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                                    FORM 10-K

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

            [X] Annual Report Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

                   For the fiscal year ended December 31, 1999

          [ ] Transition Report Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934
           For the transition period from ____________ to ____________

                         COMMISSION FILE NUMBER 0-22559

                            GSB FINANCIAL CORPORATION
             (Exact name of registrant as specified in its charter)

            Delaware                                           06-1481061
(State or other jurisdiction of                             (I.R.S.  Employer
 incorporation or organization)                             Identification No.)

                  1 South Church Street, Goshen, New York 10924
                (Address of principal executive office-zip code)
                            Telephone (914) 294-6151

           Securities registered pursuant to Section 12(g) of the Act:

                     Common Stock, par value $.01 per share

                                (Title of class)

     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 twelve 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 registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this form 10-K. [ X ]

     As of March 27, 2000 the aggregate market value of the voting stock held by
non-affiliates of the Registrant was $19.2 million based upon the reported
closing price on that date as quoted of the NASDAQ National Market System.

     As of March 27, 2000, 1,984,538 shares of Registrant's common stock were
outstanding.

                      Documents Incorporated by Reference:

(1)  The Annual Report to Shareholders for the fiscal year ended December 31,
     1999 (Items 5 through 8 of Part II) and

(2)  The definitive Proxy Statement dated March 16, 2000 to be distributed on
     behalf of the Board of Directors of Registrant in connection with the
     Annual Meeting of Shareholders to be held on April 27, 2000 which was filed
     with the Securities and Exchange Commission on or about March 17, 2000.


                                      -1-
<PAGE>

Item 1 - Business

                             BUSINESS OF THE COMPANY

General

     GSB Financial Corporation (the "Company") was organized as a Delaware
corporation on March 17, 1997, at the direction of Goshen Savings Bank (the
"Bank") in order to acquire all the common stock of the Bank to be issued upon
its conversion (the "Conversion") from the mutual to the stock form of
ownership. The Conversion was consummated on July 9, 1997, at which time the
Company sold 2,248,250 shares of its common stock at a price of $10.00 per share
and paid $10.7 million, representing one-half the net proceeds from its sale of
stock, to the Bank in exchange for all shares of stock of the Bank to be issued
in the Conversion. The Company thereupon became a savings and loan holding
company, and subsequently registered as such with the Office of Thrift
Supervision (the " OTS").

     Eight percent of the shares sold by the Company were purchased by the
Company's Employee Stock Ownership Plan (the "ESOP") using the proceeds of a
loan from the Company to pay the purchase price. Therefore, after deducting
expenses of the Conversion, the $10.7 million paid to the Bank and the $1.8
million represented by the promissory note from the ESOP, there remained $8.9
million of net proceeds available for investment directly by the Company.

     After the Conversion, the Company's business has consisted of directing,
planning and co-ordinating the business activities of the Bank and investing the
net proceeds of the Conversion available for investment by it. The Bank's
business has continued to consist of gathering deposits from the general public
within its market area and investing those deposits primarily in one-to-four
family residential first mortgage loans, debt obligations issued by the U.S.
Government, its agencies and business corporations, and mortgage-backed
securities. To a lesser extent, the Bank also makes home equity lines of credit
and other second mortgage loans on one-to-four family residential properties,
commercial mortgage loans, construction loans, commercial business loans and
consumer loans. The net proceeds retained by the Company have been invested
principally in mortgage-backed, government, agency and corporate securities and
federal funds sold.

     In the future, the Company may acquire or organize other operating
subsidiaries, including other financial institutions, or it may merge with or
acquire other financial institutions and financial services related companies,
although there are no current arrangements, understandings or agreements
regarding any such expansion. The Company neither owns nor leases any property
but instead uses the premises, equipment and furniture of the Bank. The Company
does not presently intend to employ any persons other than certain officers of
the Bank who will not be separately compensated by the Company. The Company may
utilize the support staff of the Bank from time to time, if needed. Additional
employees may be hired as appropriate if the Company expands its business.

     References herein to the business activities, financial condition and
operations of the Company prior to July 9, 1997, refer to the Bank, while
references to the Company on or after that date refer to both the Company and
the Bank as consolidated, except to the extent the context otherwise indicates.

Market Area

     The Company's market area is the Village of Goshen, and Village of
Harriman, New York and their surrounding communities, representing most of
Orange County, New York. The Village of Goshen is the


                                      -2-
<PAGE>

county seat of Orange County and lies 60 miles northwest of New York City. The
Village of Harriman is located in the southern portion of Orange County, closer
to New York City and approximately 8 miles from Rockland County. The Bank has
also recently announced that it intends to open a branch in Bloomingburg, just
over the border between Orange and Sullivan Counties. Although predominantly
rural with many small towns, many residents of the market area work in New York
City and other communities to the south and east, commuting by train or
automobile. They tend to reside in our market area due to lower housing costs
and the quieter, more rural atmosphere. Principal occupations of residents in
the community include retail trades, manufacturing, professional services
(including health, education and other professional fields) and government
administration.

     The Company's market area is the fastest growing county in the Hudson
Valley Region. The population grew in Orange County by more than 72,000
residents since 1980. This growth was primarily due to the rising housing prices
closer to New York City, coupled with an abundance of vacant land in Orange
County, led to a boom in housing construction. As the economy throughout the
region declined in the late 1980s and early 1990s, communities within the market
area continued to experience growth, but more slowly. The conversion of Stewart
International Airport, 12 miles to the northeast of Goshen, into a full-service
commercial airport in 1990, gave the Company's market area an additional boost.
The privatization of Stewart International Airport has been approved, to be run
by National Express Group, which is intended to increase the marketing of the
airport and expand business and development in the area. However, the health of
the economy in the New York City metropolitan area has, and will continue to
have, a direct effect on the economic well being of residents and businesses in
the Company's market area.

Competition

     The Company's principal competitors for deposits are savings banks, savings
and loan associations, commercial banks and credit unions in the Company's
market area, money market mutual funds, insurance companies, brokerage firms and
other financial institutions, many of which are substantially larger in size
than the Company. The Company's competition for loans comes principally from
savings banks, savings and loan associations, commercial banks, mortgage
bankers, finance companies and other institutional lenders. The Company's
principal methods of competition include loan and deposit pricing, maintaining
close ties with its local community, advertising and marketing programs and the
types of services provided.

     The Company is subject to competition from other financial institutions,
which may have much greater financial and marketing resources. However, the
Company believes it benefits from its community bank orientation as well as its
relatively high core deposit base. The relative economic stability of the
Company's lending area is reflected in the small number of mortgage
delinquencies experienced by the Company.

Lending Activities

     Loan Portfolio Composition. The Company's loan portfolio, representing
65.5% of total assets, consists primarily of conventional first mortgage loans
secured by one-to-four family residences. At December 31, 1999, the Company had
total loans receivable of $115.3 million, of which $99.3 million, or 85.9%, were
owner-occupied one-to-four family residential first mortgage loans. The
remainder consisted of $3.2 million of home equity lines of credit and other
loans secured by junior liens on one-to-four family owner-occupied residential
properties, or 2.7% of total loans; $9.6 million of commercial mortgage loans,
or 8.3% of total loans; $924,000 of construction loans, or 0.8% of total loans;
$762,000 of consumer loans which are not secured by real estate, or 0.7% of
total loans; and $1.8 million of commercial business loans, or 1.6% of total
loans. The Company's loan portfolio, after remaining relatively constant
throughout 1994,


                                      -3-
<PAGE>

1995 and 1996, grew by 11.9% during 1997, 19.7% during 1998 and by 36.0% during
1999. This growth was a deliberate result of aggressive marketing of the Bank's
loan products throughout Orange County. Although the Company is seeking to
expand its non-residential first mortgage lending, the residential first
mortgage loans have continued to represent the largest, and an increasing,
component of the loan portfolio.

     Interest rates on loans are affected by the demand for loans, the supply of
money available for lending and the rates offered by competitors. These factors
are in turn affected by, among other things, economic conditions, monetary
policies of the federal government, and legislative tax policies. The Company
seeks to compete successfully for loan opportunities in its market area through
hands-on local originations, community involvement, responsiveness to customer
and community needs, competitive pricing, and low origination fees.


                                      -4-
<PAGE>

Loan Portfolio Composition Table

The following table sets forth the composition of the Company's loan portfolio
in dollar amounts and in percentages of the respective portfolios at the dates
indicated:

<TABLE>
<CAPTION>
                                              At December 31,                       At September 30,
                             -------------------------------------------------    ---------------------
                                      1999                      1998                      1998
                             -------------------------------------------------    ---------------------

                                            Percent                   Percent                  Percent
                                              Of                         Of                       Of
                              Amount        Total        Amount        Total       Amount       Total
                             ---------    ---------     ---------    ---------    ---------   ---------
<S>                          <C>               <C>      <C>               <C>     <C>              <C>
Mortgage loans:                                            (Dollars in thousands)
One- to four-family(1) ...   $  99,282         85.9%    $  76,366         89.8%   $  73,324        93.0%

Construction .............         924          0.8           759          0.9          478         0.6

Home equity ..............       3,153          2.7         2,704          3.2        2,365         3.0

Commercial real estate ...       9,617          8.3         3,373          4.0        1,820         2.3
                             ---------    ---------     ---------    ---------    ---------   ---------

   Total mortgage loans ..     112,976         97.7        83,202         97.9       77,987        98.9

Other loans:

Commercial business ......       1,818          1.6         1,024          1.2          170         0.2

Consumer .................         688          0.6           617          0.8          605         0.8

Savings account loans ....          74          0.1           110          0.1          115         0.1
                             ---------    ---------     ---------    ---------    ---------   ---------

   Total other loans .....       2,580          2.3         1,751          2.1          890         1.1
                             ---------    ---------     ---------    ---------    ---------   ---------

   Total loans receivable      115,556        100.0%       84,953        100.0%      78,877       100.0%

Less:

Deferred loan fees .......         (68)                       (15)                       (3)

Allowances for loan losses         351                        215                       167
                             ---------                  ---------                 ---------

Loans receivable, net ....   $ 115,273                  $  84,753                 $  78,713
                             =========                  =========                 =========
Mortgage loan summary:
Fixed rate loans .........   $  86,145         76.3%    $  55,145         44.4%   $  47,831        61.3%

Adjustable-rate loans ....      26,831         23.7        28,057         55.6       30,156        38.7
                             ---------    ---------     ---------    ---------    ---------   ---------

Total mortgage loans .....   $ 112,976        100.0%    $  83,202        100.0%   $  77,987       100.0%
                             =========    =========     =========    =========    =========   =========

<CAPTION>
                                                      At September 30,
                             -----------------------------------------------------------------
                                   1997                    1996                   1995
                             -----------------------------------------------------------------
                                        Percent                Percent
                                          Of                     Of
                              Amount     Total      Amount      Total       Amount    Total
                             -------   ---------    -------   ---------    -------   ---------
<S>                          <C>            <C>     <C>            <C>     <C>            <C>
Mortgage loans:
One- to four-family(1) ...   $59,301        89.9%   $52,579        89.3%   $52,017        89.6%

Construction .............     1,377         2.1      1,003         1.7        352         0.6

Home equity ..............     2,314         3.5      2,197         3.8      2,122         3.7

Commercial real estate ...     2,073         3.2      2,255         3.8      2,660         4.6
                             -------   ---------    -------   ---------    -------   ---------

   Total mortgage loans ..    65,065        98.7     58,034        98.6     57,151        98.5

Other loans:

Commercial business ......        36         0.0         15         0.0         20         0.0

Consumer .................       630         1.0        675         1.1        669         1.1

Savings account loans ....       174         0.3        148         0.3        209         0.4
                             -------   ---------    -------   ---------    -------   ---------

   Total other loans .....       840         1.3        838         1.4        898         1.5
                             -------   ---------    -------   ---------    -------   ---------

   Total loans receivable     65,905       100.0%    58,872       100.0%    58,049       100.0%

Less:

Deferred loan fees .......        28                     22                     16

Allowances for loan losses       139                    123                    114
                             -------                -------                -------

Loans receivable, net ....   $65,738                $58,727                $57,919
                             =======                =======                =======
Mortgage loan summary:
Fixed rate loans .........   $28,864        44.4%   $17,885        30.8%   $11,074        19.4%

Adjustable-rate loans ....    36,201        55.6     40,149        69.2     46,077        80.6
                             -------   ---------    -------   ---------    -------   ---------

Total mortgage loans .....   $65,065       100.0%   $58,034       100.0%   $57,151       100.0%
                             =======   =========    =======   =========    =======   =========

</TABLE>


                                      -5-
<PAGE>

     Residential Mortgage Loans. The primary focus of the Company's lending
activities are mortgage loans secured by first liens on one-to-four family
owner-occupied or rental residential real estate. At December 31, 1999,
approximately $100.2 million, or 86.7%, of the Company's total loan portfolio
consisted of such loans. The Company offers both adjustable rate mortgages
("ARMs") and fixed-rate mortgage loans. The relative proportions of fixed-rate
loans versus ARMs originated by the Company depends principally upon current
customer preference, which is generally driven by general economic and interest
rate conditions and the pricing offered by the Company's competitors. At
December 31, 1999, approximately 20.3% of the Company's residential one-to-four
family owner-occupied first mortgage portfolio were ARMs and approximately 79.7%
were fixed rate loans. The percentage represented by fixed rate loans has
increased from 61.7% at September 30, 1998, to 79.7% at December 31, 1999,
principally due to customer preference for fixed-rate loans during current
periods of low interest rates. The ARMs generally carry annual caps and
life-of-the-loan ceilings, which limit interest rate adjustments.

     The Company's residential loan underwriting criteria are generally
comparable to those required by the Federal National Mortgage Association
("FNMA") and other major secondary market loan purchasers. Generally, ARM credit
risks are somewhat greater than fixed-rate loans primarily because, as interest
rates rise, the borrowers' payments rise, increasing the potential for default.
The Bank's teaser rate ARMs (ARMs with low initial interest rates that are not
based upon the index plus the margin for determining future rate adjustments)
were underwritten based on the payment due at the fully-indexed rate.

     In addition to verifying income and assets of borrowers, the Company
obtains independent appraisals on all residential first mortgage loans and title
insurance is required at closing. Private mortgage insurance is required on all
loans with a loan to value ratio in excess of 80% and the Company requires real
estate tax escrows on such loans. Real estate tax escrows are voluntary on
residential mortgage loans with loan to value ratios of 80% or less.

     Fixed-rate residential mortgage loans are generally originated by the
Company for terms of 15 to 30 years. Although 30 year fixed-rate mortgage loans
may adversely affect the Company's net interest income in periods of rising
interest rates, the Company originates such loans to satisfy customer demand.
Such loans are generally originated at initial interest rates which exceed the
fully indexed rate on ARMs offered at the same time. Fixed-rate residential
mortgage loans originated by the Company generally include due-on-sale clauses,
which permit the Company to demand payment in full if the borrower sells the
property without the Company's consent. Due-on-sale clauses are an important
means of adjusting the rates of the Company's fixed-rate mortgage loan
portfolio, and the Company will generally exercise its rights under these
clauses if necessary to maintain market yields.

     The Company has offered ARMs since the early 1980s. ARMs originated in
recent years have interest rates that adjust annually based upon the movement of
the one year treasury bill constant maturity index, plus a margin of from 2% to
2.75%. These loans generally have a maximum interest rate adjustment of 2% per
year, with a lifetime maximum interest rate adjustment, measured from the
initial interest rate, of 5.5% or 6%.

     The Company offers residential single family construction loans to persons
who intend to occupy the property upon completion of construction. Upon
completion of construction, these loans are automatically converted into
permanent residential mortgage loans and classified as such. The proceeds of the
construction loan are advanced in stages on a percentage of completion basis as
construction progresses. The loans generally provide for a construction period
of not more than six months during which the borrower pays interest only. In
recognition of the risks involved in such loans, the Company carefully monitors
construction through regular inspections and the borrower


                                      -6-
<PAGE>

must qualify for the permanent mortgage loan before the construction loan is
made. At December 31, 1999, the Company had 15 construction loans with an
aggregate outstanding principal balance of $924,000. The Company's delinquency
experience with its construction loans has been favorable. At the end of each
fiscal year since September 30, 1992, the Company had no non-performing
construction loans.

     Home Equity Loans. The Company makes home equity loans, representing loans
secured by junior mortgages on one-to-four family owner-occupied residences.
These loans are of two types. The Company offers a home equity line of credit
secured by a residential mortgage, normally a second lien. These loans have
adjustable rates of interest and generally provide for an initial advance period
of five or ten years, during which the borrower pays interest only, or interest
plus a nominal principal amount, and can borrow, repay, and reborrow the
principal balance. This is followed by a repayment period, generally ten years,
during which the balance of the loan is repaid in principal and interest
installments. The Company also offers regular amortizing home equity loans.
These loans are fully advanced at closing and repayable in monthly principal and
interest installments over a period not to exceed 10 years. Second mortgage
loans are limited to a maximum loan to value ratio, including prior liens, of
not more than 80%. At December 31, 1999, the Company had $1.5 million in
outstanding advances on home equity lines of credit and $1.6 million in regular
amortizing home equity loans.

     Commercial Mortgage Loans. The Company originates fixed and adjustable rate
mortgage loans secured by office buildings, retail establishments, and other
types of commercial property, almost always secured by property located in the
Company's market area or adjoining communities. For the past 15 months, the
Company has concentrated on increasing its commercial mortgage loan portfolio.
At December 31, 1999, the Company's commercial mortgage loan portfolio was $9.6
million, or 8.3% of total loans, compared to $1.8 million only 15 months
earlier. At December 31, 1999, the Company's largest such loan was a
participation loan with a local savings bank in which the Company's
participation was $1.5 million, or 30% of the total loan. The loan is secured by
unimproved land with subdivision approval in Rockland County. With the recent
expansion of commercial lending activities, larger balance originations could
occur in the future.

     The Company makes commercial mortgage loans with loan to value ratios up to
80%, terms up to 20 years, and amortization periods up to 20 years. At December
31, 1999, $3.2 million of the Company's commercial mortgage loans had adjustable
rates and $6.4 million had fixed rates.

     Loans secured by commercial properties generally involve a greater degree
of risk than one-to-four family residential mortgage loans. Because payments on
such loans are often dependent on successful operation or management of the
properties, repayment may be subject, to a greater extent, to adverse conditions
in the real estate market or the economy. The Company seeks to minimize these
risks through its underwriting policies. In reaching its decision on whether to
make a commercial mortgage loan, the Company considers the qualifications and
financial condition of the borrower, including credit history, profitability and
expertise, as well as the value and condition of the underlying property. The
factors considered by the Company include the net operating income of the
mortgaged premises before debt service and depreciation; the debt coverage ratio
(the ratio of net earnings to debt service); and the ratio of loan amount to
appraised value.

     The Company generally requires a debt service coverage ratio of at least
120% and the personal guarantee of the borrower. The Company also requires an
appraisal on the property conducted by an independent appraiser and title
insurance. When evaluating the qualifications of the borrower for a commercial
mortgage loan, the Company considers the financial resources and income level of
the borrower, the borrower's experience in owning or managing similar property
and


                                      -7-
<PAGE>

the Company's lending experience with the borrower. The Company's underwriting
policies require that the borrower be able to demonstrate management skills and
the ability to maintain the property from current rental income or from the
borrower's operations on the property. The Bank's policy requires borrowers to
present evidence of the ability to repay the mortgage and a history of making
mortgage payments on a timely basis. In making its assessment of the
creditworthiness of the borrower, the Bank generally reviews the financial
statements and credit history of the borrower, as well as other related
documentation.

     Consumer Loans. The Company also makes short-term fixed-rate consumer loans
either unsecured or secured by savings accounts, automobiles or other consumer
assets. Consumer loans, excluding these secured by real estate, totaled
$762,000, or 0.7% of total loans, at December 31, 1999. These loans generally
have an average term of not more than five years and have interest rates higher
than mortgage loans. The shorter terms to maturity are helpful in managing the
Company's interest rate risk. These loans are generally underwritten based upon
the borrower's ability to repay and the value of the collateral for the loan.
Collateral value, except for loans secured by bank deposits or marketable
securities, is a secondary consideration because personal property collateral
generally rapidly depreciates in value, is difficult to repossess, and rarely
generates close to full value at a forced sale.

     Commercial Business Loans. The Company has diversified its lending to
include business loans in its communities. Business loans at December 31, 1999,
totaled $1.8 million representing 1.6% of total loans, compared to only
$170,000, only 15 months earlier.

     The Company intends to pursue additional commercial non-mortgage loans in
the future in order to diversify its loan offering and expand its customer base.
Commercial non-mortgage loans are more likely to have both shorter terms to
maturity and adjustable interest rates when compared to residential first
mortgage loans, and also generally have higher yields. The Company intends to
offer such loans on both an unsecured and a secured basis, with the secured
loans having collateral such as machinery, equipment, accounts receivable, other
business assets or marketable securities.

     Commercial business loans are generally perceived as having greater risks
that residential first mortgage loans because historically they have higher
default rates. The collateral often declines rapidly in value or is difficult to
sell when not part of a successful ongoing business. In order to protect against
these risks, the Company markets it commercial non-mortgage loans principally to
businesses within its local market area where the Company has substantial
knowledge and expertise regarding local business and economic conditions. The
Company also requires personal guaranties of business principals as additional
support for these loans.

     Origination of Loans. Loan originations come from a number of sources.
Residential loan originations result from advertising, the efforts of the
Company's loan officers, and in-house loan originators, and referrals from other
borrowers, real estate brokers and builders. The Company originates loans
through its own efforts and does not use mortgage brokers, mortgage bankers or
other fee paid loan finders. The Company does not originate loans independent of
the Bank, except for the loan made to the Company's ESOP, which was used to
purchase stock in the Conversion. The ESOP loan is not recorded as an asset on
the Company's consolidated financial statements and is excluded throughout this
discussion of the Company's lending business.

     All of the Bank's lending is subject to its written, nondiscriminatory
underwriting standards and to loan origination procedures prescribed by the
Bank's Board of Directors. Officers of the Bank have the authority to approve
loans at differing levels established by the Board of Directors based


                                      -8-
<PAGE>

upon the position and expertise of the officer. The Board of Directors must
approve all loans over $500,000, in advance. All other loans are reviewed by the
Bank's ad hoc loan committee after approval.

     As a federal savings bank, the aggregate amount that the Bank may lend to
any one borrower is generally limited to 15% of unimpaired capital and surplus
(25% if the security for such loan has a "readily ascertainable" value or 30%
for certain residential development loans). At December 31, 1999, 15% of the
Bank's capital and surplus was approximately $3.7 million. On that date, the
Bank's largest aggregate loan relationship was $1.8 million, represented by
three loans to affiliated borrowers. One of the three component loans, a
participation loan with a balance owed to the Bank at December 31, 1999 of
$990,000, is secured by mixed use commercial property in Goshen. The two related
loans include a residential mortgage loan on the primary residence of a
principal of the commercial loan borrower and a mortgage loan on a vacant land
with infrastructure improvements and subdivision approval. The Bank had four
other loan relationships at December 31, 1999 with balances in excess of $1.0
million. The second relationship, is a participation loan with another savings
bank in the amount of $1.5 million, secured by vacant land with subdivision
approval in Rockland County. The other relationship, in the amount of $1.4
million, includes the participation loan mentioned above in the amount of
$990,000, and a residential mortgage loan and home equity loan to another
principal of the commercial loan borrower and a mortgage loan on a mixed used
commercial property in Goshen. The other relationship, in the amount of $1.2
million, includes two participation loans on property in Rockland County. The
other relationship in the amount of $1.1 million is secured by commercial
property in Orange County. At December 31, 1999, the Bank had 29 loans
outstanding with principal balances in excess of $250,000 compared to 7 at
September 30, 1998, and an additional 42 loans with principal balances from
$200,000 to $250,000, as compared to 18 as of September 30, 1998. None of these
loans was past due 90 days or more on December 31, 1999 or otherwise classified
as non-performing.


                                      -9-
<PAGE>

     The following table sets forth the Bank's loan originations, loan sales and
principal repayments for the periods indicated.

<TABLE>
<CAPTION>
                                                       3 Months
                                      Year Ended         Ended          Year Ended       Year Ended
                                      December 31,     December 31,    September 30,    September 30,
                                         1999             1998             1998              1997
                                       ---------        ---------        ---------        ---------
                                                               (In Thousands)

<S>                                    <C>              <C>              <C>              <C>
Total loans, beginning of period       $  84,953        $  78,877        $  65,905        $  58,872
                                       ---------        ---------        ---------        ---------

Loans originated:
Residential 1 to 4 family (1) ..          35,821            5,321           18,208           10,017
Commercial real estate .........           9,663            1,580               --               17
Construction loans .............           2,607              487            1,846            2,092
Commercial business loans ......           2,633              938               --               --
Consumer loans .................             761              128              699            1,127
                                       ---------        ---------        ---------        ---------
    Total loans originated .....          51,485            8,454           20,753           13,253

Loans purchased ................              --               --               --               --

Loans sold .....................              --               --               --               --

Principal repayments ...........         (20,878)          (2,366)          (7,666)          (6,206)
Total charge-offs ..............              (4)             (12)            (115)             (14)
                                       ---------        ---------        ---------        ---------
Net loan activity ..............          30,603            6,076           12,972            7,033
                                       ---------        ---------        ---------        ---------
  Total loans, end of period ...       $ 115,556        $  84,953        $  78,877        $  65,905
                                       =========        =========        =========        =========
</TABLE>

(1)  Includes home equity loans secured by junior liens on one-to-four family
     owner-occupied residences.

     The Company does not purchase loans. Prior to fiscal 1995, the Company sold
part of its fixed rate residential mortgage loan production to FNMA and retained
the right to service those loans. At December 31, 1999, the Company's portfolio
of loans serviced for FNMA totaled $5.5 million. The Company did not service
loans for any other investors at that date. The Company has never purchased loan
servicing rights.

     Loan Maturity. The following table shows the contractual maturity of the
Company's loan portfolio at December 31, 1999. Loans are shown as due based on
their contractual terms to maturity. Loans which have adjustable or renegotiable
interest rates are shown as maturing in the period during which the final loan
payment is due without regard to rate adjustments. The table does not reflect
the effects of loan amortization, possible prepayments or enforcement of
due-on-sale clauses. Non-performing loans are shown as being due based upon
their contractual maturity without regard to acceleration due to default.


                                      -10-
<PAGE>

<TABLE>
<CAPTION>
                                                                 At December 31, 1999
                                      ---------------------------------------------------------------------------
                                       One- to                                                           Total
                                        Four-            Home         Commercial         Other           Loans
                                       Family           Equity        Real Estate        Loans         Receivable
                                      ---------        ---------      -----------      ---------       ----------
                                                                    (In Thousands)
<S>                                   <C>              <C>             <C>             <C>             <C>
Contractual maturity:
  Within 1 year ...............       $      84        $      --       $   2,230       $   1,212       $   3,526
  After 1 year:
     1 to 3 years .............             449               16             766             415           1,646
     3 to 5 years .............             496               81           2,270             688           3,535
     5 to 10 years ............           4,830            1,690           2,514             239           9,273
     Over 10 years ............          94,347            1,366           1,837              26          97,576
                                      ---------        ---------       ---------       ---------       ---------
     Total due after one year .       $ 100,122        $   3,153       $   7,387       $   1,368       $ 112,030
                                      ---------        ---------       ---------       ---------       ---------
  Total amounts due ...........       $ 100,206        $   3,153       $   9,617       $   2,580       $ 115,556
                                      =========       =========       =========       =========
Less:
  Deferred loan fees, net .....                                                                              (68)
  Allowance for loan losses ...                                                                              351
                                                                                                       ---------
  Loans receivable, net .......                                                                        $ 115,273
                                                                                                       =========
</TABLE>

     The following table sets forth at December 31, 1999, the dollar amount of
loans due after December 31, 2000, and whether such loans have fixed interest
rates or adjustable interest rates.

                                               Due After December 31, 2000
                                        ----------------------------------------
                                         Fixed         Adjustable        Total
                                        --------       ----------       --------
                                                     (In Thousands)
Mortgage loans:
  One- to four-family ..........        $ 79,732        $ 20,390        $100,122
   Home equity .................           1,649           1,504           3,153
  Commercial real estate .......           5,933           1,454           7,387
Other loans ....................           1,296              72           1,368
                                        --------        --------        --------
Total loans receivable .........        $ 88,610        $ 23,420        $112,030
                                        ========        ========        ========

Asset Quality

     Delinquency Procedures. When a borrower fails to make a required payment on
a loan, the Company attempts to cause the deficiency to be cured by contacting
the borrower. Late notices are sent when a payment is more than 15 days past due
and a late charge is generally assessed at that time. The Company attempts to
contact personally any borrower who is more than 30 days past due. In most
cases, deficiencies are cured promptly. All loans past due 60 days or more, and
all loans in which the borrower is delinquent in the payment of real estate
taxes regardless of payment status, are added to a watch list and an employee
contacts the borrower on a regular basis to seek to cure the delinquency. If a
loan becomes past due 90 days, the Company refers the matter to an attorney, who
first seeks to obtain payment without litigation and, if unsuccessful, generally
commences a foreclosure action or other appropriate legal action to collect the
loan. A foreclosure action, if the default is not cured, generally leads to a
judicial sale of the mortgaged real estate. The judicial sale is normally
delayed if the borrower files a bankruptcy petition because the foreclosure
action cannot be continued unless the Company first obtains relief from the
automatic stay provided by the Bankruptcy Code.

     If the Company acquires the mortgaged property at foreclosure sale or
accepts a voluntary deed in lieu of foreclosure, the Company then classifies the
property as Real Estate Owned ("REO") until the Company sells it. At December
31, 1999, the Company had no REO. When the Company acquires REO, the Company
records the property at the lower of the principal balance of the loan or fair
value of the property less costs of sale and the Company charges to the
allowance for loan losses


                                      -11-
<PAGE>

any shortfall between the recorded value of the property and the carrying value
of the loan. Thereafter, the Company reflects changes in the value of the REO as
a valuation allowance. The Company may finance sales of REO by "loans to
facilitate," which involve a lower down payment, a longer repayment term or
other more favorable features than the Company would grant under its regular
underwriting guidelines. Currently, the Company has no "loans to facilitate."

     The following table sets forth information with respect to the Company's
non-performing assets (which generally include loans that are delinquent for 90
days or more and real estate owned) at the dates indicated.

<TABLE>
<CAPTION>
                                           At December 31,                             At September 30,
                                      ------------------------      ------------------------------------------------------
                                         1999          1998           1998           1997           1996           1995
                                      ---------      ---------      ---------      ---------      ---------      ---------
                                                                     (Dollars in Thousands)
<S>                                   <C>            <C>            <C>            <C>            <C>            <C>
Non-accrual loans:
  Loans in non-accrual status:
  One- to four-family ...........     $      --      $      92      $      --      $      --      $      16      $     157
  Home equity ...................            --             --             --             --             --             --
  Commercial real estate ........            --             --             --             --             --             --
                                      ---------      ---------      ---------      ---------      ---------      ---------
     Total mortgage loans .......            --             --             --             --             16            157
                                      ---------      ---------      ---------      ---------      ---------      ---------
  Consumer loans ................                           --             --             --             --             --
     Total non-accrual ..........            --             --             --             --             16            157
                                      ---------      ---------      ---------      ---------      ---------      ---------
  Accruing Loans delinquent
     90 days or more:
  Mortgage loans ................            --             --             --             --             --             68
  Home equity ...................            --             --             --             --             --             --
  Other loans ...................            --             --              4             --             --             --
                                      ---------      ---------      ---------      ---------      ---------      ---------
     Total ......................            --             --              4             --             --             68
                                      ---------      ---------      ---------      ---------      ---------      ---------
Total non-performing loans ......            --             --              4             --             16            225
Foreclosed and in substance
foreclosed real estate ..........            --             --             94             --             --             --
                                      ---------      ---------      ---------      ---------      ---------      ---------
Total non-performing assets .....     $      --      $      92      $      98      $      --      $      16      $     225
                                      =========      =========      =========      =========      =========      =========
Ratio of non-performing loans to
   total loans                             0.00%          0.11%          0.01%          0.00%          0.03%          0.39%
Ratio of non-performing assets to
   total assets .................          0.00%          0.07%          0.07%          0.00%          0.02%          0.22%
</TABLE>

     At December 31, 1999, management had identified as a potential problem loan
one commercial line of credit loan with a principal balance of $48,000, in which
the borrower has filed Chapter 11 bankruptcy. Although the loan is secured by
inventory and receivables, and guaranteed by the principal of the borrower some
loss may occur. Management believes that the allowance for loan losses is
adequate to cover the loss, if any, on such loan. At December 31, 1999, there
were no other loans not included in the table above with regard to which
management had information about possible credit problems of the borrower that
caused management to seriously doubt the ability of the borrower to comply with
present loan repayment terms.

     It is the Company's policy to discontinue accruing interest on a loan when
it becomes 90 days or more delinquent unless the Company determines that the
nature of the delinquency and the collateral are such that collection of the
principal and interest on the loan in full is reasonably assured. Once the
accrual of interest is discontinued, the Company records interest as and when
received until the loan is restored to accruing status.

     In each of the past three fiscal years, interest which the Company did not
accrue for nonaccrual loans was less than $5,000.



                                      -12-
<PAGE>

     Classified Assets. OTS regulations require that federal savings banks
classify their assets on a regular basis and establish prudent valuation
allowances based on such classifications. In addition, in connection with
examinations of savings associations, OTS examiners have authority to identify
problem assets and, if appropriate, require them to be classified. OTS
regulations provide for three adverse classifications for problem assets:
Substandard, Doubtful and Loss. Substandard assets have one or more defined
weaknesses and are characterized by the distinct possibility that the Bank will
sustain some loss if the deficiencies are not corrected. Doubtful assets have
the weaknesses of Substandard assets, with the additional characteristics that
the weaknesses make collection or liquidation in full on the basis of currently
existing facts, conditions and values questionable, and there is a high
probability of loss. An asset classified Loss is considered uncollectible and of
such little value that its continuance as an asset of the Bank is not warranted.
The regulations have also created a Special Mention category, consisting of
assets which do not currently expose the Bank to a sufficient degree of risk to
warrant classifications, but do possess credit deficiencies or potential
weaknesses deserving management's close attention.

     Assets classified as Substandard or Doubtful require the Bank to establish
prudent valuation allowances. If an asset or portion thereof is classified as
Loss, the Bank must either establish a specific allowance for loss equal to 100%
of the portion of the asset classified Loss or charge off such amount. If the
Bank does not agree with an examiner's classification of an asset, it may appeal
this determination to the District Director of the OTS. On the basis of
management's review of its loans at December 31, 1999, the Bank had one loan in
the amount of $48,000 classified as substandard, and no loans categorized by
management as "Special Mention."

     Allowance for Loan Losses. The allowance for loan losses is established
through a provision for loan losses based on management's evaluation of the
risks inherent in the Company's loan portfolio and the general economy. The
allowance for loan losses is maintained at an amount management considers
adequate to cover loan losses which are deemed probable and can be estimated.
The allowance is based upon a number of factors, including asset
classifications, economic trends, industry experience and trends, industry and
geographic concentrations, estimated collateral values, management's assessment
of the credit risk inherent in the portfolio, historical loan loss experience
and the Company's underwriting policies. The Company evaluates on a loan by loan
basis each calendar quarter all loans which are at least sixty days past due or
for which there are unpaid real estate taxes and considers whether the allowance
should be adjusted to protect against risks associated with such loans. The
analysis of the adequacy of the allowance is reported to and reviewed by the
Board of Directors quarterly. Although management believes it uses the best
information available to make determinations with respect to the allowance for
loan losses, future adjustments may be necessary if economic conditions and the
Company's actual experience differ substantially from the conditions and
experience used in the assumptions upon which the initial determinations are
based.

     While the Company believes that it has established an adequate allowance
for loan losses based upon its low level of prior charge-offs, there can be no
assurance that regulators, in reviewing the Company's loan portfolio as part of
a future regulatory examination, will not request the Company to materially
increase its allowance for loan losses, thereby negatively affecting the
Company's financial condition and earnings at that time. Moreover, no assurance
can be made that future additions to the allowance will not be necessary based
on changes in economic and real estate market conditions, further information
obtained regarding existing loans, identification of additional problem loans
and other factors, both within and outside of management's control. The
directors of the Bank and the Company have reviewed the provision for loan
losses and the allowance for loan losses and the assumptions utilized by
management as to their reasonableness and adequacy.



                                      -13-
<PAGE>

     The following table analyzes activity in the Company's allowance for loan
losses during the fiscal years indicated.

<TABLE>
<CAPTION>
                                           At December 31,                    At September 30,
                                          -----------------       -----------------------------------------
                                          1999         1998        1998        1997        1996        1995
                                          -----       -----       -----       -----       -----       -----
                                                              (Dollars in Thousands)
<S>                                       <C>         <C>         <C>         <C>         <C>         <C>
Allowance, beginning of period ......     $ 215       $ 167       $ 139       $ 123       $ 114       $ 106
Provision:
      Residential 1-4 family ........        32          10          70           5          --          15
      Commercial real estate ........        53          25          --          --          --          --
      Consumer and Business .........        55          25          --          15          24          14
                                          -----       -----       -----       -----       -----       -----
        Total provision .............       140          60          70          20          24          29
Charge-offs:
      Residential 1-4 family ........        --          --         (43)         --          --          --
      Consumer ......................        (5)        (12)         --         (14)        (18)        (22)
                                          -----       -----       -----       -----       -----       -----
         Total charge-offs ..........        (5)        (12)        (43)        (14)        (18)        (22)
                                          -----       -----       -----       -----       -----       -----
Recoveries:
      Residential 1-4 family ........        --          --          --          --          --          --
      Consumer ......................         1          --           1          10           3           1
                                          -----       -----       -----       -----       -----       -----
         Total recoveries ...........         1          --           1          10           3           1
                                          -----       -----       -----       -----       -----       -----
Net (charge-offs) recoveries ........        (4)        (12)        (42)         (4)        (15)        (21)
                                          -----       -----       -----       -----       -----       -----
Allowance, end of period ............     $ 351       $ 215       $ 167       $ 139       $ 123       $ 114
                                          =====       =====       =====       =====       =====       =====
Allowance as a percent of total loans      0.30%       0.25%       0.21%       0.21%       0.21%       0.19%
</TABLE>



                                      -14-
<PAGE>

     The following table sets forth the breakdown of the allowance for loan
losses by loan category at the dates indicated. The allocation of the allowance
to each category is not necessarily indicative of future losses and does not
restrict the use of the allowance to absorb losses in any category.

<TABLE>
<CAPTION>
                                      At December 31,                                     At September 30,
                          --------------------------------------     ----------------------------------------
                                 1999                1998                  1998                 1997
                          -----------------     ----------------     ----------------     ---------------
                                    Percent              Percent              Percent             Percent
                                    Of Loans             Of Loans             of Loans            Of Loans
                                    to Total             To Total             to Total            To Total
                          Amount     Loans      Amount    Loans      Amount    Loans      Amount    Loans
                          ------     -----      ------    -----      ------    -----      ------    -----
                                                                    (Dollars in Thousands)
<S>                         <C>       <C>        <C>       <C>        <C>       <C>        <C>       <C>
Allowance allocated to:
Residential 1-4 family      $163      89.45%     $131      93.97%     $121      96.56%     $117      95.58%
Commercial real estate        96       8.32%       43       3.97%       18       2.31%       --       3.15%
Commercial business ...       60       1.57%       15       1.21%       --         --        --         --
Consumer and other ....       32       0.66%       26       0.85%       28       1.13%       22       1.27%
                            ----     ------      ----     ------      ----     ------      ----     ------
Total allowance .......     $351     100.00%     $215     100.00%     $167     100.00%     $139     100.00%
                            ====     ======      ====     ======      ====     ======      ====     ======
</TABLE>


Environmental Issues

     The Company encounters certain environmental risks in its lending
activities. Under federal and state environmental laws, lenders may become
liable for costs of cleaning up hazardous materials found on property securing
their loans. In addition, the presence of hazardous materials may have a
substantial adverse effect on the value of such property as collateral and may
cause economic difficulties for the borrower, causing the loan to go into
default. Although environmental risks are usually associated with loans secured
by commercial real estate, risks also may exist for loans secured by residential
real estate if, for example, there is nearby commercial contamination or if the
residence was constructed on property formerly used for commercial purposes.
Environmental risk questionnaires are required for all commercial mortgages.
Upon, review of the questionnaire further environmental assessment may be
required. The Company attempts to control its risk by requiring a phase one
environmental assessment for all loans over $500,000 by a Company-approved
engineer as part of its underwriting review for all mortgage loans other than
those secured by one-to-three family residences.

     The Company believes its procedures regarding the assessment of
environmental risk are adequate and, as of December 31, 1999, the Company was
unaware of any environmental issues with respect to any of its mortgage loans
which are believed to expose the Company or any collateral for any of its loans
to any material liability at this time. However, no assurance can be given that
the values of properties securing loans in the Company's portfolio will not be
adversely affected by unforeseen environmental risks.

Investment Activities

     General. The investment policy of the Company and the Bank, approved by the
Boards of Directors, is based upon asset/liability management goals and is
designed primarily to provide satisfactory yields while maintaining adequate
liquidity, a balance of high quality, diversified


                                      -15-
<PAGE>

investments, and minimal risk. The investment policy is implemented by the
Senior Vice President & Chief Financial Officer.

     As required by SFAS 115, securities are classified into three categories:
trading, held-to-maturity and available-for-sale. Securities that are bought and
held principally for the purpose of selling them in the near term are classified
as trading securities and are reported at fair value with unrealized gains and
losses included in trading account activities in the statement of earnings.
Securities that the Company has the positive intent and ability to hold to
maturity are classified as held-to-maturity and reported at amortized cost. All
other securities are classified as available-for-sale. Available-for-sale
securities are reported at fair value with unrealized gains and losses included,
on an after-tax basis, as a separate component of retained earnings. The Company
has not had a trading securities portfolio since 1994 and has no current plans
to maintain such a portfolio. At December 31, 1999, $46.9 million of investment
securities were classified as available-for-sale and none were classified as
held to maturity. At December 31, 1999, $1.5 million of mortgage-backed
securities were classified as held to maturity with a fair value of $1.5
million, and $2.0 million were classified as available for sale.

     Investment Securities. The Company's investment securities portfolio
totaled $46.9 million at December 31, 1999. It is the policy of the Company to
invest in debt securities issued by the United States Government, its agencies,
municipalities and corporations. In order to benefit from higher yields, the
Company invests in callable government agency debt securities, which totaled
$37.7 million, or 80.5% of investment securities, at December 31, 1999. The
Company also invests in the Institutional Investors Capital Appreciation Fund,
Inc. ("IICAF"), a mutual fund which invests principally in common stocks of
companies listed on the New York Stock Exchange that have paid regular dividends
for at least ten consecutive fiscal years. At December 31, 1999, the Company's
investment in IICAF shares totaled $2.8 million.

     At December 31, 1999, the Bank had an investment of $2.1 million in stock
of the FHLBNY, which investment was necessary for the Bank to maintain its
membership in the FHLBNY and to utilize FHLBNY borrowing facilities. If the Bank
increases its FHLBNY borrowings, the Bank may have to increase its investment in
FHLBNY stock because the Bank must own FHLBNY stock at least equal to 5% of its
borrowings. The Bank's yield on FHLBNY stock was 6.81% for the fiscal year ended
December 31, 1999.

     Mortgage-Backed Securities. The Company invests in mortgage-backed
securities to supplement the yields on its loan portfolio. At December 31, 1999,
the Company's mortgage-backed securities portfolio totaled $3.5 million, of
which $1.5 million was classified as held to maturity and $2.0 million was
classified as available for sale. The Company's most recent purchases of
mortgage-backed securities have been classified as available for sale and the
Company expects that it will continue to so classify future purchases to
maintain flexibility. At December 31, 1999, all of the Company's mortgage-backed
securities were issued or guaranteed by FNMA, FHLMC or GNMA. The Company's
mortgage-backed securities portfolio had a weighted average yield of 6.45% at
December 31, 1999.

     Mortgage-backed securities generally have higher yields than investment
securities because of the longer terms and the uncertainties associated with the
timing of mortgage repayments. In addition, mortgage-backed securities are more
liquid than individual mortgage loans and may be used to collateralize
borrowings of the Company. However, these securities generally yield less than
the loans that underlie them because of the cost of payment guarantees or credit
enhancements that reduce credit risk. Mortgage-backed securities of the type
held by the Bank are generally weighted


                                      -16-
<PAGE>

at 20%, rather than the 50% weighting for performing residential one-to-four
family mortgage loans, in determining the Bank's regulatory risk-based capital
ratios.

     While investment and mortgage-backed securities carry a reduced credit risk
as compared to loans, such securities remain subject to the risk that a
fluctuating interest rate environment, along with other factors such as the
geographic distribution of the underlying mortgage loans, may alter the
prepayment rate of such mortgage loans and so affect both the prepayment speed,
and value, of such securities.


                                      -17-
<PAGE>

     The following table sets forth certain information regarding the amortized
cost and fair value of the Company's available for sale and held to maturity
securities portfolios at the dates indicated.

<TABLE>
<CAPTION>
                                                      At December 31,                                 At September 30,
                                        --------------------------------------------    --------------------------------------------
                                                1999                   1998                     1998                    1997
                                        --------------------    --------------------    ---------------------   --------------------
                                        Amortized     Fair      Amortized     Fair      Amortized      Fair     Amortized     Fair
                                          Cost        Value       Cost        Value       Cost         Value       Cost       Value
                                        ---------    -------    ---------    -------    ---------     -------   ---------    -------
                                                                              (In Thousands)
<S>                                      <C>         <C>         <C>         <C>         <C>         <C>         <C>         <C>
Securities Available for Sale:
    U.S. Treasury securities .......     $    --     $    --     $ 1,001     $ 1,003     $ 1,001     $ 1,006     $ 3,497     $ 3,505
    U.S. Government agencies .......      40,743      37,709      20,769      20,758      18,274      18,462       7,123       7,163
    Corporate debt obligations .....       4,051       4,051       6,827       6,918       8,338       8,468      11,879      11,942
    Mortgage-backed securities .....       2,084       2,004       4,401       4,397       5,797       5,804       6,994       6,990
    Other securities ...............          --          --          --          --          --          --         400         400
                                         -------     -------     -------     -------     -------     -------     -------     -------
         Total .....................      46,878      43,764      32,998      33,076      33,410      33,740      29,893      30,000
                                         -------     -------     -------     -------     -------     -------     -------     -------
    FHLBNY stock ...................       2,050       2,050         704         704         704         704         638         638
    Corporate equity securities ....       2,112       3,061       2,112       3,233       2,112       2,834       2,165       2,990
                                         -------     -------     -------     -------     -------     -------     -------     -------
         Total equity securities ...       4,162       5,111       2,816       3,937       2,816       3,538       2,803       3,628
                                         -------     -------     -------     -------     -------     -------     -------     -------
         Total available for .......      51,040      48,875      35,814      37,013      36,226      37,278      32,696      33,628
                                         -------     -------     -------     -------     -------     -------     -------     -------

Securities Held to Maturity:
    Mortgage-backed securities .....       1,471       1,455       2,427       2,452       3,881       3,965       5,653       5,766
                                         -------     -------     -------     -------     -------     -------     -------     -------
    Total held to maturity .........       1,471       1,455       2,427       2,452       3,881       3,965       5,653       5,766
                                         -------     -------     -------     -------     -------     -------     -------     -------

    Total Securities ...............     $52,511     $50,330     $38,241     $39,465     $40,107     $41,243     $38,349     $39,394
                                         =======     =======     =======     =======     =======     =======     =======     =======
</TABLE>


                                      -18-
<PAGE>


     The table below sets forth information regarding the carrying value,
weighted average yields and stated maturity of the Company's securities at
December 31, 1999. There were no securities (exclusive of obligations of the
U.S. Government and federal agencies) issued by any one entity with a total
carrying value in excess of 10% of the Company's equity at December 31, 1999.

<TABLE>
<CAPTION>
                                                             At December 31, 1999
                                -------------------------------------------------------------------------------------
                                  One Year or Less     One to Five Years    Five to Ten Years     More than Ten Years
                                -------------------   ------------------    ------------------    -------------------
                                Carrying    Average   Carrying   Average    Carrying   Average    Carrying    Average
                                  Value      Yield      Value     Yield       Value     Yield       Value      Yield
                                --------    -------   --------   -------    --------   -------    --------    -------
                                                            (Dollars in Thousands)
<S>                              <C>         <C>       <C>         <C>       <C>         <C>       <C>         <C>
U.S.  Government agency ....     $   955     6.38%     $ 1,000     6.03%     $ 5,004     6.95%     $33,784     6.95%
Corporate debt obligations .       3,553     7.20%         498     6.00%          --       --           --       --
Mortgage-backed securities .          --       --          801     5.95%         380     6.73%       2,374     6.57%
FHLBNY stock ...............          --       --           --       --           --       --        2,050     6.75%
Other equity securities ....          --       --           --       --           --       --        2,112     1.47%
                                 -------               -------               -------               -------
              Total ........     $ 4,508     7.03%     $ 2,299     6.00%     $ 5,384     6.93%     $40,320     6.63%
                                 =======               =======               =======               =======
<CAPTION>

                                         Total Securities
                                 ------------------------------
                                 Carrying   Average     Market
                                  Value      Yield       Value
                                 --------   -------     ------
<S>                              <C>         <C>       <C>
U.S.  Government agency ....     $40,743     6.91%     $37,709
Corporate debt obligations .       4,051     7.05%       4,051
Mortgage-backed securities .       3,555     6.45%       3,459
FHLBNY stock ...............       2,050     6.75%       2,050
Other equity securities ....       2,112     1.47%       3,061
                                 -------               -------
              Total ........     $52,511     6.66%     $50,330
                                 =======               =======
</TABLE>


Sources of Funds

     General. The Company's primary source of funds is deposits. In addition,
the Company derives funds for loans and investments from loan and security
repayments and prepayments, from net revenues from operations and, to a lesser
extent, from borrowings. Scheduled payments on loans and mortgage-backed and
investment securities are a relatively stable source of funds, while savings
inflows and outflows and prepayments of loans, mortgage-backed securities and
investment securities are less predictable and significantly influenced by
general interest rates and money market conditions. The Company uses borrowings
to compensate for reductions in other sources of funds.

     Deposits. The Company offers several types of deposit programs to its
customers, including passbook and statement savings accounts, NOW accounts,
money market deposit accounts, checking accounts and certificates of deposit.
Deposit account terms vary according to the minimum balance required, the time
periods the funds must remain on deposit and the interest rate, among other
factors. The Company's deposits are obtained predominantly from its local market
area. The Company relies primarily on customer service and long-standing
relationships with customers to attract and retain these savings deposits;
however, market interest rates and rates offered by competing financial
institutions significantly affect the Company's ability to attract and retain
savings deposits. The Company does not use brokers to obtain deposits. At
December 31, 1999, the Company had $106.3 million of deposits outstanding.

     The Company prices its deposit offerings based upon market and competitive
conditions in its market area. Beginning in fiscal 1996, the Company took steps
to decrease its cost of funds by moderating the rates it offered on certificates
of deposit. However, after the conversion of Goshen Savings Bank in July 1997,
the Company took a more aggressive posture towards deposit pricing in order to
increase deposits and leverage the additional capital obtained in the
conversion. This new pricing policy involved the creation of a tier pricing
structure for money market deposit accounts, with a premium rate offered for
higher balance accounts. In addition, the Company modified its approach to
certificate of deposit pricing to move its rates to slightly above the average
market rates, but not reaching the highest market rates, offered in the local
market. The Bank opened its third deposit-taking office in September 1998 in
Harriman, New York as part of the expansion of the


                                      -19-
<PAGE>

Company's business and to seek additional deposits for further leveraging of the
Company's capital. The Bank has recently announced that it intends to open a new
branch in Bloomingburg, just over the border between Orange and Sullivan
Counties in a leased facility located in an office building. Subject to the
regulatory review process and the satisfactory progress of the construction of
the facility, the Bank expects to open the new branch in the summer.



                                      -20-
<PAGE>

  The following table sets forth the distribution of the Company's deposit
  accounts at the dates indicated. Interest rates shown for non-time accounts
  are the rates in effect at December 31, 1999.

<TABLE>
<CAPTION>
                                                                  At December 31,
                                                 ---------------------------------------------
                                                       1999                     1998
                                                ---------------------    ---------------------
                                                            Percent of               Percent of
                                                 Amount       Total       Amount       Total
                                                --------     --------    --------     --------
                                                            (Dollars in Thousands)
Non-time accounts:
      Savings accounts (3.00%) ............     $ 30,923        29.10%   $ 28,634        30.52%
      NOW accounts (2.25%) ................        7,058         6.64%      5,871         6.26%
      Checking accounts ...................        6,750         6.35%      5,341         5.69%
      Money market accounts (3.00% - 4.90%)       15,848        14.92%     12,275        13.08%
                                                --------     --------    --------     --------
            Total non-time accounts .......       60,579        57.01%     52,121        55.55%
                                                --------     --------    --------     --------
Time accounts:
      3.00-3.99% ..........................           46         0.04%        165         0.18%
      4.00-4.99% ..........................       33,177        31.23%     21,254        22.65%
      5.00-5.99% ..........................       12,244        11.52%     19,760        21.06%
      6.00-6.99% ..........................           19         0.02%        268         0.28%
      7.00-7.99% ..........................          191         0.18%        265         0.28%
                                                --------     --------    --------     --------
            Total time accounts ...........       45,677        42.99%     41,712        44.45%
                                                --------     --------    --------     --------
                   Total deposits .........     $106,256       100.00%   $ 93,833       100.00%
                                                ========     ========    ========     ========

<CAPTION>

                                                                            At September 30,
                                                -----------------------------------------------------------------------
                                                         1998                    1997                     1996
                                                ---------------------    ---------------------    ---------------------
                                                            Percent of               Percent of               Percent of
                                                 Amount       Total      Amount        Total       Amount        Total
                                                --------     --------    --------     --------    --------     --------
<S>                                             <C>             <C>      <C>             <C>      <C>             <C>
Non-time accounts:
      Savings accounts (3.00%) ............     $ 28,089        31.81%   $ 26,839        31.65%   $ 26,805        32.12%
      NOW accounts (2.25%) ................        4,932         5.58%      4,136         4.87%      3,636         4.36%
      Checking accounts ...................        4,981         5.64%      4,869         4.70%      4,206         5.04%
      Money market accounts (3.00% - 4.90%)       10,958        12.41%      8,892        12.82%     10,457        12.53%
                                                --------     --------    --------     --------    --------     --------
            Total non-time accounts .......       48,960        55.44%     44,736        54.04%     45,104        54.05%
                                                --------     --------    --------     --------    --------     --------
Time accounts:
      3.00-3.99% ..........................          122         0.14%        208         0.42%        501         0.60%
      4.00-4.99% ..........................       19,703        22.31%      8,394        29.75%     25,479        30.53%
      5.00-5.99% ..........................       18,998        21.51%     28,861        14.27%      9,736        11.67%
      6.00-6.99% ..........................          264         0.30%        509         1.12%      2,291         2.75%
      7.00-7.99% ..........................          263         0.30%        275         0.40%        331         0.40%
                                                --------     --------    --------     --------    --------     --------
            Total time accounts ...........       39,350        44.56%     38,247        45.96%     38,338        45.95%
                                                --------     --------    --------     --------    --------     --------
                   Total deposits .........     $ 88,310       100.00%   $ 82,983       100.00%   $ 83,442       100.00%
                                                ========     ========    ========     ========    ========     ========
</TABLE>


     The following table sets forth the deposit flows at the Company during the
periods indicated.

<TABLE>
<CAPTION>
                                            Year Ended    3 Months Ended              Year Ended
                                           December 31,    December 31,              September 30,
                                              1999             1998             1998             1997
                                             -------          -------          -------          -------
                                                                   (In Thousands)
<S>                                          <C>              <C>              <C>              <C>
Net deposits (withdrawals) ........          $ 8,798          $ 4,662          $ 2,128          $(3,587)
Interest credited .................            3,625              861            3,199            3,128
                                             -------          -------          -------          -------
Net increase (decrease) in deposits          $12,423          $ 5,523          $ 5,327          $  (459)
                                             =======          =======          =======          =======
</TABLE>


                                      -21-
<PAGE>

     At December 31, 1999, the Company had $3.1 million in certificates of
deposit with balances of $100,000 or more ("jumbo deposits"), representing 2.9%
of all deposits, as follows:

            Original                           Interest
              Term                             Rate (1)         Balance
              ----                             --------         -------
                                                             (In Thousands)

         1-3 months .................            3.60%           $  201
         4-6 months .................            4.70%            1,148
         6-12 months ................            4.95%              635
         Over twelve months .........            5.10%              371
                                                                 ------
                                                                 $3,129
                                                                 ======

(1)  Interest rate offered as of December 31, 1999.

     Borrowings. The Company had borrowings of $38.6 million outstanding as of
December 31, 1999. During fiscal year ended December 31, 1999, the Company
increased borrowings by $28.6 million, of which, $20.0 million were used to
purchase investment securities and $8.6 million were used to fund loan growth
that exceeded deposit growth. These borrowings were done to increase funds
available for investment and improve the leveraging of our capital. Most of the
borrowings either have short terms of can be called at the option for the
lender. The maximum borrowings outstanding at any time during fiscal 1999 were
$39.8 million. To a limited extent, the Company has in the past relied upon
borrowed funds or repurchase agreements to supplement its available funds.

 Subsidiary Activities

     As a federal savings bank, the Bank may invest up to 2% of its assets in
subsidiaries, with an additional investment of 1% of assets if the investment
serves primarily community, inner city and community development. The Bank may
also invest an unlimited amount in operating subsidiaries engaged solely in
activities which a federal savings bank may engage in directly. The Company is
permitted, as a unitary savings and loan holding company, to invest in
subsidiaries without limits as to the activities in which the subsidiary engages
and without limit as to the amount invested. The sole active subsidiary of the
Company is the Bank. The Bank has no subsidiaries.

Personnel

     At December 31, 1999, the Bank had 31 full-time and 8 part-time employees.
The Company did not have any employees who were not also employees of the Bank.
The employees are not represented by a collective bargaining unit, and the
Company considers its relationship with its employees to be good.

Regulation

     The following is a summary of the principal statutes and regulations which
affect the Company and the Bank. The Bank, as a federally chartered, FDIC
insured, savings bank, derives its powers principally from federal law and is
subject to comprehensive regulation of virtually every aspect of its business
operations. The following summary is not complete discussion of all regulation
affecting the Company or the Bank.

     General Bank Regulation. The Bank's primary federal bank regulator is the
Office of Thrift Supervision ("OTS"). The Bank is also subject to regulation by
the FDIC as the insurer of its deposits. The Bank must file periodic reports
with the OTS. The OTS regularly examines the Bank. As a result of these
examinations, the regulators may require that the Bank adjust its loan
classifications or allowance for loan losses, take other actions to correct
deficiencies found during the examinations, or cease engaging in certain
activities. The Bank is permitted to open deposit-taking branches throughout the
United States, regardless of local laws regarding branching.



                                      -22-
<PAGE>

     The OTS may institute enforcement action against the Bank for violations of
law or for unsafe and unsound banking practices. Enforcement actions can include
the issuance of cease and desist orders, the commencement of removal proceedings
in which an employee, officer or director can be removed from involvement with
the Bank, the assessment of civil monetary penalties, and injunctive relief. The
FDIC may terminate the insurance of deposits, after notice and hearing, upon a
finding that an institution has engaged in unsafe and unsound practices, cannot
continue operations because it is in an unsafe and unsound condition, or has
violated any applicable law, regulation, rule, order or condition imposed by the
OTS or FDIC. The FDIC may instead impose less severe sanctions. Neither the OTS
nor the FDIC has ever instituted any enforcement action against the Bank.

     Federal law and OTS regulations limit the percentage of the Bank's assets
that can be invested in certain investments. For example, commercial, corporate
and business loans, other than those secured by real estate collateral, are
limited in the aggregate to 10% of assets. The purchase of below investment
grade debt securities is prohibited. Loans secured by non-residential real
property cannot, in the aggregate, exceed 400% of capital. Consumer loans not
secured by residential real estate are generally limited, in the aggregate, to
35% of total assets. Loans secured by residential real property, and many other
types of loans and investments, are not subject to any percentage of asset
limits. Generally, the Bank may not lend more than 15% of unimpaired capital and
surplus to one borrower, which equates to a lending limit of $3.7 million, with
an additional 10% of unimpaired capital and surplus being permitted if secured
by certain readily marketable collateral. The Bank is in compliance with all
these limits. The Bank's largest loan to one borrower at December 31, 1999 was
represented by three related loans in the aggregate amount of $1.8 million
secured by commercial and residential real estate in the Bank's market area.

     The OTS also imposes a semi-annual assessment on all OTS regulated
institutions to defer the cost of OTS regulation. The Bank's most recent
semi-annual OTS assessment was $19,636.

     The Company is a unitary savings and loan holding company, and its sole
FDIC-insured subsidiary, the Bank, is a qualified thrift lender ("QTL",
discussed in more detail below). Therefore, the Company generally has broad
authority to engage in all types of business activities in which businesses can
engage. If the Company were to acquire another insured institution as a separate
subsidiary or if the Bank fails to remain a QTL, the Company's activities will
be limited to those permitted of multiple savings and loan holding companies. In
general, a multiple savings and loan holding company (or subsidiary thereof that
is not an insured institution) may, subject to OTS approval in most cases,
engage in activities comparable to those permitted for bank holding companies,
certain insurance activities, and certain activities related to the operations
of its FDIC-insured subsidiaries.

     Capital Requirements. The Bank is subject to minimum capital requirements
imposed by the OTS. The Bank must maintain (i) tangible capital of at least 1.5%
of tangible assets, (ii) core capital of at least 3.0% of adjusted tangible
assets, and (iii) total capital requirement of at least 8.0% of risk-weighted
assets. Under current law and regulations, there are no capital requirements
directly applicable to the Company. The Bank substantially exceeds all minimum
capital standards imposed by the OTS. At December 31, l999, the Bank had a
tangible capital ratio of 14.1%, a core capital ratio of 14.1% and a risk based
capital ratio of 28.8%.

     The OTS has the authority to require that an institution take prompt
corrective action to solve problems if the institution is undercapitalized,
significantly undercapitalized or critically undercapitalized. Because of the
Bank's high capital ratios, the Bank does not anticipate that the prompt
corrective action regulations will have a material effect on it.

     Deposit Insurance Premiums. The FDIC's deposit insurance premiums are
assessed through a risk-based system under which all insured depository
institutions are placed into one of nine categories and assessed insurance
premiums based upon their level of capital and supervisory evaluation. Under the
system, institutions classified as well capitalized and considered healthy pay
the lowest premium. The Bank is in this category and currently pays negligible
deposit insurance premiums. However, the Bank pays an annual assessment of
approximately 0.013% of insured deposits to defray a portion of the cost of the
bonds sold by a federal agency to finance a portion of the savings and loan
bailout in the late 1980's. If the Bank's capital ratios substantially
deteriorate or if the Bank is found to be otherwise unhealthy, the deposit
insurance premiums payable by the Bank could increase.



                                      -23-
<PAGE>

     Dividend Restrictions. The Bank must notify the OTS at least 30 days in
advance of declaring a dividend to the Company. If the amount of the dividend
would exceed net income in the current year plus net income for the two
preceding calendar years, or if after the dividend the Bank would not be
adequately capitalized, OTS approval is required before the dividend may be
paid. OTS approval is also required if the OTS has not rated the Bank in the two
highest categories in the three principal examination rating systems or has
notified the Bank that it is a problem institution; or if the payment of the
dividend would violate any other statute, regulation, agreement with the OTS or
any condition imposed by the OTS.

     The Bank's capital level, examination ratings and other related
circumstances are such that advance approval from the OTS would not currently be
required to pay a dividend to the Company unless the dividend exceeded the net
income measure discussed above.

     Qualified Thrift Lenders. If the Bank fails to remain a QTL, as defined
below, it must either convert to a national bank charter or be subject to
restrictions on its activities specified by law and the OTS regulations, which
restrictions would generally limit activities to those permitted for national
banks. Also, three years after the savings institution ceases to be a QTL, it
would be prohibited from retaining any investment or engaging in any activity
not permissible for a national bank and would be required to repay any
outstanding borrowings from any Federal Home Loan Bank.

     A savings institution will be a QTL if its qualified thrift investments
equal or exceed 65% of its portfolio assets on a monthly average basis in nine
of every 12 months. Qualified thrift investments include, among others, (i)
certain housing-related loans and investments (notably including residential one
to four family mortgage loans), (ii) certain federal government and agency
obligations, (iii) loans to purchase or construct churches, schools, nursing
homes and hospitals (subject to certain limitations), (iv) consumer loans
(subject to certain limitations), (v) shares of stock issued by any Federal Home
Loan Bank, and (vi) shares of stock issued by the FHLMC or the FNMA (subject to
certain limitations). The Bank satisfied the QTL test at December 31, 1999 and
for every month during 1998 and 1999.

     Community Reinvestment Act. Under the Community Reinvestment Act (the
"CRA"), as implemented by OTS regulations, the Bank 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 Bank is periodically examined by the OTS for compliance with
the CRA. The Bank's CRA performance is evaluated based upon the lending,
investment and service activities of the Bank. The Bank received a
"satisfactory" CRA rating in its last CRA examination.

     Federal Reserve Regulation. Under Federal Reserve Board regulations, the
Bank must maintain reserves against its transaction accounts (primarily
interest-bearing checking accounts) and non-personal time deposits. The effect
of the reserve requirements is to compel the Bank to maintain certain
low-yielding reserve deposits, which are not available for investment in higher
yielding assets. However, at the present time, the Bank's normal levels of vault
cash and other cash-equivalent assets are sufficient so that the reserve
requirements do not have a material adverse effect on the Bank. The balances
maintained to meet the reserve requirements may be used to satisfy liquidity
requirements imposed by the OTS. The Bank is in compliance with its reserve
requirements.

     Taxation. The Company pays federal and New York State income taxes on its
income. The Bank, as a savings institution, was permitted a deduction under
former law for the creation of a reserve for bad debts. In August 1996, the
Internal Revenue Code (the "Code") was amended to abolish the percentage method
of calculating the tax bad debt deduction, which, in general, had permitted
savings institutions to deduct 8% of their taxable income as a reserve for bad
debts. The Bank had not been eligible to use the percentage method because its
retained earnings and surplus exceeded 12% of deposits, so the abolition should
not have a material effect on current operations. Furthermore, the change in the
Code also requires savings institutions to recapture, over a period of six to
eight years, any additions to their tax bad debt reserves since 1988. The Bank
had already provided, as a provision for deferred taxes in accordance with SFAS
No. 109, for the tax consequences of the Bank's post-1987 additions to the tax
bad debt reserve. Therefore, the recapture requirement should not have a
material financial statement impact.


                                      -24-
<PAGE>

Item 2

Properties

     The Bank conducts its business through its headquarters in Goshen, a nearby
public accommodation drive-up facility, a branch opened in March 1997 at an
elder care facility in Goshen and a branch opened in September, 1998, at a
former office of a commercial bank in Harriman. The elder care facility is
operated by a non-profit corporation of which Director Clifford Kelsey is a
director. The Company does not have separate facilities and operates out of the
Bank's headquarters. The following table sets forth certain information
regarding the Bank's deposit-taking offices.

<TABLE>
<CAPTION>
                                                               Owned/          Approximate       Net Book
Location                              Date acquired            Leased          Square Feet         Value
                                                                                              (In Thousands)
<S>                                  <C>                       <C>                <C>              <C>
One South Church Street, Goshen,           1971                Owned              10,680           2,214
NY 10924 with adjacent drive-up
facility at 50 South Church Street

214 Harriman Drive                      March 1997             Leased                105              28
Goshen, NY 10924


80 Route 17M                          September 1998           Owned               1,623             526
Harriman, NY 10926
</TABLE>


Item 3

Legal Proceedings

     In the ordinary course of its operations, the Bank is a party to routine
litigation involving claims incidental to the savings bank business. Management
believes that no litigation, threatened or pending, to which the Company or the
Bank or their assets is or may become a party, poses a substantial likelihood of
potential loss or exposure which would have a material adverse effect on the
financial condition or results of operations of the Company or the Bank.


Item 4

Submission of Matters to a Vote of Security Holders

     None


                                      -25-
<PAGE>

                                     PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

     The following information included in the Annual Report to Shareholders for
the fiscal year ended December 31, 1999, (the "Annual Report"), is incorporated
herein by reference: "STOCKHOLDERS' INFORMATION- Common Stock", which appears on
page 51 of the Annual Report.

ITEM 6.  SELECTED FINANCIAL DATA

     The following information included in the Annual Report is incorporated
herein by reference: "SELECTED CONSOLIDATED FINANCIAL INFORMATION" which appears
on pages 1 and 2 of the Annual Report.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

     The following information included in the Annual Report is incorporated
herein by reference: "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS", which appears on pages 3 through 18 of the
Annual Report.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

     The following information included in the Annual Report is incorporated
herein by reference: "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS - Gap Analysis" AND "- Analysis of Market
Risk", which appear on pages 8 through 11 of the Annual Report.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The following information included in the Annual Report is incorporated
herein by reference: The consolidated statements of financial condition of GSB
Financial Corporation and Subsidiary as of December 31, 1999 and 1998 and
September 30, 1998, and the related consolidated statements of operations,
shareholders' equity and cash flows for each of the year ended December 31, 1999
and the three months ended December 31, 1998 and the years in the two-year
period September 30, 1998, together with the related notes and the independent
auditors' report thereon, all of which appears on pages 20 through 50 of the
Annual Report.

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

     None.

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The following information included in the Proxy Statement under the major
heading "INFORMATION CONCERNING THE BOARD OF DIRECTORS AND EXECUTIVE OFFICERS"
is incorporated herein by reference: "Director Nominated for a Term Expiring In
2003," "Directors Whose Terms Will Continue Beyond the Meeting," "Board of
Directors- Biographical Information," and "Executive Officers Who Are Not
Directors," which appears on pages 8 through 10 of the definitive Proxy
Statement dated March 16, 2000 and filed with the Securities and Exchange
Commission on or about that date (the "Proxy Statement").

ITEM 11. EXECUTIVE COMPENSATION

     The information included which appears under the captions "Director
Compensation," "Executive Compensation," "Compensation Committee Report on
Executive Compensation," "Option Grants During the Year," "Stockholder Return
Performance Presentation," "Transactions with Directors and Officers,"
"Employment and Retention Agreements" and "Pension Plan" of the Proxy Statement
is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The information included under the Caption "Stock Ownership By Directors,
Executive Officers and Certain Other Holders", in the Proxy Statement is
incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The information included under the caption "Transactions with Directors and
Officers" in the Proxy Statement is incorporated herein by reference.




                                      -26-
<PAGE>

                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

     a) 1. Financial Statements

     The following financial statements are included in the Company's Annual
Report to Shareholders for the year ended December 31, 1999 and are incorporated
herein by this reference:

Consolidated Statements of Condition at December 31, 1999 and 1998 and September
30, 1998

Consolidated Statements of Operations for the years ended December 31, 1999 and
September 30, 1998, 1997 and for the three months ended December 31, 1998

Consolidated Statements of Equity for the years ended December 31, 1999 and
September 30, 1998, 1997

Consolidated Statements of Cash Flows for the years ended December 31, 1999 and
September 30, 1998, 1997 and for the three months ended December 31, 1998

Notes to Consolidated Financial Statements

Report of Independent Accountants

The remaining information appearing in the Annual Report to Stockholders is not
deemed to be filed as a part of this report, except as expressly provided
herein.

2. Financial Statement Schedules

Financial Statement Schedules have been omitted because they are not applicable
or the required information is shown in the Consolidated Financial Statements or
Notes thereto.

(b) Reports on Form 8-K filed during the last quarter of fiscal 1999

None

(c) Exhibits Required by Securities and Exchange Commission Regulation S-K

                                TABLE OF EXHIBITS

Exhibit
Number

3.1       Certificate of Incorporation of GSB Financial Corporation *

3.2       By laws of GSB Financial Corporation.*

4.1       Form of Stock Certificate of GSB Financial Corporation.*

10.1      Employment Contract by and between Goshen Savings Bank and Stephen W.
          Dederick dated as of July 1, 1999.****

10.2      Supplemental Employment Contract by and between GSB Financial
          Corporation and Stephen W. Dederick dated as July 1, 1999.****

10.3      Schedule of Additional Employment Contracts.****



                                      -27-
<PAGE>

10.4      Schedule of Additional Supplementary Retention Agreements.***

10.13     GSB Financial Corporation Employee Stock Ownership Plan.**

10.14     GSB Financial Corporation Employee Stock Ownership Plan Loan and
          Security Agreement.**

13.1      1999 Annual Report to security holders

21.1      Subsidiaries of the Registrant

27        Financial Data Schedule

* Previously filed as an exhibit to the Registration Statement on Form S-1 No.
333-23573 of GSB Financial Corporation, filed with the Securities and Exchange
Commission on March 19, 1997

** Previously filed as an exhibit to the Report on Form 10K for the year ended
September 30, 1997 as filed with the Securities and Exchange Commission on
December 29, 1998.

*** Revised from exhibit as filed with 1997 Form 10K to reflect retirement of
one of the named persons.

**** Previously filed as an exhibit to the 10Q for the quarter ended September
30, 1999 as filed with the Securities and Exchange Commission on November 15,
1999.


                                      -28-
<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, in Goshen, New York on
March 30, 2000.

                                             GSB FINANCIAL CORPORATION


                                             By:  /s/Stephen W. Dederick
                                                  ------------------------
                                             Stephen W. Dederick,
                                             Chief Financial Officer & Treasurer
                                             (duly authorized officer)

                                             By: /s/Rolland B. Peacock III
                                                 -------------------------
                                             Rolland B. Peacock III
                                             Vice President

                                             By: /s/Barbara A. Carr
                                                 -------------------------
                                             Barbara A. Carr
                                             Secretary


     Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

Name and Signature              Title                             Date
------------------              -----                             ----

/s/Stephen W. Dederick          Principal Financial and           March 30, 2000
--------------------------      Accounting Officer
Stephen W. Dederick

 /s/Herbert C. Mueller          Director                          March 30, 2000
--------------------------
Herbert C. Mueller

 /s/Stephen O. Hopkins          Director                          March 30, 2000
--------------------------
Stephen O. Hopkins

 /s/Thomas V. Guarino           Chairman and Director             March 30, 2000
--------------------------
Thomas V. Guarino

 /s/Gene J. Gengel              Director                          March 30, 2000
--------------------------
Gene J. Gengel

 /s/Roy Lippincott              Director                          March 30, 2000
--------------------------
Roy L. Lippincott

/s/Clifford E. Kelsey, Jr.      Director                          March 30, 2000
--------------------------
Clifford E. Kelsey, Jr.


                                      -29-
<PAGE>


                                TABLE OF EXHIBITS

Exhibit
Number

3.1       Certificate of Incorporation of GSB Financial Corporation *

3.2       By laws of GSB Financial Corporation.*

4.1       Form of Stock Certificate of GSB Financial Corporation.*

10.1      Employment Contract by and between Goshen Savings Bank and Stephen W.
          Dederick dated as of July 1, 1999.****

10.2      Supplemental Employment Contract by and between GSB Financial
          Corporation and Stephen W. Dederick dated as July 1, 1999.****

10.3      Schedule of Additional Employment Contracts.****

10.4      Schedule of Additional Supplementary Retention Agreements.***

10.13     GSB Financial Corporation Employee Stock Ownership Plan.**

10.14     GSB Financial Corporation Employee Stock Ownership Plan Loan and
          Security Agreement.**

13.1      1999 Annual Report to security holders

21.1      Subsidiaries of the Registrant

27        Financial Data Schedule

* Previously filed as an exhibit to the Registration Statement on Form S-1 No.
333-23573 of GSB Financial Corporation, filed with the Securities and Exchange
Commission on March 19, 1997

** Previously filed as an exhibit to the Report on Form 10K for the year ended
September 30, 1997 as filed with the Securities and Exchange Commission on
December 29, 1998.

*** Revised from exhibit as filed with 1997 Form 10K to reflect retirement of
one of the named persons.

**** Previously filed as an exhibit to the 10Q for the quarter ended September
30, 1999 as filed with the Securities and Exchange Commission on November 15,
1999.


                                      -30-