<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the fiscal year ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
Commission file number : 00015580
St. Paul Federal Bank For Savings
Profit Sharing and Savings Plan
6700 West North Avenue
Chicago, Illinois 60707
-----------------------
(Full title and address of the plan)
St. Paul Bancorp, Inc.
6700 West North Avenue
Chicago, Illinois 60707
-----------------------
(Name and address of issuer of the
securities held pursuant to the plan)
<PAGE> 2
Information Included
<TABLE>
<CAPTION>
<S> <C>
Report of Independent Auditors 1
Financial Statements
Statements of Net Assets Available
for Plan Benefits 2
Statements of Changes in Net Assets
Available for Benefits 3
Notes to Financial Statements 4
Supplemental Schedules
Schedule of Assets Held for Investment Purposes 11
Schedule of Reportable Transactions 12
Exhibits:
Exhibit 24 - Consent of Independent Auditors
</TABLE>
<PAGE> 3
Financial Statements
and Supplemental Schedules
St. Paul Federal Bank For Savings
Profit Sharing and Savings Plan
Years ended December 31, 1996, 1995,
and 1994 with Report of Independent Auditors
<PAGE> 4
St. Paul Federal Bank For Savings
Profit Sharing and Savings Plan
Financial Statements and
Supplemental Schedules
Years ended December 31, 1996, 1995, and 1994
CONTENTS
<TABLE>
<CAPTION>
<S> <C>
Report of Independent Auditors...................................... 1
Financial Statements
Statements of Net Assets Available for Plan Benefits................ 2
Statements of Changes in Net Assets Available for Plan Benefits..... 3
Notes to Financial Statements....................................... 4
Supplemental Schedules
Schedule of Assets Held for Investment Purposes..................... 11
Schedule of Reportable Transactions................................. 12
</TABLE>
<PAGE> 5
[ERNST & YOUNG LLP LETTERHEAD]
Report of Independent Auditors
The Trustees
St. Paul Federal Bank For Savings
Profit Sharing and Savings Plan
We have audited the accompanying statements of net assets available for plan
benefits of St. Paul Federal Bank For Savings Profit Sharing and Savings
Plan as of December 31, 1996 and 1995, and the related statements of changes in
net assets available for plan benefits for each of the three years in the
period ended December 31, 1996. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Plan
at December 31, 1996 and 1995, and the changes in its net assets available for
plan benefits for each of the three years in the period ended December 31,
1996, in conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules of assets
held for investment purposes as of December 31, 1996, and reportable
transactions for the year then ended are presented for purposes of complying
with the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974 and are
not a required part of the financial statements. The supplemental schedules
have been subjected to the auditing procedures applied in our audit of the 1996
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the 1996 financial statements taken as a whole.
/s/ Ernst & Young LLP
---------------------
Ernst & Young LLP
June 17, 1997
1
<PAGE> 6
St. Paul Federal Bank For Savings
Profit Sharing and Savings Plan
Statements of Net Assets Available for Plan Benefits
<TABLE>
<CAPTION>
DECEMBER 31
1996 1995
-------------------------
<S> <C> <C>
ASSETS
Investments, at current value:
Cash and cash equivalents $ 27,357 $ 54,631
Mutual funds:
Money market 3,510,190 3,443,312
Government bond 1,674,981 1,791,439
Equity 3,996,423 3,111,388
Small capitalization equity 3,612,699 2,785,548
-------------------------
Total mutual funds 12,794,293 11,131,687
Common stock of St. Paul Bancorp, Inc. 17,573,829 15,322,134
-------------------------
Total investments 30,395,479 26,508,452
Accrued interest and dividends receivable 25,070 9,745
-------------------------
Total assets 30,420,549 26,518,197
LIABILITIES
Accrued expenses 13,199 18,137
Due to broker 27,276 25,578
-------------------------
Total liabilities 40,475 43,715
-------------------------
Net assets available for plan benefits $30,380,074 $26,474,482
=========================
</TABLE>
See accompanying notes.
2
<PAGE> 7
St. Paul Federal Bank For Savings
Profit Sharing and Savings Plan
Statements of Changes in Net Assets Available for Plan Benefits
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1996 1995 1994
-------------------------------------
<S> <C> <C> <C>
Additions (deductions):
Income from investments:
Cash and cash equivalents $ 2,105 $ 3,408 $ 4,458
Common stock 263,805 179,979 174,394
Mutual funds 360,019 375,817 310,425
-------------------------------------
625,929 559,204 489,277
Contributions:
St. Paul Federal Bank For Savings 31,109 32,028 32,472
Participants 1,711,953 1,697,834 1,573,920
-------------------------------------
1,743,062 1,729,862 1,606,392
Realized and unrealized appreciation
(depreciation) in fair value
of investments 3,468,349 6,419,666 (1,143,126)
Distributions (1,839,949) (1,760,965) (1,462,687)
Administrative expenses (91,799) (102,525) -
-------------------------------------
Net increase (decrease) 3,905,592 6,845,242 (510,144)
Net assets available for plan benefits
at beginning of year 26,474,482 19,629,240 20,139,384
-------------------------------------
Net assets available for plan benefits
at end of year $30,380,074 $26,474,482 $19,629,240
=====================================
</TABLE>
See accompanying notes.
3
<PAGE> 8
ST. PAUL FEDERAL BANK FOR SAVINGS
PROFIT SHARING AND SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996
1. ACCOUNTING POLICIES
Investments are stated at current value. Investments traded on security
exchanges are valued at the last reported sales price on the last business day
of the calendar year. Mutual funds are valued at their reported net asset
value.
The change between current value at the end of the year and current value at
the beginning of the year or cost, if the investment was acquired during the
year, is reflected as net unrealized appreciation or depreciation in current
value of investments.
Purchases and sales of securities are recorded on a trade-date basis. Sales
are recorded using the FIFO method. Interest income is recorded on the accrual
basis. Dividends are recorded on the ex-dividend date.
The preparation of financial statements in conformity with generally accepted
accounting principles requires the Plan's Management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements, as well as the reported amounts of income and expenses during the
reporting period. Actual results could differ from those estimates.
2. DESCRIPTION OF PLAN
St. Paul Federal Bank For Savings Profit Sharing and Savings Plan (the Plan) is
a defined-contribution profit-sharing plan for eligible employees of St. Paul
Federal Bank For Savings (the Bank) and its affiliates. The Plan is subject to
certain provisions of the Employee Retirement Income Security Act of 1974
(ERISA) and is intended to qualify as a profit-sharing and savings plan, as
described in section 401 of the Internal Revenue Code, as amended by the Tax
Reform Act of 1986.
Any employee who has completed one year of service, as defined in the Plan, is
eligible to participate. An employee must file a written notice of election
with the trustees together with an authorization for the participant
deductions. A participant must deposit at least 2% of annual compensation and
may deposit up to 15% of their annual compensation. Employees are permitted
from time to time to change their level of contributions within this range.
The
4
<PAGE> 9
ST. PAUL FEDERAL BANK FOR SAVINGS
PROFIT SHARING AND SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
2. DESCRIPTION OF PLAN (CONTINUED)
Board of Directors of St. Paul Bancorp, Inc. (the Company), the holding company
of the Bank, may authorize the Bank to subsidize the purchase of Company stock
by the Plan. Such authorizations are restricted in that they must comply with
applicable laws and regulations. In 1997, the Bank discontinued subsidizing
the purchase of Company stock by the Plan.
The Plan is comprised of five Investment Funds: the Money Market Fund, the U.S.
Government Bond Fund, the Equity Fund, the Small Capitalization Equity Fund,
and St. Paul Bancorp, Inc. Common Stock. Participants are periodically
permitted to direct the trustees as to respective percentages of participant
account balances and contributions to be invested in each Investment Fund.
As provided for in the Plan documents, contributions have been deposited in a
trust fund administered by First Trust Illinois, as trustee.
The balance of a participant's account that represents contributions made by
the participant is fully vested and can be withdrawn under certain conditions
after one year of participation.
Distributions from the Plan may be received upon termination of service in the
form of a lump-sum distribution. The Plan also allows for withdrawals under
certain hardship circumstances in accordance with the Internal Revenue Code.
The foregoing description of the Plan provides only general information.
Further details of the Plan are contained in the Summary Plan Description.
3. INVESTMENTS
The following table summarizes realized and unrealized appreciation
(depreciation) in fair value of investments for the years ended December 31:
<TABLE>
<CAPTION>
1996 1995 1994
---------------------------------------
<S> <C> <C> <C>
Common stocks $ 2,310,532 $ 4,745,395 $ (707,423)
Mutual funds 1,157,817 1,674,271 (435,703)
---------------------------------------
$ 3,468,349 $ 6,419,666 $(1,143,126)
=======================================
</TABLE>
5
<PAGE> 10
ST. PAUL FEDERAL BANK FOR SAVINGS
PROFIT SHARING AND SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. INVESTMENTS (CONTINUED)
The current value of individual investments that represent 5% or more of the
Plan's assets is as follows:
<TABLE>
<CAPTION>
AT DECEMBER 31
1996 1995
----------------------
<S> <C> <C>
St. Paul Bancorp, Inc. common stock $17,573,829 $15,322,134
Vanguard Money Market Reserves Prime Portfolio Fund 3,510,190 3,443,312
Federated Income Trust 1,674,981 1,791,439
Vanguard Index Trust 500 Portfolio 3,996,423 3,111,388
Montgomery Funds Small Capitalization Fund 3,612,699 2,785,548
</TABLE>
On December 16, 1996, the Company declared a five-for-four stock split to
shareholders of record as of December 31, 1996, that was distributed on January
14, 1997. All share references in the accompanying financial statements
reflect the five-for-four split.
4. TRANSACTIONS WITH PARTIES IN INTEREST
The following summarizes the account balances and results of transactions of
the Plan with the Bank and the Company.
<TABLE>
<CAPTION>
AS OF OR FOR THE YEAR
ENDED DECEMBER 31
1996 1995 1994
-------------------------------------
<S> <C> <C> <C>
St. Paul Bancorp, Inc. common stock $17,573,829 $15,322,134 $10,334,992
Dividend income on St. Paul Bancorp, Inc.
common stock 263,805 179,979 174,394
Contributions to the Profit Sharing and
Savings Plan from the Bank 31,109 32,028 32,472
</TABLE>
Administrative expenses for the years ended December 31, 1996 and 1995, were
paid by the Plan. Prior to January 1, 1995, administrative expenses of the
Plan were paid by the Bank.
5. INCOME TAX STATUS
The Internal Revenue Service has ruled that the Plan qualifies under section
401 (a) of the Internal Revenue Code (IRC) and is, therefore, not subject to
tax under present income tax laws. Once qualified, the Plan is required to
operate in conformity with the IRC to maintain its qualification. The Plan
administrator is not aware of any course of action or series of events that
have occurred that might adversely affect the Plan's qualified status.
6
<PAGE> 11
ST. PAUL FEDERAL BANK FOR SAVINGS
PROFIT SHARING AND SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
6. ALLOCATION OF ASSETS AVAILABLE FOR PLAN BENEFITS
The Plan's net assets are allocated among Investment Funds as follows:
<TABLE>
Caption>
ST. PAUL MONEY U.S SMALL
BANCORP, INC. MARKET GOVERNMENT EQUITY CAPITALIZATION
STOCK FUND FUND BOND FUND FUND EQUITY FUND TOTAL
--------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Cash and cash equivalents $ 25,597 $ 1 $ 5,566 $ 13,204 $ 10,263 $ 54,631
Mutual funds - 3,443,312 1,791,439 3,111,388 2,785,548 11,131,687
Common stock of St. Paul Bancorp, Inc. 15,322,134 - - - - 15,322,134
Accrued interest and dividends receivable 41 6 9,673 8 17 9,745
Accrued expenses (10,416) (2,347) (1,255) (2,154) (1,965) (18,137)
Due to broker (25,578) - - - - (25,578)
--------------------------------------------------------------------------
Balance at December 31, 1995 $15,311,778 $3,440,972 $1,805,423 $3,122,446 $2,793,863 $26,474,482
==========================================================================
Cash and cash equivalents $ 27,357 - - - - $ 27,357
Mutual funds - $3,510,190 $1,674,981 $3,996,423 $3,612,699 12,794,293
Common stock of St. Paul Bancorp, Inc. 17,573,829 - - - - 17,573,829
Accrued interest and dividends receivable 53 15,340 9,664 7 6 25,070
Accrued expenses (4,588) (3,373) (463) (3,814) (961) (13,199)
Due to broker (27,276) - - - - (27,276)
--------------------------------------------------------------------------
Balance at December 31, 1996 $17,569,375 $3,522,157 $1,684,182 $3,992,616 $3,611,744 $30,380,074
==========================================================================
</TABLE>
7
<PAGE> 12
ST. PAUL FEDERAL BANK FOR SAVINGS
PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements (continued)
6. Allocation of Assets Available for Plan Benefits (Continued)
The Plan's transactions are allocated among Investment Funds as follows:
<TABLE>
<CAPTION>
St. Paul Money U.S Small
Bancorp, Inc. Market Goverment Equity Capitalization
Stock Fund Fund Bond Fund Fund Equity Fund Total
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1994 $10,667,437 $2,952,851 $2,247,425 $2,103,324 $2,168,347 $20,139,384
Income from investments 177,697 115,665 135,295 60,131 489 489,277
Contributions 705,304 205,476 154,784 261,362 279,466 1,606,392
Realized and unrealized appreciation
(depreciation) in fair value of
investments (707,423) - (171,513) (37,451) (226,739) (1,143,126)
Distributions (793,199) (430,292) (111,745) (76,773) (50,678) (1,462,687)
Fund transfer 312,755 111,643 (463,645) 10,819 28,428 -
--------------------------------------------------------------------------------
Balance at December 31, 1994 10,362,571 2,955,343 1,790,601 2,321,412 2,199,313 19,629,240
Income from investments 181,394 190,695 121,804 64,885 426 559,204
Contributions 778,685 216,503 194,051 267,818 272,805 1,729,862
Realized and unrealized appreciation
(depreciation) in fair value of
investments 4,745,395 - 136,726 785,314 752,231 6,419,666
Distributions (736,924) (344,434) (255,708) (256,481) (167,418) (1,760,965)
Administrative expenses (56,918) (13,873) (7,478) (12,719) (11,537) (102,525)
Funds transfers 37,575 436,738 (174,573) (47,783) (251,957) -
--------------------------------------------------------------------------------
Balance at December 31, 1995 15,311,778 3,440,972 1,805,423 3,122,446 2,793,863 26,474,482
Income from investments 264,989 173,962 115,676 71,096 206 625,929
Contributions 811,553 206,454 130,193 297,109 297,753 1,743,062
Realized and unrealized appreciation
(depreciation) in fair value of
investments 2,310,532 - (37,662) 662,083 533,396 3,468,349
Distributions (585,169) (414,295) (125,617) (462,087) (252,781) (1,839,949)
Administrative expenses (48,150) (13,158) (5,720) (14,266) (10,505) (91,799)
Fund transfers (496,158) 128,222 (198,111) 316,235 249,812 -
--------------------------------------------------------------------------------
Balance at December 31, 1996 $17,569,375 $3,522,157 $1,684,182 $3,992,616 $3,611,744 $30,380,074
================================================================================
</TABLE>
8
<PAGE> 13
ST. PAUL FEDERAL BANK FOR SAVINGS
PROFIT SHARING AND SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
7. PLAN TERMINATION
Although it has not expressed any intent to do so, the Bank has the right under
the Plan to terminate the Plan subject to the provisions of ERISA. In 1997,
the Bank discontinued its contributions to the Plan.
8. DIFFERENCES BETWEEN FINANCIAL STATEMENTS AND FORM 5500
The following is a reconciliation of net assets available for plan benefits per
the financial statements to the Form 5500:
<TABLE>
<CAPTION>
DECEMBER 31
1996 1995
-------------------------
<S> <C> <C>
Net assets available for plan benefits per the
financial statements $30,380,074 $26,474,482
Amounts allocated to withdrawn participants (1,199,986) (585,067)
-------------------------
Net assets available for plan benefits per
the Form 5500 $29,180,088 $25,889,415
=========================
</TABLE>
The following is a reconciliation of benefits paid per the financial statements
to the Form 5500:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1996 1995 1994
----------------------------------
<S> <C> <C> <C>
Distributions per the financial statements $1,839,949 $1,760,965 $1,462,687
Add: Amounts allocated to withdrawn
participants 1,199,986 585,067 341,952
Less: Amounts allocated to withdrawn
participants in prior year (585,067) (341,952) (113,387)
----------------------------------
Distributions per the Form 5500 $2,454,868 $2,004,080 $1,691,252
==================================
</TABLE>
Amounts allocated to withdrawn participants are recorded on the Form 5500 for
benefit claims that have been processed and approved for payment prior to
year-end but not paid.
9
<PAGE> 14
ST. PAUL FEDERAL BANK FOR SAVINGS
PROFIT SHARING AND SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
9. SUBSEQUENT EVENTS
On January 31, 1997, The Vanguard Group became the trustee and recordkeeper of
the Plan. At that time, several of the Plan's investment options changed and
new investment options were added to the Plan. Funds invested in the
Montgomery Funds Small Capitalization Fund were transferred to the Vanguard
Index Trust - Extended Market Portfolio and funds invested in the Federated
Income Trust were transferred to the Vanguard Bond Index Fund - Total Bond
Market Portfolio. The Vanguard Index Trust 500 Portfolio, Vanguard Money
Market Reserves Income Prime Portfolio Fund, and St. Paul Bancorp, Inc.
common stock continued to be investment options to the Plan participants. The
Plan added the following investment options: Vanguard Fixed Income Securities
Fund - High Yield Corporate Portfolio (a high yield bond fund), Vanguard
Wellington Fund (a balanced fund), and Vanguard International Growth Portfolio
(an international equity fund).
10
<PAGE> 15
SUPPLEMENTAL SCHEDULES
<PAGE> 16
ST. PAUL FEDERAL BANK FOR SAVINGS
PROFIT SHARING AND SAVINGS PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1996
<TABLE>
<CAPTION>
IDENTITY OF ISSUE, BORROWER, DESCRIPTION OF CURRENT
LESSOR, OR SIMILAR PARTY INVESTMENT COST VALUE
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash and cash equivalents:
First American Government 27,357 units,
Obligations Fund variable rate
$ 27,357 $ 27,357
------------------------
Total cash and cash equivalents $ 27,357 $ 27,357
Mutual funds:
Vanguard Money Market
Reserves Income Prime
Portfolio 3,510,190 shares 3,510,190 3,510,190
Federated Income Trust 165,023 shares 1,736,692 1,674,981
Vanguard Index Trust 500
Portfolio 57,785 shares 2,707,768 3,996,423
Montgomery Funds Small
Capitalization Fund 196,342 shares 3,237,758 3,612,699
------------------------
Total mutual funds 11,192,408 12,794,293
Common stock:
St. Paul Bancorp, Inc. 747,823 shares 6,839,401 17,573,829
------------------------
Total common stock 6,839,401 17,573,829
------------------------
Total investments $18,059,166 $30,395,479
========================
</TABLE>
11
<PAGE> 17
ST. PAUL FEDERAL BANK FOR SAVINGS
PROFIT SHARING AND SAVINGS PLAN
SCHEDULE OF REPORTABLE TRANSACTIONS
Year ended December 31, 1996
<TABLE>
<CAPTION>
Current
Maturity Value of
Proceeds/ Asset on
Description of Asset, Including Interest Purchase Selling Cost of Transaction Gain
Identity of Party Involved Rate and Maturity Price Price Asset Date (Loss)
- -------------------------------------------------------------------------------------------------------------------------------
Category (iii) - A series of transactions with respect to securities of the same issue which amount in the aggregate to more
than 5% of the total Plan assets
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
First Trust Illinois First American Government Obligations Fund,
variable rate:
249 purchases $3,479,437 $ $3,479,437 $3,479,437 $ -
237 sales 3,518,546 3,518,546 3,518,546 -
There were no category (i), (ii), or (iv) transactions reportable during the year.
</TABLE>
12
<PAGE> 18
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the Plan) have duly caused this
annual report to be signed by the undersigned thereunto duly authorized.
ST. PAUL FEDERAL BANK FOR SAVINGS
PROFIT SHARING AND SAVINGS PLAN
-------------------------------
Date: June 27, 1997 By: /s/ Joseph C. Scully
------------------------------
Joseph C. Scully
Chairman of the Board of
Directors of St. Paul Federal
Bank For Savings and Member of
the Administrative Committee
<PAGE> 19
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------- -----------
<S> <C>
24 Consent of Independent Auditors
</TABLE>
<PAGE> 1
EXHIBIT 24
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8 No. 33-11890) pertaining to the St. Paul Federal Bank For Savings
Profit Sharing and Savings Plan of our report dated June 17, 1997, with respect
to the financial statements and schedules of the St. Paul Federal Bank For
Savings Profit Sharing and Savings Plan included in this Annual Report (Form
11-K) for the year ended December 31, 1996.
/s/ Ernst & Young LLP
Chicago, Illinois
June 23, 1997
