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[LOGO OF HINSDALE FINANCIAL CORPORATION APPEARS HERE]
November 8, 1996
Dear Fellow Stockholder:
You were recently sent proxy material relating to the Special Meeting of
Stockholders to be held on Tuesday, November 26, 1996. At this important
meeting, stockholders are being asked to approve a Merger of Equals with
Liberty Bancorp, Inc. and related matters. The background and terms of this
Merger are fully explained in the proxy statement.
IF YOU HAVE NOT YET VOTED YOUR PROXY, PLEASE DO SO. YOUR BOARD OF DIRECTORS
UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE MERGER AND RELATED PROPOSALS.
Approval of this transaction requires the affirmative vote of a majority of
Hinsdale Financial Corporation's outstanding shares. Members of the Board of
Directors have publicly announced their intentions to vote for the Merger.
In connection with this Merger transaction, please consider the following:
. After thorough analysis, your Board of Directors has unanimously concluded
that the Merger is in the best interests of Hinsdale Financial and its
stockholders.
. The Merger is expected to result in an IMMEDIATE INCREASE TO BOTH EARNINGS
PER SHARE AND BOOK VALUE PER SHARE for Hinsdale Financial stockholders.
Looking forward, operating economies and revenue enhancements should have
a FURTHER POSITIVE IMPACT ON EARNINGS. These increases in earnings cannot
be achieved without the Merger.
. Following completion of the Merger you will own shares in ALLIANCE
BANCORP, WHICH INTENDS TO PAY A CASH DIVIDEND AT AN ANNUAL RATE OF $.65
PER SHARE. IN ADDITION, IT IS THE INTENTION OF ALLIANCE BANCORP, FOLLOWING
CONSUMMATION OF THE MERGER, TO REPURCHASE UP TO 10% OF THE OUTSTANDING
SHARES OF COMMON STOCK.
. Your Board of Directors is convinced that the Merger presents an
EXCEPTIONAL OPPORTUNITY TO ENHANCE THE STRATEGIC VALUE of your Company and
thereby FURTHER ENHANCE YOUR INVESTMENT. The resulting combined entity,
Alliance Bancorp, will be a $1.3 billion company operating through 14
offices in Cook and DuPage Counties, Illinois and will be better
positioned to benefit from the ongoing consolidation taking place in the
banking industry.
. Hinsdale Federal is among the goodwill litigants that have filed suit
against the Federal Government. The timing and amount of any recovery is
uncertain. We will continue to pursue the goodwill litigation to its
fullest extent, recognizing that the claim will undoubtedly be subject to
numerous governmental defenses and offsets, which may take several years
to resolve.
. CERTAIN INVESTORS, SPECULATING on the outcome of this litigation, feel
that Hinsdale Financial did not receive enough value for this goodwill
case in the Merger Agreement. DON'T BE MISLED BY THEIR CLAIMS! In
consultation with its legal and financial advisors, your Board of
Directors deliberated extensively as to the goodwill issue. The Board
considered its potential value, as well as the many related uncertainties,
including a separate distribution of the goodwill claim and the possible
adverse tax consequences to stockholders and the Company. The Board
believes that the Exchange Ratio reflects a fair value of the goodwill
lawsuit to Hinsdale Financial's stockholders.
Hinsdale Financial's business strategy does not and cannot revolve around
the unknown or unpredictable outcome of litigation. The Board believes that
the Merger transaction provides an excellent and timely opportunity to create
a more attractive, combined company with greater potential to ENHANCE THE
OPERATIONAL AND STRATEGIC VALUE OF YOUR INVESTMENT.
Thank you for your consideration of this important matter. If you have any
questions, please call the undersigned or Rick Hojnicki at (630) 323-1776. We
appreciate your support.
Sincerely,
/s/ Kenne P. Bristol /s/ William R. Rybak
Kenne P. Bristol William R. Rybak
President and Chief Executive Officer Chairman of the Board
THE HINSDALE FINANCIAL BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR
APPROVAL OF THE MERGER AND RELATED PROPOSALS.
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[LETTERHEAD OF FRB APPEARS HERE]
FOR IMMEDIATE RELEASE
HINSDALE FINANCIAL'S BOARD UNANIMOUSLY RECOMMENDS
MERGER APPROVAL
HINSDALE, ILL., November 8, 1996 -- The Board of Directors of HINSDALE FINANCIAL
CORPORATION (NASDAQ: HNFC), the holding company for Hinsdale Federal Bank for
Savings, today reaffirmed its recommendation to shareholders to vote in favor of
the proposed merger with Liberty Bancorp, Inc.
"After thorough analysis, the board of directors has unanimously
concluded that the merger is in the best interests of Hinsdale Financial and its
shareholders," stated Kenne P. Bristol, president and chief executive officer.
"The merger presents an exceptional opportunity to enhance the strategic value
of the company and thereby further enhance shareholder investment."
The resulting combined entity, to be named "Alliance Bancorp", will be a
$1.3 billion asset company operating through 14 offices in Cook and DuPage
Counties, and, Bristol noted, "will be better positioned to benefit from the
ongoing consolidation taking place in the banking industry."
Bristol continued, "The merger is expected to result in an immediate
increase to both earnings and book value per share for Hinsdale Financial
shareholders. Following the completion of the merger, holders will own shares in
Alliance Bancorp, which intends to pay a cash dividend at an annual rate of 65
cents per share." Currently, Hinsdale Financial does not pay a dividend. "In
addition, it is the intention of Alliance Bancorp, following consummation of the
merger, to repurchase up to 10 percent of the outstanding common stock," Bristol
added.
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Hinsdale federal is among the goodwill litigants that have filed suit
against the Federal government. According to Bristol. "The timing and amount of
any recovery is uncertain We will continue to pursue the goodwill litigation to
its fullest extent, recognizing that the claim will undoubtedly be subject to
numerous governmental defenses and offsets which may take several years to
resolve."
According to Bristol, Hinsdale Financial's board of Directors, in
consultation with its legal and financial advisors, deliberated extensively as
to the goodwill issue. "The Board considered its potential value, as well as the
many related uncertainties, including a separate distribution of the goodwill
claim and the possible adverse tax consequences to shareholders and the company.
The Board believes that the Exchange Ratio reflects a fair value of the goodwill
lawsuit to Hinsdale Financial's shareholders."
"Hinsdale Financial's business strategy does not and cannot revolve
around the unknown or unpredictable outcome of litigation," asserted Bristol.
"The Board believes that the merger transaction provides an excellent and timely
opportunity to create a more attractive, combined company with greater potential
to enhance the operational and strategic value of shareholder investment."
Bristol asked shareholders who have not yet voted their proxies to do
so. Approval of the transaction requires an affirmative vote of a majority of
Hinsdale Financial's outstanding shares. Members of Hinsdale Financial's Board
of Directors unanimously recommend a vote for approval of the merger and related
proposals.
FOR ADDITIONAL INFORMATION REGARDING HINSDALE FREE OF CHARGE VIA FAX,
DIAL 1-800-PRO-INFO. USE THE COMPANY'S STOCK SYMBOL, HNFC.
