<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, 1997
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>
<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 15
Schedule of Reportable Transactions 16
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, 1997, 1996,
and 1995 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, 1997, 1996, and 1995
CONTENTS
<TABLE>
<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
Line 27a - Schedule of Assets Held for Investment Purposes .............. 15
Line 27d - Schedule of Reportable Transactions .......................... 16
</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, 1997 and 1996, 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, 1997. 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, 1997 and 1996, and the changes in its net assets available for
plan benefits for each of the three years in the period ended December 31,
1997, 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, 1997, 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 1997
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the 1997 financial statements taken as a whole.
June 23, 1998 /s/ Ernst & Young LLP
---------------------
Ernst & Young LLP
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
1997 1996
-----------------------------
<S> <C> <C>
ASSETS
Investments, at current value:
Cash and cash equivalents $ 111,255 $ 27,357
Mutual funds:
Equity 5,314,316 3,996,423
Small and medium capitalization equity 4,009,401 -
Small capitalization equity - 3,612,699
Money market 2,859,230 3,510,190
Total bond market 1,644,365 -
Government bond - 1,674,981
High yield corporate bond 1,434,929 -
Balanced 730,168 -
International equity 316,194 -
-----------------------------
Total mutual funds 16,308,603 12,794,293
Common stock of St. Paul Bancorp, Inc. 27,592,790 17,573,829
Participant loans 646,457 -
-----------------------------
Total investments 44,659,105 30,395,479
Accrued interest and dividends receivable 559 25,070
-----------------------------
Total assets 44,659,664 30,420,549
LIABILITIES
Accrued expenses 39,085 13,199
Due to broker - 27,276
-----------------------------
Total liabilities 39,085 40,475
-----------------------------
Net assets available for plan benefits $ 44,620,579 $30,380,074
=============================
</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
1997 1996 1995
-------------------------------------
<S> <C> <C> <C>
Additions (deductions):
Income from investments:
Cash and cash equivalents $ 17,785 $ 2,105 $ 3,408
Participants loans 22,782 - -
Common stock 492,838 263,805 179,979
Mutual funds 818,544 360,019 375,817
-------------------------------------
1,351,949 625,929 559,204
Contributions:
St. Paul Federal Bank For Savings 2,861 31,109 32,028
Participants 1,931,221 1,711,953 1,697,834
-------------------------------------
1,934,082 1,743,062 1,729,862
Realized and unrealized appreciation
in fair value of investments 13,142,035 3,468,349 6,419,666
Distributions (2,094,342) (1,839,949) (1,760,965)
Administrative expenses (93,219) (91,799) (102,525)
-------------------------------------
Net increase 14,240,505 3,905,592 6,845,242
Net assets available for plan benefits
at beginning of year 30,380,074 26,474,482 19,629,240
-------------------------------------
Net assets available for plan benefits
at end of year $44,620,579 $30,380,074 $26,474,482
=====================================
See accompanying notes.
</TABLE>
3
<PAGE> 8
ST. PAUL FEDERAL BANK FOR SAVINGS
PROFIT SHARING AND SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
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 an average cost 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 subsidiaries and 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.
During 1997 and prior years, employees were required to complete one year of
service before they could participate in the Plan. As of January 1, 1998, any
employee, as defined in the Plan, is eligible to participate immediately from
the date of hire. An employee must file a written notice of election with the
trustees together with an authorization for the participant
4
<PAGE> 9
ST. PAUL FEDERAL BANK FOR SAVINGS
PROFIT SHARING AND SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
2. DESCRIPTION OF PLAN (CONTINUED)
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 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 eight investment fund choices:
Vanguard Index Trust - 500 Portfolio: Seeks to provide long-term growth of
capital and income from dividends by holding all of the 500 stocks that make
up the unmanaged Standard & Poor's 500 Composite Stock Price Index, a widely
recognized benchmark of U.S. stock market performance.
Vanguard Index Trust - Extended Market Portfolio: Seeks to provide
long-term growth of capital by attempting to match the performance of the
Wilshire 4500 Equity Index, an unmanaged index made up of mid- and small
capitalization companies.
Vanguard Money Market Reserves - Prime Portfolio: Seeks to provide high
income and a stable share price of $1 by investing in short-term,
high-quality money market instruments issued by financial institutions,
nonfinancial corporations, the U.S. government, and federal agencies.
Vanguard Bond Index Fund - Total Bond Market Portfolio: Seeks to provide a
high level of interest income by attempting to match the performance of the
unmanaged Lehman Brothers Aggregate Bond Index, a widely recognized measure
of the entire taxable U.S. bond market.
Vanguard Fixed Income Fund - High Yield Corporate Portfolio: Seeks to
provide a high level of interest income by investing in high-yield corporate
bonds, or "junk" bonds. These bonds pay higher interest rates because they
are considered to carry greater risk of default than bonds with higher
credit ratings.
5
<PAGE> 10
ST. PAUL FEDERAL BANK FOR SAVINGS
PROFIT SHARING AND SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
2. DESCRIPTION OF PLAN (CONTINUED)
Vanguard Wellington Fund: Seeks to provide income and long-term growth of
capital, without undue risk to capital, by investing about 65% of its assets
in stocks and the remaining 35% in bonds.
Vanguard International Growth Portfolio: Seeks to provide long-term growth
of capital by investing in stocks of high-quality, seasoned companies based
outside the United States. Stocks are selected from more than 15 countries.
St. Paul Bancorp Common Stock: Provides employees of St. Paul Federal Bank
with the opportunity to share in the potential growth and prosperity of the
Bank by investing in St. Paul Bancorp, Inc. stock and reinvesting dividends.
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. The number of fund choices expanded in 1997, when the
Plan changed trustees.
Prior to January 31, 1997, contributions were deposited in a trust fund
administered by First Trust Illinois, as trustee. On January 31, 1997, The
Vanguard Group became the trustee and recordkeeper of the Plan. At that time,
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 corporate
bond fund), Vanguard Wellington Fund (a balanced fund), and Vanguard
International Growth Portfolio (an international equity fund).
As provided for in the Plan documents, contributions have been deposited in a
trust fund administered by The Vanguard Group, as trustee. All administrative
expenses were paid by the Plan.
6
<PAGE> 11
ST. PAUL FEDERAL BANK FOR SAVINGS
PROFIT SHARING AND SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
2. DESCRIPTION OF PLAN (CONTINUED)
The balance of a participant's account that represents contributions made by
the participant is fully vested and can be withdrawn under certain conditions.
As of January 31, 1997, participants are also allowed to borrow against assets
held in their account from the Plan.
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 in fair
value of investments for the years ended December 31:
<TABLE>
<CAPTION>
1997 1996 1995
------------------------------------
<S> <C> <C> <C>
Common stocks $ 11,447,046 $ 2,310,532 $ 4,745,395
Mutual funds 1,694,989 1,157,817 1,674,271
------------------------------------
$13,142,035 $3,468,349 $6,419,666
====================================
</TABLE>
The current value of individual investments that represent 5% or more of the
Plan's assets is as follows:
<TABLE>
<CAPTION>
AT DECEMBER 31
1997 1996
------------------------
<S> <C> <C>
St. Paul Bancorp, Inc. common stock $27,592,790 $17,573,829
Vanguard Index Trust 500 Portfolio 5,314,316 3,996,423
Vanguard Index Trust - Extended Market Portfolio 4,009,401 -
Vanguard Money Market Reserves Prime Portfolio Fund 2,859,230 3,510,190
Montgomery Funds Small Capitalization Fund - 3,612,699
Federated Income Trust - 1,674,981
</TABLE>
7
<PAGE> 12
ST. PAUL FEDERAL BANK FOR SAVINGS
PROFIT SHARING AND SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. INVESTMENTS (CONTINUED)
On June 20, 1997, the Company declared a three-for-two stock split to
shareholders of record as of June 30, 1997, that was distributed on July 14,
1997. 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 have been restated to reflect the stock splits.
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
1997 1996 1995
--------------------------------------
<S> <C> <C> <C>
St. Paul Bancorp, Inc. common stock $27,592,790 $17,573,829 $15,322,134
Dividend income on St. Paul Bancorp, Inc.
common stock 492,838 263,805 179,979
Contributions to the Profit Sharing and
Savings Plan from the Bank 2,861 31,109 32,028
</TABLE>
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.
8
<PAGE> 13
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>
Small & Medium Small Money Total
Equity Capitalization Capitalization Market Bond
Fund Equity Fund Equity Fund Fund Market Fund
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cash and cash equivalents $ - $ - $ - $ - $ -
Mutual funds 3,996,423 - 3,612,699 3,510,190 -
Common stock of St. Paul Bancorp, Inc. - - - - -
Accrued interest and dividends receivable 7 - 6 15,340 -
Accrued expenses (3,814) - (961) (3,373) -
Due to broker - - - - -
--------------------------------------------------------------------------------
Balance at December 31, 1996 $3,992,616 $ - $3,611,744 $3,522,157 $ -
================================================================================
Cash and cash equivalents $ - $ - $ - $ - $ -
Mutual funds 5,314,316 4,009,401 - 2,859,230 1,644,365
Common stock of St. Paul Bancorp, Inc. - - - - -
Accrued interest and dividends receivable - - - - -
Accrued expenses - - - - -
Participant notes receivable - - - - -
--------------------------------------------------------------------------------
Balance at December 31, 1997 $5,314,316 $4,009,401 $ - $2,859,230 $1,644,365
================================================================================
<CAPTION>
U.S.
Government
Bond Fund
-----------
<S> <C>
Cash and cash equivalents $ -
Mutual funds 1,674,981
Common stock of St. Paul Bancorp, Inc. -
Accrued interest and dividends receivable 9,664
Accrued expenses (463)
Due to broker -
----------
Balance at December 31, 1996 $1,684,182
==========
Cash and cash equivalents $ -
Mutual funds -
Common stock of St. Paul Bancorp, Inc. -
Accrued interest and dividends receivable -
Accrued expenses -
Participant notes receivable -
----------
Balance at December 31, 1997 $ -
==========
</TABLE>
9
<PAGE> 14
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 net assets are allocated among Investment Funds as follows
(Continued):
<TABLE>
<CAPTION>
High Yield International St. Paul
Corporate Balanced Equity Bancorp, Inc.
Bond Fund Fund Fund Stock Fund
------------------------------------------------------------------
<S> <C> <C> <C> <C>
Cash and cash equivalents $ - $ - $ - $ 27,357
Mutual funds - - - -
Common stock of St. Paul Bancorp, Inc. - - - 17,573,829
Accrued interest and dividends receivable - - - 53
Accrued expenses - - - (4,588)
Due to broker - - - (27,276)
---------------------------------------------------------------
Balance at December 31, 1996 $ - $ - $ - $17,569,375
===============================================================
Cash and cash equivalents $ - $ - $ - $ 111,255
Mutual funds 1,434,929 730,168 316,194 -
Common stock of St. Paul Bancorp, Inc. - - - 27,592,790
Accrued interest and dividends receivable - - - 559
Accrued expenses - - - (39,085)
Participant notes receivable - - - -
---------------------------------------------------------------
Balance at December 31, 1997 $1,434,929 $730,168 $316,194 $27,665,519
===============================================================
<CAPTION>
Participant
Loans Total
-----------------------------
<S> <C> <C>
Cash and cash equivalents $ - $ 27,357
Mutual funds - 12,794,293
Common stock of St. Paul Bancorp, Inc. - 17,573,829
Accrued interest and dividends receivable - 25,070
Accrued expenses - (13,199)
Due to broker - (27,276)
-------------------------
Balance at December 31, 1996 $ - $30,380,074
=========================
Cash and cash equivalents $ - $ 111,255
Mutual funds - 16,308,603
Common stock of St. Paul Bancorp, Inc. - 27,592,790
Accrued interest and dividends receivable - 559
Accrued expenses - (39,085)
Participant notes receivable 646,457 646,457
-------------------------
Balance at December 31, 1997 $646,457 $44,620,579
=========================
</TABLE>
10
<PAGE> 15
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>
Small & Medium Small Money Total U.S.
Equity Capitalization Capitalization Market Bond Government
Fund Equity Fund Equity Fund Fund Market Fund Bond Fund
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1995 $2,321,412 $ - $2,199,313 $2,955,343 $ - $1,790,601
Income from investments 64,885 - 426 190,695 - 121,804
Contributions 267,818 - 272,805 216,503 - 194,051
Realized and unrealized appreciation
(depreciation) in fair value of
investments 785,314 - 752,231 - - 136,726
Distributions (256,481) - (167,418) (344,434) - (255,708)
Administrative expenses (12,719) - (11,537) (13,873) - (7,478)
Fund transfers (47,783) - (251,957) 436,738 - (174,573)
--------------------------------------------------------------------------------------
Balance at December 31, 1995 3,122,446 - 2,793,863 3,440,972 - 1,805,423
Income from investments 71,096 - 206 173,962 - 115,676
Contributions 297,109 - 297,753 206,454 - 130,193
Realized and unrealized appreciation
(depreciation) in fair value of
investments 662,083 - 533,396 - - (37,662)
Distributions (462,087) - (252,781) (414,295) - (125,617)
Administrative expenses (14,266) - (10,505) (13,158) - (5,720)
Fund transfers 316,235 - 249,812 128,222 - (198,111)
--------------------------------------------------------------------------------------
Balance at December 31, 1996 3,992,616 - 3,611,744 3,522,157 - 1,684,182
Income from investments 155,022 281,935 518 151,999 108,028 255
Contributions 385,603 301,006 31,550 194,406 100,272 10,462
Realized and unrealized appreciation
(depreciation) in fair value of
investments 1,164,515 465,766 38,910 - 45,423 (8,220)
Distributions (260,857) (132,513) (104,966) (957,767) (9,115) (76,964)
Administrative expenses (3,175) (21,472) (2,679) (2,117) (522) (1,606)
Fund transfers (35,089) 3,202,450 (3,575,077) 10,143 1,418,106 (1,608,109)
Participant loan withdrawals (98,721) (106,435) - (68,048) (21,652) -
Participant loan repayments 14,402 18,664 - 8,457 3,825 -
--------------------------------------------------------------------------------------
Balance at December 31, 1997 $5,314,316 $4,009,401 $ - $2,859,230 $1,644,365 $ -
======================================================================================
<CAPTION>
TOTALS
-----------
<S> <C>
Balance at January 1, 1995 9,266,669
Income from investments 377,810
Contributions 951,177
Realized and unrealized appreciation
(depreciation) in fair value of
investments 1,674,271
Distributions (1,024,041)
Administrative expenses (45,607)
Fund transfers (37,575)
Balance at December 31, 1995 11,162,704
Income from investments 360,940
Contributions 931,509
Realized and unrealized appreciation
(depreciation) in fair value of
investments 1,157,817
Distributions (1,254,780)
Administrative expenses (43,649)
Fund transfers 496,158
Balance at December 31, 1996 12,810,699
Income from investments 697,757
Contributions 1,023,299
Realized and unrealized appreciation
(depreciation) in fair value of
investments 1,706,394
Distributions (1,542,182)
Administrative expenses (31,571)
Fund transfers (587,576)
Participant loan withdrawals (294,856)
Participant loan repayments 45,348
Balance at December 31, 1997 $13,827,312
</TABLE>
11
<PAGE> 16
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
(Continued):
<TABLE>
<CAPTION>
High Yield International St. Paul
Corporate Balanced Equity Bancorp, Inc. Participant
Bond Fund Fund Fund Stock Fund Loans Total
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1995 $ - $ - $ - $10,362,571 $ - $19,629,240
Income from investments - - - 181,394 - 559,204
Contributions - - - 778,685 - 1,729,862
Realized and unrealized appreciation
(depreciation) in fair value of
investments - - - 4,745,395 - 6,419,666
Distributions - - - (736,924) - (1,760,965)
Administrative expenses - - - (56,918) - (102,525)
Fund transfers - - - 37,575 - -
----------------------------------------------------------------------------------------
Balance at December 31, 1995 - - - 15,311,778 - 26,474,482
Income from investments - - - 264,989 - 625,929
Contributions - - - 811,553 - 1,743,062
Realized and unrealized appreciation
(depreciation) in fair value of
investments - - - 2,310,532 - 3,468,349
Distributions - - - (585,169) - (1,839,949)
Administrative expenses - - - (48,150) - (91,799)
Fund transfers - - - (496,158) - -
----------------------------------------------------------------------------------------
Balance at December 31, 1996 - - - $17,569,375 - $30,380,074
Income from investments 57,867 54,279 13,489 505,775 22,782 1,351,949
Contributions 7,257 53,651 43,501 806,374 - 1,934,082
Realized and unrealized appreciation
(depreciation) in fair value of
investments 17,120 12,414 (40,939) 11,447,046 - 13,142,035
Distributions (393) (183) (456) (547,576) (3,552) (2,094,342)
Administrative expenses (62) (313) (142) (61,131) - (93,219)
Fund transfers 1,363,262 624,564 301,421 (1,701,671) - -
Participant loan withdrawals (10,122) (16,015) (1,349) (417,565) 739,907 -
Participant loan repayments - 1,771 669 64,892 (112,680) -
----------------------------------------------------------------------------------------
Balance at December 31, 1997 $1,434,929 $730,168 $316,194 $27,665,519 $646,457 $44,620,579
========================================================================================
</TABLE>
12
<PAGE> 17
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 in the form of subsidizing
the purchase of Company common stock.
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
1997 1996
--------------------------
<S> <C> <C>
Net assets available for plan benefits per the
financial statements $44,620,579 $30,380,074
Amounts allocated to withdrawn participants (148,526) (1,199,986)
--------------------------
Net assets available for plan benefits per the Form 5500 $44,472,053 $29,180,088
==========================
</TABLE>
The following is a reconciliation of benefits paid per the financial statements
to the Form 5500:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1997 1996 1995
----------------------------------------
<S> <C> <C> <C>
Distributions per the financial statements $2,094,342 $1,839,949 $1,760,965
Add: Amounts allocated to withdrawn
participants 148,526 1,199,986 585,067
Less: Amounts allocated to withdrawn
participants in prior year (1,199,986) (585,067) (341,952)
---------------------------------------
Distributions per the Form 5500 $1,042,882 $2,454,868 $2,004,080
=======================================
</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.
13
<PAGE> 18
ST. PAUL FEDERAL BANK FOR SAVINGS
PROFIT SHARING AND SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
9. YEAR 2000 ISSUE (UNAUDITED)
The Vanguard Group serves as the Plan's recordkeeper and trustee. Vanguard has
developed a plan to modify its information technology to be ready for the year
2000 and has begun converting critical data processing systems. The project
also includes determining whether third party service providers have reasonable
plans in place to become year 2000 compliant. The Vanguard Group currently
believes that the renovation of its major internal applications will be
complete by the third quarter of 1998. It has also requested that its clients,
business partners, and providers make the same commitment for all new releases
of hardware and software as well as upgraded interfaces. Full-scale testing
for year 2000 readiness will occur from the third quarter 1998 through December
1998 and readiness monitoring will continue through 1999. The Vanguard Group
does not expect this project to have a significant effect on the Plan's
operations.
14
<PAGE> 19
SUPPLEMENTAL SCHEDULES
<PAGE> 20
ST. PAUL FEDERAL BANK FOR SAVINGS
PROFIT SHARING AND SAVINGS PLAN
LINE 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
<TABLE>
<CAPTION>
DECEMBER 31, 1997
IDENTITY OF ISSUE, BORROWER, DESCRIPTION OF CURRENT
LESSOR, OR SIMILAR PARTY INVESTMENT COST VALUE
- -----------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash and cash equivalents:
Vanguard Money Market Reserves 111,255 shares
Income Prime Portfolio variable rate $ 111,255 $ 111,255
-------------------------
Total cash and cash equivalents $ 111,255 $ 111,255
Mutual funds:
Vanguard Index Trust 500
Portfolio 59,002 shares 4,451,757 5,314,316
Vanguard Index Trust
Extended Market Portfolio 130,387 shares 3,588,689 4,009,401
Vanguard Money Market
Reserves Income Prime
Portfolio 2,859,230 shares 2,859,230 2,859,230
Vanguard Bond Index Fund
Total Bond Market Portfolio 162,970 shares 1,602,035 1,644,365
Vanguard Fixed Income
Securities Fund High Yield
Corporate Portfolio 177,590 shares 1,418,966 1,434,929
Vanguard Wellington Fund 24,794 shares 720,218 730,168
Vanguard International
Growth Portfolio 19,292 shares 358,269 316,194
-------------------------
Total mutual funds 14,999,164 16,308,603
Common stock:
St. Paul Bancorp, Inc. 1,051,154 shares 7,902,816 27,592,790
-------------------------
Total common stock 7,902,816 27,592,790
Participant loans 8.5% - 9.5%
interest rate 646,457 646,457
-------------------------
Total investments $23,659,692 $44,659,105
=========================
</TABLE>
15
<PAGE> 21
St. Paul Federal Bank For Savings
Profit Sharing and Savings Plan
Line 27d - Schedule of Reportable Transactions
Year ended December 31, 1997
<TABLE>
<CAPTION>
MATURITY
PROCEEDS/
DESCRIPTION OF ASSET, INCLUDING INTEREST PURCHASE SELLING COST OF
IDENTITY OF PARTY INVOLVED RATE AND MATURITY PRICE PRICE ASSET
- ------------------------------------------------------------------------------------------------------------------------------------
Category (i) - Individual transactions in excess of 5% of the total Plan assets
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
The Vanguard Group Vanguard Index Trust Extended Market Portfolio:
1 purchase $3,563,699 $ - $3,563,699
The Vanguard Group Vanguard Bond Index Fund Total Bond Market
Portfolio:
1 purchase 1,576,694 - 1,576,694
First Trust Illinois Federated Income Trust:
1 sale - 1,577,903 1,643,591
First Trust Illinois Montgomery Funds Small Capitalization Fund:
1 sale - 3,533,196 3,134,143
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
First Trust Illinois First American Government Obligations Fund,
variable rate:
58 purchases $6,527,720 $ - $6,527,720
44 sales - 6,555,078 6,555,076
The Vanguard Group Vanguard Index Trust 500 Portfolio:
66 purchases 903,780 - 903,780
78 sales - 741,386 626,861
The Vanguard Group Vanguard Index Trust Extended Market Portfolio:
53 purchases 4,329,209 - 4,329,209
97 sales - 785,574 747,338
The Vanguard Group Vanguard Money Market Reserves
Income Prime Portfolio:
82 purchases 1,068,704 - 1,068,704
71 sales - 1,751,076 1,751,076
<CAPTION>
CURRENT
VALUE OF
ASSET ON
TRANSACTION GAIN
IDENTITY OF PARTY INVOLVED DATE (LOSS)
- ----------------------------------------------------------------
Category (i) - Individual transactions in excess of 5% of the total Plan assets
- ----------------------------------------------
The Vanguard Group
$3,563,699 $ -
The Vanguard Group
1,576,694 -
First Trust Illinois
1,577,903 (65,688)
First Trust Illinois
3,533,196 399,053
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
First Trust Illinois
$6,527,720 $ -
6,555,076 -
The Vanguard Group
903,780 -
741,386 114,525
The Vanguard Group
4,329,209 -
785,574 38,236
The Vanguard Group
1,068,704 -
1,751,076 -
</TABLE>
16
<PAGE> 22
St. Paul Federal Bank For Savings
Profit Sharing and Savings Plan
Line 27d - Schedule of Reportable Transactions
Year ended December 31, 1997
<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 (Continued)
<S> <C> <C> <C> <C> <C> <C>
The Vanguard Group Vanguard Bond Index Fund Total Bond Market
Portfolio:
66 purchases 1,853,969 - 1,853,969 1,853,969 -
62 sales - 255,027 253,548 255,027 1,479
The Vanguard Group Vanguard Fixed Income Securities Fund
High Yield Corporate Portfolio:
33 purchases 1,507,415 - 1,507,415 1,507,415 -
13 sales - 89,606 88,582 89,606 1,024
The Vanguard Group St. Paul Common Stock Fund:
81 purchases 1,979,383 - 1,979,383 1,979,383 -
87 sales - 3,382,784 1,395,308 3,382,784 1,987,476
First Trust Illinois Federated Income Trust:
3 purchases 14,938 - 14,938 14,938 -
3 sales - 1,681,700 1,751,630 1,681,700 (69,930)
First Trust Illinois Montgomery Funds Small Capitalization Fund:
2 purchases 15,318 - 15,318 15,318 -
4 sales - 3,666,927 3,253,077 3,666,927 413,850
</TABLE>
There were no category (ii) or (iv) transactions reportable during the year.
17
<PAGE> 23
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 30, 1998 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> 24
EXHIBIT INDEX
Exhibit
Number Description
- ------- -----------
24 Consent of Independent Auditors
<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 23, 1998, 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, 1997.
/s/ Ernst & Young LLP
---------------------
Ernst & Young LLP
Chicago, Illinois
June 23, 1998
