
as of the date on which the Plan was amended. This cost is being
amortized over ten years. Compensation expense pertaining to the
Recognition and Retention plan was $149,000, $198,000 and $156,000
for the years ended December 31, 2002, 2001 and 2000, respectively.
The increased expense in 2001 was attributable to a lump sum distribution
of the remaining awarded shares under the terms of the plan to
a member of the Board of Directors who retired for health reasons.



A summary of the changes in restricted stock follows:



|                             | UnawardedShares | AwardedShares
|---------------------------- | --------------- | -------------
|Balance at January 1, 2001   | 12,472          | 87,522       
|Purchased by Plan            | -               | -            
|Granted                      | -               | -            
|Forfeited                    | -               | -            
|Earned and Issued            | -               | (16,038)     
|                             |                 |              
|Balance at December 31, 2001 | 12,472          | 71,484       
|Purchased by Plan            | -               | -            
|Granted                      | -               | -            
|Forfeited                    | -               | -            
|Earned and Issued            | -               | (11,916)     
|                             |                 |              
|Balance at December 31, 2002 | 12,472          | 59,568       
|                             | =====           | =====        



NOTE O

STOCK OPTION PLAN

In 1997, the Company adopted a stock option plan for the benefit
of directors, officers, and other key employees. The number of
shares of common stock reserved for issuance under the stock option
plan was 343,850 shares, or ten percent of the total number of
shares of common stock sold in the Companys initial public
offering of its common stock.



The plan also permits the granting of Stock Appreciation Rights
(SARs). SARs entitle the holder to receive, in the
form of cash or stock, the increase in the fair value of the Company
stock from the date of grant to the date of exercise. No SARs
have been issued under the plan.



On October 15, 1997, the Company granted a total of 275,076
options to directors, officers, and other key employees. Under
the plan, the exercise price of each option cannot be less than
the fair value of the underlying common stock as of the date of
the option grant, and the maximum term is 10 years. Options vest
over five years.





The Company accounts for the plan under the recognition and
measurement principles of Accounting Principles Board (APB) Opinion
No. 25, Accounting for Stock Issued to Employees, andrelated
Interpretations. No stock-based employee compensation cost is
reflected in net income, as all options granted under the plan
have an exercise price equal to the market value of the underlying
common stock on the date grant. The following table illustrates
the effect on net income and earnings per share if the Company
had applied the fair value recognition provisions of FASB Statement
No. 123 Accounting for Stock-Based Compensation,
to stock-based employee compensation.





|                                                  | 2002                 | 2001    | 2000  
|------------------------------------------------- | -------------------- | ------- | ------
|Net Income (In thousands)                         |                      |         |       
|                                                  | As Reported          | $1,177  | $1,617
|Deduct: Total stock-based employee compensation   |                      |         |       
|expense determined under fair value based method, |                      |         |       
|net of related tax effects                        | (166)                | (210)   | (210) 
|                                                  |                      |         |       
|                                                  | Pro Forma Net Income | $ 1,011 | $1,407
|                                                  | ====                 | ====    | ====  
|Earnings per Share                                |                      |         |       
|                                                  | Basic, as reported   | $ .86   | $1.04 
|                                                  | Basic, pro forma     | $ .74   | $ .90 
|                                                  | Diluted, as reported | $ .86   | $1.04 
|                                                  | Diluted, pro forma   | $ .74   | $ .90 



The fair value of options granted on October 15, 1997 was estimated
as of the date of the grant using the Black-Scholes option-pricing
model with the following assumptions: dividend yield of 1.59%;
expected volatility of 16.2%; risk-free interest rate of 6.14%;
and life of 9.88 years.



A summary of the status of the Companys stock option
plan as of December 31, 2002, 2001, and 2000, and changes during
the years ending on those dates is presented below:





|                                 |           |          |      |          |          |  |           |         
|-------------------------------- | --------- | -------- | ---- | -------- | -------- |  | --------- | --------
|                                 | 2002      |          | 2001 |          | 2000    
|                                 |           | Exercise |      |          | Exercise |  |           | Exercise
|Fixed Options                    | Shares    | Price    |      | Shares   | Price    |  | Shares    | Price   
|                                 |           |          |      |          |          |  |           |         
|Outstanding at Beginning of Year | 275,076   | $ 17.18  |      | 275,076  | $ 17.18  |  | 275,076   | $ 17.18 
|Granted                          | -         |          |      | -        |          |  | -         |         
|Exercised                        | -         |          |      | -        |          |  | -         |         
|Forfeited                        | -         |          |      | -        |          |  | -         |         
|                                 | --------- |          |      | -------- |          |  | --------- |         
|Outstanding at End of Year       | 275,076   | $ 17.18  |      | 275,076  | $ 17.18  |  | 275,076   | $ 17.18 
|                                 | ======    |          |      | =====    |          |  | ======    |         
|Options Exercisable at Year-end  | 275,076   | $ 17.18  |      | 220,061  | $ 17.18  |  | 176,507   | $ 17.18 
|                                 | ======    |          |      | =====    |          |  | ======    |         
|                                 |           |          |      |          |          |  |           |         





The following table summarizes information about fixed stock
options outstanding at December 31, 2002:



|         |  | Options Outstanding |  | Options Exercisable
|-------- |  | ------------------- |  | -------------------
|         |  |                     |  |                    
|         |  | Number              |  | Remaining          
|Exercise |  | Outstanding         |  | Contractual        
|Price    |  | at 12/31/02         |  | Life               
|         |  |                     |  |                    
|$ 17.18  |  | 275,076             |  | 4.8 years          



NOTE P

COMPREHENSIVE INCOME

Comprehensive income was comprised of changes in the Companys
unrealized holding gains or losses on securities available-for-sale
during 2002, 2001 and 2000. The following represents the tax effects
associated with the components of comprehensive income (in thousands).



|                                        |                               | Years Ended December 31,
|--------------------------------------- | ----------------------------- | ------------------------
|                                        |                               |                         
|Gross Unrealized Holding Gains (Losses) |                               |                         
|                                        | Arising During the Period     | $                       
|Tax (Expense) Benefit                   |                               | (430)                   
|                                        |                               |                         
|                                        |                               |                         
|                                        |                               |                         
|Reclassification Adjustment for (Gains) |                               |                         
|                                        | Losses Included in Net Income |                         
|Tax Expense (Benefit)                   |                               | 336                     
|                                        |                               |                         
|                                        |                               |                         
|                                        |                               |                         
|Net Unrealized Holding Gains (Losses)   |                               |                         
|                                        | Arising During the Period     | $                       



NOTE Q

FEDERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT ACT OF
1991 (FDICIA) AND FINANCIAL INSTITUTIONS REFORM, RECOVERY AND
ENFORCEMENT ACT OF 1989 (FIRREA)

FDICIA was signed into law on December 19, 1991. Regulations
implementing the prompt corrective action provisions of FDICIA
became effective on December 19, 1992. In addition to the prompt
corrective action requirements, FDICIA includes significant changes
to the legal and regulatory environment for insured depository
institutions, including reductions in insurance coverage for certain
kinds of deposits, increased supervision by the Federal regulatory
agencies, increased reporting requirements for insured institutions,
and new regulations concerning internal controls, accounting and
operations.

FIRREA was signed into law on August 9, 1989. Regulations for
savings institutions minimum capital requirements went into
effect on December 7, 1989. In addition to its capital requirements,
FIRREA includes provisions for changes in the Federal regulatory
structure for institutions, including a new deposit insurance
system and restricted investment activities with respect to non-investment
grade corporate debt and certain other investments. FIRREA also
increases the required ratio of housing-related assets in order
to qualify as a savings institution.



The regulations require institutions to have a minimum regulatory
tangible capital equal to 1.5% of adjusted total assets, a minimum
3% core/leverage capital ratio, a minimum 4% tier 1 risk-based
ratio, and a minimum 8% total risk-based capital ratio to be considered
"adequately capitalized." An institution is deemed to
be "critically undercapitalized" if it has a tangible
equity ratio of 2% or less. The ability to include qualifying
supervisory goodwill for purposes of the core/leverage capital
and tangible capital was phased out by July 1, 1995.

The following table sets out the Associations various
regulatory capital categories at December 31, 2002 and 2001.



|                          | 2002    | 2001      
|------------------------- | ------- | ----------
|(in thousands)            | Dollars | Percentage
|                          |         |           
|Tangible Capital          | $28,145 | 13.79%    
|Tangible Equity           | 28,145  | 13.79%    
|Core/Leverage Capital     | 28,145  | 13.79%    
|Tier 1 Risk-Based Capital | 28,145  | 24.63%    
|Total Risk-Based Capital  | 28,628  | 25.05%    



As of December 31, 2002, the most recent notification from
the FDIC categorized the Association as "well capitalized"
under the regulatory framework for prompt corrective action. To
be "well capitalized", the Association must maintain
minimum leverage capital ratios and minimum amounts of capital
to "risk-weighted" assets, as defined by banking regulators.



NOTE R

REGULATORY CAPITAL

The following is a reconciliation of generally accepted accounting
principles (GAAP) net income and capital to regulatory capital
for the Association. The following reconciliation also compares
the capital requirements as computed to the minimum capital requirements
for the Association.



|(in thousands) | Net Income for the 
    Year EndedDecember 31, 2002 | Capital as ofDecember 31, 2002
|-------------- | --------------------------------------------------- | ------------------------------
|               |                                                     |                               
|Per GAAP       | $1,138                                              |                               
|               |                                                     |                               
|Total Assets   |                                                     |                               
|               |                                                     |                               
|Capital Ratio  |                                                     |                               











|         |                       |                    | TangibleCapital | TangibleEquity | Core/ LeverageEquity | Tier 1 
    Risk-BasedCapital | Total Risk-BasedCapital
|-------- | --------------------- | ------------------ | --------------- | -------------- | -------------------- | ----------------------------- | -----------------------
|Per GAAP | $                     | 30,152             | $               | 30,152         | $                    | 30,152                        | $                      
|         | Capital Required      |                    |                 |                |                      |                               |                        
|         |                       | to be Reduced:     |                 |                |                      |                               |                        
|         |                       | Unrealized Gain    |                 |                |                      |                               |                        
|         |                       | on Securities      |                 |                |                      |                               |                        
|         |                       | Available-for-Sale |                 | (2,007)        |                      | (2,007)                       |                        
|         |                       |                    |                 |                |                      |                               |                        
|         | Allowance for Loan    |                    |                 |                |                      |                               |                        
|         |                       | Losses             |                 | -              |                      | -                             |                        
|         |                       |                    |                 |                |                      |                               |                        
|         | Regulatory Capital    |                    |                 |                |                      |                               |                        
|         |                       | Measure            | $               | 28,145         | $                    | 28,145                        | $                      
|         |                       |                    |                 | =====          |                      | =====                         |                        
|         |                       |                    |                 |                |                      |                               |                        
|         | Adjusted Total Assets | $                  | 204,054         | $              | 204,054              | $                             | 204,054                
|         |                       |                    |                 | ======         |                      | ======                        |                        
|         |                       |                    |                 |                |                      |                               |                        
|         |                       |                    |                 |                |                      |                               |                        
|         | Risk-Weighted Assets  |                    |                 |                |                      |                               |                        
|         |                       |                    |                 |                |                      |                               |                        
|         | Capital Ratio         |                    | 13.79%          |                | 13.79%               |                               | 13.79%                 
|         |                       |                    |                 |                |                      |                               |                        
|         | Required Ratio        |                    | 1.50%           |                | 2.00%                |                               | 3.00%                  
|         |                       |                    |                 |                |                      |                               |                        
|         | Required Capital      | $                  | 3,061           |                |                      | $                             | 6,122                  
|         |                       |                    |                 | =====          |                      |                               |                        
|         | Excess Capital        | $                  | 25,084          |                |                      | $                             | 22,023                 
|         |                       |                    |                 | =====          |                      |                               |                        







|(in thousands) | Net Income for the 
    Year EndedDecember 31, 2001 | Capital as ofDecember 31, 2001
|-------------- | --------------------------------------------------- | ------------------------------
|               |                                                     |                               
|Per GAAP       | $1,578                                              |                               
|               |                                                     |                               
|Total Assets   |                                                     |                               
|               |                                                     |                               
|Capital Ratio  |                                                     |                               

|         |                       |                    | TangibleCapital | TangibleEquity | Core/ LeverageEquity | Tier 1 Risk-Based

    Capital | Total Risk-BasedCapital
|-------- | --------------------- | ------------------ | --------------- | -------------- | -------------------- | ------------------------------ | -----------------------
|Per GAAP | $                     | 28,218             | $               | 28,218         | $                    | 28,218                         | $                      
|         | Capital Required      |                    |                 |                |                      |                                |                        
|         |                       | to be Reduced:     |                 |                |                      |                                |                        
|         |                       | Unrealized Gain    |                 |                |                      |                                |                        
|         |                       | on Securities      |                 |                |                      |                                |                        
|         |                       | Available-for-Sale |                 | (1,825)        |                      | (1,825)                        |                        
|         |                       |                    |                 |                |                      |                                |                        
|         | Allowance for Loan    |                    |                 |                |                      |                                |                        
|         |                       | Losses             |                 | -              |                      | -                              |                        
|         |                       |                    |                 |                |                      |                                |                        
|         | Regulatory Capital    |                    |                 |                |                      |                                |                        
|         |                       | Measure            | $               | 26,393         | $                    | 26,393                         | $                      
|         |                       |                    |                 | =====          |                      | =====                          |                        
|         |                       |                    |                 |                |                      |                                |                        
|         | Adjusted Total Assets | $                  | 183,238         | $              | 183,238              | $                              | 183,238                
|         |                       |                    |                 | ======         |                      | ======                         |                        
|         |                       |                    |                 |                |                      |                                |                        
|         |                       |                    |                 |                |                      |                                |                        
|         | Risk-Weighted Assets  |                    |                 |                |                      |                                |                        
|         |                       |                    |                 |                |                      |                                |                        
|         | Capital Ratio         |                    | 14.40%          |                | 14.40%               |                                | 14.40%                 
|         |                       |                    |                 |                |                      |                                |                        
|         | Required Ratio        |                    | 1.50%           |                | 2.00%                |                                | 3.00%                  
|         |                       |                    |                 |                |                      |                                |                        
|         | Required Capital      | $                  | 2,749           |                |                      | $                              | 5,497                  
|         |                       |                    |                 | =====          |                      |                                |                        
|         |                       |                    |                 |                |                      |                                |                        
|         | Excess Capital        | $                  | 23,644          |                |                      | $                              | 20,896                 
|         |                       |                    |                 | =====          |                      |                                |                        



NOTE S

COMMITMENTS AND CONTINGENCIES

In the normal course of business, the Association has various
outstanding commitments and contingent liabilities that are not
reflected in the accompanying financial statements.

COMMITMENTS TO EXTEND CREDIT

The Association is a party to credit related commitments with
off-balance sheet risk in the normal course of business to meet
the financing needs of its customers. These consist of outstanding
mortgage and construction loan commitments and commercial lines
of credit. As of December 31, 2002 and 2001, outstanding mortgage,
construction and commercial lines of credit commitments were approximately
$2,797,000 and $2,340,000, respectively.

EMPLOYMENT CONTRACTS

The chief executive officer and the executive vice-president
of the Association serve under employment contracts that were
approved by the Board of Directors on February 13, 1997. The contracts
were amended on February 14, 2002, to extend the term thereof
to February 13, 2005.

OPERATING LEASE

During 2002, the Association entered into a lease with the
Company for a Branch Office Location. The rental expense associated
with this lease is eliminated in the consolidated statement of
operations. The lease has a term of 24 months with a rental rate
of $4,025 per month. In addition, the Association leases an automobile
under an operating lease that expires in November 2005. Total
rent expense incurred under these leases amounted to $39,907,
$16,076 and $4,713 for the years ended December 31, 2002, 2001,
and 2000, respectively.





|Year EndingDecember 31, |   | Amount  
|----------------------- | - | --------
|2003                    | $ | 55,855  
|2004                    |   | 55,855  
|2005                    |   | 6,925   
|                        |   | --------
|Total                   | $ | 118,635 
|                        |   | =====   



NOTE T

FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

The Association is a party to financial instruments with off-balance
sheet risk in the normal course of business to meet the financing
needs of its customers. These financial instruments consist of
commitments to extend credit. These instruments involve, to varying
degrees, elements of credit and interest rate risk in excess of
the amounts recognized in the balance sheets.

The Associations exposure to credit loss in the event
of nonperformance by the other party to these financial instruments
for commitments to extend credit is represented by the contractual
notional amount of those instruments (see Note S). The Association
uses the same credit policies making commitments as it does for
on-balance sheet instruments.

Commitments to extend credit are agreements to lend to a customer
as long as there is no violation of any condition established
in the contract. The total commitment amount does not necessarily
represent future cash requirements. The Association evaluates
each customers creditworthiness on a case-by-case basis.
The amount and type of collateral obtained varies and is based
on managements credit evaluation of the counterparty.



NOTE U

CONCENTRATION OF CREDIT RISK

The Associations lending activity is concentrated within
the southeastern part of Louisiana. Also in accordance with industry
practices, the Association has deposits in other financial institutions
for more than the insured limit. These deposits in other institutions
do not represent more than the normal industry credit risk.



NOTE V

DISCLOSURE ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used to estimate
the fair value of each class of financial instruments for which
it is practicable to estimate the value:

The carrying amount of cash and short-term investments approximate
the fair value.

For investment securities, mortgage-backed securities, and
collateralized mortgage obligations, fair value is based on quoted
market prices.

For mortgage loans receivable the fair values are based on
discounted cash flows using current rates at which similar loans
with similar maturities would be made to borrowers with similar
credit risk.

The fair value of savings deposits is calculated using average
rates in the market place at the date of the financial statements.

For certificates of deposit, fair value is estimated based
on current rates for deposits of similar remaining maturities.

Advances from the Federal Home Loan Bank are valued utilizing
the cash flows set forth in the existing amortization schedules
and current rates on similar advances.

The fair value of loan commitments is estimated using rates
and fees that would be charged to enter similar agreements, taking
into account (1) the remaining terms of the agreement, (2) the
creditworthiness of the borrowers, and (3) for fixed rate commitments,
the difference between current interest rates and committed rates.





|                                   |                                               | December 31, 2002 | December 31, 2001
|---------------------------------- | --------------------------------------------- | ----------------- | -----------------
|                                   |                                               | CarryingAmount    | FairValue        
|Financial Assets                   |                                               |                   |                  
|                                   | Cash and Short-Term Investments               | $                 | 13,352           
|                                   | Investment Securities                         |                   | 55,091           
|                                   | Mortgage-Backed Securities                    |                   | 569              
|                                   | Collateral Mortgage Obligations               |                   | 53,066           
|                                   | Loans (Net of Allowance for Loan

    Losses) |                   | 78,334           
|                                   |                                               |                   |                  
|Financial Liabilities              |                                               |                   |                  
|                                   | Deposits                                      | $                 | 106,509          
|                                   | Advances from Federal Home Loan Bank          |                   | 66,392           
|                                   |                                               |                   |                  
|Unrecognized Financial Instruments |                                               |                   |                  
|                                   | Commitments to Extend Credit                  | $                 | 1,533            
|                                   | Unfunded Construction Loan

    Commitments   |                   | 680              
|                                   | Unfunded Commercial Lines of

    Credit      |                   | 584              



NOTE W

SELECTED QUARTERLY FINANCIAL DATA (Unaudited)

The following sets forth condensed results of operations for
2002 and 2001 (dollar amounts in thousands, except per share data):





|                                                                                            |                     |         | First |         | Second |         | Third |         | Fourth
|------------------------------------------------------------------------------------------- | ------------------- | ------- | ----- | ------- | ------ | ------- | ----- | ------- | ------
|2002                                                                                        |                     | Quarter |       | Quarter |        | Quarter |       | Quarter
|                                                                                            |                     |         |       |         |        |         |       |         |       
|Interest Income                                                                             | $                   | 3,070   | $     | 3,135   | $      | 3,211   | $     | 3,017  
|Interest Expense                                                                            |                     | 1,709   |       | 1,678   |        | 1,699   |       | 1,718  
|                                                                                            | Net Interest Income |         | 1,361 |         | 1,457  |         | 1,512 |         | 1,299 
|Provision for Loan Losses                                                                   |                     | 4       |       | 11      |        | -       |       | 33     
|Other Income                                                                                |                     | 24      |       | 37      |        | 21      |       | 20     
|Other Expense                                                                               |                     | 969     |       | 1,027   |        | 1,027   |       | 1,164  
|Income Tax Expense                                                                          |                     | 84      |       | 98      |        | 105     |       | 31     
|                                                                                            |                     |         |       |         |        |         |       |         |       
|                                                                                            | Net Income          | $       | 328   | $       | 358    | $       | 401   | $       | 91    
|                                                                                            |                     |         | ===   |         | ===    |         | ===   |         | ===   
|Net Income per Common Share (1)                                                             |                     |         |       |         |        |         |       |        
|                                                                                            | Basic               | $       | 0.23  | $       | 0.25   | $       | 0.30  | $       | 0.07  
|                                                                                            | Dilluted            | $       | 0.23  | $       | 0.25   | $       | 0.30  | $       | 0.07  
|Dividends Per Share                                                                         | $                   | 0.09    | $     | 0.09    | $      | 0.09    | $     | 0.09   
|                                                                                            |                     |         |       |         |        |         |       |         |       
|(1) Quarterly per share amounts do not add to total for the year
    ended due to rounding.
|                                                                                            |                     |         |       |         |        |         |       |         |       
|                                                                                            |                     |         |       |         |        |         |       |         |       
|                                                                                            |                     |         | First |         | Second |         | Third |         | Fourth
|2001                                                                                        |                     | Quarter |       | Quarter |        | Quarter |       | Quarter
|                                                                                            |                     |         |       |         |        |         |       |         |       
|Interest Income                                                                             | $                   | 3,089   | $     | 3,445   | $      | 3,376   | $     | 3,190  
|Interest Expense                                                                            |                     | 1,848   |       | 2,123   |        | 2,008   |       | 1,847  
|                                                                                            | Net Interest Income |         | 1,241 |         | 1,322  |         | 1,368 |         | 1,343 
|Provision for Loan Losses                                                                   |                     | 13      |       | -       |        | 2       |       | 9      
|Other Income                                                                                |                     | 598     |       | 7       |        | 31      |       | 10     
|Other Expense                                                                               |                     | 883     |       | 923     |        | 940     |       | 945    
|Income Tax Expense                                                                          |                     | 335     |       | 124     |        | 131     |       | (1)    
|                                                                                            |                     |         |       |         |        |         |       |         |       
|                                                                                            | Net Income          | $       | 608   | $       | 282    | $       | 326   | $       | 400   
|                                                                                            |                     |         | ===   |         | ===    |         | ===   |         | ===   
|Net Income per Common Share (1)                                                             |                     |         |       |         |        |         |       |        
|                                                                                            | Basic               | $       | 0.36  | $       | 0.17   | $       | 0.22  | $       | 0.28  
|                                                                                            | Dilluted            | $       | 0.36  | $       | 0.17   | $       | 0.22  | $       | 0.28  
|Dividends Per Share                                                                         | $                   | 0.09    | $     | 0.09    | $      | 0.09    | $     | 0.09   
|                                                                                            |                     |         |       |         |        |         |       |         |       
|(1) Quarterly per share amounts do not add to total for the year
    ended due to rounding.





NOTE X

EARNINGS PER COMMON SHARE

Earnings per share are computed using the weighted average
number of shares outstanding. Options to purchase 275,076 shares
at $17.18 per share were outstanding during 2002, 2001, and 2000
but were not included in the computation of diluted earnings per
share because the options exercise price was greater than
the average market value price of the common shares. The options
were still outstanding at December 31, 2002. The Company had no
other securities outstanding during the years ended December 31,
2002, 2001, or 2000 that would have a dilutive effect on earnings
per share.



Average shares outstanding at December 31, 2002, 2001 and 2000
amounted to 1,371,800, 1,555,260, and 1,976,605, respectively.
The following table presents the components of average outstanding
shares for each of the three years:



|                                  | Years Ended December 31,
|--------------------------------- | ------------------------
|                                  | 2002                    
|                                  |                         
|Average Common Shares Issued      | 3,438,500               
|Average Treasury Shares           | (1,845,346)             
|Average Unearned ESOP Shares      | (136,373)               
|Average Unearned RRP Trust Shares | (84,981)                
|                                  | -------------           
|                                  | 1,371,800               
|                                  | ========                

















































NOTE Y

CONDENSED FINANCIAL INFORMATION - PARENT COMPANY ONLY



|GS FINANCIAL CORP.                                             |    
|-------------------------------------------------------------- | ---
|CONDENSED FINANCIAL CONDITION                                  |    
|(Dollars in Thousands)                                         |    
|                                                               |    
|ASSETS                                                         |    
|                                                               |    
|                                                               |    
|Cash and Cash Equivalents                                      | $  
|Investments - Available-for-Sale, at Fair Value                |    
|Mortgage-Backed Securities - Available-for-Sale, at Fair Value | 573
|Investment in Subsidiary                                       |    
|Loan Receivable                                                |    
|Dividend Receivable from Subsidiary                            |    
|Other Assets                                                   |    
|                                                               |    
|                                                               |    
|                                                               |    
|                                                               |    
|LIABILITIES AND STOCKHOLDERS' EQUITY                           |    
|                                                               |    
|Deferred Tax Liability                                         | $  
|Other Liabilities                                              |    
|Stockholders' Equity                                           |    
|                                                               |    
|                                                               |    
|                                                               |    



NOTE Y

CONDENSED FINANCIAL INFORMATION - PARENT COMPANY ONLY

(CONTINUED)



|GS FINANCIAL CORP.       |                                             |                             |       |                    
|------------------------ | ------------------------------------------- | --------------------------- | ----- | -------------------
|STATEMENT OF OPERATIONS  |                                             |                             |       |                    
|(Dollars in Thousands)   |                                             |                             |       |                    
|                         |                                             |                             |       | For the Years Ended
|                         |                                             |                             |       | December 31,       
|                         |                                             |                             |       | 2002               
|INTEREST INCOME          |                                             |                             |       |                    
|                         | Mortgage-Backed Securities                  | $                           | 48    | $                  
|                         | Dividend from Subsidiary                    |                             | -     |                    
|                         | Loans                                       |                             | 129   |                    
|                         | Investment Securities                       |                             | 39    |                    
|                         | Other Interest Income                       |                             | 2     |                    
|                         |                                             |                             |       |                    
|                         |                                             | Total Interest Income       |       | 218                
|                         |                                             |                             |       |                    
|NON-INTEREST INCOME      |                                             |                             |       |                    
|                         | Undistributed Earnings of Subsidiary        |                             | 1,138 |                    
|                         | Gain on Sale of Investments                 |                             | 20    |                    
|                         | Income from Real Estate Held-for-Investment |                             | 77    |                    
|                         |                                             |                             |       |                    
|                         |                                             | Total Non-Interest Income   |       | 1,235              
|                         |                                             |                             |       |                    
|NON-INTEREST EXPENSES    |                                             |                             |       |                    
|                         | General and Administrative                  |                             | 106   |                    
|                         | Intercompany Personnel Expense              |                             | 123   |                    
|                         | Taxes                                       |                             | 22    |                    
|                         | Loss on Sale of Investments                 |                             | -     |                    
|                         |                                             |                             |       |                    
|                         |                                             | Total Non-Interest Expenses |       | 251                
|                         |                                             |                             |       |                    
|INCOME BEFORE INCOME TAX |                                             | 1,202                       |       | 1,636              
|                         |                                             |                             |       |                    
|PROVISION FOR INCOME TAX |                                             | 25                          |       | 19                 
|                         |                                             |                             |       |                    
|NET INCOME               | $                                           | 1,177                       | $     | 1,617              
|                         |                                             | =====                       |       | =====              



NOTE Y

CONDENSED FINANCIAL INFORMATION - PARENT COMPANY ONLY

(CONTINUED)



|GS FINANCIAL CORP.                                       |                                                                                      |                      |                                                 |                                                     |        
|-------------------------------------------------------- | ------------------------------------------------------------------------------------ | -------------------- | ----------------------------------------------- | --------------------------------------------------- | -------
|STATEMENT OF CASH FLOWS                                  |                                                                                      |                      |                                                 |                                                     |        
|(Dollars in Thousands)                                   |                                                                                      |                      |                                                 |                                                     |        
|                                                         |                                                                                      |                      |                                                 |                                                     |        
|                                                         |                                                                                      |                      |                                                 |                                                     |        
|                                                         |                                                                                      |                      |                                                 |                                                     |        
|OPERATING ACTIVITIES                                     |                                                                                      |                      |                                                 |                                                     |        
|                                                         | Net Income                                                                           | $                    | 1,177                                           | $                                                   | 1,617  
|                                                         | Adjustments to Reconcile Net Income to Net Cash
    Provided by Operating Activities |                      |                                                 |                                                     |        
|                                                         |                                                                                      | Depreciation Expense |                                                 | 17                                                  |        
|                                                         |                                                                                      |                      | (Gain) Loss on Sale of Investments              |                                                     | (20)   
|                                                         |                                                                                      |                      | Equity in Undistributed Earnings of Subsidiary  |                                                     | (1,138)
|                                                         |                                                                                      |                      | Amortization of Investment Premium              |                                                     | 7      
|                                                         |                                                                                      |                      | Dividend on ARM Fund                            |                                                     | (36)   
|                                                         |                                                                                      |                      | Dividend on IMF Fund                            |                                                     | (1)    
|                                                         |                                                                                      |                      | Decrease in Accrued Interest Receivable         |                                                     | 2      
|                                                         |                                                                                      |                      | Decrease in Dividend Receivable from Subsidiary |                                                     | 3,000  
|                                                         |                                                                                      |                      | (Increase) Decrease in Tax Receivable           |                                                     | (5)    
|                                                         |                                                                                      |                      | Increase (Decrease) in Deferred Income Tax      |                                                     | 4      
|                                                         |                                                                                      |                      | Decrease (Increase) in Other Assets             |                                                     | 3      
|                                                         |                                                                                      |                      | Increase in Other Liabilities                   |                                                     | 2      
|                                                         |                                                                                      |                      | Increase (Decrease) in Accrued Income Tax       |                                                     | -      
|                                                         |                                                                                      |                      |                                                 | Net Cash Provided by Operating Activities           |        
|                                                         |                                                                                      |                      |                                                 |                                                     |        
|INVESTING ACTIVITIES                                     |                                                                                      |                      |                                                 |                                                     |        
|                                                         | Redemption of IMF Mutual Fund                                                        |                      | -                                               |                                                     | -      
|                                                         | Investment in ARM Mutual Fund                                                        |                      | (758)                                           |                                                     | (481)  
|                                                         | Sale (Investment) in Other Equity Securities                                         |                      | 193                                             |                                                     | (123)  
|                                                         | Principal Paydowns Note Receivable GS Financial
    ESOP                             |                      | 380                                             |                                                     | 229    
|                                                         | Principal Paydowns on Mortgage-Backed Securities
    -                               |                      |                                                 |                                                     |        
|                                                         |                                                                                      | Available-for-Sale   |                                                 | 311                                                 |        
|                                                         | Investment in Premises and Equipment                                                 |                      | (26)                                            |                                                     | -      
|                                                         | Investment in Real Estate                                                            |                      | -                                               |                                                     | (316)  
|                                                         |                                                                                      |                      |                                                 | Net Cash Provided by (Used in) Investing Activities |        
|                                                         |                                                                                      |                      |                                                 |                                                     |        
|FINANCING ACTIVITIES                                     |                                                                                      |                      |                                                 |                                                     |        
|                                                         | Purchase of Treasury Stock                                                           |                      | (2,516)                                         |                                                     | (4,611)
|                                                         | Payment of Dividends                                                                 |                      | (482)                                           |                                                     | (561)  
|                                                         |                                                                                      |                      |                                                 | Net Cash (Used in) Financing Activities             |        
|                                                         |                                                                                      |                      |                                                 |                                                     |        
|NET INCREASE (DECREASE) IN CASH
    AND CASH EQUIVALENTS |                                                                                      | 114                  |                                                 | (123)                                               |        
|                                                         |                                                                                      |                      |                                                 |                                                     |        
|CASH AND CASH EQUIVALENTS - BEGINNING 
    OF YEAR       |                                                                                      | 131                  |                                                 | 254                                                 |        
|CASH AND CASH EQUIVALENTS - END 
    OF YEAR             | $                                                                                    | 245                  | $                                               | 131                                                 | $      



Donald C. Scott

Mr. Scott (Age 51) has served as President and Chief Executive
Officer of the Company since February 1997 and President of the
Association since March 1985; prior thereto, he served in various
management and other positions at the Association. He has been
a director since 1982.

Kenneth B. Caldcleugh

Mr. Caldcleugh (Age 53) is the President and Owner of The Cellars
of River Ridge, a fine wine and spirit retail outlet in Louisiana.
Prior thereto, Mr. Caldcleugh was the Vice President and Regional
Manager of Glazer Companies of Louisiana (formerly Glazer Wholesale
Spirit & Wine Distributors), from 1973 to 1996. He has been
a director since 1996.

Stephen L. Cory

Mr. Cory (Age 53) is an insurance agent and President of the
Cory, Tucker & Larrowe Agency in Metairie, Louisiana. He has
been a director since 1995.

Bradford A. Glazer

Mr. Glazer (Age 47) is President of Glazer Enterprises, Inc.,
Cincinnati, Ohio, an independent freight agency for Landstar Ligon.
Formerly, Mr. Glazer was Senior Vice President of Espy & Straus,
Inc., Cincinnati, Ohio. Prior thereto, Mr. Glazer was the Chairman
of Glazer Steel Corporation, in New Orleans, Louisiana (and Knoxville,
Tennessee). He has been a director since 1991.

J. Scott Key

Mr. Key (Age 50) is the President and Chief Operating Officer
of Kencoil, Inc. (previously D & S Industries), an electric
motor coil manufacturer and its subsidiary Scott Armature, a provider
of sales and services of electrical apparatus, in Belle Chasse,
Louisiana. He has been a director since 1991.

Mannie D. Paine, Jr.

Dr. Paine (Age 86) is a retired physician. Dr. Paine has provided
consulting services for various companies. He is a former Medical
Director for Blue Cross of Louisiana, Medicaid and Pan American
Insurance Company. He has been a director since 1976.

Bruce A. Scott

Mr. Scott (Age 50) is an attorney and has served as Executive
Vice President of the Company since February 1997 and Executive
Vice President of the Association since 1985. Mr. Scott also serves
as legal counsel and Personnel Manager of the Association, and
performs certain legal services for the Association and its borrowers
in connection with real estate loan closings and receives fees
from the borrowers in connection therewith. He has been a director
since 1982.

Albert J. Zahn, Jr.

Mr. Zahn (Age 51) is a certified public accountant and president
of the firm Al Zahn, CPA, A Professional Accounting Corporation.
He has been a director since 1992.









Lettie R. Moll

Mrs. Moll has served as Vice President and Secretary of the
Company since 1997 and Vice President and Secretary of the Association
since March 1987 and March 1982, respectively.

Ralph E. Weber

Mr. Weber has primary responsibility for the Associations
data processing requirements and has served as Vice President
of the Company and the Association since February 1997 and March
1987, respectively.