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FREQUENTLY ASKED QUESTIONS
ABOUT THE PROPOSED REORGANIZATION

Why is the Guilford Savings Bank reorganizing?

The Proposed Reorganization will allow us to retain all of the fundamental characteristics of a mutual
banking institution while expanding our organizational flexibility to engage in strategic transactions and
opportunities to raise capital—without selling common stock. The mutual holding company structure
would preserve our mutuality and our depositors’ interests in the Bank.
 
Among other things, the Proposed Reorganization would allow The Guilford Savings Bank to do things in
the mutual holding company structure that it cannot now do as a mutual bank, such as:
  • Acquire or affiliate with other mutual or stock banks in a manner that permits The Guilford Savings Bank and the acquired or affiliated bank to share resources at the holding company level without losing their separate identities, resulting in more efficient, effective, and less expensive, operation of the banks;
  • Acquire, through the mutual holding company, a stock bank holding company in a manner that would allow each subsidiary bank to retain its separate identity, as described above;
  • Acquire an existing mutual bank not already in the mutual holding company form and operate it as a separate bank under the mutual holding company; or
  • Gain access to the capital markets, should the need arise. For example, after the Proposed Reorganization, the mid-tier holding company could raise capital by issuing debt instruments, which capital could be contributed to The Guilford Savings Bank as equity capital under certain circumstances.

How would this affect the Guilford Savings Bank's operations?

There would be no impact on The Guilford Savings Bank’s banking operations:
  • The Bank would retain the name “The Guilford Savings Bank” and would continue to do busines as “The Guilford Savings Bank.”
  • The Bank would continue to operate out of the same offices that it currently occupies.
  • The officers, employees and trustees of The Guilford Savings Bank would continue as the Bank’s officers, employees and trustees after the Proposed Reorganization.
  • Deposit accounts would continue to be insured by the Federal Deposit Insurance Corporatio (“FDIC”) to the maximum extent permitted by law.

Would the Proposed Reorganization affect deposit accounts or loans?

No. The Proposed Reorganization would not affect the balance or terms of any deposit account or loan.
Deposits would continue to be federally insured by the FDIC to the maximum legal limit. Deposit
accounts are not being converted to stock.

Would the Guilford Savings Bank still be a mutual organization?

Although the Bank will be reorganized in the stock form, the organization would retain its mutual form
of ownership and community control through the new mutual holding company. The Guilford Savings
Bank would become a subsidiary of the mutual holding company.

What are Corporators?

Corporators are a group of community leaders, local business persons and other local people elected to
represent the interests of the depositors of the Bank. The Bank’s current Corporators will be the
Corporators of the new mutual holding company. The Corporators will elect the members of the Board
of Trustees of the mutual holding company and vote on certain other matters.

Are officers or trustees of The Guilford Savings Bank planning to purchase stock of the Bank or the mid-tier holding company?

No. GSB Bancorp, Inc., the proposed mid-tier stock holding company for the Bank, and The Guilford
Savings Bank are not offering or issuing stock to the public or engaging in any other private or public
offering of securities of any kind. Following the Proposed Reorganization, GSB Mutual Holding Company,
the proposed mutual holding company, would own 100% of the outstanding capital stock of GSB
Bancorp, Inc., and GSB Bancorp, Inc. would own 100% of the outstanding capital stock of The Guilford
Savings Bank. While the Bank would legally become a stock form organization, its mutuality would be
preserved because 100% of its common stock would be controlled by GSB Mutual Holding Company.
(The stock would not be publicly traded.)

Is the Bank “going public”?

No. The proposed reorganization will not involve the offer and sale of common stock, and the Bank has
no plan or intent to issue any stock now or in the future or any plans to “go public.” While the new
mutual holding company could convert to a non-mutual (stock form) bank holding company, or the new
mid-tier stock holding company could issue stock to the depositors, community and general public, any
such conversion or stock offering will require the approval of the Board of Trustees, the Corporators and
the depositors of The Guilford Savings Bank.

Does this make it easier for The Guilford Savings Bank to “go public” later?

Both now and after the Proposed Reorganization, a conversion to stock form would require the approval
of our Board of Trustees, our Corporators and our depositors.

What would the corporate structure look like after the Proposed Reorganization?

There would be three corporate entities: a mutual holding company (GSB Mutual Holding Company), a
mid-tier stock holding company (GSB Bancorp, Inc.), which would be a wholly-owned subsidiary of the
mutual holding company, and a bank (The Guilford Savings Bank), which would be a wholly-owned
subsidiary of the mid-tier stock holding company.

Why do we need two holding companies?

A two-tier holding company structure provides greater flexibility for structuring acquisitions and raising
capital through the issuance of various debt, equity or hybrid financial instruments at the holding
company level. For example, after the Proposed Reorganization, the mid-tier holding company could
raise capital by issuing debt instruments, which capital could be contributed to The Guilford Savings
Bank as equity, which could fund future growth.

Why do the steps of the Proposed Reorganization seem so complicated?

The steps are necessary to effect the Proposed Reorganization in a tax-free manner and to comply with
certain legal requirements.

Is The Guilford Savings Bank moving?

No. After the Proposed Reorganization, The Guilford Savings Bank would continue to be headquartered
in Guilford, Connecticut, and normal business would be conducted without interruption at the Bank’s
offices. The business of the Bank and the existing level of insurance coverage of the Bank’s deposits by
the FDIC would be uninterrupted by the Proposed Reorganization.

What other approvals are required?

In addition to the approval of The Guilford Savings Bank’s Trustees, Corporators and depositors, the
Proposed Reorganization requires the approval of various regulatory authorities, including the
Connecticut Department of Banking, the Federal Deposit Insurance Corporation and the Federal Reserve
Bank.

Why does the Board of Trustees believe that the Proposed Reorganization should be done now?

The industry is seeing rapid consolidation among smaller banks faced with increased costs related to
regulatory compliance and technology. The Guilford Savings Bank can use this revised structure to
achieve operating efficiencies or to grow by merging smaller banks into ours so that we can operate
more efficiently, expand our reach and continue to offer best-in-class products, technology and service.

I have additional questions about this process. How can I learn more?

Please call or email Timothy Geelan, President & CEO at (203) 458-5456, TGeelan@gsbyourbank.com, or
Kyle Eagleson, 1st EVP, Chief Financial Officer (203) 458-5443, KEagleson@gsbyourbank.com.
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