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

Commission File Number: 0-22269

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

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

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

As of March 8, 2001, there were 1,938,646 shares of the Registrant’s common stock, par value $.01 per share, issued and outstanding. The aggregate market value of such stock, excluding the shares held by all directors and officers of the Registrant, was $20.5 million at March 8, 2001 based on the per common share price at closing of $14.63 on that date. The information presented in this Form 10-K at December 31, 2000 and 1999, and for the twelve months ended December 31, 2000, 1999, and 1998 represent the financial condition and results of operations of GS Financial Corp. and its wholly-owned subsidiary, Guaranty Savings & Homestead Association.

DOCUMENTS INCORPORATED BY REFERENCE

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

(1)	Portions of the Annual Report to Shareholders for the fiscal year ended December 31, 2000 are incorporated into Part II, Items 5 through 8, and Part IV, Item 14.
(2)	Portions of the definitive proxy statement for the 2001 Annual Meeting of Shareholders to be filed within 120 days of the Registrant’s fiscal year end are incorporated into Part III, Items 10 through 13.

Item 1. BUSINESS

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

General

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

The Company's principal business is conducted through the Association. Guaranty Savings and Homestead Association was founded in New Orleans, Louisiana in 1937 as a mutual savings and loan association. The Association’s unconsolidated assets at December 31, 2000 totaled $151.2 million and comprise 98.5% of the total consolidated assets of the Company. The Association provides financial services primarily to individuals, mainly through the origination of mortgage loans on 1-4 family residences. The Association accepts deposits in the form of passbook savings, certificates of deposit, demand deposit accounts and individual retirement accounts. The Association also invests in short and long term liquid investments such as US Treasury and Agency securities, mortgage backed securities, overnight Federal Funds, money market investments and qualified thrift grade mutual funds. The balance of the consolidated assets includes $2.0 million in similar short and long term liquid investments, and $.3 million in fixed assets held exclusively at the Company level.

Regulation

The Company’s primary regulator is the Office of Thrift Supervision ("OTS"). The OTS regulates all thrifts and thrift holding companies whose deposits are insured by the Savings Association Insurance Fund ("SAIF") which is administered by the Federal Deposit Insurance Corporation ("FDIC"). The Company, by virtue of its state charter is also subject to the rules and regulations of the Louisiana Office of Financial Institutions ("OFI"). These two agencies currently examine the Company approximately every 18 months on an individual basis, relying on the examination report of the other agency on cycles, alternating when it is not their year to examine the Association. The nature of such examinations includes safety and soundness issues or compliance with applicable laws and regulations. The Association was last examined by the OFI as of September 30, 2000 and the Company was last examined by the OTS as of June 30, 1999.

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

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

Lending Activities

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

				December 31,
				2000		1999		1998		1997		1996
Real Estate Loans:
	One to Four
		Family Residential	$	71,092	$	67,424	$	61,562	$	52,528	$	42,660
	FHA and VA			52		140		237		358		511
	Construction			619		646		740		99		298
	Commercial Real Estate			1,006		1,377		1,157		471		430
	Other			1,453		446		201		123		145
				---------		---------		---------		---------		---------
		Total Real Estate Loans		74,222		70,033		63,897		53,579		44,044
Consumer Loans:
	Second Mortgage			52		84		119		172		273
	Loans on Deposits			237		367		337		244		183
				---------		---------		---------		---------		---------
		Total Consumer Loans		289		451		456		416		456
Commercial Loans				381		-		-		-		-
				---------		---------		---------		---------		---------
		Total Loans		74,892		70,484		64,353		53,995		44,500
Allowance for
	Loan Losses			(420)		(424)		(463)		(410)		(382)
Net Deferred Loan
	Origination Costs			8		6		5		3		7
				---------		---------		---------		---------		---------
Net Loans			$	74,480	$	70,066	$	63,895	$	53,588	$	44,125
				=====		=====		=====		=====		=====

 

Contractual Term to Final Maturities. The following table sets forth certain information as of December 31, 2000 regarding the dollar amount of loans maturing in the Company’s portfolio, based on the contractual date of the loan’s final maturity, before giving effect to net items. Demand loans and loans having no stated maturity are reported as due in one year or less. The amounts shown below do not reflect normal principal amortization; rather, the balance of each loan outstanding at December 31, 2000 is shown in the appropriate year of the loan’s final maturity. The actual maturity of loans varies primarily on prepayments which to a large extent depends on market interest rates. In general if prevailing market rates fall below those of the portfolio, prepayments accelerate. Conversely if market interest rates increase above portfolio rates early pay-offs tend to decrease.

Fixed rate loans receivable as of December 31, 2000 are scheduled to mature and adjustable rate loans are scheduled to re-price as follows (in thousands):

					Under One Year		One to Five Years		Over Five to Ten Years		Over 10 Years		Total
					------		------		------		------		------
Loans Secured by 1-4 Family
	Residential:
		Fixed Rate		$	65	$	2,054	$	9,740	$	59,233	$	71,092
Other Loans Secured by
	Real Estate:
		Fixed Rate			32		111		331		2,708		3,182
Commercial Fixed Rate					99		-		-		282		381
All Other Loans					237		-		-		-		237
					------		------		------		------		------
				$	433	$	2,165	$	10,071	$	62,223	$	74,892
					=====		=====		=====		=====		=====

 

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

			December 31,
			2000		1999		1998		1997		1996
			-------		-------		-------		-------		-------
Loan Originations (in thousands):
	1-4 family residential	$	10,846	$	13,082	$	14,697	$	14,806	$	8,876
	Construction		1,514		1,004		1,610		726		823
	Commercial real estate		323		306		526		75		69
	Consumer		106		266		283		149		66
	Commercial		383		-		-		-		-
	Other Real Estate		568		263		732		165		235
			-------		-------		-------		-------		-------
Total Loan Originations			13,740		14,921		17,848		15,921		10,069
Loan principal
	repayments		(9,218)		(8,790)		(7,490)		(6,425)		(5,776)
Increase (decrease)
	due to other items		6		72		(51)		(33)		3
			-------		-------		-------		-------		-------
Net increase(decrease) in
	Loan portfolio	$	4,528	$	6,203	$	10,307	$	9,463	$	4,296
			======		======		======		======		======

Real Estate Lending Standards and Underwriting Policies. As of March 19, 1993, the Company was required to adopt and maintain written real estate lending policies that are consistent with safe and sound banking practices. The Company is in compliance with all such standards.

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

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

Loan applications are accepted at all three of the Company’s offices and forwarded to the Loan Committee which meets weekly. The Company requires a title insurance policy on all loans prior to closing.

The Company’s loan portfolio consists of conventional fixed rate mortgage loans on 1-4 family residential dwellings. The terms of these go up to 30 years. Currently, the minimum cash down payment is 20% of the lesser of purchase price or appraised value. The Company also makes loans on residential investment property, commercial real estate, condominiums and vacant ground. Terms and rates are commensurate with current market conditions and risk factors.

The Company originates and funds construction loans which subsequently convert to permanent, fixed rate mortgage loans. During the construction period, the company requires payment of interest only on the amount of principal drawn.

During 2000, the Company began offering commercial loans. These include loans secured by commercial real estate, inventory, equipment or receivables. These loans provide the Company an opportunity to offer additional services, attract new business and diversify its loan portfolio.

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

Asset Quality

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

All of the Company’s assets are reviewed on a quarterly basis. Factors taken into consideration include the asset’s payment history, the value of the underlying collateral as well as current economic conditions, particularly in the local real estate market. Assets displaying tendencies which might hinder full collection of principal are classified as substandard. Such tendencies include but are not limited to late payments on loans or deterioration of the underlying collateral. Assets classified as special mention are those not yet serious enough to merit the substandard classification but do require additional attention from Management.

The Company’s Watch List, comprising substandard and special mention assets is presented to the Board quarterly and ratified. The allowance for loan loss ("ALL") is calculated by assigning various percentages to assets on the watch list, particular types of mortgage loans and the mortgage portfolio taken as a whole. The ALL is maintained at an overall percentage of the mortgage portfolio deemed appropriate by management considering conditions in the local real estate market, current economic circumstances and recent foreclosure or charge-off activity.

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

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

Delinquent Loans and Non-Performing Assets. The following tables set forth the Company’s delinquent loans and non-performing assets as of the dates indicated. Balances are indicative of the total principal balances of such loans rather than the actual principal past due based on the number of payments past due. At December 31 of the five years presented, predominantly all of the Association’s delinquent loans and non performing assets were either 1-4 family residential dwellings or loans secured by 1-4 family residential loans.

		2000		1999		1998		1997		1996
		-----		-----		-----		-----		-----
30-89 Days	$	2,231	$	2,673	$	2,171	$	271	$	175
90+ Days		434		100		266		166		253
		-----		-----		-----		-----		-----
Total Delinquent Loans	$	2,665	$	2,773	$	2,437	$	437	$	428
		====		====		====		====		====

During 1998, the Company changed its data processing parameters to include accounts exactly 30 days past due in the delinquent 30-89 day category. This accounts for the material increase in the amount of loans delinquent 30-89 days in 1998 through 2000 compared to 1997 and 1996.

			2000		1999		1998		1997		1996
			-----		-----		-----		-----		-----
90+ Day Delinquent Loans		$	434	$	100	$	266	$	166	$	253
Foreclosed Real Estate			117		14		-		-		-
			-----		-----		-----		-----		-----
Total Non Performing Assets		$	551	$	114	$	266	$	166	$	253
			===		===		===		===		===
Non Performing Loans as
	a % of Total Loans		.58%		.14%		.42%		.31%		.57%
Non Performing Assets as
	a % of Total Assets		.28%		.06%		.17%		.13%		.29%

Classified Assets. The following table presents information pertaining to the Company’s Watch list of classified assets and associated specific valuation allowances as of the dates indicated. All substandard and special mention loans receivable and related specific valuation allowances were on 1-4 family residential mortgage loans.

			At December 31,
			2000		1999		1998		1997		1996
			------		------		------		------		------
Substandard		$	1,785	$	1,633	$	1,970	$	1,564	$	1781
Special Mention			127		148		241		298		346
			------		------		------		------		------
Gross			1,912		1,781		2,211		1,862		2,127
Less Allowance for
	Loan Loss *		-		(106)		(141)		(141)		(160)
			------		------		------		------		------
Net		$	1,912	$	1,675	$	2,070	$	1,721	$	1,967
			=====		=====		=====		=====		=====

* Up until the safety and soundness examination completed by the OTS in November, 1999, the Company maintained a specific and general valuation allowance for loan loss. At the suggestion of OTS regulators, the Company adopted a methodology of one single allowance for loan loss, eliminating the prior separate accounting of the specific and general valuation allowances for loan loss.

LOAN LOSS EXPERIENCE

Provisions for loan losses are charged to earnings to bring the total allowance for loan losses to a level considered appropriate by Management based on a quarterly review which is reflective of each individual loan’s performance and condition of the underlying collateral. Management targets a certain percentage of the entire portfolio given the current economic conditions at which the ALL is deemed adequate. The Company employs the reserve method of accounting for its ALL. The following table sets forth the Company’s loan loss experience for the years presented.

An analysis of the allowance for loan losses is as follow (dollars in thousands):

			Years Ended December 31,
			2000		1999		1998		1997		1996
			-----		-----		-----		-----		-----
Balance, Beginning
	of Year	$	424	$	463	$	410	$	382	$	323
Provision for Losses			7		6		53		28		59
Loans Charged Off			(11)		(45)		-		-		-
Recoveries			-		-		-		-		-
			-----		-----		-----		-----		-----
Balance, End of Year		$	420	$	424	$	463	$	410	$	382
			====		====		====		====		====
Allowance for Loan
	Losses as a % of
	Total Loans Receivable	.56%		.60%		.72%		.77%		.87%
Allowance for Loan
	Losses as a % of
	Non Performing Loans	96.69%		422.97%		174.01%		247.49%		151.17%

Mortgage-Backed Securities

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

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

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

On September 30, 1997 the Company reclassified all of its mortgage-backed securities as available-for-sale pursuant to SFAS 115. Management felt that this classification was more appropriate considering the magnitude of the Company’s investment in these instruments and the liquidity available should other investment opportunities arrive.

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

MORTGAGE-BACKED SECURITIES

December 31, 2000		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
		----------		----------		----------		----------
Available for Sale:
FNMA	$	1,481	$	-	$	5	$	1,476
FHLMC		1,096		-		2		1,094
GNMA		1,541		4		-		1,545
		-------		-------		-------		-------
	$	4,118	$	4	$	7	$	4,115
		=====		=====		=====		=====
December 31, 1999		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
		----------		----------		----------		----------
Available for Sale:
FNMA	$	5,255	$	1	$	81	$	5,175
FHLMC		1,328		3		34		1,297
GNMA		10,160		-		357		9,803
		-------		-------		-------		-------
	$	16,743	$	4	$	472	$	16,275
		=====		=====		=====		=====

 

The following table sets forth the maturities of the mortgage-backed security portfolio as of December 31, 2000 (in thousands):

MORTGAGE-BACKED SECURITIES

	December 31, 2000		Amortized Cost		Fair Value	Weighted Average Rate
			---------		---------
Mortgage-Backed Securities Maturing:
	In One Year or Less	$	230	$	230	5.69%
	After One Year Through Five Years		814		819	6.77%
	After Five Years Through Ten Years		1,187		1,177	5.83%
	After Ten Years		1,887		1,889	8.02%
			------		------
		$	4,118	$	4,115
			=====		=====

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

MORTGAGE-BACKED SECURITIES

				2000		1999		1998
				-------		-------		-------
Mortgage Backed Securities
	Balance at January 1,		$	16,743	$	23,058	$	41,648
	Purchases			-		-		5,764
	Repayments			(1,956)		(6,227)		(11,790)
	Sales (Net of Gains)			(10,650)		-		(12,388)
	Amortizations of Premiums
		/Discounts (Net)		(19)		(88)		(176)
				-------		-------		-------
	Balance at December 31,		$	4,118	$	16,743	$	23,058
				======		======		======
	Weighted Average Yield			6.68%		6.53%		6.34%

Investment Securities

The Company invests in United States Treasury and Agency issued obligations ranging in term from 3 months to 10 years. The investment policy of the Company is reviewed periodically by Management and ratified annually by the Board of Directors. At present the investment policy of the Company strives to maintain a liquid, conservative portfolio of investments keeping in mind the cash flow and investment needs of the Company.

The Company also invests its excess cash in two institutional funds whose principal underlying holdings are qualified thrift investments. One is an adjustable rate mortgage (ARM) fund while the other is an intermediate mortgage fund (IMF). Both of these funds are offered by the First Financial Trust, which is a co- operative institutional investment group comprised of members of America’s Community Bankers. These two funds provide a supplement to the Company’s other short-term money market investments and Federal Funds Sold, typically yielding a higher rate of return while still providing excellent liquidity.

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

The Company