ST FRANCIS CAPITAL CORP, S-4, 1998-09-29

ST FRANCIS CAPITAL CORP
S-4, 1998-09-29
SAVINGS INSTITUTION, FEDERALLY CHARTERED

Previous: DEJORIA JOHN PAUL, 3, 1998-09-29

Next: ESQUIRE COMMUNICATIONS LTD, RW, 1998-09-29

<PAGE> 1
As filed with the Securities and Exchange Commission on September 29, 1998.
Registration No. 333-
================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------

FORM S-4
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
--------------------

ST. FRANCIS CAPITAL CORPORATION
(Exact name of Registrant as Specified in its Charter)

<TABLE>
<S> <C> <C>
WISCONSIN 6711 39-1747461
--------- ---- ----------
(State or other jurisdiction of (Primary Standard (I.R.S. Employer
incorporation or organization) Industrial Classification Code Number) Identification No.)
</TABLE>

13400 BISHOPS LANE, SUITE 350
BROOKFIELD, WISCONSIN 53005-6203
(414) 486-8700
-----------------------------------------------------------------
(Address, including Zip Code, and Telephone Number,
including Area Code, of Registrant's Principal Executive Offices)

THOMAS R. PERZ, PRESIDENT
AND CHIEF EXECUTIVE OFFICER
ST. FRANCIS CAPITAL CORPORATION
13400 BISHOPS LANE, SUITE 350
BROOKFIELD, WISCONSIN 53005-6203
(414) 486-8700
---------------------------------------------------------
(Name, Address, including Zip Code, and Telephone Number,
including Area Code, of Agent for Service)

Copies to:
W. CHARLES JACKSON, ESQ. CHRISTOPHER J. ZINSKI, ESQ.
MICHAEL BEST & FRIEDRICH LLP SCHIFF HARDIN & WAITE
100 EAST WISCONSIN AVENUE 6600 SEARS TOWER
SUITE 3300 CHICAGO, ILLINOIS 60606-6473
MILWAUKEE, WISCONSIN 53202

-------------------------

Approximate date of commencement of proposed sale of securities to the public:
At the effective time of the merger ("Merger") of Reliance Bancshares, Inc.
("Reliance") with and into St. Francis Capital Corporation ("St. Francis") as
described in the attached Proxy Statement/Prospectus.

If the securities being registered on this Form are being offered in connection
with the formation of a holding company and there is compliance with General
Instruction G, check the following box. [ ]

CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=======================================================================================================================
PROPOSED PROPOSED AMOUNT
AMOUNT MAXIMUM MAXIMUM OF
TITLE OF EACH CLASS OF TO BE OFFERING AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED(1) PRICE PER UNIT OFFERING PRICE(2) FEE(2)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $0.01 par value per share(3)...... 740,022 N/A $ 9.13 $6,460.74
=======================================================================================================================
</TABLE>

(1) The number of shares to be registered is based upon an estimate of the
maximum number of shares of St. Francis Common Stock to be issued to
holders of Reliance Common Stock pursuant to the Merger Agreement (as
defined herein).
(2) Computed in accordance with Rule 457(f), based on the estimated market
value of Reliance Common Stock of $9.13 per share as reported on the
NASDAQ "Small-Cap" Market on September 23, 1998 and the maximum number
of shares that may be exchanged or converted in the Merger.
(3) This Registration Statement also includes associated Rights to purchase
shares of the Registrant's Series A Junior Participating Preferred
Stock, which Rights (i) are not currently separable from the shares of
common stock and (ii) are not currently exercisable. See "Description
of St. Francis Capital Stock" and "Comparison of Shareholders' Rights."

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHOULD BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.

================================================================================
<PAGE> 2

[RELIANCE BANCSHARES, INC. LETTERHEAD]

December __, 1998

Dear Fellow Shareholder:

The Special Meeting of Shareholders (the "Special Meeting") of Reliance
Bancshares, Inc. ("Reliance"), a Wisconsin corporation and the holding company
for Reliance Savings Bank ("Reliance Savings Bank"), will be held on January __,
1999, at ____ [a.m./p.m.], Milwaukee, Wisconsin time, at the Clarion Hotel &
Conference Center, 5311 South Howell Avenue, Milwaukee, Wisconsin 53207.

AT THE SPECIAL MEETING, YOU WILL BE ASKED TO CONSIDER AND VOTE UPON A
PROPOSAL TO APPROVE AN AGREEMENT AND PLAN OF REORGANIZATION, DATED JUNE 30, 1998
(THE "MERGER AGREEMENT"), AND THE RELATED AGREEMENT AND PLAN OF MERGER, DATED
SEPTEMBER 22, 1998 (THE "PLAN OF MERGER"), BY AND BETWEEN RELIANCE AND ST.
FRANCIS CAPITAL CORPORATION ("ST. FRANCIS"), A WISCONSIN CORPORATION AND THE
HOLDING COMPANY FOR ST. FRANCIS BANK, F.S.B., A FEDERALLY CHARTERED SAVINGS BANK
("ST. FRANCIS BANK"), PROVIDING FOR THE MERGER OF RELIANCE WITH AND INTO ST.
FRANCIS (THE "MERGER"). As described in the accompanying proxy statement, in the
Merger, each of your shares of Reliance common stock will be converted into the
right to elect the consideration due you in cash, shares of St. Francis common
stock, or a combination thereof, but such right is subject to the requirements
that (i) the aggregate consideration to be paid to shareholders of Reliance must
be equal to at least 60% in St. Francis common stock and no greater than 40% in
cash, and (ii) the Merger must qualify as a tax-free reorganization. Thus, no
guarantee can be given that an election by any given shareholder will be
honored, or that Reliance shareholders will receive their elected form of
consideration. AS DESCRIBED FURTHER HEREIN, THE ACTUAL AMOUNT OF CASH AND/OR
SHARES OF ST. FRANCIS COMMON STOCK TO BE RECEIVED BY SHAREHOLDERS OF RELIANCE
WILL BE DEPENDANT UPON THE AVERAGE OF THE LAST SALE PRICE OF THE DAY OF ONE
SHARE OF ST. FRANCIS COMMON STOCK OVER A TEN-DAY PRICING PERIOD ENDING SHORTLY
BEFORE THE EFFECTIVE TIME OF THE MERGER. AN ELECTION FORM AND LETTER OF
TRANSMITTAL IS ENCLOSED HEREWITH.

RELIANCE'S BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE TERMS OF THE
MERGER AGREEMENT AND PLAN OF MERGER, BELIEVES THE MERGER AGREEMENT IS IN THE
BEST INTERESTS OF RELIANCE SHAREHOLDERS, AND RECOMMENDS THAT SHAREHOLDERS OF
RELIANCE VOTE FOR THE PROPOSAL TO APPROVE AND ADOPT THE MERGER AGREEMENT AND
PLAN OF MERGER.

The attached Notice of Special Meeting and Proxy Statement/Prospectus
describe the formal business to be conducted at the Special Meeting, including
details concerning the Merger Agreement and Plan of Merger, and the Merger.
Directors and officers of Reliance will be present at the Special Meeting to
respond to any questions that our shareholders may have.

The affirmative vote of the holders of a majority of the issued and
outstanding shares of common stock of Reliance will be required to approve the
Merger. An abstention or failure to vote will have the same effect as a vote
against the Merger. Accordingly, please complete, date, sign and promptly return
your proxy card in the enclosed envelope. Returning your proxy card will not
prevent you from voting in person at the Special Meeting, but will assure that
your vote is counted if you are unable to attend.

You should not send in certificates for your shares of Reliance common
stock with your proxy card; please carefully read and follow the instructions
set forth in the election form and letter of transmittal delivered to you under
separate cover regarding the making of your election and the surrender of your
Reliance stock certificates.

On behalf of the Board of Directors

Allan T. Bach
President and Chief
Executive Officer

<PAGE> 3

RELIANCE BANCSHARES, INC.
3140 SOUTH 27TH STREET
MILWAUKEE, WISCONSIN 53215
(414) 671-2222

-----------------------------------------

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JANUARY __, 1999

-----------------------------------------

TO THE HOLDERS OF COMMON STOCK OF RELIANCE BANCSHARES, INC.:

NOTICE IS HEREBY GIVEN that the Special Meeting of Shareholders (the
"Special Meeting") of Reliance Bancshares, Inc. ("Reliance") will be held on
January __, 1999, at ____ [a.m./p.m.], Milwaukee, Wisconsin time, at the Clarion
Hotel & Conference Center, 5311 South Howell Avenue, Milwaukee, Wisconsin. The
Special Meeting is for the purpose of considering and voting upon the following
matters, all of which are set forth more completely in the accompanying Proxy
Statement/Prospectus:

1. To consider and vote upon the approval and adoption of the Agreement
and Plan of Reorganization, dated as of June 30, 1998 (the "Merger
Agreement"), and the related Agreement and Plan of Merger, dated as of
September 22, 1998 (the "Plan of Merger"), between St. Francis Capital
Corporation, a Wisconsin corporation ("St. Francis") and Reliance.
Copies of the Merger Agreement and Plan of Merger are attached as
Exhibits A and B, respectively, to the accompanying Proxy
Statement/Prospectus, providing, among other things, for the merger of
Reliance with and into St. Francis (the "Merger"), and the issuance of
shares of common stock of St. Francis and the payment of cash to the
shareholders of Reliance in connection therewith. Pursuant to the
Merger Agreement, shareholders of Reliance may elect, subject to
certain election and allocation procedures, to exchange their shares of
Reliance common stock for either cash in an amount ranging from $10.00
per Reliance share up to an amount equal to .2295 multiplied by the
average market price of St. Francis' common stock over a ten-day
pricing period ending shortly before the effective time of the Merger
(the "St. Francis Average Stock Price") (the exact per share cash
amount to be dependant upon the St. Francis Average Stock Price),
between .2295 and .3085 fractional shares of St. Francis common stock
(the exact fractional share amount to be dependant upon the St. Francis
Average Stock Price), or an overall combination thereof, for each
Reliance common share. However, the aggregate consideration to be paid
to shareholders of Reliance must be equal to at least 60% in St.
Francis common stock and no greater than 40.0% in cash and the Merger
must qualify as a tax-free reorganization. Thus, no guarantee can be
given that an election by any given shareholder will be honored, or
that Reliance shareholders will receive their elected form of
consideration.

2. To adjourn the Special Meeting to solicit additional votes in favor of
the Merger Agreement in the event that the required vote for approval
and adoption of the Merger Agreement has not been obtained by the date
of the Special Meeting.

3. To consider and act upon such other matters as may properly come before
the Special Meeting or any adjournments or postponements thereof. The
Board of Directors is not aware of any such other business.

<PAGE> 4

The Board of Directors has established December __, 1998 as the record
date for the determination of shareholders entitled to notice of and to vote at
the Special Meeting and any adjournments or postponements thereof. Only
shareholders of record as of the close of business on that date will be entitled
to vote at the Special Meeting or any adjournments or postponements thereof. In
the event there are not sufficient votes for a quorum or to approve or ratify
any of the foregoing proposals at the time of the Special Meeting, the Special
Meeting may be postponed or adjourned in order to permit further solicitation of
proxies by Reliance.

BY ORDER OF THE BOARD OF DIRECTORS,

Carol A. Barnharst
Vice President, Chief Financial Officer,
Secretary and Treasurer

December __, 1998
Milwaukee, Wisconsin

================================================================================

YOUR VOTE IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES YOU OWN. WHETHER OR
NOT YOU EXPECT TO ATTEND THE SPECIAL MEETING, PLEASE SIGN, DATE AND PROMPTLY
RETURN THE ACCOMPANYING PROXY CARD USING THE ENCLOSED POSTAGE-PAID ENVELOPE.

================================================================================

PLEASE DO NOT SEND IN CERTIFICATES FOR YOUR SHARES OF RELIANCE COMMON STOCK WITH
YOUR PROXY CARD; PLEASE CAREFULLY READ AND FOLLOW THE INSTRUCTIONS SET FORTH IN
THE ELECTION FORM AND LETTER OF TRANSMITTAL REGARDING THE MAKING OF YOUR
ELECTION AND THE SURRENDER OF YOUR RELIANCE STOCK CERTIFICATES.

================================================================================

-2-

<PAGE> 5

RELIANCE BANCSHARES, INC.

PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON JANUARY __, 1999

ST. FRANCIS CAPITAL CORPORATION
PROSPECTUS
UP TO 740,022 SHARES OF COMMON STOCK, $0.01 PAR VALUE PER SHARE
(AND ASSOCIATED PURCHASE RIGHTS)

This combined Proxy Statement and Prospectus ("Proxy
Statement/Prospectus") is being furnished to the holders of common stock, $1.00
par value per share ("Reliance Common Stock"), of Reliance Bancshares, Inc., a
Wisconsin corporation ("Reliance"), in connection with the solicitation of
proxies by the Reliance Board of Directors for use at the Special Meeting of
Shareholders of Reliance to be held on January __, 1999, at _____ [a.m./p.m.],
Milwaukee, Wisconsin time, at the Clarion Hotel & Conference Center, 5311 South
Howell Avenue, Milwaukee, Wisconsin, or at any adjournments or postponements
thereof (the "Special Meeting"). The primary purpose of the Special Meeting is
for shareholders to consider and vote upon the merger (the "Merger") of Reliance
with and into St. Francis Capital Corporation, a Wisconsin corporation ("St.
Francis"). The Merger will be effected in accordance with an Agreement and Plan
of Reorganization, dated as of June 30, 1998 (the "Merger Agreement"), and
related Agreement and Plan of Merger, dated as of September 22, 1998 ("Plan of
Merger"), by and between Reliance and St. Francis. At the Special Meeting,
shareholders of Reliance also will consider and vote upon the possible
adjournment of the Special Meeting, if necessary, to solicit additional votes in
favor of the Merger.

In the Merger, each outstanding share of Reliance Common Stock will be
converted into the right to receive either cash (the "Per Share Cash
Distribution") (to be computed as described herein) or a fractional share of St.
Francis common stock (the "Per Share Stock Distribution") (to be computed as
described herein). The value of the Per Share Cash Distribution and Per Share
Stock Distribution will be based on the average market price of St. Francis'
common stock over a ten-day pricing period ending shortly before the effective
time of the Merger (the "St. Francis Average Stock Price"). SEE PAGES 5-7, 13-15
AND 35-37 OF THE PROXY STATEMENT/PROSPECTUS FOR AN ILLUSTRATION OF THE
COMPUTATION OF THE VALUE OF THE PER SHARE CASH DISTRIBUTION AND PER SHARE STOCK
DISTRIBUTION.

Pursuant to the Merger Agreement, Reliance shareholders may elect,
subject to certain election and allocation procedures, to exchange all of their
shares of Reliance Common Stock for the Per Share Cash Distribution for each
share, the Per Share Stock Distribution for each share, or an overall
combination thereof. However, the aggregate consideration to be paid to
shareholders of Reliance must be equal to at least 60% in St. Francis common
stock and no greater than 40% in cash, and the Merger must qualify as a tax-free
organization. Thus, no guarantee can be given that an election by any given
shareholder will be honored, or that Reliance shareholders will receive their
elected form of consideration. For a more detailed description of the terms of
the Merger, see "Proposal To Approve The Merger."

This Proxy Statement/Prospectus also constitutes a prospectus of St.
Francis with respect to up to 740,022 shares of St. Francis common stock, $0.01
par value per share ("St. Francis Common Stock") to be issued to the
shareholders of Reliance upon consummation of the proposed Merger pursuant to
the terms of the Merger Agreement. This Proxy Statement/Prospectus and
accompanying form of proxy ("Proxy") are first being mailed to shareholders of
Reliance as of December ___, 1998 (the "Voting Record Date") on or about
December __, 1998.

SEE "RISK FACTORS" BEGINNING ON PAGE 29 FOR A DISCUSSION OF CERTAIN
FACTORS WHICH SHOULD BE CONSIDERED IN CONNECTION WITH THE ACQUISITION OF ST.
FRANCIS COMMON STOCK.

All information contained in this Proxy Statement/Prospectus relating
to St. Francis has been supplied by St. Francis, and all information relating to
Reliance has been supplied by Reliance. Neither St. Francis nor Reliance
warrants the accuracy or completeness of information relating to the other.

THE SECURITIES TO BE ISSUED PURSUANT TO THIS PROXY STATEMENT/PROSPECTUS HAVE NOT
BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR BY ANY
STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED ON THE ACCURACY OR ADEQUACY OF THIS PROXY
STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE SHARES OF ST. FRANCIS COMMON STOCK OFFERED HEREBY ARE NOT DEPOSITS OR
SAVINGS ACCOUNTS AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY OR INSTRUMENTALITY.

THE DATE OF THIS PROXY STATEMENT/PROSPECTUS IS DECEMBER __, 1998.

<PAGE> 6

As described above, this Proxy Statement/Prospectus incorporates by
reference documents that are not presented herein or delivered herewith. These
documents (other than exhibits to such documents that are specifically
incorporated by reference into the text of such documents) are available,
without charge, to each person, including any beneficial owner, to whom a copy
of this Proxy Statement/Prospectus is delivered, upon written or oral request to
William R. Hotz, 13400 Bishops Lane, Suite 350, Brookfield, Wisconsin
53005-6203. In order to ensure timely delivery of the documents, any request
should be made by ______________, 1998. See "Incorporation of Certain
Information By Reference."

NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROXY STATEMENT/PROSPECTUS, AND, IF GIVEN
OR MADE, SUCH INFORMATION OR REPRESENTATION SHOULD NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY ST. FRANCIS, RELIANCE OR ANY OTHER PERSON. THIS PROXY
STATEMENT/PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF
AN OFFER TO BUY A SECURITY, OR A SOLICITATION OF A PROXY, IN ANY JURISDICTION IN
WHICH, OR TO ANY PERSON TO WHOM, IT WOULD BE UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION. NEITHER THE DELIVERY OF THIS PROXY STATEMENT/PROSPECTUS NOR ANY
DISTRIBUTION OF THE SECURITIES MADE PURSUANT TO THIS PROXY STATEMENT/PROSPECTUS
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF ST. FRANCIS OR RELIANCE OR IN THE INFORMATION SET FORTH
HEREIN OR IN THE DOCUMENTS INCORPORATED HEREIN BY REFERENCE SINCE THE DATE OF
THIS PROXY STATEMENT/PROSPECTUS; HOWEVER, IF ANY MATERIAL CHANGE OCCURS IN SUCH
AFFAIRS OR INFORMATION DURING THE PERIOD THAT THIS PROXY STATEMENT/PROSPECTUS IS
REQUIRED TO BE DELIVERED, THIS PROXY STATEMENT/PROSPECTUS WILL BE AMENDED AND
SUPPLEMENTED ACCORDINGLY.

FORWARD-LOOKING STATEMENTS

This Proxy Statement/Prospectus, including the information incorporated
by reference herein, information included in, and incorporated by reference
from, future filings by St. Francis with the Securities and Exchange Commission
(the "SEC" or the "Commission"), and information contained in written material,
press releases and oral statements issued by or on behalf of St. Francis or
Reliance, contains, or may contain, certain statements that may be deemed to be
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). All statements, other
than statements of historical facts, included in this Proxy Statement/Prospectus
that address activities, events or developments that St. Francis or Reliance
expect, believe or anticipate will or may occur in the future are
forward-looking statements. These statements are based on certain assumptions
and analyses made by St. Francis or Reliance in light of their experience and
perception of historical trends, current conditions, expected future
developments and other factors they believe are appropriate under the
circumstances. Such statements are subject to a number of assumptions, risks and
uncertainties and are based on managements' current expectations. Examples of
factors which could cause future results to differ from managements'
expectations include, but are not limited to, the following: general economic
and competitive conditions; legislative and regulatory initiatives; monetary and
fiscal policies of the federal government; general market rates of interest;
interest rates on competing investments; interest rates on funding sources;
consumer demand for deposit and loan products and services; changes in
accounting policies and guidelines; and changes in the quality or composition of
St. Francis' and/or Reliance's loan and investment portfolios. In the case of
St. Francis, some of these risks are described in more detail below under "Risk
Factors." Investors are cautioned that any such statements are not guarantees of
future performance and that actual results or developments may differ materially
from the expectations expressed in the forward-looking statements.

-2-

<PAGE> 7

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----

<S> <C>
FORWARD-LOOKING STATEMENTS...................................................................................... 2

QUESTIONS AND ANSWERS ABOUT THE MERGER.......................................................................... 5

SUMMARY ....................................................................................................... 10
The Parties to the Merger.............................................................................. 10
The Reliance Special Meeting........................................................................... 11
The Merger............................................................................................. 13
Comparative per Share Information...................................................................... 22
Comparative Market and Stock Price Information......................................................... 23
Selected Historical Financial Information.............................................................. 25

INTRODUCTION.................................................................................................... 28

RISK FACTORS.................................................................................................... 29

THE SPECIAL MEETING............................................................................................. 31

PROPOSAL TO APPROVE THE MERGER
(Proposal No. 1)................................................................................................ 34
General .............................................................................................. 34
The Merger and the Bank Merger......................................................................... 34
Effect of The Merger................................................................................... 34
Effective Time......................................................................................... 35
Merger Consideration................................................................................... 35
Price-Based Termination................................................................................ 37
Background of the Merger............................................................................... 37
Reasons For The Merger and Recommendation of the Reliance Board of Directors........................... 40
Opinion of Reliance Financial Advisor.................................................................. 43
Election and Allocation Procedures..................................................................... 47
Issuance of Stock and Payment of Cash.................................................................. 51
Representations and Warranties......................................................................... 52
Certain Covenants...................................................................................... 52
Conditions to Each Party's Obligations................................................................. 53
Regulatory Approvals................................................................................... 55
Conduct of Business Pending Merger..................................................................... 55
Amendment and Waiver................................................................................... 58
Termination............................................................................................ 58
Management After the Merger............................................................................ 59
Interests of Certain Persons In The Merger............................................................. 59
Effect On Reliance Employee Benefit Plans.............................................................. 62
Certain Federal Income Tax Consequences................................................................ 63
Accounting Treatment................................................................................... 66
NASDAQ Listing......................................................................................... 66
Expenses .............................................................................................. 66
Voting Agreements...................................................................................... 66
Termination Fee Arrangements........................................................................... 66
Resales of St. Francis Common Stock.................................................................... 67
No Appraisal or Dissenters' Rights..................................................................... 67
</TABLE>

-3-

<PAGE> 8

<TABLE>
<S> <C>
DESCRIPTION OF ST. FRANCIS CAPITAL STOCK........................................................................ 68
General .............................................................................................. 68
St. Francis Common Stock............................................................................... 68
St. Francis Preferred Stock............................................................................ 69
Rights Plan............................................................................................ 69
Changes in Control..................................................................................... 69

COMPARISON OF SHAREHOLDERS' RIGHTS.............................................................................. 72
Vacancies on the Board of Directors.................................................................... 72
Advance Notice of Nominations of Directors and Shareholder Proposals................................... 72
Shareholder Rights Plan ............................................................................... 72

BUSINESS OF THE PARTIES TO THE MERGER........................................................................... 73
St. Francis............................................................................................ 73
Reliance .............................................................................................. 73
Regulations............................................................................................100

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS OF RELIANCE...........................................................................110

STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS....................................................................126

EXPERTS .......................................................................................................127

LEGAL MATTERS...................................................................................................127

SHAREHOLDER PROPOSALS FOR THE 1999 ANNUAL MEETING...............................................................127
Deadline for Submission of Shareholder Proposals for Inclusion in 1999 Proxy Materials.................127
Advance Notice Requirement for Any Proposal or Nomination to be Raised by a Shareholder................127
Discretionary Voting of 1999 Proxies...................................................................128

PROPOSAL TO ADJOURN THE SPECIAL MEETING
(Proposal No. 2)................................................................................................128

OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE SPECIAL MEETING................................................129

AVAILABLE INFORMATION...........................................................................................129

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE...............................................................130

FINANCIAL STATEMENTS OF
RELIANCE...............................................................................F-1
Report of Independent Auditors.........................................................................F-1
Consolidated Statements of Financial Condition.........................................................F-2
Consolidated Statements of Income......................................................................F-3
Consolidated Statements Stockholders' Equity...........................................................F-4
Consolidated Statements of Cash Flows..................................................................F-5
Notes to Consolidated Financial Statements.............................................................F-7

EXHIBIT A: AGREEMENT AND PLAN OF REORGANIZATION..........................................................A-1
EXHIBIT B: AGREEMENT AND PLAN OF MERGER..................................................................B-1
EXHIBIT C: OPINION OF ROBERT W. BAIRD & CO. INCORPORATED.................................................C-1
</TABLE>

-4-

<PAGE> 9

QUESTIONS AND ANSWERS ABOUT THE MERGER

Q(1): WHY IS RELIANCE BEING ACQUIRED BY ST. FRANCIS?

A(1): The Reliance Board has approved the Merger with St. Francis based upon
its assessment of the financial condition and prospects of Reliance in
particular and the competitive and regulatory environment for financial
institutions generally. St. Francis is a Wisconsin-based bank holding
company for St. Francis Bank, F.S.B., a federally-chartered savings
bank which operates 25 banking offices in Wisconsin. Reliance's
financial advisor has advised the Reliance Board that the merger
consideration provided for in the Merger Agreement is fair, from a
financial point of view, to the holders of Reliance Common Stock. The
Merger will enable Reliance shareholders who elect to exchange their
shares of Reliance Common Stock for St. Francis Common Stock to hold
stock in a larger and more diversified entity whose shares are more
widely held and more actively traded. Based upon these and other
factors, the Reliance Board believes that combining with St. Francis is
in the best interests of Reliance and Reliance shareholders. To review
the background and reasons for the Merger, see pages 37 through 42.

Q(2): AS A RELIANCE SHAREHOLDER, WHAT WILL I RECEIVE IN THE MERGER?

A(2): Prior to the Special Meeting, you will elect to receive shares of St.
Francis Common Stock, cash, or a combination of the two, in exchange
for your shares of Reliance Common Stock. You also will receive cash
instead of fractional shares of St. Francis Common Stock. You will make
this election on an Election Form being mailed to you under separate
cover. See Question 5. See also Question 3 for a further discussion and
an illustrative example of how the amount of stock and/or cash you will
receive will be calculated under the Merger Agreement.

The extent to which elections by Reliance shareholders to receive cash,
stock or a combination thereof, will be accommodated will depend upon
the election of all other Reliance shareholders. Pursuant to the Merger
Agreement and in order to ensure that the Merger qualifies as a
tax-free reorganization, at least 60% of the total consideration paid
in the Merger must be in the form of shares of St. Francis Common
Stock. For example:

(1) If all Reliance shareholders elect to receive cash
for their shares, then each Reliance shareholder
(other than the Reliance ESOP, which in all cases
will receive cash) would receive 60% of their Merger
consideration in shares of St. Francis Common Stock
and 40% in cash;

(2) If Reliance shareholders collectively elect to
receive at least 60% or more than 60% of their total
Merger consideration in shares of St. Francis Common
Stock, then all Reliance shareholders' elections with
respect to stock, cash or a combination thereof will
be honored; and

(3) If Reliance shareholders elect to receive 50% of the
total Merger consideration in shares of St. Francis
Common Stock and 50% in cash, then all Reliance
shareholders electing stock would receive stock and
all Reliance shareholders electing cash would
pro-rata receive stock such that at least 60% of the
total Merger consideration is in the form of shares
of St. Francis Common Stock.

However, in no event will a shareholder who elects to receive stock
receive cash instead (except cash which may be issued in lieu of
fractional shares).

-5-

<PAGE> 10

Q(3): HOW WILL THE NUMBER OF SHARES OF ST. FRANCIS COMMON STOCK OR THE AMOUNT
OF CASH I RECEIVE BE DETERMINED?

A(3): Generally, the Merger has been designed to give you between $10.00 and
$10.50 in value for each share of Reliance Common Stock, assuming the
St. Francis Average Stock Price (as hereinafter defined) is $32.41 or
more but not greater than $45.74. However, the number of shares of St.
Francis Common Stock and/or the amount of cash you receive will depend
on the "St. Francis Average Stock Price," which is the average of the
last sale price per share of St. Francis Common Stock for the ten
consecutive trading days ending on the fifth business day prior to the
completion of the Merger.

The following is a breakdown of the per share value (in stock and cash)
that you will receive based upon various ranges of the St. Francis
Average Stock Price:

(1) IF THE ST. FRANCIS AVERAGE STOCK PRICE IS LESS THAN
$32.41, St. Francis may elect not to complete the
Merger; however, if St. Francis elects to complete
the Merger, you will receive $10.00 per share in cash
or shares of St. Francis Common Stock having a value
of $10.00 per share;

(2) IF THE ST. FRANCIS AVERAGE STOCK PRICE IS BETWEEN
$32.41 AND $40.00, you will receive $10.00 per share
in cash or shares of St. Francis Common Stock having
a value of $10.00 per share;

(3) IF THE ST. FRANCIS AVERAGE STOCK PRICE IS BETWEEN
$40.01 AND $42.00, you will receive cash in an amount
equal to .25 multiplied by the St. Francis Average
Stock Price per share (i.e., between $10.00 and
$10.25 per share) or .25 shares of St. Francis Common
Stock per share;

(4) IF THE ST. FRANCIS AVERAGE STOCK PRICE IS BETWEEN
$42.01 AND $45.74, you will receive $10.50 per share
in cash or shares of St. Francis Common Stock having
a value of $10.50 per share; and

(5) IF THE ST. FRANCIS AVERAGE STOCK PRICE IS $45.75 OR
MORE, you will receive cash in an amount equal to
.2295 multiplied by the St. Francis Average Stock
Price per share or .2295 shares of St. Francis Common
Stock per share.

-6-
<PAGE> 11

FOR ILLUSTRATIVE PURPOSES ONLY, WE HAVE PROVIDED
THE FOLLOWING EXAMPLE.

The average of the last sale price per share of St. Francis
Common Stock for the ten consecutive trading days ending on December
__, 1998 (the latest practicable time period to obtain information
prior to the printing of this Proxy Statement/Prospectus) was $____.
Assuming the St. Francis Average Stock Price also is $_____, then (as
described above), the per share cash consideration to be received by a
Reliance shareholder would be $_____ and the per share value of St.
Francis Common Stock to be received by a Reliance shareholder would be
$______ (based on a conversion ratio of _________).

Assuming you own 100 shares of Reliance Common Stock, under the
following scenarios you would receive the following, based on the
stated assumptions.

(1) Assuming that Reliance shareholders collectively elect to
receive at least 60% of the total Merger consideration in
shares of St. Francis Common Stock:

(a) if you elected to receive all stock, you would receive
___ shares of St. Francis Common Stock [and $____ in
cash (representing the issuance of cash in lieu of
fractional shares)];

(b) if you elected to receive one-half stock and one-half
cash, you would receive ___ shares of St. Francis
Common Stock and $____ in cash; and

(2) Assuming that Reliance shareholders collectively elect to
receive 40% of the total Merger consideration in shares of
St. Francis Common Stock and 60% in cash:

(a) if you elected to receive all stock, you would receive
____ shares of St. Francis Common Stock [and $_____ in
cash (representing the issuance of cash in lieu of
fractional shares)];

(b) if you elected to receive one-half stock and one-half
cash, you would receive ___ shares of St. Francis
Common Stock and $____ in cash; and

THIS ILLUSTRATION SHOULD NOT BE CONSIDERED INDICATIVE OF THE ACTUAL
ALLOCATION OF ST. FRANCIS COMMON STOCK AND CASH AS TO ANY INDIVIDUAL RELIANCE
SHAREHOLDER. RATHER, THIS ILLUSTRATION IS INTENDED TO DEMONSTRATE ONLY TWO OF
MANY POSSIBLE ALLOCATION SCENARIOS. THE FOREGOING EXAMPLE IS NOT INTENDED TO
REFLECT WHAT THE ACTUAL ST. FRANCIS AVERAGE STOCK PRICE WILL BE WHEN FINALLY
DETERMINED IN ACCORDANCE WITH THE MERGER AGREEMENT, NOR IS THE PER SHARE VALUE
OF ST. FRANCIS COMMON STOCK AND PER SHARE CASH DISTRIBUTION ILLUSTRATED INTENDED
TO REFLECT WHAT THE ACTUAL VALUE WILL BE WHEN FINALLY DETERMINED AND WHEN THE
SHARES OF ST. FRANCIS COMMON STOCK ARE DISTRIBUTED IN ACCORDANCE WITH THE MERGER
AGREEMENT.

For a more detailed listing of the consideration to be received by
Reliance shareholders in the Merger based upon various assumed St. Francis
Average Stock Prices, see pages 13-15 and 35-37.

-7-
<PAGE> 12

Q(4): WHAT HAPPENS AS THE MARKET PRICE OF ST. FRANCIS COMMON STOCK
FLUCTUATES?

A(4): As noted above in Q(2) and Q(3), the number of shares of St. Francis
Common Stock and the amount of cash to be distributed to you in
connection with the Merger is based upon an average of the market price
of St. Francis Common Stock over a ten-day trading period prior to
completion of the Merger. Because the market price of the shares of St.
Francis Common Stock is subject to fluctuation, the amount of cash you
receive and the number of shares of St. Francis Common Stock you
receive in the Merger may increase or decrease between the date of this
Proxy Statement/Prospectus and completion of the Merger. Furthermore,
once the St. Francis Common Stock is distributed to Reliance
shareholders upon completion of the Merger, the market price will be
subject to fluctuation. You are encouraged to obtain current market
quotations for St. Francis Common Stock and Reliance Common Stock prior
to submitting your Election Form. See Question 5.

Q(5): HOW DO I MAKE MY ELECTION TO RECEIVE CASH, SHARES OF ST. FRANCIS COMMON
STOCK, OR A COMBINATION THEREOF?

A(5): You will be required to submit an Election Form prior to the Special
Meeting, prior to the date the Merger is completed, and prior to the
calculation of the St. Francis Average Stock Price. Therefore, at the
time you make your election decision, you will not know the exact per
share value (in cash and stock) that will be distributed to Reliance
shareholders in the Merger. No assurance can be given as to what the
final St. Francis Average Stock Price will be during the actual
valuation period shortly before completion of the Merger or as to what
the market prices of St. Francis Common Stock will be at the time the
Merger is completed. You are encouraged to obtain current market
quotations for St. Francis Common Stock prior to submitting your
Election Form.

Follow the detailed instructions on page __ of the Election Form and
Letter of Transmittal which are being sent to you in a separate mailing
concurrently with the mailing of the Proxy Statement/Prospectus. YOUR
ELECTION FORM, TOGETHER WITH STOCK CERTIFICATES REPRESENTING ALL SHARES
OF RELIANCE COMMON STOCK REPRESENTED THEREBY (OR AFFIDAVITS AND
INDEMNIFICATION REGARDING THE LOSS OR DESTRUCTION OF SUCH CERTIFICATES
OR THE GUARANTEED DELIVERY OF SUCH CERTIFICATES), MUST BE RETURNED TO
FIRSTAR TRUST CO., AS EXCHANGE AGENT, NO LATER THAN 4:00 P.M.,
MILWAUKEE TIME, ON _______, 1999.

Q(6): WHAT RISKS SHOULD I CONSIDER?

A(6): You should review "Risk Factors" on pages 29-31. You also should review
the factors considered by Reliance's Board of Directors. See "Proposal
to Approve The Merger -- Background of for the Merger" and "--Reasons
for the Merger and Recommendation of the Reliance Board of Directors"
(pages 37-42).

Q(7): WHEN IS THE MERGER EXPECTED TO BE COMPLETED?

A(7): We hope to complete the Merger during January 1999. In addition to the
approval of Reliance shareholders, Reliance also must obtain regulatory
approvals, which include approval of the Office of Thrift Supervision,
the Federal Deposit Insurance Corporation and the Wisconsin Department
of Financial Institutions. If the Merger has not been completed by
February 28, 1999 (subject to extension to May 31, 1999, in the case of
a protest to the Merger under the Community Reinvestment Act of 1977,
as amended), St. Francis and Reliance each have the right to terminate
the Merger Agreement.

Q(8): WHAT ARE THE TAX CONSEQUENCES OF THE MERGER TO ME?

A(8): We expect that for U.S. federal income tax purposes, your exchange of
shares Reliance Common Stock for shares of St. Francis Common Stock by
virtue of the Merger generally will not cause you to recognize any gain
or loss. Reliance shareholders will, however, have to pay taxes on
recognized gains in connection with any cash received, including cash
received instead of fractional shares. To review the tax consequences
to Reliance shareholders in greater detail, see pages 63 through 65.

YOUR TAX CONSEQUENCES WILL DEPEND ON YOUR PERSONAL SITUATION. YOU
SHOULD CONSULT YOUR TAX ADVISOR FOR A FULL UNDERSTANDING OF THE TAX
CONSEQUENCES OF THE MERGER TO YOU.

Q(9): WILL RELIANCE SHAREHOLDERS HAVE DISSENTERS' RIGHTS?

A(9): No. Reliance shareholders will not have dissenters' rights as a result
of the Merger.

-8-
<PAGE> 13

Q(10): WHAT AM I BEING ASKED TO VOTE UPON?

A(10): You are being asked to approve and adopt the Merger Agreement and the
related Plan of Merger which provides for the acquisition of Reliance
through a merger of Reliance with and into St. Francis. Approval of the
proposal requires the affirmative vote of the holders of a majority of
the outstanding shares of Reliance Common Stock.

THE RELIANCE BOARD HAS UNANIMOUSLY APPROVED AND ADOPTED THE MERGER
AGREEMENT AND THE PLAN OF MERGER AND RECOMMENDS THAT SHAREHOLDERS VOTE
FOR THE APPROVAL AND ADOPTION OF THE MERGER AGREEMENT AND THE PLAN OF
MERGER.

You also are being asked to approve a proposal to adjourn the Special
Meeting, if necessary, in order to solicit additional votes in favor of
approval of the Merger Agreement and the Plan of Merger.

THE RELIANCE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE FOR APPROVAL TO
ADJOURN THE SPECIAL MEETING, IF NECESSARY, IN ORDER TO SOLICIT
ADDITIONAL VOTES IN FAVOR OF THE APPROVAL OF THE MERGER AGREEMENT AND
PLAN OF MERGER.

Q(11): WHAT SHOULD I DO NOW?

A(11): Just indicate on your proxy card how you want to vote, and sign and
mail the proxy card in the enclosed envelope as soon as possible so
that your shares will be represented at the Special Meeting. If you
sign and send in your proxy and do not indicate how you want to vote,
your proxy will be voted in favor of the proposal to approve and adopt
the Merger Agreement. If you do not sign and send in your proxy (or
vote by telephone) or you abstain, it will have the effect of a vote
against the Merger.

The Special Meeting will take place on January __, 1999 at ____
[a.m./p.m.]. You are invited to attend the Special Meeting. If you do
sign your proxy card, you can cancel your proxy up to and including the
date of the Special Meeting and change your vote by signing a new proxy
or you may attend the Special Meeting and vote in person. We provide
more detailed instructions about voting on pages 31 through 33.

SEE QUESTION (5) FOR DIRECTIONS ON HOW TO MAKE YOUR ELECTION TO RECEIVE
SHARES OF ST. FRANCIS COMMON STOCK, CASH OR A COMBINATION THEREOF.

SEE QUESTION (13) FOR DIRECTIONS ON WHAT TO DO WITH YOUR CERTIFICATES
FOR RELIANCE COMMON STOCK.

Q(12): IF MY SHARES ARE HELD IN "STREET NAME" BY MY BROKER, WILL MY BROKER
VOTE MY SHARES FOR ME?

A(12): Your broker will vote your shares of Reliance Common Stock only if you
provide instruction on how to vote. You should instruct your broker how
to vote your shares, following the directions your broker provides. If
you do not provide instructions to your broker, your shares will not be
voted and this will have the effect of voting against the Merger.

Q(13): WHEN AND WHERE SHOULD I SEND IN MY STOCK CERTIFICATES?

A(13): You should NOT send in your stock certificates representing shares of
Reliance Common Stock along with your proxy card. Instead, you should
send in your Reliance stock certificates along with your Election Form
and Letter of Transmittal which are being sent to you in a separate
mailing concurrently with the mailing of this Proxy
Statement/Prospectus.

Please follow the instructions carefully on the Election Form and
Letter of Transmittal in making your election and surrendering your
Reliance stock certificates. If for any reason the Merger is not
completed, your Reliance stock certificates will be returned to you.

Q(14): WHO CAN RELIANCE SHAREHOLDERS CALL WITH QUESTIONS?

A(14): Reliance shareholders who have questions about the Merger should
contact the person below:

MR. ALLAN T. BACH
RELIANCE BANCSHARES, INC.
3140 SOUTH 27TH STREET
MILWAUKEE, WISCONSIN
(414) 671-2222

-9-
<PAGE> 14
SUMMARY

The following is a summary of certain information contained elsewhere
in this Proxy Statement/Prospectus and is qualified in its entirety by reference
to, and should be read in conjunction with, the more detailed information
appearing elsewhere in this Proxy Statement/Prospectus, including the exhibits,
the documents accompanying this Proxy Statement/Prospectus and the documents
incorporated by reference herein. As used in this Proxy Statement/Prospectus,
the terms "St. Francis" and "Reliance" refer to such corporations, respectively,
and where the context requires, such corporations and their subsidiaries on a
consolidated basis.

The information contained in this Proxy Statement/Prospectus with
respect to St. Francis has been supplied by St. Francis. The information
contained in this Proxy Statement/Prospectus with respect to Reliance has been
supplied by Reliance. Neither St. Francis nor Reliance warrants the accuracy or
completeness of information relating to the other.

THE PARTIES TO THE MERGER

ST. FRANCIS AND
ST. FRANCIS BANK, F.S.B............ St. Francis, a Wisconsin corporation,
was incorporated on December 18, 1992
for the purpose of becoming the
holding company for St. Francis Bank,
F.S.B. ("St. Francis Bank") upon St.
Francis Bank's conversion from a
federally-chartered mutual savings
bank to a federally-chartered stock
savings bank. This transaction was
completed in June 1993. In November
1994, St. Francis consummated the
acquisition of the stock of Valley
Bank East Central in Kewaskum,
Wisconsin as well as the acquisition
of the deposits and certain assets of
the Hartford, Wisconsin branch of
Valley Bank Milwaukee. The acquired
bank offices were combined as a
commercial bank named Bank Wisconsin.
In February 1997, St. Francis
completed the acquisition of Kilbourn
State Bank in Milwaukee, Wisconsin,
which subsequently was merged into
Bank Wisconsin. In September 1997,
Bank Wisconsin was merged into St.
Francis Bank, with St. Francis Bank
being the surviving entity.

At June 30, 1998, St. Francis had
total assets of $1.8 billion, total
deposits of $1.1 billion and
shareholders' equity of $131.0
million. St. Francis has not engaged
in any significant activity other than
holding the stock of St. Francis Bank.
St. Francis Bank is regulated by the
Office of Thrift Supervision ("OTS")
and its deposits are insured up to
applicable limits under the Savings
Association Insurance Fund ("SAIF") of
the Federal Deposit Insurance
Corporation ("FDIC").

St. Francis Bank's principal business
consists of attracting retail deposits
from the general public and investing
those deposits, together with funds
generated from other operations,
primarily to originate mortgage,
consumer and other loans within its
primary market area and to invest in
mortgage-backed and related
securities, and to a lesser extent,
debt and equity securities. Primary
areas of lending include single-family
and multi-family residential
mortgages, home equity lines of
credit, second mortgages, commercial
real estate and commercial loans.

At June 30, 1998, St. Francis operated
25 banking offices in Wisconsin. The
principal executive offices of St.
Francis are located at 13400 Bishops
Lane, Suite 350, Brookfield, Wisconsin
53005-6203, and its telephone number
is (414) 486-8700.

-10-
<PAGE> 15
RELIANCE AND
RELIANCE SAVINGS BANK.............. Reliance, a Wisconsin corporation
incorporated on November 10, 1995, is
the holding company for Reliance
Savings Bank, a Wisconsin
state-chartered stock savings bank
("Reliance Savings Bank"), which
consummated its conversion from mutual
to stock form in April 1996. At June
30, 1998, Reliance had total assets of
$42.3 million, total deposits of $17.3
million and shareholders' equity of
$22.4 million. Reliance Savings Bank
is regulated by the FDIC and the
Wisconsin Department of Financial
Institutions ("WDFI") and its deposits
are insured up to applicable limits by
the SAIF of the FDIC.

Reliance Savings Bank's principal
business consists of attracting funds
in the form of deposits and investing
such funds in investment securities
(including United States government
and other agency obligations and
mutual funds), mortgage-backed and
related securities and loans secured
by real estate. The primary lending
activity of Reliance Savings Bank is
on one- to four-family owner-occupied
homes. While Reliance Savings Bank
has in recent years had funds to lend,
management of Reliance Savings Bank
believes there has been a diminishing
demand for one- to four-family
mortgage loans in its local market
area (generally defined as an area
within a three-mile radius of its
office). Since fiscal 1997, Reliance
Savings Bank has been, and intends to
continue, emphasizing one- to
four-family mortgage lending in its
local market area, but also has been
originating and intends to continue to
originate one- to four-family,
residential construction, commercial
real estate, commercial construction
and land development and multi-family
loans both within and outside its
local market area in suburbs
surrounding the City of Milwaukee,
which encompasses the Wisconsin
counties of Milwaukee, Waukesha,
Ozaukee and Washington, in order to
generate adequate earnings, adequately
leverage its capital and make
effective use of its liquid assets.
Reliance Savings Bank invests a
significant portion of its assets in
investment securities and
mortgage-backed securities, including
U.S. Government and federal agency
securities, short-term liquid assets
and other marketable securities.

At June 30, 1998, Reliance and
Reliance Savings Bank operated one
banking office in Wisconsin. The
principal executive offices of
Reliance are located at 3140 South
27th Street, Milwaukee, Wisconsin
53215, and its telephone number is
(414) 671-2222.

THE RELIANCE SPECIAL MEETING

PLACE, TIME AND DATE;
PURPOSE............................ The Special Meeting of Shareholders of
Reliance will be held on January __,
1999, at [____] [a.m./p.m.],
Milwaukee, Wisconsin time, at the
Clarion Hotel & Conference
Center, 5311 South Howell Avenue,
Milwaukee, Wisconsin. The purpose of
the Special Meeting is to consider and
vote upon proposals to approve the
Merger Agreement attached hereto as
Exhibit A and the related Plan of
Merger attached hereto as Exhibit B,
and to adjourn the Special Meeting, if
necessary, to solicit additional votes
in favor of the Merger.

-11-
<PAGE> 16

RECORD DATE; SHARES
ENTITLED TO VOTE................... The Board of Directors of Reliance
(the "Reliance Board") has fixed the
close of business on December __, 1998
as the record date (the "Voting Record
Date") for the determination of
shareholders entitled to notice of and
to vote at the Special Meeting or any
postponements or adjournments thereof.
Only holders of shares of Reliance
Common Stock of record on the Voting
Record Date will be entitled to notice
of and to vote at the Special Meeting.
Each share of Reliance Common Stock
will be entitled to one vote.
Shareholders who execute proxies
retain the right to revoke them at any
time prior to being voted at the
Special Meeting or any postponements
or adjournments thereof. On the
Voting Record Date, there were _______
shares of Reliance Common Stock
outstanding and Reliance had no other
class of securities outstanding.

VOTES REQUIRED; VOTING
AGREEMENTS; SECURITY
OWNERSHIP OF MANAGEMENT............ The affirmative vote of the holders of
a majority of the issued and
outstanding shares of Reliance Common
Stock is required for approval and
adoption of the Merger Agreement and
the related Plan of Merger. The
affirmative vote of a majority of the
total votes cast in person or by proxy
is required to approve the proposal to
adjourn the Special Meeting, if
necessary, to solicit additional votes
in favor of the Merger Proposal.
Approval of the Merger by St. Francis
shareholders is not required.

As of October 31, 1998, the directors
and executive officers of Reliance and
their affiliates beneficially owned
_______ shares, or _____% of the
outstanding shares of Reliance Common
Stock, including ______ shares
subject to unexercised options held by
such persons at that date which were
not exercised prior to the Voting
Record Date, and thus cannot be voted
at the Special Meeting. As an
inducement to St. Francis to enter
into the Merger Agreement, all of the
directors and executive officers of
Reliance entered into voting
agreements ("Voting Agreements") with
St. Francis to vote the shares of
Reliance Common Stock beneficially
owned by them in favor of the Merger.
As of October 31, 1998, the directors
and executive officers of Reliance who
signed the Voting Agreements
beneficially owned _______ shares, or
_____% of the outstanding shares of
Reliance Common Stock, including
______ shares subject to unexercised
options held by such persons at that
date which were not exercised prior to
the Voting Record Date, and thus
cannot be voted at the Special
Meeting. As of October 31, 1998, with
the exception of one director of St.
Francis who acquired shares of
Reliance Common Stock in 1996, St.
Francis directors, executive officers
and their affiliates did not own any
shares of Reliance Common Stock.

Pursuant to the Voting Agreements, the
directors and executive officers of
Reliance may not sell, assign,
transfer or otherwise dispose of, or
permit to be sold, assigned,
transferred or otherwise disposed of,
any shares of Reliance Common Stock
owned of record or beneficially by
such shareholder, whether such shares
of Reliance Common Stock are owned of
record or beneficially by such
shareholder on the date of the Voting
Agreement or are subsequently
acquired, whether pursuant to the
exercise of stock options or
otherwise, except (i) for transfers by
will or by operation of law (in which
case the Voting Agreement would bind
the transferee), (ii) for sales,
assignments, transfers or other
dispositions necessitated by hardship
with the prior written consent of St.
Francis, or (iii) as St. Francis may
otherwise agree in writing.

-12-
<PAGE> 17
THE MERGER

EFFECT OF THE MERGER................ Pursuant to the Merger Agreement, at the
Effective Time (as defined below),
Reliance will merge with and into St.
Francis, which will be the surviving
corporation. See "Proposal to Approve
the Merger--Effect of the Merger." St.
Francis also plans to merge Reliance
Savings Bank into St. Francis Bank
immediately following the Merger, or as
soon as practicable after, the Effective
Time (the "Bank Merger"), and St.
Francis and Reliance have agreed to take
all action necessary and appropriate to
effectuate the Bank Merger.

MERGER CONSIDERATION............... The Merger Agreement provides that,
subject to the election and allocation
procedures provided for therein, each
issued and outstanding share of Reliance
Common Stock at the Effective Time will
be converted into the right to receive,
at the election of each holder thereof,
either:

(a) A NUMBER OF SHARES OF ST.
FRANCIS COMMON STOCK EQUAL
TO (i) a fractional share
of St. Francis Common Stock
determined by dividing
$10.00 by the St. Francis
Average Stock Price (as
defined herein) if the St.
Francis Average Stock Price
is between $32.41 and
$40.00; (ii) .25 shares of
St. Francis Common Stock,
if the St. Francis Average
Stock Price is between
$40.01 and $42.00; (iii) a
fractional share of St.
Francis Common Stock
determined by dividing
$10.50 by the St. Francis
Average Stock Price, if the
St. Francis Average Stock
Price is between $42.01 and
$45.74; and (iv) .2295
shares of St. Francis
Common Stock, if the St.
Francis Average Stock Price
is $45.75 or more (the "Per
Share Stock Distribution");
or

(b) CASH EQUAL TO (i) $10.00,
if the St. Francis Average
Stock Price is between
$32.41 and $40.00; (ii) an
amount equal to .250 of the
St. Francis Average Stock
Price, if the St. Francis
Average Stock Price is
between $40.01 and $42.00;
(iii) $10.50, if the St.
Francis Average Stock Price
is between $42.01 and
$45.74; and (iv) an amount
equal to .2295 of the St.
Francis Average Stock
Price, if the St. Francis
Average Stock Price is
$45.75 or more (the "Per
Share Cash Distribution").

If the St. Francis Average Stock Price
is $32.40 or less, then St. Francis has
the option of completing the Merger
using a Per Share Cash Distribution of
$10.00 and a Per Share Stock
Distribution equal to a fractional share
of St. Francis Common Stock determined
by dividing $10.00 by the St. Francis
Average Stock Price, or terminating the
Merger Agreement.

THE "ST. FRANCIS AVERAGE STOCK PRICE"
MEANS THE AVERAGE (ROUNDED TO THE
NEAREST WHOLE CENT) OF THE LAST SALE
PRICE OF THE DAY OF ONE SHARE OF ST.
FRANCIS COMMON STOCK AS REPORTED IN THE
WALL STREET JOURNAL FOR THE TEN
CONSECUTIVE TRADING DAYS ENDING ON THE
FIFTH BUSINESS DAY PRECEDING THE
EFFECTIVE TIME (THE "VALUATION PERIOD").

The Merger Agreement also provides that
the value of the aggregate number of
shares of St. Francis Common Stock to be
issued in the Merger must be equal to at
least 60% of the aggregate value of all
of the consideration to be paid in
connection with the Merger, and the
aggregate amount of consideration paid
to Reliance shareholders in cash must be
not more than 40% of the aggregate value
of all of the consideration to be paid
in connection with the Merger.

-13-
<PAGE> 18

Assuming that (i) there are _______
shares of Reliance Common Stock
outstanding, which represents the
_______ shares of Reliance Common Stock
issued and outstanding as of the Voting
Record Date, plus 20,514 shares of
Reliance Common Stock that will be
issued in connection with the closing of
the Merger under the terms of the RRP;
(ii) no exercise of options for ______
shares of Reliance Common Stock
currently outstanding under Reliance's
stock option plan, (iii) the St. Francis
Average Stock Price is $_____, and (iv)
the aggregate amount of consideration
payable in cash is equal to 40% of the
aggregate value of all of the
consideration paid in connection with
the Merger and the aggregate amount of
consideration payable in value of whole
shares of St. Francis Common Stock is
equal to 60% of the aggregate value of
all of the consideration paid in
connection with the Merger, St. Francis
will issue approximately _______ shares
of St. Francis Common Stock and between
approximately $___ million in cash in
the Merger. St. Francis intends to fund
the cash portion of the purchase price
with an existing line of credit
maintained by St. Francis Bank with a
third party financial institution.

Fractional shares of St. Francis Common
Stock will not be issued in the Merger.
Reliance shareholders otherwise entitled
to a fractional share will be paid the
value of such fraction in cash
determined as described herein under
"Proposal to Approve the Merger-- Effect
of the Merger."

On _______, 1998, the most recent date for which it was practicable to
obtain market price data prior to the printing of this Proxy
Statement/Prospectus, the closing sales price per share of St. Francis Common
Stock was $_____.

The following table sets forth various assumed St. Francis Average
Stock Prices, the resulting conversion ratio, the value of St. Francis Common
Stock to be received per share of Reliance Common Stock based on such assumed
St. Francis Average Stock Price, and the Per Share Cash Consideration to be
received based on such assumed St. Francis Average Stock Price.

<TABLE>
<CAPTION>
PER SHARE VALUE
ASSUMED ST. FRANCIS OF ST. FRANCIS PER SHARE
AVERAGE CONVERSION COMMON STOCK CASH CONSIDERATION
STOCK PRICE RATIO TO BE RECEIVED TO BE RECEIVED
------------------- ---------- --------------- ------------------
<S> <C> <C> <C>
30.00 .3333 $ 10.00 $ 10.00
31.00 .3226 10.00 10.00
32.00 .3125 10.00 10.00
32.40 .3086 10.00 10.00
33.00 .3030 10.00 10.00
34.00 .2941 10.00 10.00
35.00 .2857 10.00 10.00
36.00 .2778 10.00 10.00
37.00 .2703 10.00 10.00
38.00 .2632 10.00 10.00
39.00 .2564 10.00 10.00
40.00 .2500 10.00 10.00
41.00 .2500 10.25 10.25
42.00 .2500 10.50 10.50
43.00 .2442 10.50 10.50
44.00 .2386 10.50 10.50
45.00 .2333 10.50 10.50
45.75 .2295 10.50 10.50
46.00 .2295 10.56 10.56
47.00 .2295 10.79 10.79
48.00 .2295 11.02 11.02
</TABLE>

NONE OF THE ASSUMED ST. FRANCIS AVERAGE STOCK PRICES ARE INTENDED TO
REFLECT WHAT THE ACTUAL ST. FRANCIS AVERAGE STOCK PRICE WILL BE WHEN FINALLY
DETERMINED IN ACCORDANCE WITH THE MERGER AGREEMENT AND THE PLAN OF MERGER, NOR
IS THE PER SHARE VALUE OF ST. FRANCIS COMMON STOCK TO BE RECEIVED AND PER SHARE
CASH CONSIDERATION ILLUSTRATED AS TO BE RECEIVED INTENDED TO REFLECT WHAT THE
ACTUAL VALUE WILL BE WHEN FINALLY DETERMINED AND WHEN THE SHARES OF ST. FRANCIS
COMMON STOCK AND CASH ARE DISTRIBUTED IN ACCORDANCE WITH THE MERGER AGREEMENT
AND THE PLAN OF MERGER.

-14-
<PAGE> 19

Because under the Merger Agreement the
number of shares of St. Francis Common
Stock and the total amount of cash to be
issued in the Merger must be fixed in
accordance with certain parameters,
primarily to ensure that the Merger will
qualify as a tax-free reorganization
under Section 368 of the Internal
Revenue Code of 1986, as amended (the
"Code"), no guarantee can be given that
an election by any given shareholder
will be honored. Rather, the election
by each holder will be subject to the
election and allocation procedures
described herein and in the Merger
Agreement. Thus, holders may not
receive their chosen form of
consideration. See "Proposal to Approve
the Merger--Election and Allocation
Procedures."

Reliance shareholders who receive shares
of St. Francis Common Stock also will
receive attached Purchase Rights. See
"Description of St. Francis Capital
Stock--Rights Plan."

ELECTION BY RELIANCE
SHAREHOLDERS..................... Each shareholder of Reliance (except for
the Reliance ESOP which will receive the
Per Share Cash Distribution for shares
held by it) will have the opportunity to
submit an election form and letter of
transmittal ("Election Form") specifying
the kind of consideration sought to be
received in exchange for his or her
shares of Reliance Common Stock. The
Election Form will be mailed (the
"Mailing Date") concurrently with this
Proxy Statement/Prospectus to each
holder of record of Reliance Common
Stock as of the Voting Record Date. An
Election Form and a copy of this Proxy
Statement/Prospectus also will be mailed
to persons who become shareholders of
record of Reliance after the Voting
Record Date up to one business day prior
to the Election Deadline (as defined
below). Election Forms also will be
available at Reliance's main office, St.
Francis' main office and from the
Exchange Agent at all times through the
Election Deadline.

The Election Form will permit Reliance
shareholders (i) to indicate that they
elect to receive in exchange for their
Reliance shares (a) St. Francis Common
Stock ("Stock Election Shares"), (b)
cash ("Cash Election Shares"), or (c) a
combination thereof, or (ii) to make no
election ("No Election Shares"). The No
Election Shares will be converted into
Stock Election Shares, Cash Election
Shares or a combination thereof as
necessary to ensure that (i) the
aggregate amount of consideration
payable in cash is not more than 40% of
the aggregate value of all of the
consideration issued or paid in
connection with the Merger, and the
total number of shares of St. Francis
Common Stock to be issued in connection
with the Merger shall be that number of
whole shares of St. Francis Common Stock
that has an aggregate value of at least
60% of the aggregate value of all of the
consideration issued or paid in
connection with the Merger, and (ii) the
Merger will qualify as a tax-free
reorganization.

THE ELECTION FORM, TOGETHER WITH STOCK
CERTIFICATES REPRESENTING ALL SHARES OF
RELIANCE COMMON STOCK COVERED THEREBY
(OR AFFIDAVITS AND INDEMNIFICATION
REGARDING THE LOSS OR DESTRUCTION OF
SUCH CERTIFICATES OR THE GUARANTEED
DELIVERY OF SUCH CERTIFICATES), MUST BE
RETURNED TO FIRSTAR TRUST CO., AS
EXCHANGE AGENT (THE "EXCHANGE AGENT"),
NO LATER THAN 4:00 P.M., MILWAUKEE TIME,
ON ________, 1999 (THE "ELECTION
DEADLINE"). Shares of Reliance Common
Stock for which a properly completed
Election Form has not been received by
the Exchange Agent by the Election
Deadline will be deemed No Election
Shares. Accordingly, persons who become
shareholders of Reliance after the
Election Deadline will be deemed to hold
No Election Shares, because they could
not have made an effective election with
respect to such shares. See "Proposal
to Approve the Merger--Election and
Allocation Procedures."

-15-
<PAGE> 20
Because the number of shares of St.
Francis Common Stock to be issued and
the total amount of cash to be paid in
the Merger will be fixed in accordance
with certain parameters pursuant to the
Merger Agreement, and because the Merger
must qualify as a tax-free
reorganization, the extent to which
individual elections will be
accommodated will depend upon the
respective number of Reliance
shareholders who elect cash and stock
and who fail to make an election.
Accordingly, a Reliance shareholder who
elects to receive cash may instead
receive a combination of cash and shares
of St. Francis Common Stock, and a
Reliance shareholder who elects to
receive a combination of cash and shares
of St. Francis Common Stock may instead
receive a different combination of cash
and shares of St. Francis Common Stock.
However, in no event will a shareholder
who elects to receive stock receive cash
instead (except cash which may be issued
in lieu of fractional shares).

If the cash election is oversubscribed,
Reliance shareholders making no election
will have their shares of Reliance
Common Stock randomly selected and
converted into St. Francis Common Stock
to the extent necessary so that the cash
election is not oversubscribed. If the
cash election is still oversubscribed,
Reliance shareholders making a cash
election shall have their shares of
Reliance Common Stock converted, on a
pro rata basis, into shares of St.
Francis Common Stock, to the extent
necessary. However, the Merger
Agreement also provides that no
particular holder who has elected to
receive cash or stock, as the case may
be, will be allocated, or selected to
receive, St. Francis Common Stock if
such allocation or selection would
threaten satisfaction of the conditions
to the consummation of the Merger.

Because the tax consequences of
receiving cash or St. Francis Common
Stock will differ, shareholders of
Reliance are urged to read carefully the
information under the caption "Proposal
to Approve the Merger--Certain Federal
Income Tax Consequences" and consult
their own tax advisor to determine the
particular tax consequences to them of
the Merger.

ALLOCATION PROCEDURES............... The aggregate amount of consideration to
be received by Reliance shareholders in
exchange for their shares of Reliance
Common Stock shall consist of cash and
St. Francis Common Stock, in such
proportion as follows: (i) the
aggregate amount of consideration
payable in cash ("Cash Amount") shall
not be more than 40% of the aggregate
value of all of the consideration issued
or paid in connection with the Merger;
and (ii) the total number of shares of
St. Francis Common Stock to be issued in
connection with the Merger ("Stock
Amount") shall be that number of whole
shares of St. Francis Common Stock that
has an aggregate value of at least 60%
of the aggregate value of all of the
consideration issued or paid in
connection with the Merger.

The Merger Agreement provides that the
value of the aggregate number of shares
of St. Francis Common Stock to be issued
in the Merger must equal or exceed 60%
of the aggregate value of all of the
consideration to be paid in connection
with the Merger. However, in order for
Michael Best & Friedrich LLP to render
its opinion that the Merger qualifies as
a tax-free reorganization, the value of
the aggregate number of shares of St.
Francis Common Stock to be issued in the
Merger must be at least 60% of the
aggregate value of all of the
consideration to be paid in connection
with the Merger. The relative
percentages that the Cash Amount (i.e.,
up to 40%) and the Stock Amount (i.e.,
at least 60%) bear to the aggregate
amount of consideration to be issued or
paid in connection with the Merger will
depend largely upon the elections of the
Reliance shareholders. To the greatest
extent possible, St. Francis will
allocate cash and stock in accordance
with each Reliance shareholder's
election. However, if the cash portion
is oversubscribed, Reliance shareholder
elections will be adjusted in order to
fall within the parameters set forth
above. See "Proposal to Approve the
Merger--Election and Allocation
Procedures."

-16-
<PAGE> 21
DELIVERY OF ST. FRANCIS
COMMON STOCK AND CASH............. No holder of certificates formerly
representing shares of Reliance Common
Stock will be entitled to receive either
cash or shares of St. Francis Common
Stock until the certificates are
properly surrendered to the Exchange
Agent, and no interest will accrue in
respect thereof. Each share of St.
Francis Common Stock for which shares of
Reliance Common Stock are exchanged in
the Merger will be deemed to have been
issued at the Effective Time.
Accordingly, Reliance shareholders who
receive St. Francis Common Stock in the
Merger will be entitled to vote their
shares and to receive any dividends or
other distributions, without interest,
that may be payable to holders of record
of St. Francis Common Stock after the
Effective Time, except that no such
dividend will be remitted until the
certificates representing Reliance
Common Stock have been properly
surrendered to the Exchange Agent.

Within five business days after the
allocation described above under
"--Allocation Procedures," the Exchange
Agent will distribute St. Francis Common
Stock and cash with respect to shares of
Reliance Common Stock which have been
properly surrendered to the Exchange
Agent. Stock certificates will not be
delivered for fractional shares
resulting from the exchange of Reliance
Common Stock for St. Francis Common
Stock. Instead, each holder of shares
of Reliance Common Stock who would
otherwise be entitled to a fractional
share of St. Francis Common Stock will
receive in lieu thereof a check in an
amount equal to the value of such
fractional share based upon the St.
Francis Average Stock Price.

PLEASE DO NOT SEND IN YOUR CERTIFICATES
FOR YOUR SHARES OF RELIANCE COMMON STOCK
WITH YOUR PROXY CARD. PLEASE CAREFULLY
READ AND FOLLOW THE INSTRUCTIONS SET
FORTH IN THE ELECTION FORM AND LETTER OF
TRANSMITTAL DELIVERED TO YOU UNDER
SEPARATE COVER REGARDING THE MAKING OF
YOUR ELECTION AND THE SURRENDER OF YOUR
RELIANCE STOCK CERTIFICATES.

RECOMMENDATION OF RELIANCE'S
BOARD OF DIRECTORS................ All members of the Reliance Board
participated in the meeting at which the
Merger Agreement and the related Plan of
Merger were considered. The Reliance
Board unanimously approved the Merger
Agreement and Plan of Merger and
recommends that Reliance shareholders
vote in favor of approval of the Merger
Agreement and Plan of Merger. The
Reliance Board believes that the terms
of the Merger are fair to, and in the
best interests of, Reliance's
shareholders. For a discussion of the
factors considered by Reliance's Board
in reaching its decision, see "Proposal
to Approve the Merger--Reasons for the
Merger and Recommendation of the
Reliance Board of Directors" and
"Proposed to Approve the Merger--Opinion
of Reliance Financial Advisor."

OPINION OF FINANCIAL
ADVISOR........................... Robert W. Baird & Co. Incorporated
("Baird") has delivered to the Reliance
Board its written opinion, dated June
30, 1998 and updated as of December __,
1998, to the effect that, as of such
dates, the consideration to be received
in the Merger by the holders of shares
of Reliance Common Stock, is fair to
such holders from a financial point of
view. A copy of the updated opinion of
Baird, which sets forth the assumptions
made, matters considered and limits of
its review, is attached to this Proxy
Statement/Prospectus as Exhibit C, and
should be read in its entirety. See
"Proposal to Approve the Merger--
Opinion of Reliance Financial Advisor."

-17-
<PAGE> 22
EFFECTIVE DATE OF
THE MERGER........................ The Merger will become effective on the
date articles of merger are filed with
the WDFI in accordance with the
Wisconsin Business Corporation Law (the
"WBCL"), or on such later date as the
articles of merger may specify (the
"Effective Time"). The Articles of
Merger will be filed upon satisfaction
or waiver of all of the conditions to
the Merger provided in the Merger
Agreement but in no event later than the
last business day of the month in which
all conditions to the Merger set forth
in the Merger Agreement have been
satisfied or waived. Assuming receipt
of Reliance shareholder approval of the
Merger, and after regulatory approvals
that would permit consummation of the
Merger have been obtained, the parties
expect that the Merger will occur on a
date that will facilitate an orderly
business combination of Reliance and St.
Francis, which date may be after the
first possible date on which the Merger
could occur under the terms of the
Merger Agreement. As consummation of the
Merger is subject to approval of the
shareholders of Reliance, certain
regulatory approvals for the Merger and
certain conditions precedent to closing
(as described herein), the parties are
unable at this time to predict when or
if the Effective Date will occur. See
"Proposal to Approve the
Merger--Conditions to Each Party's
Obligations."

CONDITIONS TO THE MERGER;
REGULATORY APPROVAL............... The obligations of St. Francis and
Reliance to consummate the Merger are
subject to the satisfaction of certain
conditions, including (i) obtaining
requisite shareholder approval and
requisite regulatory approvals for the
Merger (as defined in the Merger
Agreement), (ii) the receipt of an
opinion of counsel with respect to
certain tax aspects of the Merger, (iii)
the absence of an adverse change with
respect to Reliance; (iv) the absence of
any Environmental Conditions (as defined
in the Merger Agreement) with respect to
any Real Property of Reliance (as
defined therein) which is likely to have
a material adverse effect (as defined
therein) on St. Francis; (v)
verification that Reliance's net worth
(to be computed as described further
therein) is not less than Reliance's net
worth as of March 31, 1998; and (vi) the
satisfaction of other customary closing
conditions. Prior to the Effective Date
of the Merger, any condition of the
Merger Agreement may be waived by the
party in whose favor the provision runs
or may be amended or modified by an
agreement in writing approved by both
parties; provided, however, that after
Reliance shareholder approval is
obtained, no such extension, waiver,
amendment or modification may adversely
affect the amount of consideration to be
received in the Merger by the Reliance
shareholders. See "Proposal to Approve
the Merger--Certain Federal Income Tax
Consequences" and "Proposal to Approve
the Merger--Conditions to Each Party's
Obligations."

St. Francis and Reliance intend that
Reliance Savings Bank will merge with
and into St. Francis Bank immediately
following the Merger or as soon as
practicable after the Merger (the "Bank
Merger"), and St. Francis and Reliance
have agreed to take all action necessary
and appropriate to effectuate the Bank
Merger. See "Proposal to Approve the
Merger--Regulatory Approvals."

The Merger and Bank Merger will require
the review and/or approval of the
appropriate federal and state regulatory
agencies, including the OTS, FDIC and
WDFI. There can be no assurance that
the regulatory approvals will be
obtained, and, if obtained, there can be
no assurance as to the date of any such
approvals. There also can be no
assurance that any such approvals will
not contain a condition or requirement
which causes the structure of the Merger
and/or the Bank Merger to change from
that presently contemplated by St.
Francis and Reliance, or which causes
such approvals to fail to satisfy the
conditions set forth in the Merger
Agreement and summarized under "Proposal
to Approve the Merger--Conditions to
Each Party's Obligations." Also, there
can be no assurance that the

-18-
<PAGE> 23
United States Department of Justice or a
state attorney general will not
challenge the Merger or Bank Merger or,
if such a challenge is made, as to the
result thereof. See "Proposal to
Approve the Merger--Regulatory
Approvals."

TERMINATION OF THE
REORGANIZATION
AGREEMENT......................... The Merger Agreement may be terminated,
and the Merger abandoned, before the
Effective Time, either before or after
its approval by the shareholders of
Reliance, (a) by the mutual consent of
St. Francis and Reliance, or (b) by
either of them individually under
certain specified circumstances,
including (i) if the Merger has not
become effective by February 28, 1999
(subject to extension to May 31, 1999,
in the case of a protest to the Merger
under the Community Reinvestment Act of
1977, as amended), or (ii) in the event
of a breach by the other party of
certain representations, warranties,
covenants or agreements contained in the
Merger Agreement. In addition to other
customary termination provisions,
pursuant to the Merger Agreement,
Reliance may terminate the Merger
Agreement, if the Board of Directors of
Reliance determines in good faith and in
the exercise of reasonable judgment
(based on the advice of independent
financial advisors and counsel) that a
bona fide, written and unsolicited
proposal or offer made by a corporation
(excluding St. Francis or any of its
subsidiaries or affiliates),
partnership, person, other entity or
group (as defined in Section 13(d)(3) of
the Exchange Act), with respect to an
Acquisition Proposal (as defined
therein) is more favorable to Reliance
and its shareholders than the
transactions contemplated hereby. See
"Proposal to Approve the
Merger--Termination."

In addition, the Merger Agreement
contains a price-based termination
provision. Under this provision, the
Merger Agreement may be terminated by
St. Francis if the St. Francis Average
Stock Price is $32.40 or less. Before
making any decision to terminate the
transaction, the St. Francis Board would
consult with its financial and other
advisors and would consider all
financial and other information it
deemed relevant to its decision. The
matter would not, however, be
resubmitted to shareholders. See
"Proposal to Approve the
Merger--Price-Based Termination."

INTERESTS OF CERTAIN PERSONS
IN THE MERGER..................... Certain members of Reliance's management
and the Reliance Board may be deemed to
have interests in the Merger in addition
to their interests, if any, as
shareholders of Reliance generally.
These include, among other things,
provisions in the Merger Agreement
relating to accelerated vesting of
awards under the RRP, the grant of
additional RRP awards contingent upon
completion of the Merger, with
recipients of awards under the RRP
entitled to elect to receive either cash
or stock in the same manner as other
Reliance shareholders, accelerated
vesting of outstanding options and cash
payments under outstanding stock options
or, in certain circumstances, the
conversion of such outstanding options
into options for shares of St. Francis
Common Stock, the grant of additional
stock options contingent upon completion
of the Merger, service as a member of an
advisory board of St. Francis and
appointment of one director to St.
Francis Bank's Board, benefits under the
Reliance ESOP and Reliance Savings Bank
Financial Institutions Retirement Fund
("Reliance Pension Plan"), assumption by
St. Francis of Reliance's obligations
under the Reliance Savings Bank
Non-Qualified Deferred Retirement Plan
for Directors ("Directors' Retirement
Plan") and immediate vesting of benefits
thereunder, maintenance of
post-retirement medical and health
coverage no less favorable than that
maintained by Reliance with respect to
eligible former and current officers and
employees and current non-employee
directors of Reliance and Reliance
Savings Bank, and certain other
benefits.

-19-
<PAGE> 24
In addition, Mr. Allan T. Bach,
President and Chief Executive Officer of
Reliance and Reliance Savings Bank, will
receive severance benefits, as described
further herein, including severance
salary payments over three years
pursuant to the terms of his current
employment agreement with Reliance and
Reliance Savings Bank in the aggregate
amount of $499,362 and other severance
benefits. Ms. Carol A. Barnharst, Vice
President, Chief Financial Officer,
Secretary and Treasurer of Reliance,
will enter into a three-year employment
agreement with St. Francis Bank, which
will provide for a base salary of
$65,600, as well as coverage under other
St. Francis incentive compensation plans
and other benefits.

In addition, as noted above, in April
1998, Mr. Allan T. Bach, Ms. Carol A.
Barnharst, Mr. O. William Held, Mr. John
T. Lynch and Ms. Marjorie A. Spicuzza
each were granted options to purchase
Reliance Common Stock with respect to
5,000 shares, which option grants are
contingent upon completion of the Merger
("Contingent Option Grants"), and Mr.
Bach and Ms. Barnharst each were granted
RRP awards with respect to 10,257
shares, which RRP awards are contingent
upon completion of the Merger
("Contingent RRP Awards"). If the
Merger is not consummated, the
Contingent Option Grants and Contingent
RRP Awards will be forfeited by the
recipients.

In addition, as noted above, holders of
options granted under Reliance's stock
option plan may elect to surrender their
options for cash, or in certain
circumstances may be eligible to
participate in the option plans
established by St. Francis. In
connection with the Merger and assuming
the St. Francis Average Stock Price is
$________, the executive officers and
directors of Reliance could receive, if
they choose to surrender their vested
options (including the Contingent Option
Grants) for cash, the following amounts:
Mr. Allan T. Bach - $____; Ms. Carol A.
Barnharst - $____; Mr. John T. Lynch -
$_____; Mr. O. William Held - $_____;
and Ms. Marjorie A. Spicuzza - $______.
In addition, assuming the St. Francis
Average Stock Price is $_____, the value
of the aggregate RRP awards (including
the Contingent RRP Awards) to executive
officers and directors of Reliance would
be as follows: Mr. Allan T. Bach -
$____; Ms. Carol A. Barnharst - $____;
Mr. John T. Lynch - $_____; Mr. O.
William Held - $_____; and Ms. Marjorie
A. Spicuzza - $______. See "Proposal to
Approve the Merger--Interests of Certain
Persons in the Merger" and "Proposal to
Approve the Merger--Effect on Reliance
Employee Benefit Plans."

TERMINATION FEE
ARRANGEMENTS...................... Pursuant to the Merger Agreement,
Reliance has agreed to pay St. Francis a
fee of $875,000 in the event of the
occurrence of a "Company Purchase
Event." The term "Company Purchase
Event" means any of the following
events, or Reliance agreeing to enter
into an agreement relating to any of the
following events, occurring before the
Effective Time or within 12 months of
the date of termination of the Merger
Agreement: (i) the acquisition by any
person, other than St. Francis, of
beneficial ownership of 25% or more of
the shares of Reliance Common Stock;
(ii) a merger, consolidation, share
exchange, business combination or any
other similar transaction involving
Reliance or Reliance Savings Bank, other
than a transaction involving St. Francis
or any of its subsidiaries; (iii) any
sale, lease, exchange, mortgage, pledge,
transfer or other disposition of 50% or
more of the assets of Reliance or
Reliance Savings Bank, in a single
transaction or series of transactions;
or (iv) the Reliance Board does not
recommend approval of the Merger to the
Reliance shareholders.

-20-
<PAGE> 25
Certain Federal Income
Tax Consequences.................. The Merger is intended to be a
reorganization within the meaning of
Section 368 of the Code; accordingly, a
gain or loss generally will not be
recognized by Reliance shareholders who
receive solely St. Francis Common Stock
in exchange for their Reliance Common
Stock. Receipt of cash in the Merger
will be a taxable event. The Merger
Agreement provides that consummation of
the Merger is conditioned upon receipt
by St. Francis and Reliance of an
opinion of Michael Best & Friedrich LLP,
legal counsel to St. Francis, to the
effect that the Merger will constitute a
reorganization within the meaning of
Section 368 of the Code. For a further
discussion of the federal income tax
consequences of the Merger, see
"Proposal to Approve the Merger--Certain
Federal Income Tax Consequences" and
"Proposal to Approve the
Merger--Conditions to Each Party's
Obligations."

BECAUSE CERTAIN TAX CONSEQUENCES OF THE
MERGER MAY VARY DEPENDING UPON THE
PARTICULAR CIRCUMSTANCES OF EACH
SHAREHOLDER AND OTHER FACTORS, EACH
HOLDER OF RELIANCE COMMON STOCK IS URGED
TO CONSULT SUCH HOLDER'S OWN TAX ADVISOR
TO DETERMINE THE PARTICULAR TAX
CONSEQUENCES TO SUCH HOLDER OF THE
MERGER (INCLUDING THE APPLICATION AND
EFFECT OF STATE AND LOCAL INCOME AND
OTHER TAX LAWS).

ACCOUNTING TREATMENT................ It is intended that the Merger will be
accounted for as a purchase under
generally accepted accounting principles
("GAAP").

COMPARISON OF SHAREHOLDERS'
RIGHTS............................ See "Comparison of Shareholders' Rights"
for a summary of the material
differences between the rights of
holders of shares of St. Francis Common
Stock and holders of shares of Reliance
Common Stock.

DISSENTERS' RIGHTS.................. Under the WBCL, holders of shares of a
Wisconsin corporation quoted on the
NASDAQ Small-Cap Market on the record
date for a meeting at which shareholders
are to vote on a merger are not entitled
to appraisal or dissenters' rights.
Shares of Reliance Common Stock were
quoted on the NASDAQ Small-Cap Market on
the Voting Record Date. Therefore,
holders of Reliance Common Stock are not
entitled to dissenters' rights in
connection with the Merger. See
"Proposal to Approve the Merger--
No Appraisal or Dissenters' Rights."

-21-
<PAGE> 26

COMPARATIVE PER SHARE INFORMATION

The following table sets forth unaudited comparative per share data of St.
Francis on both a historical and pro forma combined basis and per share data of
Reliance on both a historical and pro forma equivalent combined basis. These
tables should be read in conjunction with the consolidated financial statements
and notes thereto of St. Francis contained in the St. Francis Form 10-K for the
fiscal year ended September 30, 1997 and the St. Francis Form 10-Q for the nine
and three months ended June 30, 1998, incorporated by reference herein, and the
consolidated financial statements and notes thereto of Reliance for the fiscal
year ended June 30, 1998, which are included herein. See "Incorporation of
Certain Information by Reference." Pro forma combined and pro forma equivalent
per share data have been prepared giving effect to the Merger under the purchase
method of accounting. The following information is not necessarily indicative of
the results of operations or combined financial position that would have
resulted had the Merger been consummated at the beginning of the periods
indicated, nor is it necessarily indicative of the results of operations of
future periods or future combined financial position. As discussed under
"Proposal to Approve the Merger--Merger Consideration," the conversion ratio is
subject to adjustment as a result of changes in the market price of shares of
St. Francis Common Stock.

<TABLE>
<CAPTION>
AT OR FOR THE AT OR FOR THE
NINE MONTHS ENDED YEAR ENDED
JUNE 30, 1998 SEPTEMBER 30, 1997
------------------------- ------------------
<S> <C> <C>
BOOK VALUE PER SHARE(1)
Historical:
St. Francis............................................ 25.78 24.54
Reliance............................................... 9.34 9.08
Pro forma:
St. Francis and Reliance combined...................... 27.01 25.88
Reliance equivalent(2)................................. 6.75 6.47

CASH DIVIDENDS PER SHARE(3)
Historical:
St. Francis............................................ 0.42 0.48
Reliance............................................... -- 3.00
Pro forma:
St. Francis and Reliance combined...................... 0.42 0.48
Reliance equivalent(2)................................. 0.105 0.12

DILUTED NET INCOME PER SHARE
Historical:
St. Francis ........................................... 2.09 2.20
Reliance............................................... 0.17 0.26
Pro forma(4)(5)
St. Francis and Reliance combined...................... 1.97 2.11
Reliance equivalent(2)................................. 0.49 0.53
</TABLE>

- ----------
(1) Book value per share has been computed assuming 5,558,487 and 5,738,338
diluted shares of St. Francis Common Stock outstanding at June 30, 1998
and September 30, 1997, respectively. Included in these share amounts
are 479,000 and 500,000 shares, respectively, assumed to have been
issued by St. Francis in connection with the acquisition of Reliance.
See "Proposal to Approve the Merger--Merger Consideration."
(2) The pro forma equivalent per share data for Reliance has been computed
by multiplying the pro forma combined per share information by .2500,
which represents the number of shares of St. Francis Common Stock into
which each share of Reliance Common Stock may be converted if the St.
Francis Average Stock Price is between $40.00 and $42.00. The per share
stock distribution and per share cash distribution are subject to
adjustment pursuant to the Merger Agreement, depending upon the St.
Francis Average Stock Price. See "Proposal to Approve the
Merger--Merger Consideration."
(3) Based on historical dividends of St. Francis and Reliance.
(4) Pro forma diluted net income per share has been computed assuming
5,240,000 and 5,334,000 diluted shares of St. Francis Common Stock
outstanding for the periods ended June 30, 1998 and September 30, 1997,
respectively. Included in each of these share amounts are 479,000
shares assumed to have been issued by St. Francis in connection with
the acquisition of Reliance. See "Proposal to Approve the Merger --
Merger Consideration."
(5) Net income per share assumes goodwill amortization. Goodwill
approximates $3.2 million and will be amortized over 25 years.

-22-
<PAGE> 27

COMPARATIVE MARKET AND STOCK PRICE INFORMATION

St. Francis Common Stock is quoted on the NASDAQ National Market System
under the symbol "STFR." Reliance Common Stock is quoted on the NASDAQ
"Small-Cap" Market under the symbol "RELI." The table below sets forth, for the
calendar quarters indicated, (i) the high and low sales prices for St. Francis
Common Stock as reported on the NASDAQ National Market System, (ii) the high and
low sales prices as reported on the NASDAQ "Small-Cap" Market for Reliance
Common Stock, and (iii) the dividends per share declared on St. Francis Common
Stock and Reliance Common Stock in each quarter. No assurance can be given as to
the market price of St. Francis Common Stock or Reliance Common Stock at, or in
the case of St. Francis Common Stock, after, the Effective Time.

<TABLE>
<CAPTION>
ST. FRANCIS RELIANCE
------------------------------- ------------------------------
SALES PRICE CASH SALES PRICE CASH
--------------- DIVIDENDS --------------- DIVIDENDS
HIGH LOW PAID HIGH LOW PAID
----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
1995

Quarter Ended March 31................. $ 18.50 $13.75 -- -- -- --
Quarter Ended June 30.................. 20.25 17.75 -- -- -- --
Quarter Ended September 30............. 22.75 20.00 -- -- -- --
Quarter Ended December 31.............. 25.50 22.25 $ 0.10 -- -- --

1996

Quarter Ended March 31................. 28.00 22.25 0.10 -- -- --
Quarter Ended June 30.................. 28.00 24.00 0.10 $ 8.75 $ 7.50 --
Quarter Ended September 30............. 26.25 24.75 0.10 8.75 7.63 --
Quarter Ended December 31.............. 27.00 25.00 0.12 10.25 6.13 $ 3.00

1997

Quarter Ended March 31................. 32.25 26.00 0.12 7.75 6.38 --
Quarter Ended June 30.................. 38.75 29.00 0.12 8.50 7.00 --
Quarter Ended September 30............. 38.00 33.88 0.12 9.00 7.75 --
Quarter Ended December 31.............. 53.25 36.50 0.14 9.75 8.25 --

1998

Quarter Ended March 31................. 51.00 41.25 0.14 10.13 8.75 --
Quarter Ended June 30.................. 45.50 34.38 0.14 9.31 8.06 --
Quarter Ended September 30, 1998
(through _______).................... --
----- ----- ----- ----- ----- -----
</TABLE>

-23-
<PAGE> 28
On June 29, 1998, the last trading day before the public announcement
of the Merger Agreement, the reported closing sale prices of St. Francis Common
Stock and Reliance Common Stock were $37.50 and $8.50, respectively. On December
__, 1998, the most recent date for which it was practicable to obtain market
price data prior to the printing of this Proxy Statement/Prospectus, the closing
sale prices per share of St. Francis Common Stock and Reliance Common Stock were
$_____ and $_____, respectively. The Per Share Stock Distribution will be
determined based on a formula set forth in the Merger Agreement that takes into
consideration the average of the last sale price of the day of one share of St.
Francis Common Stock as reported in the Wall Street Journal for the ten
consecutive trading days ending on the fifth business day prior to the Effective
Time of the Merger (the "Valuation Period"). If the Effective Time had been
December __, 1998, the St. Francis Average Stock Price would have been $______,
based on a Valuation Period of _________ to __________, 1998, resulting in a Per
Share Stock Distribution of _______ and a Per Share Cash Distribution of
$_________.

The following table sets forth (i) the closing price per share of St.
Francis Common Stock and the closing price per share of Reliance Common Stock on
each of (a) June 29, 1998, the last full trading day before the public
announcement of the signing of the Merger Agreement, and (b) December __, 1998,
the most recent date for which it was practicable to obtain market price data
prior to the printing of this Proxy Statement/Prospectus, (ii) the St. Francis
Average Stock Price determined as if the last day of the Valuation Period were
such date, and (iii) the pro forma equivalent price per share of Reliance Common
Stock determined as if the Effective Time were five business days after such
date. The pro forma equivalent price per share of Reliance Common Stock at each
specified date represents the closing price of a share of St. Francis Common
Stock at such date multiplied by a fraction equal to the Per Share Stock
Distribution that would have existed if the Effective Time had been five
business days after such date.

<TABLE>
<CAPTION>
ST. FRANCIS RELIANCE ST. FRANCIS
COMMON COMMON AVERAGE STOCK PRO FORMA EQUIVALENT
STOCK STOCK PRICE FOR PRICE PER SHARE OF
CLOSING PRICE CLOSING PRICE PERIOD THEN ENDED RELIANCE COMMON STOCK
------------- ------------- ----------------- ---------------------

<S> <C> <C> <C> <C>
June 29, 1998................. $37.50 $ 8.50 __.___ __.__

_______, 1998................. $__.__ $__.__ __.___ __.__
</TABLE>

No assurance can be given as to what the St. Francis Average Stock
Price will be during the actual Valuation Period or as to what the market price
of the shares of St. Francis Common Stock will be at the time the Merger is
consummated. Because the market price of the shares of St. Francis Common Stock
is subject to fluctuation, the Per Share Stock Distribution and the Per Share
Cash Distribution may change before the Merger. See "Proposal to Approve the
Merger--Merger Consideration" and "Proposal to Approve the Merger--Price-Based
Termination." Reliance shareholders are encouraged to obtain current market
quotations for St. Francis Common Stock and Reliance Common Stock. No assurance
can be given as to the market price of St. Francis Common Stock or Reliance
Common Stock at, or in the case of St. Francis Common Stock, after, the
Effective Time.

-24-
<PAGE> 29

SELECTED HISTORICAL FINANCIAL INFORMATION

The following tables set forth, for the periods indicated, certain
selected historical financial information for St. Francis and Reliance. This
information should be read in conjunction with the consolidated financial
statements of St. Francis and Reliance, and the related notes thereto, included
herein or in documents incorporated herein by reference. See "Incorporation of
Certain Information by Reference."

The historical balance sheet and income statement information included
in the selected financial information for St. Francis for the five years ended
September 30, 1997, and for Reliance for the five years ended June 30, 1998, are
derived from audited financial statements as of, and for, such years. The
historical balance sheet and income statement information for St. Francis for
the nine months ended June 30, 1998 and 1997, is derived from unaudited
financial statements as of, and for, such period. These unaudited financial
statements include all adjustments which are, in the opinion of St. Francis
management, necessary for a fair statement of the results of these periods and
are of a normal recurring nature.

-25-
<PAGE> 30

ST. FRANCIS CAPITAL CORPORATION
SELECTED CONSOLIDATED HISTORICAL FINANCIAL INFORMATION
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
JUNE 30,
---------------------------
1998 1997
----------- -----------
(Unaudited)
<S> <C> <C>
INCOME STATEMENT DATA:
Interest and dividend income ................. $ 86,709 $ 78,829
Interest expense ............................. 55,907 50,254
----------- -----------
Net interest income ....................... 30,802 28,575
Provision for loan losses .................... 2,000 501
----------- -----------
Net interest income after provision
for loan losses ........................ 28,802 28,074
Other operating income (expense), net:
Loan servicing and loan related fees ...... 1,564 1,421
Impairment loss on mortgage
backed securities ...................... -- (2,050)
Gain (loss) on debt and equity and
mortgage-backed and related
securities available for sale, net ..... 1,108 1,038
Gain on sales of mortgage
loans held for sale, net ............... 3,238 834
Other Operating Income .................... 8,361 5,203
----------- -----------
Total other operating income, net ............ 14,271 6,446
----------- -----------
General and administrative expenses(1) ....... 31,076 24,589
----------- -----------
Income before income tax expense ............. 11,997 9,931
Income tax expense ........................... 1,062 1,322
----------- -----------
Net Income ................................... $ 10,935 $ 8,609
=========== ===========
PER SHARE DATA:
Net income (basic) ........................... $ 2.22 $ 1.71
Net income (diluted) ......................... 2.09 1.61
Dividends paid ............................... 0.42 0.36
Book value at end of period ...................... 25.78 24.07
BALANCE SHEET DATA:
Total assets ................................. $ 1,754,803 $ 1,644
Cash and cash equivalents .................... 50,515 45,005
Loans receivable, net ........................ 809,436 697,269
Mortgage loans held for sale ................. 19,923 17,080
Debt and equity securities held to maturity .. 1,821 4,663
Debt and equity securities available
for sale .................................. 87,475 71,835
Mortgage-backed and related
securities held to maturity ............... 65,274 67,341
Mortgage-backed and related
securities available for sale ............. 569,156 617,925
Deposits ..................................... 1,129,445 1,054,604
Advances from the FHLB and
other borrowings .......................... 477,120 448,311
Shareholders' Equity ......................... 130,966 129,682
SELECTED RATIOS:
Return on average assets ..................... 0.88% 0.78%
Return on average equity ..................... 11.07 8.05
Average equity to average assets ............. 7.94 8.58
Net interest rate spread ..................... 2.48 2.47
Net interest margin .......................... 2.70 2.77
General and administrative
expenses to average assets ................ 2.50 2.23
Allowance for loan losses to
non-performing assets ..................... 233.11 219.45

AT OR FOR THE YEAR ENDED SEPTEMBER 30,
-----------------------------------------------------------------------------
1997 1996 1995 1994 1993
----------- ----------- ----------- ----------- -----------

<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Interest and dividend income ................. $ 108,146 $ 92,097 $ 83,787 $ 60,133 $ 49,784
Interest expense ............................. 69,363 56,413 50,223 31,633 27,629
----------- ----------- ----------- ----------- -----------
Net interest income ....................... 38,783 35,684 33,564 28,500 22,155
Provision for loan losses .................... 1,280 1,300 240 240 95
----------- ----------- ----------- ----------- -----------
Net interest income after provision
for loan losses ........................ 37,503 34,384 33,324 28,260 22,060
Other operating income (expense), net:
Loan servicing and loan related fees ...... 1,813 1,258 1,276 1,116 1,110
Impairment loss on mortgage
backed securities ...................... (3,400) -- -- -- --
Gain (loss) on debt and equity and
mortgage-backed and related
securities available for sale, net ..... 1,289 3,311 2,576 (101) 2,351
Gain on sales of mortgage
loans held for sale, net ............... 1,562 1,057 261 137 649
Other Operating Income .................... 7,398 4,988 4,218 2,342 1,829
----------- ----------- ----------- ----------- -----------
Total other operating income, net ............ 8,662 10,614 8,331 3,494 5,939
----------- ----------- ----------- ----------- -----------
General and administrative expenses(1) ....... 32,903 31,622 22,679 19,381 16,205
----------- ----------- ----------- ----------- -----------
Income before income tax expense ............. 13,262 13,376 18,976 12,373 11,794
Income tax expense ........................... 1,544 2,911 6,277 4,336 4,625
----------- ----------- ----------- ----------- -----------
Net Income ................................... $ 11,718 $ 10,465 $ 12,699 $ 8,037 $ 7,169
=========== =========== =========== =========== ===========
PER SHARE DATA:
Net income (basic) ........................... $ 2.33 $ 1.91 $ 2.18 $ 1.20 $ 0.32
Net income (fully-diluted) ................... 2.20 1.82 2.10 1.16 0.31
Dividends paid ............................... 0.48 0.40 n/a n/a n/a
Book value at end of period ...................... 24.54 28.12 22.66 18.40 17.50
BALANCE SHEET DATA:
Total assets ................................. $ 1,660,649 $ 1,404,116 $ 1,189,215 $ 1,026,806 $ 812,473
Cash and cash equivalents .................... 42,858 22,459 20,780 15,951 11,753
Loans receivable, net ........................ 712,875 610,699 513,308 427,753 324,387
Mortgage loans held for sale ................. 24,630 20,582 1,138 2,978 10,043
Debt and equity securities held to maturity .. 3,833 6,215 49,928 23,804 28,813
Debt and equity securities available
for sale .................................. 56,247 60,001 4,142 2,374 915
Mortgage-backed and related
securities held to maturity ............... 66,849 68,392 157,495 159,178 370,562
Mortgage-backed and related
securities available for sale ............. 620,716 519,766 360,077 336,772 32,655
Deposits ..................................... 1,087,136 877,684 688,348 569,892 552,004
Advances from the FHLB and
other borrowings .......................... 420,228 375,034 345,681 317,317 122,180
Shareholders' Equity ......................... 128,530 125,179 135,228 122,701 124,452
SELECTED RATIOS(unaudited):
Return on average assets ..................... 0.77% 0.82% 1.10% 0.87% 1.00%
Return on average equity ..................... 9.17 7.81 10.02 6.44 8.99
Average equity to average assets ............. 8.37 10.48 10.95 13.52 11.14
Net interest rate spread ..................... 2.45 2.56 2.56 2.61 2.63
Net interest margin .......................... 2.73 2.97 3.04 3.17 3.20
General and administrative
expenses to average assets ................ 2.16 2.47 1.96 2.10 2.26
Allowance for loan losses to
non-performing assets ..................... 181.82 131.41 65.06 44.89 134.91
</TABLE>

- ----------

(1) General and administrative expenses for the year ended September 30, 1996
included a one-time special SAIF assessment of $4.2 million.

-26-
<PAGE> 31

RELIANCE BANCSHARES, INC.
SELECTED CONSOLIDATED HISTORICAL FINANCIAL INFORMATION(1)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
AT OR FOR THE YEAR ENDED JUNE 30,
------------------------------------------------
1998 1997 1996 1995
-------- -------- -------- --------
<S> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Interest and income .......................... $ 3,360 $ 3,472 $ 2,724 $ 2,453
Interest expense ............................. 1,189 1,072 1,153 1,083
-------- -------- -------- --------
Net interest income ....................... 2,171 2,400 1,571 1,370
Provision for loan losses .................... 22 22 22 22
-------- -------- -------- --------
Net interest income after provision
for loan losses ........................ 2,149 2.378 1,549 1,348
-------- -------- -------- --------
Gain (loss) on sale of investments ........... 28 2 (3) (11)
Other income ................................. 13 23 9 10
Loan fees and service charges ............. 10 11 11 9
-------- -------- -------- --------
Total non-interest income ................. 51 36 17 8
-------- -------- -------- --------
Operating income ............................. 2,198 2,414 1,566 1,356
Total non-interest expense ................... 1,262 1,431 721 680
-------- -------- -------- --------
Income before income taxes ................... 938 983 845 676
-------- -------- -------- --------
Income tax expense ........................... 366 367 331 271
-------- -------- -------- --------
Net income ................................ $ 572 $ 616 $ 514 $ 405
======== ======== ======== ========
PER SHARE DATA:
Net income (basic)............................ $ 0.24 $ 0.25 $ 0.21 N/A
Net income (diluted) ......................... 0.24 0.25 0.21 N/A
Dividends paid ............................... -- 3.00 -- N/A
Book value at end of period .................. 9.34 8.99 11.45 N/A
BALANCE SHEET DATA:
Total assets ................................. $ 42,289 $ 47,009 $ 47,752 $ 32,260
Investments:
Certificates of deposit-at cost ........... 493 294 294 479
Investment securities available for
sale, at fair value .................... 10,493 11,481 7,882 6,193
Investment securities held to maturity .... -- 3,189 11,178 2,196
Mortgage-backed and related securities ....... 456 685 800 1,020
Federal Home Loan Bank stock-at cost ......... 200 200 157 152
Loans receivable, net ........................ 25,798 27,601 22,931 21,034
Accrued interest receivable .................. 87 182 173 95
Office properties and equipment .............. 75 86 84 107
Deposit accounts ............................. 17,330 17,596 18,200 22,312
Borrowed Funds ............................... 2,000 6,008 -- --
Shareholders' equity ......................... 22,372 22,966 29,348 9,616
SELECTED RATIOS (unaudited):
Return on average assets ..................... 1.24% 1.32% 1.40% 1.23%
Return on average equity ..................... 2.43 2.44 3.45 4.32

Average equity to average assets ............. 50.88 54.08 40.71 28.49
Average interest rate spread ................. 2.23 2.55 2.25 2.96
Average net interest margin .................. 4.91 5.29 4.42 4.24
Allowance for loan losses to total loans
held for investment at end of period ...... 0.55 0.49 0.47 0.47
Non-interest expense to average assets ....... 2.73 3.07 1.97 2.06
</TABLE>

- ----------
(1) Certain terminology used in the presentation of Reliance's historical
data has been changed to conform with terminology used in St. Francis'
presentation. Reliance Savings Bank consummated its conversion from
mutual to stock form on April 18, 1996; on that date, Reliance issued
shares of common stock to complete the conversion. Therefore, selected
consolidated historical financial information prior to fiscal 1995 is
not applicable.

-27-
<PAGE> 32

INTRODUCTION

GENERAL

This Proxy Statement/Prospectus is being furnished to the holders of
common stock, par value $1.00 per share ("Reliance Common Stock"), of Reliance
Bancshares, Inc., a Wisconsin corporation ("Reliance"), in connection with the
solicitation of proxies by the Board of Directors of Reliance (the "Reliance
Board"), for use at the Special Meeting of Shareholders of Reliance to be held
on January 11, 1999, at [_____] [a.m./p.m.], Milwaukee, Wisconsin time, at the
Clarion Hotel & Conference Center, 5311 South Howell Avenue, Milwaukee,
Wisconsin, or at any adjournments or postponements thereof (the "Special
Meeting"). This Proxy Statement/Prospectus also constitutes the Prospectus of
St. Francis filed as part of its Registration Statement on Form S-4
("Registration Statement") with respect to up to 740,022 shares of St. Francis
Common Stock (and associated Purchase Rights) to be issued upon consummation of
the Merger pursuant to the Merger Agreement.

At the Special Meeting, holders of record of Reliance Common Stock as of the
close of business on December __, 1998 (the "Voting Record Date") will consider
and vote upon a proposal to approve the Agreement and Plan of Reorganization,
dated as of June 30, 1998 (the "Merger Agreement"), and related Agreement and
Plan of Merger, dated as of September 22, 1998 (the "Plan of Merger"), by and
between Reliance and St. Francis Capital Corporation, a Wisconsin corporation
("St. Francis"), pursuant to which Reliance will be merged with and into St.
Francis (the "Merger"). Pursuant to the Merger Agreement and the Plan of Merger,
shareholders of Reliance may elect, subject to certain election and allocation
procedures, to exchange their shares of Reliance Common Stock for either cash in
an amount ranging from $10.00 per Reliance share up to an amount equal to .2295
multiplied by the average market price of St. Francis' Common Stock over a
ten-day pricing period ending shortly before the Effective Time (the "St.
Francis Average Stock Price") (the exact per share cash amount to be dependant
upon the St. Francis Average Stock Price), between .2295 and .3085 fractional
shares of St. Francis common stock (the exact fractional share amount to be
dependant upon the St. Francis Average Stock Price), or an overall combination
thereof, for each Reliance common share. The aggregate consideration to be paid
to shareholders of Reliance will be at least equal to 60% in St. Francis Common
Stock and not more than 40% in cash. The Reliance Board has unanimously approved
the terms of the Merger Agreement and the Plan of Merger and recommends that
shareholders of Reliance vote FOR the proposal to approve and adopt the Merger
Agreement and the Plan of Merger.

PARTIES TO THE MERGER

St. Francis, a Wisconsin corporation, was incorporated on December 18,
1992 for the purpose of becoming the holding company for St. Francis Bank,
F.S.B. ("St. Francis Bank") upon St. Francis Bank's conversion from a
federally-chartered mutual savings bank to a federally-chartered stock savings
bank. This transaction was completed in June 1993. In November 1994, St. Francis
consummated the acquisition of the stock of Valley Bank East Central in
Kewaskum, Wisconsin as well as the acquisition of the deposits and certain
assets of the Hartford, Wisconsin branch of Valley Bank Milwaukee. The acquired
bank offices were combined as a commercial bank named Bank Wisconsin. In
February 1997, St. Francis completed the acquisition of Kilbourn State Bank in
Milwaukee, Wisconsin, which subsequently was merged into Bank Wisconsin. In
September 1997, Bank Wisconsin was merged into St. Francis Bank, with St.
Francis Bank being the surviving entity. At June 30, 1998, St. Francis had total
assets of $1.8 billion, total deposits of $1.1 billion and shareholders' equity
of $131.0 million. St. Francis has not engaged in any significant activity other
than holding the stock of St. Francis Bank. St. Francis Bank is regulated by the
Office of Thrift Supervision ("OTS") and its deposits are insured up to
applicable limits under the Savings Association Insurance Fund ("SAIF") of the
Federal Deposit Insurance Corporation ("FDIC"). St. Francis Bank's principal
business consists of attracting retail deposits from the general public and
investing those deposits, together with funds generated from other operations,
primarily to originate mortgage, consumer and other loans within its primary
market area and to invest in mortgage-backed and related securities, and to a
lesser extent, debt and equity securities. Primary areas of lending include
single-family and multi-family residential mortgages, home equity lines of
credit, second mortgages, commercial real estate and commercial loans. At June
30, 1998, St. Francis operated 25 banking offices in Wisconsin. The principal
executive offices of St. Francis are located at 13400 Bishops Lane, Suite 350,
Brookfield, Wisconsin 53005-6203, and its telephone number is (414) 486-8700.

-28-
<PAGE> 33

Reliance, a Wisconsin corporation incorporated on November 10, 1995, is
the holding company for Reliance Savings Bank, a Wisconsin state-chartered stock
savings bank ("Reliance Savings Bank"), which consummated its conversion from
mutual to stock form in April 1996. At June 30, 1998, Reliance had total assets
of $42.3 million, total deposits of $17.3 million and shareholders' equity of
$22.4 million. Reliance Savings Bank is regulated by the FDIC and the Wisconsin
Department of Financial Institutions ("WDFI"), and its deposits are insured up
to applicable limits by the SAIF of the FDIC. Reliance's principal business
consists of attracting funds in the form of deposits and investing such funds in
investment securities (including United States government and other agency
obligations and mutual funds), mortgage-backed and related securities and loans
secured by real estate. The primary lending activity of Reliance Savings Bank is
on one- to-four-family owner-occupied homes. While Reliance Savings Bank has in
recent years had funds to lend, management of Reliance Savings Bank believes
there has been a diminishing demand for one- to four-family mortgage loans in
its local market area (generally defined as an area within a three- mile radius
of its office). Since fiscal 1997, Reliance Savings Bank has been, and intends
to continue to emphasize one- to four-family mortgage lending in its local
market area, but also has been originating and intends to continue to originate
one- to four-family, residential construction, commercial real estate,
commercial construction and land development and multi-family loans both within
and outside its local market area in suburbs surrounding the City of Milwaukee,
which encompasses the Wisconsin counties of Milwaukee, Waukesha, Ozaukee and
Washington, in order to generate adequate earnings, adequately leverage its
capital and make effective use of its liquid assets. Reliance Savings Bank
invests a significant portion of its assets in investment securities and
mortgage-backed securities, including U.S. Government and federal agency
securities, short-term liquid assets and other marketable securities. At June
30, 1998, Reliance and Reliance Savings Bank operated one banking office in
Wisconsin. The principal executive offices of Reliance are located at 3140 South
27th Street, Milwaukee, Wisconsin 53215, and its telephone number is (414)
671-2222.

RISK FACTORS

IN ADDITION TO OTHER INFORMATION CONTAINED IN AND INCORPORATED BY
REFERENCE IN THE PROXY STATEMENT/PROSPECTUS, RELIANCE SHAREHOLDERS SHOULD
CAREFULLY CONSIDER THE MATTERS DESCRIBED BELOW IN DETERMINING WHETHER TO APPROVE
THE MERGER AGREEMENT AND THE PLAN OF MERGER AND THE TRANSACTIONS CONTEMPLATED
THEREBY.

UNCERTAIN LEGISLATIVE AND REGULATORY ENVIRONMENT

The banking and financial services businesses in which St. Francis and
Reliance engage are highly regulated. The laws and regulations affecting such
businesses may be changed dramatically in the near future. On May 13, 1998, the
U.S. House of Representatives (the "House") passed a sweeping financial
modernization bill, H.R. 10, "The Financial Services Act of 1998," by a vote of
214 to 213. The bill was first proposed by the Clinton Administration on May 21,
1997. The final House version differs in many significant respects from the
Administration's proposed bill. The House bill has been sent to the U.S. Senate
for its consideration. The Senate Banking Committee reported its version of H.R.
10 on September 3, 1998. If passed by the full Senate, the bill would not become
law unless it is signed by the President. Given the limited number of
legislative days left in the 105th Congress, many observers believe there is an
inadequate amount of time for the Senate to act on the legislation in the 1998
legislative year. Accordingly, whether the bill will pass in the near future
remains uncertain, and the ultimate form the legislation might take if enacted
cannot be predicted at this time.

The bill among other things, addresses the ongoing debate concerning
mixing banking and commerce. Under the proposal, banks could affiliate with
insurance and securities companies in a holding company structure, subject to
functional regulation. Much of the debate concerning the legislation has
centered on whether non-banking activities can be conducted through subsidiaries
of the bank, rather than only through holding companies. In this regard, H.R. 10
requires banks to move non-banking activities to holding companies regulated by
the Board of Governors of the Federal Reserve System, thereby removing them from
under the bank. Securities activities would be regulated by the SEC, and state
regulators would oversee insurance activities. The proposal provides for further

-29-
<PAGE> 34

study of the issues relating to merging the SAIF and BIF. If adopted, the
legislation would represent the most significant overhaul of financial services
laws since the 1930s when the Glass-Steagall Act of 1933 was enacted.

With respect to the thrift industry, H.R. 10, as passed by the House
and the Senate Banking Committee, does not contain provisions eliminating the
federal thrift charter and requiring all federal thrifts to convert to national
banks within two years. The Senate Banking Committee version of the bill allows
unitary thrift holding companies to continue operating and allows the formation
of new unitaries, but prohibits unitary thrift holding companies applied for
after September 3, 1998 from engaging in commercial activities or affiliations.
Prior versions of the bill would have eliminated the federal thrift charter,
while allowing existing unitary thrift holding companies to retain their status
and affiliations with non-financial enterprises and to engage in all currently
permissible activities. Neither St. Francis nor Reliance can predict what
changes will occur or the effect that any such changes would have on the ability
of the combined entity to compete effectively or to take advantage of new
opportunities after the Merger.

EFFECT OF INTEREST RATES

The operations of St. Francis are, like those of financial institutions
in general, significantly influenced by general economic conditions and the
related monetary and fiscal policies of the federal government. Deposit flows
and costs of funds are influenced by interest rates of competing investments and
general market rates of interest. Lending activities are affected by the demand
for commercial loans, mortgage financing and for consumer and other types of
loans, which in turn are affected by the interest rates at which financing may
be offered and by other factors affecting the availability of funds. St.
Francis' profitability, like that of most financial institutions, is dependent
to a large extent upon its net interest income, which is the difference between
its interest income on interest-earning assets, such as loans and investments,
and its interest expense on interest-bearing liabilities, such as deposits and
borrowings. As a financial institution, St. Francis' vulnerability to changes in
interest rates depends upon the effective maturing and repricing characteristics
of its interest-earning assets and interest-bearing liabilities and the
direction of market interest rate movements. Further information concerning the
effect of interest rates on the business and financial condition of St. Francis
is provided in St. Francis' periodic reports filed with the SEC under the
Exchange Act which are incorporated by reference herein. See "Incorporation of
Certain Documents by Reference."

COMPETITION

The markets in which St. Francis and Reliance operate are highly
competitive. Competition in such markets is likely to increase in light of the
changing legislative and regulatory environment in which St. Francis and
Reliance operate. In addition, consolidation and mergers in the banking industry
are expected to continue, resulting in stronger and more effective competitors.
Neither St. Francis nor Reliance can predict the degree to which competition in
the industry will increase in the future or the effect any such increased
competition will have on the combined entity.

RAPID TECHNOLOGICAL CHANGES

Evolving technology will play a major role in the processing and
delivery of financial services. The effective use of new technology will enable
banking and financial service businesses to improve information concerning their
customers and markets. It also will enable them to reduce overhead expenses
while improving the quality of service to customers. Communications technology
will substantially improve the ability of financial institutions to exchange
information with their customers and employees. Banks and financial institutions
that are unwilling or unable to access this evolving new technology could
experience lower earnings and a loss of competitiveness.

UNCERTAIN ECONOMIC ENVIRONMENT

Until recently, banks and financial service companies in the Midwest
have experienced a relatively long period of price stability and a growing
economy. Price stability enables banks to better protect themselves against
interest rate risks. A strong economy enhances the opportunity of the commercial
sector of the economy to improve earnings and performance. It also provides an
environment for financial institutions to experience positive and profitable
growth. Any changes in the global economy may affect the regional or national
economic market, which, in turn, presents risks for all banks and financial
service companies.

SHARE PRICE FLUCTUATION

The share price of St. Francis Common Stock on the NASDAQ National
Market System is by nature subject to the general price fluctuations in the
market for publicly-traded equity securities. Such fluctuations are not
necessarily related to a change in the financial performance or condition of St.
Francis.

YEAR 2000

Advances and changes in available technology can significantly impact
the business and operations of all financial institutions, including St. Francis
and Reliance. St. Francis is in the process of conducting a review of its
computer systems and its third-party systems to identify those that could be
affected by the "Year 2000" issue and is developing an implementation plan to
resolve the issue. The Year 2000 problem is the result of computer programs
being written using two digits rather than four to define the applicable year.
Any of St. Francis' programs or programs of third-party providers that have
time-sensitive software may recognize a date using "00" as the year

-30-
<PAGE> 35

1900 rather than the year 2000. If not considered, Year 2000 issues could result
in major system failure or miscalculations and material costs to St. Francis.
St. Francis presently believes that, with modifications to existing software and
converting to new software, the Year 2000 problem will not pose significant
operational problems for St. Francis' computer systems as so modified and
converted. However, if such modifications and conversions are not completed
timely, the Year 2000 problem may have a material impact on St. Francis. St.
Francis expects to incur costs associated with Year 2000 issues of approximately
$200,000 to $500,000 on an annual basis in each of its fiscal years ending
September 30, 1998, 1999 and 2000.

Reliance has developed a Year 2000 Compliance Plan and has conducted a
review of its computer systems and its third-party systems, and has identified
those that could be affected by the Year 2000 issue. Reliance believes that,
with modifications to existing software used by Reliance and by its third-party
providers, the Year 2000 problem will not pose significant operational issues
for Reliance. Reliance does not anticipate costs to remedy the Year 2000 problem
will have a material impact on the financial condition of Reliance.

St. Francis has evaluated, on a preliminary basis, the Year 2000 issue
as it impacts St. Francis' and Reliance's operations on a pro forma basis
assuming the Merger is consummated. Based on such evaluation, St. Francis does
not believe that the costs of ensuring that Reliance's operations, as integrated
with St. Francis' operations following completion of the Merger, will be
material. However, there can be no assurance that all necessary modifications
will be identified or corrected or that unforeseen difficulties or costs will
not arise. In addition, there can be no assurance that the systems of
third-party providers on which both St. Francis and Reliance rely will be
modified on a timely basis, or that the failure by another company to properly
modify its systems will not negatively impact the systems or operations of St.
Francis and Reliance following completion of the Merger.

THE SPECIAL MEETING

PLACE, TIME AND DATE

The Special Meeting of Shareholders of Reliance will be held on January
__, 1999, at______ [a.m./p.m.], Milwaukee, Wisconsin time, at the Clarion Hotel
& Conference Center, 5311 South Howell Avenue, Milwaukee, Wisconsin. This Proxy
Statement/Prospectus is being sent to holders of shares of Reliance Common Stock
and is accompanied by an appointment form of proxy ("Proxy") which is being
solicited by the Reliance Board for use at the Special Meeting or any
adjournments or postponements thereof.

PURPOSE

The purpose of the Special Meeting is: (i) to consider and vote upon
the approval and adoption of the Merger Agreement and Plan of Merger described
herein, providing for, among other things, the merger of Reliance with and into
St. Francis, with St. Francis surviving the Merger, and the conversion of
Reliance Common Stock into shares of St. Francis Common Stock or cash, or a
combination thereof; (ii) to adjourn the Special Meeting to solicit additional
votes in favor of the Merger Agreement and Plan of Merger in the event the
required vote for approval and adoption of the Merger Agreement and Plan of
Merger has not been obtained by the date of the Special Meeting; and (iii) to
consider and act upon such other matters as may properly come before the Special
Meeting or any adjournments or postponements thereof.

RECORD DATE; SHARES ENTITLED TO VOTE

The Reliance Board has fixed the close of business on December __,1998
(the "Voting Record Date") as the record date for the determination of Reliance
shareholders entitled to notice of and to vote at the Special Meeting. Only
those holders of Reliance Common Stock of record on the Voting Record Date will
be entitled to notice of and to vote in person or by properly executed proxy at
the Special Meeting or any adjournments or postponements thereof. Each share of
Reliance Common Stock will be entitled to one vote on each matter presented for
action at the Special Meeting. As of the Voting Record Date, _______ shares of
Reliance Common Stock were issued and outstanding, and Reliance had no other
class of securities issued and outstanding.

-31-
<PAGE> 36

RELIANCE SHAREHOLDERS SHOULD NOT SEND STOCK CERTIFICATES FOR RELIANCE
COMMON STOCK WITH THEIR PROXY CARDS. AS DESCRIBED UNDER "PROPOSAL TO APPROVE THE
MERGER--ELECTION AND ALLOCATION PROCEDURES," EACH RELIANCE SHAREHOLDER WILL BE
PROVIDED WITH AN ELECTION FORM FOR EXCHANGING SHARES OF RELIANCE COMMON STOCK,
AND SHOULD FOLLOW THE INSTRUCTIONS SET FORTH THEREIN.

VOTES REQUIRED

A majority of the shares of Reliance Common Stock entitled to vote,
represented in person or by proxy, will constitute a quorum for the transaction
of business at the Special Meeting. Abstentions and broker non-votes (referring
to where a broker or nominee physically indicates on the proxy that it does not
have discretionary authority as to certain shares of Reliance Common Stock to
vote on a particular matter) will be considered present for purposes of
determining whether a quorum exists. The following votes are required for
various actions to be taken at the Special Meeting:

o The affirmative vote of the holders of a majority of the
issued and outstanding shares of Reliance Common Stock entitled to
vote on the Merger Agreement and the Plan of Merger at the Special
Meeting is required for approval and adoption of the Merger
Agreement and the Plan of Merger. Abstentions and broker non-votes
will have the same effect as votes cast against approval of the
Merger Agreement.

o The affirmative vote of a majority of the total votes cast in
person or by proxy is necessary to approve the proposal to adjourn
the Special Meeting, if necessary, to solicit additional votes in
favor of the Merger proposal. Any shares not voted will have no
effect on the proposal to adjourn the Special Meeting provided
that a quorum is present at the Special Meeting.

THE REQUIRED VOTE OF RELIANCE SHAREHOLDERS ON THE MERGER AGREEMENT AND
PLAN OF MERGER IS BASED UPON THE NUMBER OF OUTSTANDING SHARES OF RELIANCE COMMON
STOCK, AND NOT THE NUMBER OF THOSE SHARES WHICH ARE ACTUALLY VOTED. ACCORDINGLY,
THE FAILURE TO SUBMIT A PROXY CARD OR TO VOTE IN PERSON AT THE SPECIAL MEETING,
OR THE ABSTENTION FROM VOTING BY A RELIANCE SHAREHOLDER, WILL HAVE THE SAME
EFFECT AS A "NO" VOTE WITH RESPECT TO THE MERGER AGREEMENT AND PLAN OF MERGER.
BROKER NON-VOTES WILL NOT BE COUNTED AS HAVING BEEN VOTED IN PERSON OR BY PROXY
AT THE SPECIAL MEETING AND WILL HAVE THE SAME EFFECT AS A "NO" VOTE WITH RESPECT
TO THE MERGER AGREEMENT AND PLAN OF MERGER.

DISSENTERS' RIGHTS

Holders of shares of Reliance Common Stock have no appraisal or
dissenters' rights in connection with the Merger. See "Proposal to Approve the
Merger--No Appraisal or Dissenters' Rights."

PROXIES

Holders of shares of Reliance Common Stock may vote either in person or
by properly executed Proxy. Shares of Reliance Common Stock represented by a
properly executed Proxy received prior to or at the Special Meeting or any
postponements or adjournments thereof will, unless such Proxy is revoked, be
voted in accordance with the instructions indicated on such Proxy. If no
instructions are indicated on a properly executed Proxy, the shares covered
thereby will be voted FOR the proposal to approve the Merger Agreement and Plan
of Merger, and FOR the proposal to adjourn the Special Meeting, if necessary, to
solicit additional votes in favor of the Merger. If any other matters are
properly presented at the Special Meeting for consideration, the persons named
in the Proxy and acting thereunder will have discretion to vote on such matters
in accordance with their best judgment; provided, however, that no Proxy which
is voted against the proposal to approve the Merger Agreement and Plan of Merger
will be voted in favor of any adjournment. As of the date hereof, Reliance knows
of no such other matters.

Any Proxy given pursuant to this solicitation or otherwise may be
revoked by the person giving it at any time before it is voted by (i) filing
with the Secretary of Reliance written notice thereof (Carol A. Barnharst,
Secretary, Reliance Bancshares, Inc., 3140 South 27th Street, Milwaukee,
Wisconsin 53215); (ii) submitting a duly- executed Proxy bearing a later date;
or (iii) appearing at the Special Meeting and giving the Secretary notice of his
or her intention to vote in person. If you are a shareholder whose shares are
not registered in your own name, you will need additional documentation from
your record holder to vote personally at the Special Meeting.

-32-
<PAGE> 37

If a quorum is not obtained, or if fewer shares of Reliance Common
Stock are voted in favor of approval of the Merger Agreement and Plan of Merger
than the number required for approval, it is expected that the Special Meeting
will be postponed or adjourned for the purpose of allowing additional time for
obtaining additional Proxies or votes, and at any subsequent reconvening of the
Special Meeting, all Proxies will be voted in the same manner as such Proxies
would have been voted at the original convening of the Special Meeting (except
for any Proxies which have theretofore effectively been revoked or withdrawn).

The cost of solicitation of Proxies on behalf of the Reliance Board
will be borne by Reliance. The expense of printing this Proxy
Statement/Prospectus, the cost of filing the Registration Statement on Form S-4
with the SEC registering the shares of St. Francis Common Stock to be issued in
connection with the Merger (excluding the legal fees of the parties to the
Merger incurred in connection therewith), and the cost of listing such shares of
St. Francis Common Stock on the NASDAQ National Market System will be shared
equally between Reliance and St. Francis. Proxies will be solicited principally
by mail, but also may be solicited by personal interview, telephone, facsimile
or other means of communication by directors, officers and other employees of
Reliance. Such directors, officers and employees will receive no compensation,
but may be reimbursed for out-of-pocket expenses in connection with such
solicitation. Reliance also has made arrangements with brokerage firms, banks,
nominees and other fiduciaries to forward proxy solicitation materials for
shares of Reliance Common Stock held of record by the beneficial owners of such
shares. Reliance will reimburse such holders for their reasonable out-of-pocket
expenses.

RECOMMENDATION OF RELIANCE'S BOARD OF DIRECTORS REGARDING THE MERGER

The Reliance Board has unanimously determined that the terms of the
Merger Agreement and Plan of Merger are fair to, and in the best interests of,
Reliance and the Reliance shareholders, has unanimously approved and adopted the
Merger Agreement and the Plan of Merger and the transactions contemplated
thereby, and recommends that shareholders of Reliance vote FOR approval and
adoption of the Merger Agreement and Plan of Merger and the transactions
contemplated thereby. See "Proposal to Approve the Merger--Background of the
Merger,"--Reasons for the Merger and Recommendation of the Reliance Board of
Directors," and "--Opinion of Reliance Financial Advisor."

SECURITY OWNERSHIP OF MANAGEMENT; VOTING AGREEMENTS

As an inducement to St. Francis to enter into the Merger Agreement, the
directors and executive officers of Reliance entered into voting agreements
("Voting Agreements") with St. Francis to vote the shares of Reliance Common
Stock beneficially owned by them in favor of the Merger. As of October 31, 1998,
the directors and executive officers of Reliance who signed the Voting
Agreements beneficially owned ________ shares of Reliance Common Stock (or
approximately _____% of the outstanding shares of Reliance Common Stock),
including _________ shares subject to unexercised options held by such persons
at that date which were not exercised prior to the Voting Record Date, and thus
cannot be voted at the Special Meeting. As October 31, 1998, with the exception
of one director of St. Francis who acquired shares of Reliance Common Stock in
1996, the directors and executive officers of St. Francis and their affiliates
did not own any shares of Reliance Common Stock.

Pursuant to the Voting Agreements, the directors and executive officers
of Reliance may not sell, assign, transfer or otherwise dispose of, or permit to
be sold, assigned, transferred or otherwise disposed of, any shares of Reliance
Common Stock owned of record or beneficially by such shareholder, whether such
shares of Reliance Common Stock are owned of record or beneficially by such
shareholder on the date of the Voting Agreement or are subsequently acquired,
whether pursuant to the exercise of stock options or otherwise, except (i) for
transfers by will or by operation of law (in which case the Voting Agreement
would bind the transferee), (ii) for sales, assignments, transfers or other
dispositions necessitated by hardship with the prior written consent of St.
Francis, or (iii) as St. Francis may otherwise agree in writing.

OTHER MATTERS

As of the date of this Proxy Statement/Prospectus, the Reliance Board
does not intend to bring any other business before the Special Meeting other
than as set forth in the Notice of Special Meeting of Shareholders and, so far
as is known to the Reliance Board, no matters are to be brought before the
Special Meeting except as specified in the Notice of Special Meeting of
Shareholders. As to any other business that may properly come before the
meeting, however, the proxy holders intend to vote the proxies in respect
thereof in accordance with their best judgment and discretion.

-33-
<PAGE> 38

PROPOSAL TO APPROVE THE MERGER
(PROPOSAL NO. 1)

GENERAL

The following information, insofar as it relates to matters contained
in the Merger Agreement and Plan of Merger between St. Francis and Reliance, is
qualified in its entirety by reference to the Merger Agreement and Plan of
Merger which are incorporated herein by reference and attached hereto as
Exhibits A and B, respectively. RELIANCE SHAREHOLDERS ARE URGED TO READ THE
MERGER AGREEMENT AND PLAN OF MERGER IN THEIR ENTIRETY.

THE AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY OF THE ISSUED AND
OUTSTANDING SHARES OF RELIANCE COMMON STOCK ENTITLED TO VOTE ON THE MERGER
AGREEMENT AND PLAN OF MERGER IS REQUIRED TO APPROVE THE MERGER AGREEMENT AND
PLAN OF MERGER. UNLESS OTHERWISE SPECIFIED, THE SHARES OF RELIANCE COMMON STOCK
REPRESENTED BY THE PROXIES SOLICITED HEREBY WILL BE VOTED IN FAVOR OF THE
APPROVAL OF THE MERGER AGREEMENT AND PLAN OF MERGER. THE RELIANCE BOARD
RECOMMENDS THAT YOU VOTE FOR THE APPROVAL OF THE MERGER AGREEMENT AND PLAN OF
MERGER.

THE MERGER AND THE BANK MERGER

The Merger Agreement provides that St. Francis will acquire Reliance
through a merger of Reliance with and into St. Francis with St. Francis being
the surviving entity. Upon consummation of the Merger, all shares of Reliance
Common Stock will no longer be outstanding and will automatically be cancelled
and retired and will cease to exist, and each holder of a certificate
representing any shares of Reliance Common Stock will cease to have any rights
with respect thereto, except the right to receive cash and/or shares of St.
Francis Common Stock to be paid or issued upon the surrender of such
certificate, without interest, as described below. St. Francis also plans to
merge Reliance Savings Bank with and into St. Francis Bank immediately following
the Merger, or as soon as practicable thereafter (the "Bank Merger"), and St.
Francis and Reliance have agreed to take all action necessary and appropriate to
effectuate the Bank Merger. There can be no assurance that the structure of the
Bank Merger will not change from that presently contemplated by St. Francis and
Reliance in order to obtain all necessary regulatory approvals.

EFFECT OF THE MERGER

At the Effective Time, as defined below, Reliance will merge with and
into St. Francis. The Reliance Common Stock will be exchanged for shares of St.
Francis Common Stock or cash, or a combination of both stock and cash, as
described under "--Merger Consideration." Each share of St. Francis Common Stock
outstanding immediately prior to the Effective Time will remain outstanding and
unchanged as a result of the Merger.

No fractional shares of St. Francis Common Stock will be issued in
connection with the Merger. In lieu of issuing fractional shares, St. Francis
will make a cash payment equal to the fractional interest which a Reliance
shareholder would otherwise receive multiplied by the St. Francis Average Stock
Price.

The amount and form of the consideration to be received by holders of
Reliance Common Stock were arrived at through arm's length negotiations between
St. Francis and Reliance. See "--Background of the Merger." For certain
information concerning the historical range of sales prices of Reliance Common
Stock, see "Summary-- Comparative Market and Stock Price Information." For
information regarding certain Purchase Rights attached to each share of St.
Francis Common Stock, including, when issued, to each of the shares of St.
Francis Common Stock to be issued in the Merger, see "Description of St. Francis
Capital Stock--Rights Plan."

-34-
<PAGE> 39

EFFECTIVE TIME

The Merger will become effective on the date Articles of Merger are
filed with the WDFI in accordance with the WBCL or such later date as the
Articles of Merger may specify (the "Effective Time"). The Articles of Merger
will be filed upon satisfaction or waiver of all of the conditions to the Merger
provided in the Merger Agreement but in no event later than the last business
day of the month in which all conditions to the Merger set forth in the Merger
Agreement have been satisfied or waived. After regulatory approvals that would
permit consummation of the Merger and related transactions have been obtained,
the parties expect that the Merger will occur on a date that will facilitate an
orderly business combination of Reliance and St. Francis, which date may be
after the first possible date on which the Merger could occur under the terms of
the Merger Agreement. The parties are unable at this time to predict when or if
the Effective Time will occur.

MERGER CONSIDERATION

The Merger Agreement provides that, subject to the election and
allocation procedures provided for therein, each issued and outstanding share of
Reliance Common Stock will be converted into the right to receive, at the
election of each holder thereof, either:

(a) A NUMBER OF SHARES OF ST. FRANCIS COMMON STOCK EQUAL TO (i) a
fractional share of St. Francis Common Stock determined by
dividing $10.00 by the St. Francis Average Stock Price (as
defined herein) if the St. Francis Average Stock Price is
between $32.41 and $40.00; (ii) .25 shares of St. Francis
Common Stock, if the St. Francis Average Stock Price is between
$40.01 and $42.00; (iii) a fractional share of St. Francis
Common Stock determined by dividing $10.50 by the St. Francis
Average Stock Price, if the St. Francis Average Stock Price is
between $42.01 and $45.74; and (iv) .2295 shares of St. Francis
Common Stock, if the St. Francis Average Stock Price is $45.75
or more (the "Per Share Stock Distribution"); or

(b) CASH EQUAL TO (i) $10.00, if the St. Francis Average Stock
Price is between $32.41 and $40.00; (ii) an amount equal to
.25 of the St. Francis Average Stock Price, if the St. Francis
Average Stock Price is between $40.01 and $42.00; (iii)
$10.50, if the St. Francis Average Stock Price is between
$42.01 and $45.74; and (iv) an amount equal to .2295 of the
St. Francis Average Stock Price, if the St. Francis Average
Stock Price is $45.75 or more (the "Per Share Cash
Distribution").

If the St. Francis Average Stock Price is $32.40 or less, then St.
Francis has the option of completing the Merger using a Per Share Cash
Distribution of $10.00 and a Per Share Stock Distribution equal to a fractional
share of St. Francis Common Stock determined by dividing $10.00 by the St.
Francis Average Stock Price, or terminating the Merger Agreement.

The "St. Francis Average Stock Price" means the average (rounded to the
nearest whole cent) of the last sale price of the day of one share of St.
Francis Common Stock as reported in the Wall Street Journal for the ten
consecutive trading days ending on the fifth business day preceding the
Effective Time (the "Valuation Period").

The Merger Agreement also provides that the value of the aggregate
number of shares of St. Francis Common Stock to be issued in the Merger must be
equal to at least 60% of the aggregate value of all of the consideration to be
paid in connection with the Merger, and the aggregate amount of consideration
paid to Reliance shareholders in cash must not be more than 40% of the aggregate
value of all of the consideration to be paid in connection with the Merger.

Assuming that: (i) there are _______ shares of Reliance Common Stock
outstanding, which represents the _______ shares of Reliance Common Stock issued
and outstanding as of the Voting Record Date, plus 20,514 shares of Reliance
Common Stock that will be issued in connection with the closing of the Merger
under the terms of the RRP; (ii) no exercise of options for ____ shares of
Reliance Common Stock currently outstanding under Reliance's stock option plan;
(iii) the St. Francis Average Stock Price is $_____; and (iv) the aggregate
amount of consideration

-35-
<PAGE> 40

payable in cash is equal to 40% of the aggregate value of all of the
consideration paid in connection with the Merger and the aggregate amount of
consideration payable in value of whole shares of St. Francis Common Stock is
equal to 60% of the aggregate value of all of the consideration paid in
connection with the Merger, St. Francis will issue approximately _______ shares
of St. Francis Common Stock and approximately $___ million in cash in the
Merger. St. Francis intends to fund the cash portion of the purchase price with
an existing line of credit maintained by St.
Francis Bank with a third party financial institution.

Fractional shares of St. Francis Common Stock will not be issued in the
Merger. Reliance shareholders otherwise entitled to a fractional share will be
paid the value of such fraction in cash determined as described herein under
"Proposal to Approve the Merger--Effect of the Merger."

On December __, 1998, the most recent date for which it was practicable
to obtain market price data prior to the printing of this Proxy
Statement/Prospectus, the closing sales price per share of St. Francis Common
Stock was $_____.

The following table sets forth various assumed St. Francis Average
Stock Prices, the resulting conversion ratio, the value of St. Francis Common
Stock to be received per share of Reliance Common Stock based on such assumed
St. Francis Average Stock Price, and the per share cash consideration to be
received based on such assumed St. Francis Average Stock Price.

<TABLE>
<CAPTION>
PER SHARE VALUE
ASSUMED ST. FRANCIS OF ST. FRANCIS PER SHARE
AVERAGE CONVERSION COMMON STOCK CASH CONSIDERATION
STOCK PRICE RATIO TO BE RECEIVED TO BE RECEIVED
------------------- ---------- --------------- -----------------
<S> <C> <C> <C>
30.00 .3333 $ 10.00 $ 10.00
31.00 .3226 10.00 10.00
32.00 .3125 10.00 10.00
32.40 .3086 10.00 10.00
33.00 .3030 10.00 10.00
34.00 .2941 10.00 10.00
35.00 .2857 10.00 10.00
36.00 .2778 10.00 10.00
37.00 .2703 10.00 10.00
38.00 .2632 10.00 10.00
39.00 .2564 10.00 10.00
40.00 .2500 10.00 10.00
41.00 .2500 10.25 10.25
42.00 .2500 10.50 10.50
43.00 .2442 10.50 10.50
44.00 .2386 10.50 10.50
45.00 .2333 10.50 10.50
45.75 .2295 10.50 10.50
46.00 .2295 10.56 10.56
47.00 .2295 10.79 10.79
48.00 .2295 11.02 11.02
</TABLE>

NONE OF THE ASSUMED ST. FRANCIS AVERAGE STOCK PRICES ARE INTENDED TO
REFLECT WHAT THE ACTUAL ST. FRANCIS AVERAGE STOCK PRICE WILL BE WHEN FINALLY
DETERMINED IN ACCORDANCE WITH THE MERGER AGREEMENT AND PLAN OF MERGER, NOR IS
THE PER SHARE VALUE OF ST. FRANCIS COMMON STOCK AND PER SHARE CASH CONSIDERATION
ILLUSTRATED AS TO BE RECEIVED INTENDED TO REFLECT WHAT THE ACTUAL VALUE WILL BE
WHEN FINALLY DETERMINED AND WHEN THE SHARES OF ST. FRANCIS COMMON STOCK AND CASH
ARE DISTRIBUTED IN ACCORDANCE WITH THE MERGER AGREEMENT AND PLAN OF MERGER.

-36-
<PAGE> 41

From November __ to December __, 1998, the most recent Valuation Period
for which it was practicable to obtain information prior to the printing of this
Prospectus/Proxy Statement, the average of the last sale price per share of St.
Francis Common Stock, as reported on the NASDAQ National Market System, was
$______. By way of example only, if the St. Francis Average Stock Price also is
$______, the conversion ratio would be equal to ________ which would have a
value, determined on the basis of the St. Francis Average Stock Price, of $_____
per share, and the per share cash consideration to be received would be $_____.

Reliance shareholders should note that the market price of the shares
of St. Francis Common Stock they receive will continue to be subject to market
fluctuations, as well as the future results of operations and financial
condition of St. Francis, and therefore may be worth less than, or more than,
the St. Francis Average Stock Price or the market price of St. Francis Common
Stock on the date they receive their St. Francis Common Stock certificates. See
"--Election and Allocation Procedures," and "--Issuance of Stock and Payment of
Cash." For a description of certain tax consequences that may result from
elections to receive stock or cash, or a combination thereof, as well as certain
limitations and qualifications relating thereto, see "-- Certain Federal Income
Tax Consequences."

Because the number of shares of St. Francis Common Stock and the total
amount of cash to be issued in the Merger will be fixed in accordance with
certain parameters, no guarantee can be given that an election by any given
shareholder will be honored. Rather, the election by each holder will be subject
to the election and allocation procedures described herein. Thus, holders may
not receive their chosen form of consideration. See "--Election and Allocation
Procedures."

If St. Francis effects a reclassification, recapitalization, stock
split, consolidation or similar change in St. Francis Common Stock before the
Effective Time, the Per Share Stock Distribution will be appropriately adjusted.

Although the St. Francis Average Stock Price, which will determine the
value of the Per Share Stock Distribution and Per Share Cash Distribution to be
received by Reliance shareholders, will be based on the average market price of
St. Francis Common Stock during the Valuation Period, the market price of St.
Francis Common Stock may fluctuate thereafter and, on the Effective Time, may be
more or less than the St. Francis Average Stock Price.

At the Effective Time, all rights with respect to Reliance Common Stock
pursuant to stock options granted by Reliance under Reliance's stock option plan
that are outstanding at such time, will be converted into the right to receive,
either an option to purchase shares of St. Francis Common Stock or cash, as
discussed below in "--Interests of Certain Persons in the Merger" and "--Effect
on Reliance Employee Benefit Plans."

As of the Effective Time, each share of Reliance Common Stock held
directly or indirectly by Reliance or Reliance Savings Bank, other than shares
held in a fiduciary capacity or in satisfaction of a debt previously contracted,
will be canceled and retired, and no exchange or payment will be made with
respect to such shares.

PRICE-BASED TERMINATION

The Merger Agreement contains a price-based termination provision.
Under this provision, the Merger Agreement may be terminated by St. Francis if
the St. Francis Average Stock Price is $32.40 or less.

BACKGROUND OF THE MERGER

In April 1996, Reliance Savings Bank converted from mutual to stock
form and simultaneously formed Reliance as Reliance Savings Bank's parent
holding company (the "Conversion"). As part of the Conversion, Reliance raised
$19 million in new capital through a public stock offering. Since the
Conversion, the Reliance Board has taken various steps to enhance shareholder
value. One of the most significant challenges the Reliance Board has faced has
been managing Reliance's unusually high capital-to-assets ratio, which was
49.96% at March 31, 1998. To manage Reliance's capital, the Reliance Board paid
a special dividend of $3.00 per share to Reliance's shareholders of record on
November 8, 1996. The distribution was structured as a non-taxable return of
capital and

-37-
<PAGE> 42

reduced Reliance's shareholders' equity by $7.3 million, representing more than
30% of Reliance's shareholders' equity at the time. Reliance also has
repurchased its shares through several share repurchase programs, which has
reduced the number of outstanding Reliance shares by approximately 6.5%, net of
shares applied to fund stock based benefit programs.

Since becoming a public company in 1996, Reliance has engaged in
discussions from time to time with other financial service companies interested
in considering a possible business combination with Reliance. One of these
companies was St. Francis. Thomas R. Perz, President and Chief Executive Officer
of St. Francis, met with Allan T. Bach, President and Chief Executive Officer of
Reliance, on several occasions following the Conversion to convey St. Francis'
interest in negotiating a merger between the two companies. At the beginning of
the 1998 calendar year, Mr. Perz expressed to Mr. Bach St. Francis' interest in
acquiring Reliance whereby St. Francis would offer Reliance $10.50 per share of
Reliance Common Stock as merger consideration payable in St. Francis Common
Stock. Mr. Perz also asked Mr. Bach if he could meet with the Reliance Board to
discuss his proposal.

Mr. Bach, with the approval of the Reliance Board, invited Mr. Perz to
a Reliance Board meeting, held on March 24, 1998, to present St. Francis'
proposal. During the meeting, Mr. Perz expressed St. Francis' interest in
negotiating a transaction for $10.50 per share using St. Francis Common Stock as
merger consideration, and he outlined and explained the basic terms of the
proposed transaction. The Reliance Board convened a special board meeting on
March 31, 1998 to consider St. Francis' verbal expression of interest, and
discussed the proposal with a representative of Robert W. Baird & Co.
Incorporated ("Baird"), Reliance's financial advisor, who also was present
during the meeting.

Discussion of Mr. Perz's presentation continued during a special
meeting of the Reliance Board held on April 8, 1998. The consensus of the
Reliance Board was to ask St. Francis to provide Reliance with additional
information concerning its proposal. In anticipation of further discussions
between St. Francis and Reliance, at the April 8, 1998 meeting, the Reliance
Board authorized Mr. Bach to retain the law firm of Schiff Hardin & Waite as
special counsel to Reliance with respect to business combination discussions
("Reliance's Legal Counsel") and to retain Baird as Reliance's financial adviser
to assist Reliance in evaluating St. Francis' merger proposal. The Board also
authorized Mr. Bach to negotiate with St. Francis toward a definitive business
combination agreement. Following the April 8 meeting, Mr. Bach contacted Mr.
Perz to express the interest of the Reliance Board in receiving more information
concerning St. Francis and the terms of its proposal.

On April 13, 1998, St. Francis forwarded a letter of intent to
Reliance, which proposed that St. Francis would acquire all of the outstanding
shares of Reliance through a merger transaction, and the Reliance shareholders
would receive, as merger consideration, .2295 shares of St. Francis Common Stock
for each share of Reliance common stock. The fixed exchange ratio set forth in
the letter of intent was determined by dividing the proposed acquisition price
of $10.50 per share by the trading price of St. Francis Common Stock as of the
close of trading on March 24, 1998, which price was $45.75. The Reliance Board
met during a regular board meeting on April 15, 1998 to consider the proposed
letter of intent. It was the consensus of the Reliance Board that Reliance not
accept the letter of intent. Rather, the Reliance Board directed Mr. Bach, to be
accompanied by Reliance's Legal Counsel and Baird, to meet with St. Francis and
its advisers to clarify certain terms of the transaction as expressed in the
letter and, assuming certain issues were clarified to Reliance's satisfaction,
to move directly toward a definitive business combination agreement. St. Francis
agreed to a meeting, but requested that prior to the meeting Reliance enter into
a confidentiality agreement that St. Francis had prepared, which included an
agreement that Reliance negotiate exclusively with St. Francis for a period of
90 days.

On April 23, 1998, St. Francis and Reliance entered into the
confidentiality agreement that included the exclusive bargaining arrangement and
the parties also held a meeting in the offices of St. Francis' legal counsel to
discuss the terms of the transaction. Present during that meeting were Mr. Bach,
Carol Barnharst, Chief Financial Officer of Reliance, a representative of
Reliance's Legal Counsel, representatives of Baird, Mr. Perz and a
representative of St. Francis' legal counsel. A few days after that meeting, Mr.
Perz, Mr. Bach and Ms. Barnharst met to discuss certain social issues relating
to the transaction and St. Francis gathered additional due diligence information
concerning Reliance. After St. Francis had completed its additional due
diligence investigation,

-38-
<PAGE> 43

St. Francis directed its legal counsel to begin preparing a first draft of the
definitive Merger Agreement. Reliance received a first draft of the definitive
Merger Agreement on May 5, 1998.

The Reliance Board held a special meeting on May 8, 1998 to consider
the first draft of the definitive Merger Agreement. Reliance's Legal Counsel and
representatives of Baird were present at the May 8 meeting to review the Merger
Agreement with the Reliance Board. The first draft of the Merger Agreement
included a provision allowing shareholders the option of choosing either cash or
St. Francis common stock as merger consideration; however, the agreement
provided that in no event would the cash consideration exceed 40% of the total
consideration. While the draft included a $10.50 per share merger price, it
reflected a floating rather than fixed exchange ratio, meaning that the exchange
ratio would be established based on a measurement period immediately prior to
closing and the average price of St. Francis Common Stock during that period.
After receiving direction from the Reliance Board, Mr. Bach, Reliance's Legal
Counsel and representatives of Baird continued negotiations with St. Francis
concerning the terms of the definitive Merger Agreement. On May 22, 1998,
Reliance entered into an agreement with Baird retaining Baird as its financial
adviser for the proposed transaction with St. Francis.

A revised draft of the definitive Merger Agreement, reflecting further
negotiations between the parties, was presented to the Reliance Board at a
regular board meeting held on May 26, 1998. Mr. Perz and a representative of St.
Francis' legal counsel attended a portion of the May 26 meeting to answer
questions members of the Reliance Board had concerning the terms of the
transaction. St. Francis also gave the Reliance Board the option of choosing
between either a fixed exchange ratio of .2295 shares of St. Francis stock for
each share of Reliance stock or a floating exchange ratio derived by dividing
the per share merger price of $10.50 by the average price for St. Francis Common
Stock during a measurement period prior to closing of the transaction. The draft
continued to provide that Reliance shareholders would have the option of
choosing between cash and shares of St. Francis Common Stock, provided however,
that the cash consideration not exceed 40% of the total consideration. The
Reliance Board discussed the revised draft of the document with Reliance's Legal
Counsel and representatives of Baird outside the presence of Mr. Perz and St.
Francis' counsel and gave Mr. Bach, Reliance's Legal Counsel and representatives
of Baird further direction for continuing negotiations with St. Francis
regarding the terms of the definitive Merger Agreement.

On May 28, 1998, Mr. Bach, representatives of Baird and a
representative of Reliance's Legal Counsel conducted an on-site due diligence
review of St. Francis. Baird's representatives continued this due diligence
examination on May 29 and several days thereafter. On May 29, 1998, the Reliance
Board held a special meeting to discuss the preliminary results of the due
diligence examination with Mr. Bach and Baird, and to discuss with Baird the
merger consideration that St. Francis had offered in the latest draft of the
definitive Merger Agreement. On May 29, 1998, but subsequent to the Reliance
Board meeting, Reliance received another draft of the definitive Merger
Agreement reflecting further negotiations between the parties.

The Reliance Board met again at a special meeting on June 2, 1998 to
discuss the status of the transaction and the ongoing negotiations and to
consider the May 29, 1998 revisions to the draft definitive Merger Agreement;
the meeting was attended by representatives of Baird and Reliance's Legal
Counsel. On June 1, 1998, St. Francis' stock price had closed at $41.25 per
share. Baird reviewed with the Reliance Board the decrease in St. Francis' stock
price since the March 24 date used in the April 1998 letter of intent. Based on
that discussion, the Reliance Board directed Baird to propose an increase in the
fixed exchange ratio from that proposed in the letter of intent to take into
account the decline in the St. Francis stock price since March 24, 1998. The
Reliance Board also directed Reliance's Legal Counsel to contact legal counsel
for St. Francis and to negotiate further on issues identified by the Board,
which issues included, among others, continuing the name of Reliance Savings
Bank after the Merger, the proposed condition to closing that Reliance maintain
a minimum amount of net worth, the terms of the service of the advisory Board of
Directors, due diligence issues, the termination fee and certain social issues.
On June 2 and June 3, 1998, the position of the Reliance Board regarding the
exchange ratio and other terms of the transaction were communicated to St.
Francis and its representatives. On June 3, 1998, St. Francis rejected
Reliance's proposal concerning an increase in the fixed exchange ratio. Later on
June 3, 1998, on behalf of Reliance, Baird proposed a modification to the
exchange ratio, which on June 4, 1998, St. Francis rejected. On June 8, 1998,
St. Francis proposed a revised exchange ratio to Reliance, which also reflected
a reduction in the purchase price to $10.00 per share.

-39-
<PAGE> 44

The Reliance Board held a special meeting on June 11, 1998, to consider
the revised proposal from St. Francis. Representatives of Baird and a
representative of Reliance's Legal Counsel were present for the June 11, 1998
meeting. The Reliance Board gave directions to Mr. Bach, Baird and Reliance's
Legal Counsel regarding points in the draft definitive Merger Agreement it
wanted negotiated further, including the merger price and exchange ratio. Baird
and Reliance's Legal Counsel communicated these points to St. Francis and its
legal counsel. St. Francis considered these points, and in response requested
that Mr. Perz be permitted to meet again with the Reliance Board to discuss the
transaction, and specifically to explain St. Francis' latest modification to the
amount of the merger consideration.

On June 23, 1998, Mr. Perz met with the Reliance Board during a regular
board meeting. Also present during the meeting were representatives of Baird and
a representative of Reliance's Legal Counsel. The discussion at the meeting
focused in particular on the $10.00 per share merger price that St. Francis had
recently proposed and the proposed exchange ratio (because on June 22, 1998, the
St. Francis stock price had closed at $36.00 per share), as well as other open
issues. The representatives of Baird reviewed with the Reliance Board
information concerning changes in the St. Francis stock price since negotiations
between the two companies had begun in March 1998. At the conclusion of the
meeting, there was a consensus that both parties would continue to work toward a
definitive Merger Agreement. In that regard, discussions concerning the price,
the exchange ratio and other terms of the definitive agreement continued through
June 30, 1998 when the Reliance Board met to consider the definitive Merger
Agreement.

At the Reliance Board meeting on June 30, 1998, representatives of
Baird were present along with a representative of Reliance's Legal Counsel.
Prior to the meeting, copies of the proposed definitive Merger Agreement were
made available to the directors. Baird provided a financial analysis of the
offer and expressed its verbal opinion (subsequently confirmed in writing) to
the effect that, as of such date, the merger consideration was fair, from a
financial point of view, to the holders of Reliance common stock (see "The
Merger--Opinion of Financial Advisor"). Reliance's Legal Counsel also reviewed
with the Reliance Board the definitive Merger Agreement and discussed the
Reliance Board's fiduciary duties in considering the Merger Agreement.

The Reliance Board asked questions of Mr. Bach, Ms. Barnharst,
Reliance's Legal Counsel and Baird regarding the Merger Agreement and Plan of
Merger. Following discussion on the proposed Merger Agreement and Plan of Merger
and the transactions related thereto, the opinion of Baird and numerous other
factors (described below in "The Merger -- Reasons for the Merger;
Recommendation of the Reliance Board"), the Reliance Board unanimously
authorized and approved the Merger Agreement and Plan of Merger and the
transactions contemplated thereby, determined that the Merger Agreement and Plan
of Merger be submitted to a vote of Reliance's shareholders and authorized Mr.
Bach to execute the Merger Agreement and Plan of Merger, subject to satisfactory
resolution of final contract terms. The Merger Agreement was executed in the
early evening of June 30, 1998, and the Merger was publicly announced through a
joint press release that night. Baird subsequently delivered its fairness
opinion that as of June 30, 1998, the merger consideration was fair, from a
financial point of view, to the holders of the Reliance Common Stock.

REASONS FOR THE MERGER AND RECOMMENDATION OF THE RELIANCE BOARD OF DIRECTORS

St. Francis. The St. Francis Board authorized St. Francis management to
negotiate with Reliance and approved the Merger Agreement and Plan of Merger and
has determined that the Merger and the issuance of the shares of St. Francis
Common Stock pursuant thereto are in the best interests of St. Francis and its
shareholders. In doing so, the St. Francis Board considered a number of factors.
The material factors considered by the St. Francis Board were the following:

(a) The St. Francis Board's review, based in part on the
presentations made and written material submitted by St.
Francis management, of the business, operations, earnings and
financial condition, including the capital levels and asset
quality, of Reliance on a historical, prospective and pro
forma basis;

-40-
<PAGE> 45

(b) The demographic, economic and financial characteristics of
Reliance's market area, including existing competition and the
ability to increase service options for St. Francis customers,
while still recognizing savings in costs, because of the
proximity of the Reliance office to an existing St. Francis
branch; and

(c) A variety of factors affecting and relating to the overall
strategic focus of St. Francis, including St. Francis' desire
to expand its operations in Reliance's market area and to
improve its presence in southern portion of Milwaukee,
Wisconsin.

Reliance. The Reliance Board has concluded that the Merger would be in
the best interests of Reliance and its shareholders. In reaching that
determination, the Reliance Board consulted with Reliance's Legal Counsel with
respect to the legal duties of the Reliance Board, regulatory matters, tax
matters and the Merger Agreement and Plan of Merger and issues related thereto.
The Reliance Board also consulted with Baird with respect to the financial
aspects and fairness of the merger consideration. The Reliance Board considered
the following material factors:

(1) The prospects for enhancing shareholder value using
strategic alternatives other than a sale of Reliance. At March 31,
1998, Reliance had shareholders' equity of $22.1 million, which
represented 49.96% of Reliance's total assets as of that date. Although
Reliance has been profitable, generating net income of $514,000 and
$616,000 for the fiscal years ended June 30, 1996 and 1997,
respectively, its extremely high capital-to-assets ratio has depressed
its average return on equity, which was 3.45% and 2.44% for the 1996
and 1997 fiscal years. Since the Conversion, the Reliance Board has
employed various strategies to improve Reliance's financial condition,
operating results and return on equity. These strategies have included
a one-time $3.00 tax-free capital distribution in late calendar year
1996 and several stock repurchase programs. While these methods have
deployed some of Reliance's excess capital, they have had a marginal
effect on Reliance's return on equity. Reliance also has considered
expansion opportunities, including acquiring other financial
institutions or branches thereof and de novo branching. In the case of
acquisitions, Reliance has had difficulty finding acquisition
candidates that would enhance value to its shareholders, while de novo
branching would involve significant costs and business risks.
Management and the Reliance Board also recognized that the prospects
for significant internal growth of Reliance Savings Bank were limited
because demand for one- to four-family mortgage loans was diminishing
in Reliance Savings Bank's local market area (generally defined as an
area within a three-mile radius of Reliance Savings Bank's office). The
Reliance Board determined that a business combination with St. Francis
was an attractive alternative for enhancing shareholder value relative
to remaining independent.

(2) Management succession issues. In light of the diminishing
demand for one- to four-family mortgage loans within Reliance Savings
Bank's local market area and increasing competition relating to such
loans, Reliance Savings Bank has increasingly relied on a niche lending
strategy involving the origination of comparatively large balance
construction and land development loans, and commercial and
multi-family loans. Reliance Savings Bank has been able to originate
most of these "niche" loans in recent years because of the
relationships and contacts Reliance Savings Bank's President and Chief
Executive Officer, Allan T. Bach, has established with Milwaukee-area
builders and developers. The Reliance Board has concerns regarding (i)
management succession, as Mr. Bach has approached retirement age, and
(ii) the difficulties of eventually replacing the income Mr. Bach
generates for Reliance through his lending contacts. In addition, the
small size of Reliance relative to other local financial institutions
would make it difficult to attract high quality managers in the future
should the need arise.

(3) The amounts paid in recent acquisitions for thrift holding
companies approximately the size of Reliance. The Reliance Board
considered information supplied by Baird concerning the amounts paid in
recent acquisitions for thrift holding companies approximately the size
of Reliance, taking into account Reliance's unusually high
capital-to-asset ratio. In consultation with Baird, the Reliance Board
considered the value it could derive for shareholders by remaining
independent compared to the value it could obtain for shareholders
through a sale of the company.

-41-
<PAGE> 46

(4) The lack of liquidity for Reliance's shares. Reliance's
market capitalization on June 29, 1998, the day before the Merger was
announced, was $19.8 million and Reliance had 2,403,701 shares of
common stock issued and outstanding. Since Reliance became a public
company in April 1996, Reliance has experienced low liquidity for its
shares. While Reliance attempted to create more liquidity for its
shares through stock repurchase programs, the Reliance Board continued
to remain concerned about the absence of liquidity for the Reliance
shares. The lack of liquidity for Reliance shares caused investors
difficulty in acquiring or selling Reliance shares at predictable
prices, and it also hindered Reliance's ability to use its shares as
merger consideration in connection with expanding through the
acquisition of other financial institutions. By affiliating with St.
Francis, a financial institution holding company having a market
capitalization of $198.0 million as of June 30, 1998, the Reliance
Board believes Reliance shareholders will have significantly more
liquidity for their shares, and the other difficulties associated with
liquidity would be significantly diminished.

(5) The lack of critical mass posed potential competitive
problems for Reliance in the years ahead. As a financial institution
holding company with assets of $42 million at June 30, 1998, the
Reliance Board determined that Reliance's smaller size relative to much
larger Milwaukee-area financial institutions, like St. Francis, would
be a disadvantage to Reliance in the years ahead. Critical mass and the
associated economies of scale allow larger banking organizations like
St. Francis to deliver products and services more cost effectively and
efficiently, and provide a much greater opportunity for cross-selling
other services and products.

(6) The Reliance Board took into consideration and relied upon
the advice of Baird, Reliance's financial adviser. At the Reliance
Board meeting held on June 30, 1998, Baird provided a financial
analysis of the St. Francis proposal and its verbal opinion that the
merger consideration was fair, from a financial point of view, to the
holders of Reliance Common Stock. Baird subsequently delivered its
written opinion that as of June 30, 1998, the merger consideration was
fair, from a financial point of view, to the holders of Reliance Common
Stock. That opinion was updated as of the date of this Proxy
Statement/Prospectus and is attached hereto as Exhibit C. The Reliance
Board considered the presentation by Baird concerning the financial
aspects of the Merger Agreement and the related transactions. For
information regarding the presentation by Baird, see "THE MERGER --
Opinion of Reliance's Financial Adviser."

The foregoing discussion of the information and factors considered by
the Reliance Board is not intended to be exhaustive but is believed to include
all material factors considered by the Reliance Board. Throughout its
deliberations, the Reliance Board received the advice of its outside legal
counsel. After deliberating with respect to the Merger and the other
transactions contemplated by the Merger Agreement and Plan of Merger,
considering, among other things, the information and factors described above
(including reliance on the opinion of Baird), the Reliance Board concluded that
the Merger is fair to, and in the best interests of, the Reliance shareholders.
In reaching this conclusion, the Reliance Board did not assign relative or
specific weights to the above information and factors or determine that any
information or factor was of particular importance relative to others. A
determination of various weighing would, in the view of the Reliance Board, be
impractical. Rather, the Reliance Board viewed its position and recommendation
as being based on the totality of the information and factors presented to and
considered by it. In addition, individual members of the Reliance Board may have
given different weight to different information and factors.

FOR THE REASONS SET FORTH ABOVE, THE RELIANCE BOARD HAS DETERMINED THAT
THE TERMS OF THE MERGER ARE FAIR TO, AND IN THE BEST INTERESTS OF, RELIANCE
SHAREHOLDERS. ACCORDINGLY, THE RELIANCE BOARD UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS OF RELIANCE VOTE FOR APPROVAL OF THE MERGER AGREEMENT AND THE PLAN
OF MERGER.

-42-
<PAGE> 47

OPINION OF RELIANCE FINANCIAL ADVISOR

The Reliance Board retained Baird to act as its financial advisor in
connection with the Merger and to assist it in its examination of the fairness,
from a financial point of view, of the merger consideration to the holders of
Reliance Common (other than St. Francis and its affiliates). On June 30, 1998,
Baird rendered its opinion to the Reliance Board (subsequently confirmed as of
the date of this Proxy Statement/Prospectus) to the effect that the merger
consideration was fair, from a financial point of view, to the holders of
Reliance Common Stock (other than St. Francis and its affiliates).

THE FULL TEXT OF BAIRD'S OPINION, WHICH SETS FORTH THE ASSUMPTIONS
MADE, GENERAL PROCEDURES FOLLOWED, MATTERS CONSIDERED AND LIMITATIONS ON THE
SCOPE OF REVIEW UNDERTAKEN BY BAIRD IN RENDERING ITS OPINION, IS ATTACHED AS
EXHIBIT C TO THIS PROXY STATEMENT/PROSPECTUS. THE BAIRD OPINION IS DIRECTED ONLY
TO THE FAIRNESS OF THE MERGER CONSIDERATION FROM A FINANCIAL POINT OF VIEW TO
THE HOLDERS OF RELIANCE COMMON STOCK AND DOES NOT CONSTITUTE A RECOMMENDATION TO
ANY RELIANCE SHAREHOLDER AS TO HOW SUCH SHAREHOLDER SHOULD VOTE WITH RESPECT TO
THE MERGER. THE SUMMARY OF THE BAIRD OPINION SET FORTH IN THIS PROXY/PROSPECTUS
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL TEXT OF THE OPINION
ATTACHED AS EXHIBIT C HERETO, AND SHAREHOLDERS OF RELIANCE SHOULD READ THE BAIRD
OPINION CAREFULLY AND IN ITS ENTIRETY.

Baird's Analysis. In conducting its investigation and analysis and in
arriving at its opinion, Baird reviewed such information and took into account
such financial and economic factors as it deemed relevant. In doing so, Baird
among other things: (i) reviewed certain internal information, primarily
financial in nature, including projections, concerning the business and
operations of Reliance and St. Francis furnished to Baird for purposes of its
analysis, as well as publicly available information, including but not limited
to Reliance's and St. Francis' recent filings with the Commission and equity
analyst research reports prepared by various investment banking firms, including
Baird; (ii) reviewed the Merger Agreement; (iii) compared the historical market
prices and trading activity of Reliance Common Stock and St. Francis Common
Stock with those of certain other publicly traded companies Baird deemed
relevant; (iv) compared the financial position and operation results of Reliance
and St. Francis with those of other publicly traded companies Baird deemed
relevant; (v) compared the proposed financial terms of the Merger with the
financial terms of certain other business combinations involving thrift
institutions Baird deemed relevant; and (vi) reviewed certain potential pro
forma effects of the Merger on St. Francis. Baird held discussions with certain
members of Reliance's and St. Francis' senior management concerning Reliance's
and St. Francis' historical and current financial condition and operating
results, as well as the future prospects of Reliance and St. Francis,
respectively. Baird had not been requested to, and did not, solicit third party
indications of interest in acquiring all or any part of Reliance. Baird also
considered such other information, financial studies, analysis and
investigations and financial, economic and market criteria as Baird deemed
relevant for the preparation of its opinion. The merger consideration was
determined by Reliance and St. Francis in arm's-length negotiations. Reliance
did not place any limitation upon Baird with respect to the procedures followed
or factors considered by Baird in rendering its opinion.

In arriving at its opinion, Baird assumed and relied upon the accuracy
and completeness of all of the financial and other information that was publicly
available or provided to it by or on behalf of Reliance and St. Francis, and was
not engaged to independently verify any such information. Baird assumed, with
Reliance's and St. Francis' consent, that (i) all material assets and
liabilities (contingent or otherwise, known or unknown) of Reliance and St.
Francis are set forth in their respective financial statements; (ii) the Merger
will be accounted for under the purchase method of accounting, (iii) the Merger
will be consummated in accordance with the terms of the Merger Agreement without
any amendment thereto and without any condition; (iv) the prospective cost
savings and revenue enhancements contemplated by management of both companies
following the Merger will be realized; and (v) all shareholder and required
regulatory approvals will be obtained in a timely manner. Baird also assumed
that the financial forecasts examined by it were reasonably prepared on bases
reflecting the best available estimates and good faith judgments of Reliance's
and St. Francis' respective senior managements, as to future performance of
their respective companies. Baird did not undertake or obtain an independent
evaluation or appraisal of any of the assets or liabilities (contingent or
otherwise) of Reliance or St. Francis, nor did it make a physical inspection of
the properties or facilities of Reliance or St. Francis. Baird's opinion
necessarily was based upon economic, monetary

-43-
<PAGE> 48

and market conditions as they existed and could be evaluated on the date
thereof, and did not predict or take into account any changes which may occur,
or information which may become available, after the date thereof. Furthermore,
Baird expressed no opinion as to the price or trading range at which shares of
Reliance's or St. Francis' securities (including without limitation, the
Reliance Common Stock and St. Francis Common Stock) would trade following the
date of such opinion.

Analysis of Selected Comparable Transactions. Baird reviewed certain
information relating to two groups of transactions involving business
combinations involving thrifts: (i) a group of 16 selected business combinations
completed or pending, since August 1995 where the acquired entity had an equity
to assets ratio exceeding 20% ("Highly Capitalized Group"); (ii) a group of 15
selected business combinations, completed or pending, since January 1996 where
the acquired entity had an equity to asset ratio less than 20% ("Adjusted
Capital Group"). Baird noted that in each group ratios based upon book value and
tangible book value were identical.

For the Highly Capitalized Group, the median price to book ratio and
price to tangible book ratio for consideration paid was 116.82% and the mean was
120.30%. The transaction values ranged from a high of 150.73% to a low of
104.29% of book and tangible book. The median price to earnings multiple was
30.30X trailing 12 months earnings for the twelve months ended March 31, 1998
("LTM") and the mean was 30.88X LTM. The high price to earnings multiple was
65.50X LTM and the low was 15.05X LTM. As a tangible premium to core deposits,
the median premium was 7.75% and the mean was 9.08%. Tangible premium to core
deposit values ranged from a high of 20.64% to a low of 1.25%. The stock price
premium 1-day prior to the announcement reflects a median premium of 15.75% and
a mean premium of 17.35%. The high stock price premium was 42.40% and the low
stock price premium was (1.70%). The stock price premium 30-days prior to
announcement was 21.70% for the median and 24.34% for the mean. The stock price
premium ranged from 53.80% as a high to (3.40%) as the low. The stock price
premium at 90-days prior to announcement was 23.85% at the median and 24.89% at
the mean. The stock price premium ranged from 58.10% for the high to a low of
(6.00%).

For the Adjusted Capital Group, the median price to book and price to
tangible book ratio for the consideration paid was 148.60% and the mean was
153.00%. The transaction values ranged from a high of 220.50% to a low of
114.90% of book and tangible book.

Analysis of Reliance Valuation Multiples. Baird calculated the "Implied
Equity Value Per Share" reflected by the terms of the Merger to be $10.00 for
each share of Reliance Common Stock, obtained by multiplying an Exchange Ratio
of 0.2685 by the closing price per share of St. Francis Common Stock of $37.25
on June 25, 1998. Baird then calculate the "Implied Total Equity Value" to be
$24.9 million, obtained by multiplying the Implied Equity Value Per Share by the
total number of outstanding shares of Reliance Common Stock, including shares
issuable upon exercise of such stock options, less net proceeds from the
exercise of such stock options. In performing its analysis, Baird used, among
other items, operating statistics for Reliance's latest twelve months through
March 31, 1998, as provided by Reliance management. Baird calculated multiples
of the Implied Total Equity Value to Reliance's LTM fully diluted earnings per
share, book value, tangible book value and tangible premium to core deposits.
The calculations resulted in ratios of the Implied total Equity Value to net
income ("P/E Ratios") of 40.27x based on LTM results, 112.94% of book value,
112.94% of tangible book value and a 13.96% tangible premium to core deposits.

By comparison, Baird calculated based on current price of $10.00 per
share for Reliance Common Stock as the consideration to be paid for Reliance in
the transaction presented. Based upon historical capital and related to the
"Highly Capitalized Group," this is a price to book and tangible book of 107.41%
of Reliance book and tangible book at March 31, 1998, which compares to a median
of 116.82% and a mean of 120.30% for the comparable companies. The range for the
price to book and tangible book values of the comparable companies was a high of
150.73% to a low of 104.29%. The price to LTM for Reliance was 47.62X compared
to a median of 30.30X and a mean of 30.88X for the comparable companies. The
range for the price to LTM of the comparable companies was a high of 65.50X and
a low of 15.05X. The tangible premium to core deposits was 13.96% for Reliance
compared to a median of 7.75% and a mean of 9.08% for the comparable companies.
The range for the price to tangible premium to core deposits for the comparable
companies was a high of 20.64% and a low of 1.25%.

-44-
<PAGE> 49

In analyzing Reliance in the context of the Adjusted Capital Group,
Baird adjusted Reliance's data for excess capital consistent with the median
equity to assets ratio of the Adjusted Capital Group, in order to normalize
Reliance's capital level. When comparing the "Adjusted Capital Group" to
Reliance, the price to book and tangible group for Reliance was 185.79% compared
to a median of 148.60% and a mean of 153.00% for the comparable companies. The
range for the price to book and tangible book for the comparable companies was a
high of 220.50% and a low of 153.00%.

As no comparative group or transaction from any comparative group is
identical to the Merger, Baird indicated to the Reliance Board that the analyses
described above are not mathematical, but rather involve complex consideration
and judgments concerning differences in operating and financial characteristics
including, among other things, differences in revenue composition and earnings
performance among Reliance and St. Francis and the selected companies and
transactions reviewed.

Analysis of Publicly Traded Companies Comparable to Reliance. Baird
reviewed certain publicly available financial and stock market information for
certain publicly traded companies which Baird deemed relevant. These companies
consisted of: CKF Bancorp, Inc., Crazy Woman Creek Bancorp, CSB Financial Group,
Inc., First Lancaster Bancshares, Mitchell Bancorp, Inc., Market Financial
Corp., Great Pee Dee Bancorp, S. Carolina Community Bancshares and Scotland
Bancorp Inc. (the "Comparable Companies"). The data described below for such
group is as of the most recently reported period and are compared to Reliance's
financial information, as reported, as of March 31, 1998.

Baird noted that the equity to assets for Reliance was 49.96% compared
with a median of 24.71% and a mean of 28.83% for the Comparable Companies. The
equity to assets for the Comparable Companies ranged from a high of 45.12% to a
low of 20.38%. Baird also noted the following operating performance statistics
for Reliance compared to the Comparable Companies: (i) the LTM net interest
margin for Reliance was 4.84% compared to a median of 4.00% and a mean of 4.03%.
(The range for the latest 12 month net interest margin of the Comparable
Companies was a high of 4.87% to a low of 3.43%); (ii) the LTM efficiency ratio
for Reliance was 67.11% compared to a median of 55.56% and a mean of 55.11% for
the Comparable Companies. (The range for the latest 12 months efficiency ratio
for the Comparable Companies was 70.93% to 42.35%); (iii) the LTM return on
average assets for Reliance was 1.02% compared to a median of 1.20% and a mean
of 1.22% for the Comparable Companies. (The range of the 12 month return on
average assets was 1.87% and 0.54% for the Comparable Companies); (iv) the LTM
return on average equity for Reliance was 2.06% compared to a median of 3.85%
and a mean of 4.38% for the Comparable Companies. (The range for the latest 12
month return on average equity was 8.15% to 2.25% for the Comparable Companies.)

Discounted Earnings Analysis. Baird performed a discounted earnings
analysis of Reliance on a stand-alone basis using Reliance management's
projections of future earnings for the five-year period ending June 30, 2002.
Baird estimated terminal values for Reliance using asset growth rates beginning
at 5.54% and increasing to 5.73% by 2002, return on average assets between 1.46%
to 1.60%, no cash dividends, discount rates of 9% to 11%, and terminal book
value multiples of 100%, 110% and 120%. Based upon projections without
synergies, Baird calculated an implied per share price from $7.00 to $9.00 per
share of Reliance Common Stock. Using the same discount rates and terminal book
value multiples as above but including synergies (per Reliance management
estimates), an implied per share price of $9.00 to $11.00 per share of Reliance
Common Stock. Baird noted that the discounted earnings analysis was included
because it is a widely used valuation methodology, but noted that the results of
such methodology are highly dependent upon the numerous assumptions that must be
made, including earnings growth ratios, dividend payout rates, terminal values
and discount rates.

-45-
<PAGE> 50

Analysis of St. Francis. In order to assess the relative public market
valuation of the St. Francis Common Stock to be issued in the Merger, Baird
reviewed certain publicly available financial information of the most recently
reported period as of March 31, 1998 for St. Francis and stock market
information and certain selected publicly traded companies which Baird deemed
relevant. Such comparable companies consist of: Alliance Bancorp, Anchor BanCorp
Wisconsin, CitFed Bancorp, Inc., D&N Financial Corp., First Indiana Corp.,
Flagstar Bancorp, Inc., First Federal Capital Corp., Jefferson Savings Bancorp,
MAF Bancorp, Inc., and St. Paul Bancorp, Inc. (the "St. Francis Comparable
Companies"). The data described below for such group is as of the most recently
reported period and are compared to St. Francis' financial information, as
reported, as of March 31, 1998. Baird noted the following operating performance
statistics for St. Francis compared to the St. Francis Comparable Companies: (i)
the LTM net interest margin, adjusted for the effect of tax credits received,
was 2.51% compared to a median of 2.93% and a mean of 2.89% for the St. Francis
Comparable Companies. (The range for the LTM net interest margin was 4.06% to
2.24% for the St. Francis Comparable Companies); (ii) the LTM efficiency ratio
for St. Francis, adjusted for the effect of tax credits received, was 62.06%
compared with a median of 54.85% and a mean of 55.68% for the St. Francis
Comparable Companies. (The range for the LTM efficiency ratio was 63.34% to
48.41% for the St. Francis Comparable Companies); (iii) the LTM return on
average assets for St. Francis was 0.80% compared to a median of 1.05% and a
mean of 1.03% for the St. Francis Comparable Companies. (The range for the LTM
return on average assets was 1.31% to 0.78% for the St. Francis Comparable
Companies); (iv) the LTM return on average equity for St. Francis was 9.93%
compared to a median of 14.40% and a mean of 14.42% for the St. Francis
Comparable Companies. (The range for the LTM return on average equity was 21.11%
to 8.67% for the St. Francis Comparable Companies); (v) the ratio of
non-performing assets to total assets for St. Francis was 0.20% compared with a
median of 0.56% and a mean of 0.76% for the St. Francis Comparable Companies.
(The range for the non-performing assets to total assets was 2.32% to 0.21% for
the St. Francis Comparable Companies).

Pro Forma Merger Analysis. Baird prepared a pro forma analysis of the
financial impact of the Merger. Using financial forecasts for Reliance (prepared
by Reliance management) and St. Francis (prepared by St. Francis management),
Baird compared St. Francis' earnings per share and book value on a stand-alone
basis to earnings and book value of the combined companies on a pro forma basis.
Without any synergies, this analysis indicated that the Merger would be dilutive
to earnings per share and after synergies as provided by Reliance's management
less dilutive to earnings per share for each of the three years following the
Merger. However, this analysis shows that it is immediately accretive to book
value per share.

Stock Trading Analysis. Baird reviewed the historical trading prices
and volume of Reliance Common Stock and St. Francis Common Stock for the
year ending June 23, 1998.

Also, Baird compared the performance of the market value of Reliance
Common Stock with that of the Comparable Companies and the NASDAQ Bank Index.
During the year ended June 23, 1998, the market value of Reliance Common Stock
underperformed an index of the Comparable Companies and the NASDAQ Bank Index.
Additionally, since the conversion of Reliance from mutual to stock form on
April 19, 1996 to June 18, 1998, Reliance Common Stock outperformed the index of
Comparable Companies and underperformed the NASDAQ Bank Index.

Additionally, Baird compared the performance of the market value of St.
Francis Common Stock with that of the St. Francis Comparable Companies and the
NASDAQ Bank Index. During the year ended June 24, 1998, the market value of St.
Francis Common Stock underperformed an index of the St. Francis Comparable
Companies and the NASDAQ Bank Index. Since the conversion of St. Francis from
mutual to stock form on June 21, 1993 to June 1, 1998, St. Francis Common Stock
has underperformed the index of the St. Francis Comparable Companies and the
NASDAQ Bank Index.

Contribution Analysis, Baird analyzed the contribution of each of
Reliance and St. Francis to the pro forma company of assets, deposits, latest 12
months net income, estimated net income, tangible equity and ownership. Baird
calculated that: St. Francis would contribute 97.39% and Reliance 2.61% of
assets; St. Francis would contribute 98.42% and Reliance 1.58% of deposits; St.
Francis would contribute 96.49% and Reliance 3.51% of net income based upon the
historical latest 12 months; St. Francis would contribute 96.29% and Reliance
3.71% of estimated net income; St. Francis would contribute 84.22% and Reliance
15.78% of tangible equity; and St. Francis would represent 88.84% and Reliance
11.16% based on prices for St. Francis Common Stock of $37.25 per share and the
issuance by St. Francis of approximately 655,948 shares out of a pro forma total
of 5,879,363 shares.

-46-
<PAGE> 51

The summary of the opinion set forth above does not purport to be a
complete description of the presentation of Baird to the Reliance Board or the
analyses performed by Baird. The preparation of a fairness opinion is a complex
process and is not susceptible to partial analysis or summary description. Baird
believes that its analyses must be considered as a whole and that selecting
portions of its analyses, without considering all factors and analyses would
create an incomplete view of the processes underlying the analyses conducted by
Baird and its opinion. Baird did not attempt to assign particular weights to
particular analyses. Any estimates contained in Baird's analyses are not
necessarily indicative of actual values, which may be significantly more or less
favorable than as set forth therein. Estimates of values of companies do not
purport to be appraisals or necessarily to reflect the prices at which companies
may actually be sold. Because such estimates are inherently subject to
uncertainty, Baird does not assume responsibility for their accuracy.

Baird, as part of its investment banking business, is engaged in the
evaluation of businesses and their securities in connection with mergers and
acquisitions, negotiated underwritings, competitive biddings, secondary
distributions of listed and unlisted securities, private placements, and
valuations for estate, corporate and other purposes. Reliance retained Baird
because of its experience and expertise in the valuation of businesses and their
securities in connection with mergers and acquisitions. In the ordinary course
of business, Baird may from time to time trade securities of Reliance and St.
Francis for its own account and the accounts of its customers and, accordingly,
may at any time hold a long or short position in such securities.

Pursuant to an agreement, dated May 22, 1998, between Reliance and
Baird, Reliance has paid Baird a non-refundable retainer fee of $25,000 and a
fee of $100,000, payable upon delivery of Baird's opinion. Reliance also has
agreed to reimburse Baird for certain of its out-of-pocket expenses incurred in
connection with its engagement. Additionally, Reliance has agreed to indemnify
Baird against certain liabilities, including liabilities under the federal
securities laws, incurred in connection with the engagement of Baird by
Reliance. In the past, Baird has provided investment banking and financial
advisory services to Reliance and St. Francis, including in connection with both
Reliance's and St. Francis' conversion from mutual to stock companies, for which
Baird has received its customary compensation.

ELECTION AND ALLOCATION PROCEDURES

Description of Elections. Each record holder of Reliance Common Stock
(except for the Reliance ESOP) will have the right to submit an election form
and letter of transmittal (the "Election Form") specifying the kind of
consideration sought to be received. The Election Form and other appropriate
transmittal materials will be mailed by the Exchange Agent, Firstar Trust Co.,
on the Mailing Date, December _, 1998, under separate cover of this Proxy
Statement/Prospectus, to each holder of record of Reliance Common Stock as of
the Voting Record Date. Holders of record of shares of Reliance Common Stock who
hold such shares as nominees, trustees or in other representative capacities may
submit multiple Election Forms that cover all the shares of Reliance Common
Stock held by such record holder for each beneficial owner thereof. See
"--Certain Federal Income Tax Consequences." The Election Form will permit
Reliance shareholders (1) to indicate that they elect to receive in exchange for
their shares of Reliance Common Stock (i) the Per Share Cash Distribution with
respect to a specified number of shares of Reliance Common Stock (the "Cash
Election Shares"), (ii) the Per Share Stock Distribution with respect to a
specified number of shares of Reliance Common Stock (the "Stock Election
Shares"), or (iii) a combination thereof, or (2) to make no election with
respect to a specified number of shares of Reliance Common Stock (the "No
Election Shares").

The No Election Shares will be converted into Stock Election Shares,
Cash Election Shares or a combination thereof as necessary to ensure that (i)
the aggregate amount of consideration payable in cash is not more than 40% of
the aggregate value of all of the consideration issued or paid in connection
with the Merger, and the total number of shares of St. Francis Common Stock to
be issued in connection with the Merger shall be that number of whole shares of
St. Francis Common Stock that has an aggregate value of at least 60% of the
aggregate value of all of the consideration issued or paid in connection with
the Merger, and (ii) the Merger will qualify as a tax-free reorganization.

-47-
<PAGE> 52

Each holder of shares of Reliance Common Stock may elect to receive
either the Per Share Cash Distribution or the Per Share Stock Distribution for
each share of Reliance Common Stock held. However, each individual beneficial
owner of shares of Reliance Common Stock can only choose an overall combination
of the Per Share Cash Distribution and the Per Share Stock Distribution relating
to all of the shares of Reliance Common Stock beneficially owned by him, her or
it, if he, she or it chooses the Per Share Stock Distribution such that he, she
or it would receive at least 50 shares of St. Francis Common Stock in connection
with the Merger. If the Exchange Agent determines that this 50-share limit has
not been complied with, the shares of Reliance Common Stock to which the
improper election has been made shall be deemed No Election Shares.

The Election Form, together with stock certificates representing all
shares of Reliance Common Stock covered thereby (or affidavits and
indemnification regarding the loss or destruction of such certificates or the
guaranteed delivery of such certificates), must be completed, signed and
returned to the Exchange Agent no later than the Election Deadline, 4:00 p.m.,
Milwaukee time, on ___________, 199_. If a certificate for Reliance Common Stock
has been lost, stolen or destroyed, an Election Form will be properly completed
only if accompanied by appropriate evidence as to such loss, theft, or
destruction, appropriate evidence as to the ownership of such certificate by
such Reliance shareholder and appropriate and customary indemnification. Shares
of Reliance Common Stock for which an Election Form has not been properly
completed and received by the Exchange Agent by the Election Deadline will be
deemed No Election Shares. The Election Forms will be accompanied by
instructions specifying other details of the exchange.

RELIANCE SHAREHOLDERS SHOULD SEND THEIR CERTIFICATES ALONG WITH A
COMPLETED ELECTION FORM IN ACCORDANCE WITH THE INSTRUCTIONS CONTAINED
THEREIN.

TO MAKE AN EFFECTIVE ELECTION, A RELIANCE SHAREHOLDER WILL BE REQUIRED
TO RETURN A PROPERLY COMPLETED ELECTION FORM SUFFICIENTLY IN ADVANCE OF THE
ELECTION DEADLINE SO THAT IT IS ACTUALLY RECEIVED BY THE EXCHANGE AGENT AT OR
PRIOR TO THE ELECTION DEADLINE. AN ELECTION FORM WILL NOT BE CONSIDERED PROPERLY
COMPLETED IF IT IS NOT ACCOMPANIED BY CERTIFICATES REPRESENTING ALL SHARES OF
RELIANCE COMMON STOCK COVERED THEREBY (OR AFFIDAVITS AND INDEMNIFICATION
REGARDING THE LOSS OR DESTRUCTION OF SUCH CERTIFICATES OR THE GUARANTEED
DELIVERY OF SUCH CERTIFICATES). THE ELECTION DEADLINE IS 4:00 P.M., MILWAUKEE
TIME, ON ______________, 199_.

In the Merger, the aggregate number of shares of St. Francis Common
Stock to be issued and the total amount of cash payable will be fixed in
accordance with certain parameters. Accordingly, there can be no assurance that
each Reliance shareholder will receive the form of consideration that such
holder elects. In the event that the elections result in an oversubscription of
cash, certain procedures for allocating St. Francis Common Stock and cash will
be followed by the Exchange Agent.

Any Election Form may be revoked or changed by written notice from the
person submitting such Election Form to the Exchange Agent, but to be effective
such notice must actually be received by the Exchange Agent on or before the
Election Deadline. The Exchange Agent will have discretion to determine when any
election, modification or revocation has been properly made, and such
determination shall be final.

Persons who become shareholders of record of Reliance after the Voting
Record Date and up to one business day prior to the Election Deadline will be
mailed an Election Form and a copy of this Proxy Statement/Prospectus. Any
shareholder who needs an Election Form may obtain copies of the Election Form
upon request from (i) St. Francis, either in writing at St. Francis, [ADDRESS]
Attention: [NAME] or by telephone at (___) ___-____, (ii) Reliance, either in
writing at Reliance, 3140 South 27th Street, Milwaukee, WI 53215, Attention: Ms.
Carol A. Barnharst, Secretary, or by telephone at (414) 671-2222, or (iii) the
Exchange Agent, either in writing at [NAME AND ADDRESS] or by telephone at (___)
___-____ or 1-800-___-____ (toll free). Election Forms also will be available to
all persons who become holders of Reliance Common Stock up until the close of
business on the day prior to the Election Deadline at the principal offices of
St. Francis and Reliance. Any shares of Reliance Common Stock with respect to
which the holder thereof shall not, as of the Election Deadline, have made an
effective election, shall be deemed No Election Shares. Accordingly, persons who
become shareholders of Reliance after the Election Deadline will be deemed to
hold No Election Shares, because they could not have made an effective election
with respect to such shares.

-48-
<PAGE> 53

Because the Election Deadline likely will occur prior to the end of the
Valuation Period during which the St. Francis Average Stock Price will be
determined for purposes of fixing the conversion ratio, the St. Francis Average
Stock Price and the conversion ratio, and thus the market value of the shares of
St. Francis Common Stock to be received, will not be known by the time Reliance
shareholders are required to submit their Election Forms.

In the event the Merger Agreement is terminated prior to completion of
the Merger, the Exchange Agent will promptly return all certificates
representing shares of Reliance Common Stock submitted with Election Forms. In
such event, shares of Reliance Common Stock held through the Depository Trust
Company, the nominee for shares held in brokerage accounts, are expected to be
available for sale or transfer promptly following termination of the Merger
Agreement; however, Reliance stock certificates held directly by Reliance
shareholders will be returned by registered mail. The Exchange Agent and St.
Francis will use their commercially reasonable efforts to cooperate with
Reliance and Reliance shareholders to facilitate return of Reliance stock
certificates in the event of such termination, but return other than by
registered mail will only be made at the expense, written direction and risk of
Reliance shareholders, accompanied by a pre-paid, pre-addressed return envelope
sent to the Exchange Agent.

Allocation Procedures. Within five business days after the Effective
Time, the Exchange Agent will allocate among holders of shares of Reliance
Common Stock the right to receive shares of St. Francis Common Stock or cash as
follows:

(1) the aggregate amount of consideration that shall be
payable to Reliance shareholders, including the ESOP,
in cash (the "Cash Amount") shall be not greater than
40% of the aggregate value of all of the
consideration to be issued or paid in connection with
the Merger;

(2) the total number of shares of St. Francis Common
Stock to be issued in connection with the Merger (the
"Stock Amount") shall be that number of whole shares
of St. Francis Common Stock that has an aggregate
value, valuing such stock at the St. Francis Average
Stock Price for this purpose, equal to or greater
than 60% of the aggregate value of all of the
consideration to be issued or paid in connection with
the Merger;

(3) the calculation of the aggregate amount of
consideration, the Cash Amount and the Stock Amount
shall be made by St. Francis. The relative
percentages that the Cash Amount (i.e., up to 40%)
and the Stock Amount (i.e., equal to or greater than
60%) bear to the aggregate amount of consideration to
be issued or paid in connection with the Merger shall
be determined as follows:

(i) If the aggregate value of the Stock Election
Shares, valuing each such Stock Election
Share as the product of the St. Francis
Average Stock Price multiplied by the Per
Share Stock Distribution, is equal to or
greater than 60%, the Stock Amount shall be
equal to the product of the Stock Election
Shares multiplied by the Per Share Stock
Distribution (or such greater amount as
determined by St. Francis in order that the
Merger qualify as a reorganization within
the meaning of Section 368 of the Code, as
set forth above); and

(ii) If the aggregate value of the Stock Election
Shares, valuing each such Stock Election
Share as the product of the St. Francis
Average Stock Price multiplied by the Per
Share Stock Distribution, is less than 60%
of the aggregate value of all of the
consideration to be issued or paid in
connection with the Merger, the Stock Amount
shall be equal to that number of whole
shares of St. Francis Common Stock that has
an aggregate value, valuing such stock at
the St. Francis Average Stock Price for this
purpose, equal to or greater than 60%, of
the aggregate value of all of the
consideration to be issued or paid in
connection with the Merger; and

-49-
<PAGE> 54

(4) within five business days after the Effective Time,
the Exchange Agent shall effectuate the allocation
among holders of the shares of Reliance Common Stock
of the right to receive the Cash Election Shares
and/or the Stock Election Shares in the Merger as
follows:

(i) if the number of shares of St. Francis
Common Stock that would be issued upon
conversion in the Merger of the Stock
Election Shares is less than the Stock
Amount, then

(A) all shares of Reliance
Common Stock electing Stock
Election Shares will be
converted into the right to
receive the Per Share Stock
Distribution,

(B) the No Election Shares will
be converted, in a random
method, mutually agreed by
St. Francis and Reliance to
be reasonable, unbiased and
fair (the "Random Selection
Basis"), by the Exchange
Agent into the right to
receive the Per Share Stock
Distribution ("Stock
Designee Shares"), and then
(if necessary) Cash
Election Shares will be
converted on a Pro Rata
Basis (as described below)
by the Exchange Agent into
Stock Designee Shares (in
each case, subject to the
requirement for issuance of
at least 50 shares of St.
Francis Common Stock to
each recipient thereof)
until such number of Stock
Designee Shares will, when
added to the number of
Stock Election Shares,
equal the Stock Amount
(provided, however, that no
particular holder of Cash
Election Shares will be
required to designate a
portion of his, her or its
Cash Election Shares as
Stock Designee Shares if
such designation would
threaten satisfaction of
any of the conditions to
the consummation of the
Merger set forth in the
Merger Agreement), and

(C) the Cash Election Shares
and the No Election Shares
not converted into Stock
Designee Shares will be
converted into the right to
receive the Per Share Cash
Distribution; or

(ii) if the number of shares of St. Francis
Common Stock that would be issued upon
conversion of the Stock Election Shares is
equal to or greater than the Stock Amount,
then all shares of Reliance Common Stock
electing Stock Election Shares will be
converted into the right to receive the Per
Share Stock Distribution and all Cash
Election Shares and No Election Shares will
be converted into the right to receive the
Per Share Cash Distribution.

The Pro Rata Basis shall be calculated for each record holder of
Reliance Common Stock as a fraction, the numerator of which equals the number of
shares of Reliance Common Stock held of record by such Reliance shareholder
which were designated as Cash Election Shares and the denominator of which
equals the total number of shares of Reliance Common Stock designated as Cash
Election Shares multiplied by the number of shares necessary to be converted
into Stock Designee Shares so that the Stock Election Shares plus the Stock
Designee Shares equals the Stock Amount. The number of shares of Reliance Common
Stock converted on the Pro Rata Basis for each shareholder shall be rounded up
to the next higher whole share.

The extent to which elections by holders of shares of Reliance Common
Stock will be accommodated will depend upon the respective number of shares of
Reliance Common Stock electing cash or stock (or making no election).
Accordingly, a holder of shares of Reliance Common Stock who elects cash may
instead receive a combination of cash and shares of St. Francis Common Stock,
and a holder of shares of Reliance Common Stock

-50-
<PAGE> 55

who elects to receive a combination of cash and shares of St. Francis Common
Stock may instead receive a different combination of cash and shares of St.
Francis Common Stock. In addition, if so directed by St. Francis, the Exchange
Agent may alter the selection and allocation procedures in order to ensure that
all of the conditions to consummation of the Merger set forth in the Merger
Agreement may be complied with. Because the tax consequences of receiving cash,
St. Francis Common Stock or a combination of cash and St. Francis Common Stock
will differ, shareholders of Reliance are urged to read carefully the
information under "--Certain Federal Income Tax Consequences," and to consult
with their own tax advisors before returning the Election Form.

Notwithstanding the selection and allocation procedures described
above, the Merger Agreement provides that no particular Cash Election Shares
will be selected to receive or will be allocated St. Francis Common Stock if
such selection or allocation would threaten satisfaction of any of the
conditions to consummation of the Merger.

ISSUANCE OF STOCK AND PAYMENT OF CASH

General. On or shortly after the Effective Time, St. Francis will
deliver to the Exchange Agent certificates representing the number of shares of
St. Francis Common Stock issuable and the amount of cash payable in the Merger.
The Exchange Agent will not be entitled to vote or exercise any rights of
ownership with respect to the shares of St. Francis Common Stock held by it
pursuant to the Merger Agreement, except that it will receive and hold all
dividends or other distributions paid or distributed with respect to such shares
for the account of the persons entitled thereto.

Exchange of Certificates; Delivery of St. Francis Common Stock and
Cash. At the Effective Time, holders of certificates representing shares of
Reliance Common Stock will cease to have any rights as shareholders of Reliance
and will have only the right to receive the cash or shares of St. Francis Common
Stock into which their shares of Reliance Common Stock are to be converted. No
holder of certificates formerly representing shares of Reliance Common Stock
will be entitled to receive either cash or shares of St. Francis Common Stock
until the certificates are properly surrendered and delivered to the Exchange
Agent, and no interest will accrue in respect thereof. Each share of St. Francis
Common Stock for which shares of Reliance Common Stock are exchanged in the
Merger will be deemed to have been issued at the Effective Time. Accordingly,
Reliance shareholders who receive St. Francis Common Stock in the Merger will be
entitled to vote their shares and to receive any dividends or other
distributions, without interest, that may be payable to holders of record of St.
Francis Common Stock after the Effective Date, except that no such dividend will
be remitted until the certificates representing Reliance Common Stock have been
properly surrendered and delivered to the Exchange Agent.

Until so surrendered, each certificate that before the Effective Time
represented outstanding shares of Reliance Common Stock will, except as
otherwise provided in the Merger Agreement, be deemed to evidence ownership of
the number of shares of St. Francis Common Stock or the right to receive the
amount of cash into which the same has been converted in the Merger. After the
Effective Time, there will be no further transfers on the records of Reliance of
certificates theretofore representing Reliance Common Stock and, if such
certificates are presented to Reliance for transfer, they will be canceled
against delivery of certificates for St. Francis Common Stock or cash, as the
case may be.

Within five business days after the allocation described above under
"--Election and Allocation Procedures," the Exchange Agent will distribute
shares of St. Francis Common Stock and cash with respect to shares of Reliance
Common Stock which have been properly surrendered and delivered to the Exchange
Agent. No dividends that have been declared on the shares of St. Francis Common
Stock will be remitted with respect to shares of Reliance Common Stock that have
been converted into shares of St. Francis Common Stock in the Merger until the
certificate or certificates previously representing shares of Reliance Common
Stock have been surrendered to the Exchange Agent, at which time such dividends
will be remitted to such person, without interest. Stock certificates will not
be delivered for fractional shares resulting from the exchange of Reliance
Common Stock for St. Francis Common Stock. Instead, each holder of Reliance
Common Stock who would otherwise be entitled to a fractional share will receive
in lieu thereof cash in an amount equal to the value of such fractional share
based upon the St. Francis Average Stock Price.

-51-
<PAGE> 56

Neither St. Francis, Reliance nor the Exchange Agent will be liable to
any former holder of shares of Reliance Common Stock for any amount delivered to
a public official pursuant to applicable abandoned property, escheat or similar
laws.

REPRESENTATIONS AND WARRANTIES

The Merger Agreement contains various customary representations and
warranties relating to, among other things: (a) each of St. Francis' and
Reliance's organization and similar corporate matters; (b) each of St. Francis'
and Reliance's capital structure; (c) authorization, execution, delivery,
performance and enforceability of the Merger Agreement and related matters; (d)
conflicts under charters or bylaws, required consents or approvals and
violations of any agreements, instruments or laws; (e) documents filed by each
of St. Francis and Reliance with the Commission and the accuracy of information
and financial statements contained therein; (f) absence of certain material
adverse events, changes or effects; (g) undisclosed liabilities; (h) the
accuracy of information supplied by each of St. Francis and Reliance in
connection with the Registration Statement and this Proxy Statement/Prospectus;
(i) retirement and other employee plans and matters relating to the Employee
Retirement Income Security Act of 1974, as amended; (j) regulatory filings; (k)
litigation; (l) compliance with law, including environmental law; (m) tax
returns and audits, and (n) asset quality, loan portfolio matters and investment
portfolio matters.

CERTAIN COVENANTS

Recognition of Reliance Contributions. St. Francis has agreed to
install a plaque in the branch office serving former Reliance Savings Bank
customers to memorialize Reliance's service to the community and to provide
customer continuity in the context of the Merger. Ms. Barnharst will manage the
office servicing the accounts of former Reliance Savings Bank customers for the
purpose of dealing at a local level with such marketing, competitive and other
issues as may be particular to Reliance Savings Bank's market area. Subsequent
to the Merger, St. Francis will consult with an Advisory Board comprised of
former directors of Reliance Savings Bank, to attempt to ensure the continuity
necessary to achieve the goal of uninterrupted, locally responsive service to
Reliance Savings Bank's customers and market area.

No Solicitation. The Merger Agreement provides that Reliance and its
subsidiaries will not: (a) initiate, solicit or encourage inquiries or proposals
with respect to the purchase of all or a substantial part of the assets or
equity of Reliance or any of its subsidiaries, except as contemplated by the
Merger Agreement; or (b) except to the extent required for the discharge by the
Reliance Board of its fiduciary duties as advised in writing by legal counsel,
furnish any information relating to, or participate in any negotiations or
discussions concerning, any such inquires or proposals. The Merger Agreement
provides that Reliance will notify St. Francis upon receipt of any such inquires
or proposals.

Employee Benefit Plans. St. Francis has agreed that employees and
officers of Reliance and its subsidiaries who are employed by St. Francis or its
subsidiaries following the Merger will be immediately entitled to participate in
St. Francis' pension, welfare and employee benefit plans (including without
limitation, group hospitalization, medical, life and disability insurance plans,
severance plans, qualified retirement, ESOP and savings plans, stock option
plans and management recognition plans) on the same terms as similarly situated
employees and officers of St. Francis and its subsidiaries, giving effect to
years of service with Reliance and its subsidiaries as if such service were with
St. Francis for all purposes, including without limitation, for purposes of
vesting and eligibility (except for St. Francis' retirement plan, in which case
giving effect to years of service shall be for eligibility and vesting purposes
only and not for benefit accrual purposes). Any expenses incurred by an employee
of Reliance or its subsidiaries under its welfare benefit plans (such as
deductibles or co-payments) will be counted for all purposes under the St.
Francis plans. St. Francis will waive any pre-existing condition exclusions for
conditions existing at the Effective Time, and actively at work requirements for
periods ending at the Effective Time, contained in the St. Francis plans as they
apply to employees of Reliance and its subsidiaries and former employees and
their dependents, provided that St. Francis' waiver of pre-existing conditions
shall not extend to any condition which has prevented an employee's coverage
under comparable benefit plans of Reliance or Reliance Savings Bank.

-52-
<PAGE> 57

St. Francis has sole discretion with respect to the determination
whether to terminate, merge or continue any employee benefit plan or program of
Reliance or any of its subsidiaries (other than the Reliance ESOP, the Reliance
Pension Plan or the Reliance Directors' Retirement Plan); provided, however,
that St. Francis must continue to maintain Reliance plans other than stock-based
incentive plans and the tax-qualified plans of Reliance until employees of
Reliance are able to participate in similar plans of St. Francis. In addition,
St. Francis must maintain post-retirement medical and health coverage no less
favorable than that maintained by Reliance at the Effective Time with respect to
former and current officers, employees and non-employee directors of Reliance
and Reliance Savings Bank, and their dependents, who satisfied the requirements
for coverage under such program.

Employees and officers of Reliance and its subsidiaries who become
employees and officers of St. Francis also will receive compensation
arrangements and fringe benefits as are provided to St. Francis' employees and
officers, as described under "--Interests of Certain Persons in the Merger" and
"--Effect on Reliance Employee Benefit Plans." The treatment under the Merger
Agreement of the holders of Reliance stock options also is described therein.

Best Efforts to Consummate Merger. St. Francis and Reliance have each
agreed to use their best efforts in good faith to take or cause to be taken all
action necessary to consummate the Merger as promptly as practicable.

CONDITIONS TO EACH PARTY'S OBLIGATIONS

The respective obligations of St. Francis and Reliance to effect the
Merger are subject to certain conditions, including the following:

(a) approval of the Merger by holders of a majority of the issued
and outstanding shares of Reliance Common Stock;

(b) procurement of all regulatory approvals and consents required
for the Merger and the expiration of all waiting periods in
connection therewith;

(d) verification that Reliance's net worth immediately preceding
the Effective Time (computed as described further herein) is
not less than Reliance's net worth as of March 31, 1998. For
purposes of this condition to closing, Reliance's net worth
shall be computed as the sum of its total shareholders' equity
plus the allowance for loan losses, but excluding any
adjustments made as a result of the application of SFAS No.
115, "Accounting for Certain Investments in Debt and Equity
Securities," any adjustments made pursuant to confirming and
conforming accounting and reserve policies, plus an allowance
of up to $210,000 for legal, accounting and investment
advisor/fairness opinion fees incurred in connection with the
transactions contemplated by the Merger Agreement. Reliance's
net worth, computed in accordance with the above-noted
procedures of the Merger Agreement, was $22.1 million at March
31, 1998;

(e) representations and warranties made by St. Francis in the
Merger Agreement shall be true and correct in all material
respects as of the Effective Time, except for those matters
which in the aggregate do not have a material adverse effect
on the consolidated financial condition and earnings of St.
Francis, and St. Francis shall have complied with all material
covenants contained in the Merger Agreement in all material
respects;

(f) the absence of any unstayed or final injunction prohibiting
consummation of the Merger or of any litigation or
governmental proceeding seeking to restrain, prohibit or
invalidate the Merger;

-53-
<PAGE> 58

(g) receipt by St. Francis of "comfort letters" from Reliance's
independent accountants with respect to facts concerning the
financial condition of Reliance;

(h) receipt by each party of an acceptable legal opinion as is
customary in a transaction of this kind;

(i) the representations and warranties made by Reliance in the
Merger Agreement shall be true and correct in all material
respects as of the Effective Time, except for those matters
which in the aggregate do not have a material adverse effect
on the consolidated financial condition and earnings of
Reliance and Reliance shall have complied with all material
covenants contained in the Merger Agreement in all material
respects;

(j) the effectiveness of the Registration Statement filed with the
Commission and compliance by St. Francis with all "Blue Sky"
requirements necessary to consummate the transactions
contemplated by the Merger;

(k) St. Francis' Board of Directors shall by appropriate
resolution have authorized and reserved the required number of
shares of St. Francis Common Stock to be issued pursuant to
the Merger and the shares of Common Stock to be issued upon
consummation of the Merger shall have been authorized for
listing on the NASDAQ National Market System subject to
official notice of issuance;

(l) Reliance shall have received an opinion from Baird, dated as
of the date of the Proxy Statement/Prospectus, to the effect
that, subject to the terms, conditions and qualifications set
forth therein, the consideration to be paid by St. Francis to
Reliance shareholders pursuant to the Merger is fair to such
shareholders from a financial point of view;

(m) receipt by Reliance and St. Francis from legal counsel of an
opinion, dated the Effective Time, to the effect that for
federal income tax purposes:

(i) the Merger will constitute a reorganization within the
meaning of Section 368 of the Code; and

(ii) with respect to counsel's opinion to Reliance only
(except for cash in lieu of a fractional share
interest paid to holders of Reliance Common Stock and
cash paid to those holders of Reliance Common Stock
who receive the Per Share Cash Distribution):

(x) no gain or loss will be recognized by a
holder of Reliance Common Stock upon
conversion in the Merger of such stock into
St. Francis Common Stock,

(y) the basis of the shares of St. Francis
Common Stock to be received by a shareholder
of Reliance will be the same as such
shareholder's basis in the Reliance Common
Stock exchanged therefor, and

(z) the holding period of the St. Francis Common
Stock received in the Merger by a holder of
Reliance Common Stock exchanged therefor
will include the period during which such
holder held the Reliance Common Stock
therefor, provided that such Reliance Common
Stock was held as a capital asset
immediately before the Effective Date; and

(n) the absence of any Environmental Condition (as defined in the
Merger Agreement) with respect to any Real Property of
Reliance (as defined therein) which is likely to have a
material adverse effect (as defined therein) on St. Francis.

-54-
<PAGE> 59

REGULATORY APPROVALS

The Merger and the Bank Merger are subject to the prior approval of the
OTS under the Home Owners' Loan Act of 1933, as amended (the "HOLA") and the
regulations adopted under the HOLA, and the Bank Merger is subject to review by
the WDFI under Chapter 214 of the Wisconsin Statutes and administrative rules
and regulations promulgated thereunder. An application for approval of the
Merger and related transactions was filed with the OTS on August 31, 1998. On
___________, 1998, the OTS deemed the application complete and sufficient for
further processing and review. Under applicable OTS regulations, the OTS reviews
the financial, managerial, competitive, legal, disclosure, accounting and tax
aspects of the transactions. In addition, the OTS has the responsibility by
statute and regulation to review the performance of all involved institutions in
meeting their responsibilities under the Community Reinvestment Act ("CRA"). No
protest of the Merger has been filed with the OTS under the CRA as of the date
of this Proxy Statement/Prospectus.

A copy of the application was filed with the WDFI on August 31, 1998.
In connection with its review of the application, the WDFI may conduct such
investigations as it deems appropriate, and may impose conditions to its
approval of the transactions. As of the date of this Proxy Statement/Prospectus,
review of the application submitted to the WDFI had not yet been completed.

Under the terms of the Merger Agreement, the obligation of each of St.
Francis and Reliance to consummate the Merger and related transactions is
conditioned upon the receipt of all requisite regulatory approvals (as defined
in the Merger Agreement), including the approval of the OTS and the WDFI. There
can be no assurance that such approvals or action will not be conditioned upon
matters that would cause the parties to change the structure of the Bank Merger
from that presently contemplated by St. Francis and Reliance, or to abandon the
Merger, or that no action will be brought challenging such approvals or action,
including a challenge by the United States Department of Justice or a state
attorney general, or, if such a challenge is made, the result thereof. The
obligations of St. Francis and Reliance to consummate the Merger also were
conditioned upon waiver by the Board of Governors of the Federal Reserve System
("FRB") of their requirement for receipt of an application under the Bank
Holding Company Act of 1956, as amended (pursuant to the waiver authority under
12 C.F.R. ss.225.12), which waiver was granted by the FRB on September 11, 1998.

St. Francis and Reliance are not aware of any governmental approvals or
actions that may be required for consummation of the Merger except as described
above. Should any such further approval or action be required, it is presently
contemplated that such approval or action would be sought. There can be no
assurance, however, that any such approval or action, if needed, could be
obtained and would not be conditioned in a manner that would cause the parties
to abandon the Merger.

CONDUCT OF BUSINESS PENDING MERGER

The Merger Agreement contains certain restrictions regarding the
conduct of Reliance's and St. Francis' business pending consummation of the
Merger. In particular, Reliance has agreed that, before the Effective Time,
except as permitted by the Merger Agreement or as otherwise consented to by St.
Francis, it will (i) conduct its business and operate only in the usual ordinary
course of business in accordance with prudent and sound banking practices; (ii)
maintain an allowance for loan losses deemed to be adequate based on GAAP; (iii)
remain in good standing with all applicable federal and state regulatory
authorities and preserve its existing banking locations; (iv) use its best
efforts to retain the services of its present officers and employees; (v)
maintain insurance covering the performance of its and their duties by its and
their directors, officers and employees; (vi) take no action which would
adversely affect or delay the ability of Reliance or St. Francis to obtain any
necessary approvals, consents or waivers of any governmental authority required
for the transactions contemplated by the Merger Agreement and use its best
efforts to obtain all written consents and approvals from third parties
necessary in order to consummate the Merger; (vii) consult with St. Francis
prior to acquiring any interest in real property (except in the ordinary course
of business) and before entering into any contract or agreement having a term of
more than one year; (viii) take no action which would cause the termination or
cancellation by the FDIC of insurance in respect of Reliance's deposits; (ix)
cooperate with St. Francis in providing timely notice to Reliance's data
processor to facilitate the continued customer account data processing; (x)
cause all materials and other internal, nonpublic financial and business

-55-
<PAGE> 60

information obtained by it from St. Francis to be treated confidentially; and
(xi) consult with St. Francis about any proposed settlement or lack thereof, or
any disposition of, any litigation matter in which it is or becomes involved and
the amount involved exceeds $50,000; (xii) within five business days of the
Effective Time, consult with St. Francis regarding such accruals, reserves,
charges, and changes in accounting and reserve policies as may be necessary to
conform Reliance's practices in those areas with those of St. Francis and to
recognize for financial accounting purposes the expenses related to the Merger;
(xiii) provide St. Francis, its representatives and agents, with access to
books, records, and facilities at all times during normal business hours; (xiv)
cause its Board of Directors, subject to their fiduciary duties, to recommend
approval of the Merger to the Reliance shareholders; (xv) cause such severance
and termination benefits as may be payable in connection with the Merger not to
exceed the level of payments and benefits which would be deductible under
Section 280G of the Code, giving effect to any obligations of St. Francis and
its subsidiaries; (xvi) obtain and deliver to St. Francis signed Voting
Agreements obligating each of Reliance's executive officers and directors in
their individual capacities not to dispose of any shares of Reliance Common
Stock beneficially owned by them (subject to certain exceptions set forth in the
Voting Agreements) and to vote all such shares in favor of the Merger; (xvii)
advise St. Francis promptly and in writing of any fact or document which if
existing or known as of the date of execution of the Merger Agreement would have
been set forth, disclosed or made available to St. Francis or which would have
made any of Reliance's disclosures, representations or warranties in the Merger
Agreement materially untrue; and (xviii) use its best efforts to cause the
conditions to the Merger Agreement to be satisfied.

In addition, Reliance has agreed that it will not, directly or
indirectly, initiate, solicit or knowingly encourage or take any other action to
facilitate knowingly, any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to, any Acquisition Proposal
(as defined below), or enter into or maintain or continue discussions or
negotiate with any person or entity in furtherance of such inquiries or to
obtain an Acquisition Proposal or agree to or endorse any Acquisition Proposal,
or authorize or permit any of its officers, directors or employees or any
investment banker, financial advisor, attorney, accountant or other
representative retained by it to take any such action, and notify St. Francis
orally and in writing of all relevant details relating to all inquiries and
proposals which it or any such officer, director, employee, investment banker,
financial advisor, attorney, accountant or other representative may receive
relating to any of such matters. However, the Merger Agreement provides that
this provision will not prohibit the Reliance Board from taking any of the
foregoing actions necessary to fulfill their fiduciary obligations. "Acquisition
Proposal" shall mean any of the following involving Reliance (other than the
transactions contemplated hereunder): (a) any merger, consolidation, share
exchange, business combination or other similar transaction; (b) any sale,
lease, exchange, mortgage, pledge, transfer or other disposition of 10% or more
of the assets of Reliance in a single transaction or series of transactions; (c)
any tender offer or exchange offer for 10% or more of the outstanding shares of
capital stock of Reliance or the filing of a registration statement under the
Securities in connection therewith; or (d) any public announcement of a
proposal, plan or intention to do any of the foregoing or any agreement to
engage in any of the foregoing.

Furthermore, Reliance has agreed that, before the Effective Time,
except as permitted by the Merger Agreement or as otherwise consented to by St.
Francis, it will not: (i) amend its Articles of Incorporation, Charter or
Bylaws; (ii) except in connection with the exercise of options, issue, deliver
or sell, or authorize or propose the issuance, delivery or sale of, any shares
of its capital stock, or issue or grant any stock options, warrants, rights,
calls or commitments of any character calling for or permitting the issue or
sale of its capital stock; (iii) make payment of any form of cash or other
dividend, or institute any other form of dividend or distribution, with respect
to Reliance's capital stock; (iv) increase or reduce the number of shares of its
capital stock issued or outstanding by repurchase, split-up, reverse split,
reclassification, distribution of stock dividends, or change of par or stated
value; (v) make or grant any general or individual wage or salary increase or
fringe benefit increase except for general salary and wage adjustments now in
progress, or, as part of the conduct of a normal salary administration program
consistent with past practices, increase in any manner the compensation or
fringe benefits of any of its directors, officers or employees, or pay any
bonus, pension or retirement allowance to any such directors, officers or
employees, or become a party to, adopt, amend or otherwise modify or make any
contribution outside the ordinary course of business to any compensation and
benefit plan, any bonus, pension, profit sharing, retirement or other
compensation plan or enter into any contract of employment with any officer
which is not terminable at will without cost or other liability, or enter into,
modify, or renew (for a term longer than the prior term) any contract,
agreement, commitment or arrangement providing for the payment to any director,
officer or employee of such party of

-56-
<PAGE> 61

compensation or benefits contingent, or the terms of which are materially
altered, upon the occurrence of any of the transactions contemplated by the
Merger Agreement; provided however, that (x) the annual compensation of officers
employed by Reliance and Reliance Savings Bank as of July 1, 1998 may be
increased effective as of such date in a manner consistent with prior practice
of Reliance and Reliance Savings Bank, provided that the combined amount of the
annual increase put into effect for all such officers shall not exceed, in the
aggregate, 5% of the total amount paid to such officers for the year ended June
30, 1998, and (y) Reliance and Reliance Savings Bank may pay to their employees
year-end bonuses for the 1998 fiscal year in a manner and amount consistent with
prior practices of Reliance and Reliance Savings Bank; (vi) incur any
obligations or liabilities or make any capital expenditures except in the
ordinary course of business or make any equity investment or commitment to make
such an investment in real estate or in any real estate development project;
(vii) mortgage, pledge or subject to any material lien, charge, permit a
security interest on, or encumber any of its assets, properties or other rights;
(viii) transfer or lease any of its or their assets or property except in the
ordinary course of business, or close any banking office, or file any
application to relocate or terminate the operations of any of its offices; (ix)
transfer or grant any rights under any leases, licenses or agreements, other
than in the ordinary course of business; (x) other than with respect to loan
transactions (including, without limitation, letters of credit and purchase of
leases), and other than with respect to sales of real estate owned for less than
$25,000, make or enter into any transaction, contract or agreement or incur any
other commitment where the amount involved exceeds $50,000 or the term exceeds
one year; (xi) incur any indebtedness for borrowed money, assume, guarantee,
endorse or otherwise as an accommodation become responsible for the obligations
of any other individual, corporation or other entity, except for deposit
liabilities and except for indebtedness incurred for liquidity purposes in the
ordinary course of business; (xii) cancel or compromise any debt or claim which
has not previously been charged off other than in the ordinary course of
business; (xiii) enter into any transaction other than in the ordinary course of
business or enter into any new, or materially alter or expand any present, line
of business or change any of its methods of accounting; (xiv) take any action
which constitutes a breach or default of its obligations under the Merger
Agreement or cause any of the other conditions set forth in the Merger Agreement
to fail; (xv) make or commit to any loan over $150,000; (xvi) purchase or commit
to purchase any bulk loan servicing portfolio; (xvii) make any payment to any
director, officer, employee or independent contractor in connection with or as a
result of transactions contemplated by the Merger Agreement, or otherwise, which
is not deductible to Reliance or is not an ordinary business expense for travel,
meals or entertainment in connection with Reliance's business (exclusive of
payments of the expenses of Reliance's professional advisors); (xviii) take or
cause to be taken any action which would disqualify the Merger as a tax-free
reorganization under Section 368 of the Code; or (ix) fail to comply in any
material respect with any laws, regulations or governmental actions applicable
to it or to the conduct of its business.

St. Francis has agreed that it will: (i) conduct its business and
operate in accordance with prudent and sound banking and business practices;
(ii) use its best efforts to remain in good standing with all applicable banking
regulatory authorities; (iii) take all actions necessary to have the shares of
St. Francis Common Stock to be delivered in exchange for Reliance Common Stock
qualified or registered for offering and sale, or to identify and perfect an
exemption therefrom, under the federal securities laws and the securities or
"Blue Sky" laws of each jurisdiction within the United States in which
shareholders of Reliance reside; (iv) use all reasonable efforts to cause the
shares of St. Francis Common Stock to be issued pursuant to the Merger Agreement
to be approved for listing on The NASDAQ National Market System, subject to
official notice of issuance; (v) generally cause all internal, nonpublic
financial and business information obtained by it from Reliance which is
reasonably designated as confidential at the time of delivery to be treated
confidentially; (vi) file all necessary applications, notices or statements with
the appropriate regulatory agencies and governmental entities for approval of
the Merger and the transactions contemplated thereby; (vii) provide an
employment agreement for Ms. Carol A. Barnharst, which will retain her as
manager for the St. Francis office which is to serve customers formerly
maintaining accounts at Reliance; (viii) honor the present provisions of the
employment contract between Reliance and Mr. Allan T. Bach relating to the
termination of employment following a change in control (which shall be deemed
to have occurred upon consummation of the Merger); (ix) not take any action, or
agree to take any action which constitutes a material breach or default of St.
Francis' obligations under the Merger Agreement; (x) create an Advisory Board
comprised of members of the Board of Directors of Reliance to assist in the
integration of Reliance's customers and operations with those of St. Francis;
(xi) not to take or cause to be taken any action that would disqualify the
Merger as a tax-free reorganization under Section 368 of the Code; and (xii) in
the event of any threatened or actual claim, action, suit, proceeding or
investigation, civil, criminal or administrative, including any such claim,
action, suit, proceeding

-57-
<PAGE> 62

or investigation in which any individual who is now, or has been at any time
prior to the date of the Merger Agreement, or who becomes prior to the Effective
Time, a director or officer or employee of Reliance or its Subsidiaries (the
"Indemnified Parties"), is, or is threatened to be, made a party based on, or
arising out of, or pertaining to (A) the fact that he or she is or was a
director, officer or employee of the Reliance or its subsidiaries, or (B) the
Merger Agreement or any of the transactions contemplated thereby, whether
asserted or arising before or after the Effective Time), St. Francis will
cooperate and use reasonable efforts to defend against and respond thereto,
indemnifying and holding harmless, to the fullest extent permitted by law, each
such Indemnified Party against any losses, claims, damages, liabilities, costs,
expenses (including payment of reasonable attorney's fees and expenses and other
costs in advance of the final disposition of any claim, suit, proceeding or
investigation incurred by each Indemnified Party upon receipt of any undertaking
required by applicable law), judgments, fines and amounts paid in settlement in
connection with any such threatened or actual claim, action, suit, proceeding or
investigation, and in the event of any such threatened or actual claim, action,
suit, proceeding or investigation (whether asserted or arising before or after
the Effective Time).

AMENDMENT AND WAIVER

Prior to the Effective Time of the Merger, any condition of the Merger
Agreement may be waived by the party in whose favor the provision runs or may be
amended or modified by an agreement in writing approved by both parties;
provided, however, that after Reliance shareholder approval is obtained, no such
extension, waiver, amendment or modification may adversely affect the amount of
consideration to be received in the Merger by the Reliance shareholders.

TERMINATION

The Merger Agreement may be terminated and the Merger abandoned at any
time before the Effective Date, whether before or after approval by the
shareholders of Reliance: (a) by written agreement between St. Francis and
Reliance authorized by a majority of the entire board of directors of each; (b)
by either St. Francis or Reliance, if generally the other party has failed (i)
to perform and comply with, in all material respects, its agreements and
covenants under the Merger Agreement; and (ii) if such failure is not remedied
by the failing party within 30 days of receipt from the other of written notice
of such failure; (c) by either St. Francis or Reliance, if the Merger is not
consummated on or before February 28, 1999 (subject to extension to May 31,
1999, in the case of a protest to the Merger under the Community Reinvestment
Act), unless the delay is due to a breach by the party seeking to terminate; (d)
by either party, if the Merger Agreement is not approved by holders of Reliance
Common Stock; (e) by either party, if regulatory approvals are not obtained,
unless the failure to obtain approval is due to a breach by the party seeking to
terminate; (f) by St. Francis, if the St. Francis Average Stock Price is less
than $32.40; (g) by St. Francis or Reliance, upon receipt of notice of changes
to the other parties disclosure schedules as attached to the Merger Agreement if
the terminating party reasonably determines that such changes would have a
material adverse effect on the business of the other if the Merger were
consummated; (h) by Reliance if its Board of Directors determines in good faith
and in the exercise of reasonable judgment that a competing acquisition proposal
is more favorable to Reliance and Reliance shareholders; (i) by St. Francis, if
any person or group of persons other than St. Francis or its subsidiaries
acquires 25% or more of Reliance's Common Stock, consummates a merger,
consolidation, share exchange, business combination, or any other similar
transaction with Reliance, acquires more than 50% of the assets of Reliance
through sale, lease, exchange, pledge, mortgage or other form of transfer; or
(j) by St. Francis, if the Reliance Board fails to recommend approval of the
transaction to Reliance shareholders for any reason other than St. Francis'
material breach of representations, warranties, or covenants.

In the event of a valid termination of the Merger Agreement, the
obligations of the parties to the Merger Agreement shall terminate, and there
will be no liability on the part of either party except for (i) liability for
willful breach of the Merger Agreement, (ii) the termination fee, if applicable,
and (iii) certain expenses under various circumstances.

-58-
<PAGE> 63

MANAGEMENT AFTER THE MERGER

The directors and officers of St. Francis and St. Francis Bank
immediately prior to the Effective Time will continue as directors and officers
of those respective entities thereafter. Pursuant to the Merger Agreement, Ms.
Carol A. Barnharst will enter into a three-year employment agreement on the
Effective Time, whereby she will become a manager of the St. Francis Bank office
that will service the accounts of former Reliance Savings Bank customers. St.
Francis also has agreed to elect Mr. John T. Lynch to the Board of Directors of
St. Francis Bank. In addition, St. Francis will cause St. Francis Bank to create
an advisory board which will consist of all current members (other than Mr.
Lynch) of the Board of Directors of Reliance Savings Bank. See "--Interests of
Certain Persons In The Merger."

INTERESTS OF CERTAIN PERSONS IN THE MERGER

In considering the recommendation of the Reliance Board, shareholders
should be aware that certain members of Reliance's Board and management may be
deemed to have interests in the Merger in addition to their interests, if any,
as holders of Reliance Common Stock.

Severance Arrangement with Mr. Allan T. Bach. Pursuant to the Merger
Agreement, St. Francis will honor the provisions of the employment agreement
between Reliance Savings Bank and Mr. Allan T. Bach, President and Chief
Executive Officer of Reliance, relating to a termination of employment following
a change in control of Reliance, which shall be deemed to have occurred upon
completion of the Merger. Pursuant to Mr. Bach's employment agreement, upon
completion of the Merger, Mr. Bach shall receive severance pay for a 36-month
period, based upon his highest rate of base salary within the three years
preceding termination, plus one-twelfth of his total bonus and incentive
compensation based on his most recently completed calendar year of employment.
In addition, Mr. Bach is entitled to all retirement and other benefits in which
he was vested at the time of termination. St. Francis will maintain and provide
to Mr. Bach, during the 36-month period following termination (or the earlier
date on which Mr. Bach obtains full-time employment with another employer that
provides benefits similar to those described in the employment agreement), at no
cost to Mr. Bach, his continued participation in all group insurance, life
insurance, health and other accident, disability and other employee benefit
plans, programs and agreements, in which he was entitled to participate
immediately prior to termination, other than certain specified retirement and
deferred compensation plans, individual insurance policies or stock compensation
plans described in the next sentence. Mr. Bach also is entitled to receive, as
additional severance benefits, a benefit determined under each retirement and
deferred compensation plan or individual insurance policy maintained by Reliance
and its subsidiaries, determined as if Mr. Bach were fully vested under the plan
and had accumulated the additional years of credit service under the applicable
plan that he would have received had he continued in employment of Reliance or
its subsidiaries during the period in which he is receiving severance payments.

If the aggregated severance payments to which Mr. Bach is entitled
following the change in control would constitute "parachute payments" within the
meaning of Section 280G(b)(2) of the Code, the aggregate severance benefits
payable to Mr. Bach will be reduced to an amount equal to 2.99 times the average
annual compensation paid to Mr. Bach during the five calendar years immediately
preceding the year in which such change in control occurs. Under the terms of
his employment agreement, due to the operation of the limits of Section
280G(b)(2) of the Code, Mr. Bach will receive severance payments of $499,362.

Employment Agreement with Ms. Carol A. Barnharst. In connection with
the Merger, St. Francis Bank will enter into three-year employment agreement
with Ms. Carol A. Barnharst. The employment agreement is intended to ensure that
Ms. Barnharst will remain with St. Francis Bank following the Merger and that
she will be available to assist in integrating of the former Reliance office
into St. Francis Bank's operations and then to oversee ongoing operations and
marketing in the area formerly served by Reliance.

Under the employment agreement, which will become effective upon
completion of the Merger, the base salary for Ms. Barnharst will be $65,500,
the same amount as her current base salary from Reliance Savings Bank. Ms.
Barnharst's base salary may be increased by St. Francis Bank's Board of
Directors, but may not be reduced.

-59-
<PAGE> 64

In addition to base salary, the agreement provides for coverage under other St.
Francis Bank incentive compensation plans and for other benefits, including
participation in any group health, life, disability or similar insurance program
and in any pension, profit-sharing, employee stock ownership plan, deferred
compensation, 401(k) or other retirement plans maintained by St. Francis Bank.
The agreement may be terminated by St. Francis Bank upon death, disability or
retirement; for cause at any time; or in certain events specified by rules and
regulations of the OTS. In the event of termination of Ms. Barnharst's
employment by St. Francis Bank, she is entitled to severance pay (based on her
then applicable base salary and her bonus and incentive compensation paid or
vested for her most recently completed calendar year of employment) for the
remaining unexpired term her employment agreement, together with other
compensation and benefits in which she was vested at the termination date.
However, if the employment of Ms. Barnharst, pursuant to her employment
agreement with St. Francis Bank, is terminated on or before six months following
the effective date of the agreement, which is expected to be the closing date of
the Merger, (i) by her for any reason other than disability, retirement or
death, or (ii) by St. Francis or any of its subsidiaries for any reason other
than cause, disability, retirement or death, Ms. Barnharst will be entitled to
receive amounts and benefits that are not less than all amounts and benefits
which she would have received under her prior employment agreement with
Reliance Savings Bank (less amounts received previously under her employment
agreement with St. Francis Bank).

The agreement also provides for severance payments if Ms. Barnharst's
employment terminates following a change in control. Under the agreement, a
"Change in Control" is generally defined to include any change in control with
respect to St. Francis Bank or St. Francis which is required to be reported
under the federal securities laws, as well as (i) the acquisition by any person
of 25% or more of St. Francis' outstanding voting securities, or (ii) a change
in a majority of the directors of St. Francis during any two-year period without
the approval of at least two-thirds of the persons who were directors at the
beginning of such period. In the event of termination following a Change in
Control, Ms. Barnharst shall receive severance pay (based upon her average
annual compensation for the three years preceding termination) for the remaining
term of the employment agreement. In addition, if the aggregate severance
benefits following a Change in Control would constitute "parachute payments"
within the meaning of Section 280G(b)(2) of the Code, the severance benefits
payable to Ms. Barnharst will be reduced to an amount equal to the present value
of 2.99 times the average annual compensation paid to the executive during the
five calendar years immediately preceding the year in which such Change in
Control occurs. If total payments following a Change in Control were to
constitute excess parachute payments under Section 280G of the Code, it could
result in the imposition of an excise tax on the recipient and denial of an
income tax deduction to St. Francis Bank and St. Francis for such excess
amounts.

Reliance Stock Options. Pursuant to the Merger Agreement, the holders
of all outstanding and unexercised options to purchase shares of Reliance Common
Stock granted by Reliance under the Reliance Bancshares, Inc. 1997 Stock Option
Plan (the "Reliance Option Plan"), whether or not the options are then
exercisable under the terms of the Reliance Option Plan, will receive in
replacement of their options to purchase Reliance Common Stock either:

(a) cash in an amount equal to the excess of the Per Share Cash
Distribution over the exercise price of the option, multiplied
by the number of shares subject to such option; or

(b) in the case of option holders who, by reason of their
employment or other status with St. Francis Savings Bank after
consummation of the Merger, would be eligible to participate
in St. Francis' option plans, may elect to have their Reliance
options converted into options to purchase shares of St.
Francis Common Stock (rather than cash) in an amount and at a
price adjusted to reflect the per share consideration received
in the Merger by holders of Reliance Common Stock.

-60-
<PAGE> 65

Subject to the foregoing, each option to buy shares of Reliance Common Stock
will terminate upon consummation of the Merger. The determination of whether a
Reliance option will be converted into the right to receive cash or a substitute
St. Francis option will be made by each eligible option holder.

In April 1988, Mr. Allan T. Bach, Ms. Carol A. Barnharst, Mr. O.
William Held, Mr. John T. Lynch and Ms. Marjorie A. Spicuzza each were granted
options to purchase Reliance Common Stock with respect to 5,000 shares (at an
exercise price of $9.25 per share), which option grants are contingent upon
completion of the Merger ("Contingent Option Grants"). If the Merger is not
consummated, the recipients must forfeit the Contingent Option Grants.

As of October 31, 1998, directors and officers as a group held options
outstanding on _________ shares of Reliance Common Stock under the Reliance
Option Plan with an average exercise price of $_____. In connection with the
Merger, and assuming the St. Francis Average Stock Price is $________, the
executive officers and directors, consisting of Allan T. Bach, Carol A.
Barnharst, John T. Lynch, O. William Held, and Marjorie A. Spicuzza could
receive, if they choose to exchange their vested options (including the
Contingent Option Grants) for cash, $_______, $_______, $______, $______,
$______, $______ and $______, respectively. The Merger Agreement does not
restrict the exercisability, before the Merger, of options for Reliance Common
Stock, other than the Contingent Option Grants, that were granted under existing
Reliance benefit plans.

Shareholders of Reliance who have entered into the Voting Agreements
may not sell, assign, transfer or otherwise dispose of, or permit to be sold,
assigned, transferred or otherwise disposed of, any shares of Reliance Common
Stock owned of record or beneficially by such shareholder, whether such shares
of Reliance Common Stock are owned of record or beneficially by such shareholder
on the date of the Voting Agreement or are subsequently acquired, whether
pursuant to the exercise of stock options or otherwise, except (i) for transfers
by will or by operation of law (in which case the Voting Agreement would bind
the transferee), (ii) for sales, assignments, transfers or other dispositions
necessitated by hardship with the prior written consent of St. Francis, or (iii)
as St. Francis may otherwise agree in writing.

Retiree Medical Coverage. Following consummation of the Merger, St.
Francis will maintain post-retirement medical and health coverage no less
favorable than that maintained by Reliance prior to the Merger with respect to
former and current officers and employees, and current non-employee directors of
Reliance and Reliance Savings Bank, and their dependents, who satisfy the
requirements for coverage under the Reliance Post-Retirement Medical Plan (the
"Reliance Retiree Medical Coverage Program"), adopted by Reliance Savings Bank
in October 1983. Pursuant to the Reliance Retiree Medical Coverage Program,
eligible participants and their dependents receive supplemental medical,
hospital and dental insurance for life, so long as they are not employed by
another employer after retirement. As of the date of this Proxy
Statement/Prospectus, six individuals are eligible to participate in the
Reliance Retiree Medical Coverage Program, including Directors Lynch, Held and
Spicuzza, and Ms. Barnharst. Mr. Bach is not eligible to participate in the
Reliance Retiree Medical Coverage Program.

Advisory Board. Pursuant to the Merger Agreement, St. Francis will
create an advisory board to assist in, and advise with respect to, the
integration of Reliance's operations and customer base with those of St.
Francis. The advisory board will consist of all current members of the Board of
Directors of Reliance Savings Bank, other than Director John T. Lynch, all of
whom will receive an annual retainer of $10,000. The Advisory Board is initially
scheduled to meet with the same frequency as the St. Francis Bank Board. In
addition, St. Francis intends to designate Ms. Carol A. Barnharst as the
Advisory Board's liaison for purposes of reporting to the Board of Directors of
St. Francis Bank. The Advisory Board will remain in existence for at least three
years following the Effective Date, and thereafter as may be determined by St.
Francis. See "Compensation of Executive Officers and Directors" for a
description of the compensation arrangements with members of the Board of
Directors of Reliance Savings Bank.

Appointment to St. Francis Bank Board of Directors. The Merger
Agreement provides that as soon as practicable following the Bank Merger, St.
Francis will appoint Mr. John T. Lynch to the Board of Directors of St. Francis
Bank.

-61-
<PAGE> 66

EFFECT ON RELIANCE EMPLOYEE BENEFIT PLANS

General. Each person employed by Reliance prior to the Effective Date
who remains an employee of St. Francis following the Effective Date (each, a
"Continued Employee") shall be entitled to participate on the same basis as
similarly situated employees of St. Francis in whatever employee benefit plans
are in effect for employees of St. Francis (the "St. Francis Plans"). Such
participation shall be subject to the terms of the St. Francis Plans in effect
from time to time. Each St. Francis Plan, other than St. Francis' qualified
retirement plans, shall recognize credit for all purposes for each Continued
Employee's term of service with Reliance. Qualified retirement plans will
recognize service with Reliance for purposes of determination of participation
rights and vesting rights but not for purposes of benefit accrual.

RRP. Reliance Savings Bank maintains the RRP for certain executive
officers of Reliance. Unvested shares of Reliance Common Stock awarded pursuant
to the RRP will become vested upon the Effective Date of the Merger. Such shares
of Reliance Common Stock will be converted into the right to receive the Per
Share Cash Distribution or Per Share Stock Distribution in the same manner as
all other outstanding shares of Reliance Common Stock. In addition, in April
1998, Mr. Bach and Ms. Barnharst each were granted RRP awards with respect to
10,257 shares, which awards are contingent upon completion of the Merger (the
"Contingent RRP Awards"). If the Merger is not consummated, Mr. Bach and Ms.
Barnharst must forfeit the Contingent RRP awards.

Of the 59,436 RRP shares granted to Mr. Bach, 32,786 have vested and
26,650 will vest as a result of the Merger (including the Contingent RRP
Awards). Of the 43,057 RRP shares granted to Ms. Barnharst, 21,867 have vested
and 21,190 will vest as a result of the Merger (including the Contingent RRP
Awards). Assuming the per share fair value of the RRP shares upon vesting is
$________ (the "St. Francis Average Stock Price" as of December __, 1998), the
approximate economic effect of the accelerated vesting of the Reliance Common
Stock awarded to the certain executives of Reliance would be as follows: Mr.
Bach, $_____, and Ms. Barnharst, $_____. The RRP will be terminated as soon as
practicable after the Effective Time.

Reliance Option Plan. The Merger Agreement provides that St. Francis
will assume Reliance's obligations under the Reliance Option Plan. Holders of
options granted under the Reliance Option Plan to buy shares of Reliance Common
Stock that have not been exercised before the Effective Date, whether or not
such options are exercisable, will be entitled to receive, at the option
holder's election, (i) cash in an amount equal to the difference between the Per
Share Cash Distribution and the exercise price of such option, whereupon such
option shall terminate, or (ii) in replacement of their options to purchase
Reliance Common Stock, an option to purchase St. Francis Common Stock on the
same terms as the option to purchase shares of Reliance Common Stock, in an
amount and at a price appropriately adjusted to reflect the Per Share Stock
Consideration received in the Merger by holders of Reliance Common Stock.

As of October 31, 1998, directors and executive officers as a group
held options outstanding on _____ shares of Reliance Common Stock under the
Reliance Option Plan with an average exercise price of $_____. See "--Interests
of Certain Persons in the Merger" for a further discussion of the treatment of
Reliance optionees. The Merger Agreement does not restrict the exercisability,
before the Merger, of options for shares of Reliance Common Stock that were
granted under the Reliance Option Plan. Also, the Merger Agreement does not
restrict the ability of an option holder to sell, before the Merger, shares of
Reliance Common Stock obtained after exercise of an option (unless the
individual is a party to one of the Voting Agreements).

Reliance ESOP and Reliance Pension Plan. Reliance maintains two
qualified plans for eligible employees of Reliance, the Reliance Savings Bank
Employee Stock Ownership Plan (the "Reliance ESOP") and the Financial
Institutions Retirement Fund ("the Reliance Pension Plan"). As of the Effective
Date, the Reliance ESOP and the Reliance Pension Plan will be terminated.
Participants in the Reliance ESOP and the Reliance Pension Plan will begin
participation in the St. Francis qualified plans as of the Effective Date of the
Merger. The participation of Continued Employees in the St. Francis qualified
plans will be on the same basis as similarly situated employees of St. Francis.
For purposes of vesting and eligibility, St. Francis' qualified plans will
recognize credit for service with Reliance.

-62-
<PAGE> 67

When it was established, the Reliance ESOP obtained a loan from
Reliance for the purpose of acquiring shares of Reliance Common Stock. As of
October 31 1998, the Reliance ESOP Trust held ________ shares of Reliance Common
Stock. As of that date, a total of _______ of such shares were allocated to the
accounts of participating employees and the remaining ________ shares were
unallocated and pledged as collateral security for the aforementioned loan
obtained to finance their purchase. On the Effective Date, all allocated and
unallocated shares of Reliance Common Stock held by the Reliance ESOP will be
converted into the right to receive the Per Share Cash Distribution. The Per
Share Cash Distribution received by the Reliance ESOP in the Merger with respect
to unallocated shares of Reliance Common Stock will be applied to prepay the
remainder of the Reliance ESOP's outstanding loan in the principal amount of
$________. Thereafter, the obligation of Reliance to make further contributions
to the Reliance ESOP for purposes of debt amortization would be extinguished,
and any Per Share Cash Distribution with respect to the unallocated shares
remaining after the prepayment would be allocated among the ESOP accounts of
eligible Reliance ESOP participants. All ESOP participants shall fully vest in
their ESOP accounts as of the Effective Time.

Non-Qualified Deferred Retirement Plan for Directors. St. Francis shall
assume the obligations of Reliance under the Reliance Savings Bank Non-Qualified
Deferred Retirement Plan for Directors (the "Directors' Retirement Plan") and
shall continue to perform and satisfy the terms and obligations thereof,
following the Effective Time of the Merger. Pursuant to the Directors'
Retirement Plan, directors can elect to defer receipt of all or any portion of
their directors' fees payable in each calendar year (the "Deferred Benefit"). In
addition, each director also is eligible to receive a "Service Credit Benefit"
upon retirement from active service on the Reliance Board. Each director
receives one serve credit for each full year of service on the Reliance Board,
with a maximum of five service credits. The "Service Credit Benefit" for each
director equals $10,000 for each service credit received. Directors Bach, Held,
Lynch and Barnharst each have accumulated four years of service under the
Deferred Retirement Plan. Director Spicuzza does not participate in the Deferred
Retirement Plan. Pursuant to the Merger Agreement, the transactions contemplated
by the Merger Agreement constitute a change of control of Reliance under
the Directors' Retirement Plan, and therefore, the interests of each of
Directors Bach, Held, Lynch and Barnharst with respect to their four years of
Service Credit Benefits ($40,000 each) shall be vested in full as of the
Effective Time of the Merger. To date, none of the participants in the
Directors' Retirement Plan have elected to defer directors' fees and
accordingly, no Deferred Benefits have accrued thereunder. Reliance Savings Bank
owns a life insurance policy on each participating director representing his or
her interest under the Directors' Retirement Plan.

CERTAIN FEDERAL INCOME TAX CONSEQUENCES

The following is a summary description of the material federal income
tax consequences of the Merger and the Bank Merger. This summary is not a
complete description of all of the consequences of the Merger and the Bank
Merger and, in particular, does not address federal income tax considerations
that may affect the treatment of certain holders, such as financial
institutions, broker-dealers, life insurance companies, tax-exempt
organizations, investment companies, foreign taxpayers, holders which, on the
Effective Date of the Merger already own St. Francis Common Stock, individuals
who acquired Reliance Common Stock pursuant to employee stock options or
otherwise as compensation, and other special status taxpayers. Holders should be
aware that the federal income tax rate for individuals on long-term capital
gains may be significantly lower than the rate imposed on ordinary income or
short-term capital gain. No information is provided herein with respect to the
tax consequences of the Merger to any holder or party under applicable foreign,
state or local laws. Consequently, each Reliance holder is advised to consult a
tax advisor as to the specific tax consequences of the Merger to that holder.

General. St. Francis has received an opinion from Michael Best & Friedrich
LLP to the effect that (i) the Merger will be treated for federal income tax
purposes as a reorganization within the meaning of Section 368(a) of the Code,
and St. Francis and Reliance each will be a party to that reorganization within
the meaning of Section 368(b) of the Code, and (ii) the Bank Merger will be
treated for federal income tax purposes as a reorganization within the meaning
of Section 368(a) of the Code and Reliance Savings Bank and St. Francis Savings
Bank will each be a party to that reorganization within the meaning of Section
368(b) of the Code. The opinion of Michael Best & Friedrich LLP is based upon
the Code, regulations now in effect thereunder, current administrative practice
and judicial authority, and certain factual representations, and is subject to
various assumptions and qualifications. The opinion also is based on certain
factual representations made by St. Francis, Reliance, St. Francis Savings Bank
and Reliance Savings Bank (including representations concerning the satisfaction
of "continuity of shareholder interest" and "continuity of business enterprise"
requirements) which legal counsel does not intend to investigate or verify. A
ruling from the Internal Revenue Service (the "IRS") concerning the tax
consequences of the Merger will not be requested. Unlike a ruling from the IRS,
an opinion of counsel is not binding on the IRS and there can be no assurance,
and none is

-63-
<PAGE> 68

hereby given, that the IRS will not take a position contrary to counsel's
opinion or that the opinion will be upheld if challenged by the IRS.

The following discussion constitutes the opinion of Michael Best &
Friedrich LLP as to the material income tax consequences of the Merger and the
Bank Merger.

Tax Treatment to St. Francis, Reliance, St. Francis Savings Bank and
Reliance Savings Bank. No gain or loss will be recognized by St. Francis,
Reliance, St. Francis Savings Bank and Reliance Savings Bank solely as a result
of the Merger and the Bank Merger.

Receipt of St. Francis Common Stock for Reliance Common Stock. No gain
or loss will be recognized by a holder who receives solely shares of St. Francis
Common Stock (except for cash received in lieu of fractional shares, as
discussed below) in exchange for all of his or her shares of Reliance Common
Stock. The tax basis of the shares of St. Francis Common Stock received by a
holder in such exchange will be equal (except for the basis attributable to any
fractional shares of St. Francis Common Stock, as discussed below) to the basis
of the Reliance Common Stock surrendered in exchange therefor. The holding
period of the St. Francis Common Stock received will include the holding period
of shares of Reliance Common Stock surrendered in exchange therefor, provided
that such shares were held as capital assets on the Effective Date of the
Merger.

Receipt of St. Francis Common Stock and Cash in Exchange for Reliance
Common Stock. A holder who receives a combination of St. Francis Common Stock
and cash in exchange for his or her Reliance Common Stock will not be permitted
to recognize any loss for federal income tax purposes. Such a holder will
recognize gain, if any, equal to the lesser of (i) the amount of cash received,
or (ii) the amount of gain "realized" in the transaction. The amount of gain a
holder "realizes" will equal the amount by which (i) the cash plus the fair
market value on the Effective Date of the Merger of the St. Francis Common Stock
received exceeds (ii) the holders' basis in the Reliance Common Stock to be
surrendered in the exchange therefor. Any recognized gain could be taxed as a
capital gain or a dividend, as described below. The aggregate tax basis of the
shares of St. Francis Common Stock received by such holder will be the same as
the aggregate basis of the shares of Reliance Common Stock surrendered in
exchange therefor, adjusted as provided in Section 358(a) of the Code for the
cash received in exchange for such shares of Reliance Common Stock. The holding
period for shares of St. Francis Common Stock received in the Merger will be the
same as the holding period for Reliance Common Stock surrendered in exchange
therefor, provided that such shares were held as capital assets of the holder on
the Effective Date of the Merger.

A holder's federal income tax consequences also will depend on whether
his or her shares of Reliance Common Stock were purchased at different times at
different prices. If they were, the holder could realize gain with respect to
some of the shares of Reliance Common Stock and loss with respect to other
shares. Such holder would have to recognize such gain to the extent such holder
receives cash with respect to those shares in which the holder's adjusted tax
basis is less than the amount of cash plus the fair market value on the
Effective Date of the Merger of the St. Francis Common Stock received, but could
not recognize loss with respect to those shares in which the holder's adjusted
tax basis is greater than the amount of cash plus the fair market value on the
Effective Date of the Merger of the St. Francis Common Stock received. Any
disallowed loss would be included in the adjusted basis of the St. Francis
Common Stock. Such a holder is urged to consult his or her own tax advisor
regarding the tax consequences of the Merger on that holder.

Possible Dividend Treatment. In certain circumstances, a holder who
receives cash or a combination of cash and St. Francis Common Stock in the
Merger may receive ordinary dividend, rather than capital gain, treatment on all
or a portion of the gain recognized by that holder. The determination of whether
a cash payment has the effect of a dividend distribution is made by treating a
Reliance shareholder as if such holder had received solely St. Francis Common
Stock in the Merger, and St. Francis immediately thereafter redeemed a number of
shares of St. Francis Common Stock equal in value to the cash consideration
received. This hypothetical redemption is then tested under the provisions and
limitations of Section 302 of the Code to determine whether the holder's change
in ownership in St. Francis results in a dividend distribution. For purposes of
this hypothetical Section 302 redemption analysis, shares of St. Francis Common
Stock held by certain members of the holder's family or certain entities in
which the holder has an ownership or beneficial interest and certain stock
options may be aggregated with the holder's shares of St. Francis Common Stock.
The amount of the cash payment that may be treated as a dividend is limited to
the

-64-
<PAGE> 69

holder's ratable share of the accumulated earnings and profits of Reliance (or
possibly of the total earnings and profits of Reliance and St. Francis) on the
Effective Date of the Merger. Any gain that is not treated as a dividend will be
taxed as a capital gain, provided that the holder's shares were held as capital
assets on the Effective Date of the Merger. Because the determination of whether
a cash payment will be treated as having the effect of a dividend will depend in
part upon the facts and circumstances of each holder, holders are advised to
consult their own tax advisors regarding the tax treatment of cash received in
the Merger.

Receipt of Cash in Exchange for Reliance Common Stock. A holder who
receives solely cash in exchange for all of his or her shares of Reliance Common
Stock, whether pursuant to exercise of dissenters' rights or otherwise (and,
unless such shares also are exchanged solely for cash, does not own any Reliance
Common Stock constructively under the circumstances referred to above under "--
Certain Federal Income Tax Consequences -- Possible Dividend Treatment"), and
owns no St. Francis Common Stock actually or constructively, will recognize gain
or loss for federal income tax purposes equal to the difference between the cash
received and such holder's tax basis in the Reliance Common Stock surrendered in
exchange therefor. Such gain or loss will be a capital gain or loss, provided
that such shares were held as capital assets of the holder on the Effective Date
of the Merger. Such gain or loss will be long-term capital gain or loss if the
holder's holding period is more than one year on the Effective Date of the
Merger. The Code contains limitations on the extent to which a holder may deduct
capital losses from ordinary income. It is not clear whether the above treatment
would apply to a holder who receives solely cash for his or her shares but who
owns constructively shares of St. Francis Common Stock, or owns constructively
shares of Reliance Common Stock which are not exchanged solely for cash, or
whether instead the treatment referred to above under "-- Certain Federal Income
Tax Consequences -- Possible Dividend Treatment" would apply. A holder in this
situation is advised to consult his or her own tax advisor regarding the tax
consequences to the holder.

Cash in Lieu of Fractional Shares. A holder who holds Reliance Common
Stock as a capital asset and who receives in the Merger, in exchange for such
stock, solely St. Francis Common Stock and cash in lieu of a fractional share
interest in St. Francis Common Stock will be treated as having received such
fraction of a share of St. Francis Common Stock and then as having received cash
in redemption by St. Francis of the fractional share interest. Under the IRS's
present advance ruling position, since the cash is being distributed in lieu of
factional shares solely for the purpose of saving St. Francis the expense and
inconvenience of issuing and transferring fractional shares, and is not
separately bargained-for consideration, the cash received will be treated as
having been received in part or full payment in exchange for the fractional
share of stock redeemed, and as capital gain or loss, not as a dividend.

Backup Withholding; Information Reporting. The cash payments due a
holder upon the exchange of such Reliance Common Stock pursuant to the Merger
(other than certain exempt persons or entities) will be subject to "backup
withholding" for federal income tax purposes unless certain requirements are
met. St. Francis or a third party paying agent, as the case may be, must
withhold 31% of the cash payments to a holder, unless such holder (i) is a
corporation or comes within certain other exempt categories and, when required,
demonstrates this fact, or (ii) provides St. Francis or a third party paying
agent, as the case may be, with his or her taxpayer identification number and
completes a form in which he or she certifies that he or she has not been
notified by the IRS that he or she is subject to backup withholding as a result
of a failure to report interest and dividends. The taxpayer identification
number of an individual is his or her Social Security number. Any amount paid as
backup withholding will be credited against the holder's federal income tax
liability. Holders who receive St. Francis Common Stock also must comply with
the information reporting requirements of the Treasury regulations under Section
368 of the Code. Appropriate documentation for the foregoing purposes will be
provided to holders with the Election Forms that will be sent to them by the
Exchange Agent.

All of the foregoing are subject to change (which change could be
retroactive) and any such change could affect the continuing validity of this
discussion. Since the federal income tax consequences of the Merger to a holder
of Reliance Common Stock depend to a great extent on whether he or she receives
St. Francis Common Stock or cash, it is important that each holder of Reliance
Common Stock return the Election Form so that it is received before the Election
Deadline.

-65-
<PAGE> 70

ACCOUNTING TREATMENT

St. Francis intends to treat the Merger as a "purchase" under GAAP.
Under the purchase method of accounting, the assets and liabilities of Reliance
will be, as of the Effective Date, recorded at their respective fair values and
added to those of St. Francis. The expected excess of the consideration paid by
St. Francis over the fair value of Reliance's assets and liabilities will be
recorded as goodwill.

NASDAQ LISTING

The shares of St. Francis Common Stock are listed on the NASDAQ
National Market System. St. Francis has agreed in the Merger Agreement to use
its best efforts to assure that the shares of St. Francis Common Stock to be
issued pursuant to the Merger Agreement be authorized for listing on the NASDAQ
National Market System. An application has been filed by St. Francis for listing
the shares of St. Francis Common Stock issuable pursuant to the Merger Agreement
on the NASDAQ National Market System.

EXPENSES

Except as set forth below, whether or not the Merger is consummated,
all expenses incurred in connection with the Merger Agreement shall be paid by
the party incurring such expense. Expenses incurred in connection with the
printing of the Registration Statement and this Proxy Statement/Prospectus and
the cost of filing the Registration Statement with the SEC and the listing of
additional shares of St. Francis Common Stock with NASDAQ shall be shared
equally by St. Francis and Reliance. If the Merger Agreement is terminated by
one party because of another party's breach of a representation, warranty or
covenant or because of the discovery of an adverse condition with respect to the
other party, then the breaching party or the party with respect to which a
material adverse condition was discovered shall promptly pay its own transaction
expenses and the other party's transaction expenses; provided, however, that in
no event will Reliance be required to reimburse St. Francis for its fees and
expenses in excess of $80,000, nor will St. Francis be required to reimburse
Reliance for its fees and expenses in excess of $80,000.

VOTING AGREEMENTS

As an inducement to St. Francis to enter into the Merger Agreement, all
of the directors and executive officers of Reliance entered into voting
agreements (the "Voting Agreements") to vote the shares of Reliance Common Stock
beneficially owned by them in favor of the Merger. The directors and executive
officers who signed Voting Agreements owned or controlled, as of October 31,
1998, ________ shares, representing ___% of the outstanding shares of Reliance
Common Stock.

The executive officers and directors of Reliance who have entered into
the Voting Agreements may not, pursuant to the Voting Agreements, sell, assign,
transfer or otherwise dispose of, or permit to be sold, assigned, transferred or
otherwise disposed of, any shares of Reliance Common Stock owned of record or
beneficially by such shareholder, whether such shares of Reliance Common Stock
are owned of record or beneficially by such shareholder on the date of the
Voting Agreement or are subsequently acquired, whether pursuant to the exercise
of stock options or otherwise, except (i) for transfers by will or by operation
of law (in which case the Voting Agreement would bind the transferee), (ii) for
sales, assignments, transfers or other dispositions necessitated by hardship
with the prior written consent of St. Francis, or (iii) as St. Francis may
otherwise agree in writing.

TERMINATION FEE ARRANGEMENTS

Pursuant to the Merger Agreement, Reliance has agreed to pay St.
Francis a fee of $875,000 (i) if Reliance terminates the Merger Agreement as the
result of a good faith determination by its Board of Directors that a different
acquisition proposal is more favorable to Reliance shareholders than the
transactions contemplated by the Merger Agreement, (ii) if St. Francis
terminates the Merger Agreement as the result of a "Company Purchase Event" (as
defined below), (iii) the Merger is not consummated as a result of a material
breach of Merger Agreement obligations by Reliance or Reliance Savings Bank, or
(iv) a "Company Purchase Event" occurs at any time within 12 months of
termination of the Merger Agreement where termination has occurred (A) by reason
of Reliance having failed to

-66-
<PAGE> 71

perform and comply in all material respects with its agreements and covenants
under the Merger Agreement and not having remedied such failure upon 30 days
notice from St. Francis, (B) following receipt of notice by St. Francis due to
changes to Reliance Disclosure Statements under the Merger Agreement, which
changes St. Francis reasonably determines would have a material adverse impact
on the business of Reliance, or (C) following a failure of the shareholders of
Reliance to have duly approved confirmed and ratified the Merger Agreement or a
termination by Reliance as a result of the parties having failed to obtain the
necessary regulatory approvals. The term "Company Purchase Event" means any of
the following events, or Reliance or Reliance Savings Bank entering into any
agreement relating to any of the following: (i) the acquisition by any person or
group of persons, as defined in Section 13(d) of the Exchange Act, other than
St. Francis and its affiliates, of beneficial ownership of 25% or more of
Reliance Common Stock; (ii) a merger, consolidation, share exchange, business
combination or similar transaction involving Reliance or Reliance Savings Bank,
other than with St. Francis and its affiliates; (iii) any sale, lease, exchange,
mortgage, pledge, transfer or other disposition of 50% or more of the assets of
Reliance or Reliance Savings Bank, other than to St. Francis or its affiliates;
or (iv) any failure by the Reliance Board to recommend approval of the Merger to
Reliance shareholders for any reason (including a failure based upon a good
faith determination by the Reliance Board that another person (as defined in
Section 13(d) of the Exchange Act) has made an acquisition proposal more
favorable to Reliance shareholders than the transaction contemplated under the
Merger Agreement) other than a material breach by St. Francis of its
representations, warranties or covenants under the Merger Agreement.

Payment of the termination fee by Reliance will relieve it of any claim
for damages or other remedy by St. Francis; provided that under certain
circumstances specified in the Merger Agreement, a party may be entitled to
reimbursement of up to $80,000 of transaction-related expenses if the other
party's actions result in termination of the Merger Agreement.

RESALES OF ST. FRANCIS COMMON STOCK

The shares of St. Francis Common Stock to be issued in the Merger will
be registered under the Securities Act and will be freely transferable under the
Securities Act, except for shares issued to any Reliance shareholder who is an
"affiliate" of Reliance for purposes of Rule 145 under the Securities Act.
Affiliates may not sell their shares of St. Francis Common Stock acquired in
connection with the Merger except pursuant to an effective registration
statement under the Securities Act covering such shares or in compliance with
Rule 145 or another applicable exemption from the registration requirements of
the Securities Act. This Proxy Statement/Prospectus does not cover any resales
of shares of St. Francis Common Stock received by persons who may be deemed to
be affiliates of Reliance. Persons who may be deemed to be affiliates of
Reliance generally include individuals or entities that control, are controlled
by or are under common control with Reliance, and may include certain officers
and directors as well as principal shareholders of Reliance.

Reliance has agreed in the Merger Agreement to use its best efforts to
cause each person who is an affiliate (for purposes of Rule 145 of the
Securities Act) of such party to deliver to St. Francis a written agreement
intended to ensure compliance with the Securities Act. Certificates surrendered
for exchange by an "affiliate" of Reliance will not be exchanged for
certificates representing shares of St. Francis Common Stock until St. Francis
has received such an agreement from such person.

NO APPRAISAL OR DISSENTERS' RIGHTS

Under the WBCL, holders of shares of a Wisconsin corporation quoted on
the NASDAQ Small-Cap Market on the record date for a meeting at which
shareholders are to vote on a merger are not entitled to appraisal or
dissenters' rights. Shares of Reliance Common Stock were quoted on the NASDAQ
Small-Cap Market on the Voting Record Date. Therefore, holders of Reliance
Common Stock are not entitled to dissenters' rights in connection with the
Merger.

-67-
<PAGE> 72

DESCRIPTION OF ST. FRANCIS CAPITAL STOCK

The following summary of certain provisions of the Articles of
Incorporation of St. Francis (the "St. Francis Articles") and the Bylaws of St.
Francis (the "St. Francis Bylaws"), does not purport to be complete and is
qualified in its entirety by reference to such instruments, each of which is
incorporated by reference to the Registration Statement. See "Available
Information" and "Incorporation of Certain Information by Reference."

GENERAL

St. Francis is authorized to issue 12,000,000 shares of St. Francis
Common Stock and 6,000,000 shares of preferred stock, $0.01 par value per share
("St. Francis Preferred Stock"). As of December __, 1998, there were __________
shares of St. Francis Common Stock outstanding. As of the date of this Proxy
Statement/Prospectus, no shares of St. Francis Preferred Stock or any class or
series thereof were issued and outstanding; however, shares of St. Francis
Preferred Stock have been designated as St. Francis Series A Junior
Participating Preferred Stock pursuant to St. Francis' shareholder rights plan
(see "Rights Plan"). St. Francis Common Stock is listed for trading on the
NASDAQ National Market System under the symbol "STFR." Each share of St. Francis
Common Stock has the same relative rights and is identical in all respects with
each other share of St. Francis Common Stock. Upon the issuance of St. Francis
Common Stock in connection with the terms of the Merger, all such shares will be
duly authorized, fully paid and nonassessable, subject to a limitation contained
in Section 180.0622 of the WBCL, as judicially interpreted, which provides that
shareholders of corporations such as St. Francis may be personally liable for
all debts owing to employees of the corporation for services performed for such
corporation for up to six months' services in any one case, but not in an amount
greater than the consideration paid for such shares.

ST. FRANCIS COMMON STOCK

Dividends. Subject to the prior rights of holders of any class or
series of St. Francis Preferred Stock, the holders of shares of St. Francis
Common Stock are entitled to such dividends as the St. Francis Board may declare
out of funds legally available therefor. The payment of dividends by St. Francis
is subject to limitations which are imposed by law and applicable regulations.

Voting Rights. Each holder of shares of St. Francis Common Stock has
one vote for each share held on all matters voted upon by shareholders, and
there are no cumulative voting rights in elections of directors. For a
description of certain laws which may reduce a shareholder's voting rights under
certain circumstances, see "--Changes in Control."

Preemptive Rights. The holders of shares of St. Francis Common Stock
are not entitled to preemptive rights with respect to any securities which may
be issued by St. Francis in the future. Therefore, holders of shares of St.
Francis Common Stock may be subject to dilution in the event St. Francis issues
additional shares of St. Francis Common Stock.

Issuance of Stock. The St. Francis Articles authorize the St. Francis
Board to issue authorized shares of St. Francis Common Stock without shareholder
approval, except as otherwise provided by the WBCL or other law, rule or
regulation.

Liquidation Rights. In the event of liquidation, dissolution or winding
up of St. Francis, whether voluntary or involuntary, the holders of St. Francis
Common Stock will be entitled to share ratably in any of its assets or funds
that are available for distribution to its shareholders after the satisfaction
of its liabilities (or after adequate provision is made therefor). If shares of
St. Francis Preferred Stock are issued, the holders thereof may have a priority
over the holders of St. Francis Common Stock in the event of liquidation or
dissolution.

-68-
<PAGE> 73

ST. FRANCIS PREFERRED STOCK

Pursuant to the St. Francis Articles, the St. Francis Board may,
without further action of St. Francis shareholders, (i) issue one or more new
classes or series of the authorized shares of St. Francis Preferred Stock, (ii)
fix the number of shares constituting any such new classes or series, and (iii)
fix the preferences, limitations and any other relative rights of the St.
Francis Preferred Stock or any class or series thereof. If issued, the St.
Francis Preferred Stock may be convertible into St. Francis Common Stock and may
rank prior to St. Francis Common Stock as to dividend rights, liquidation
preferences, or both. Accordingly, the issuance of St. Francis Preferred Stock
could adversely affect the rights of holders of St. Francis Common Stock. Except
for the designation of St. Francis Series A Junior Participating Preferred
Stock, $0.01 par value per share ("Series A Preferred Stock"), pursuant to St.
Francis' Rights Plan described below, the St. Francis Board has not acted to
designate or issue any shares of St. Francis Preferred Stock.

RIGHTS PLAN

On September 25, 1997, the St. Francis Board adopted a shareholders'
rights plan (the "Rights Plan"). Under the terms of the Rights Plan, the St.
Francis Board declared a dividend of one preferred share purchase-right (a
"Right") for each outstanding share of St. Francis Common Stock. Upon becoming
exercisable, each Right entitles shareholders to buy one one-hundredth of a
share of St. Francis' Series A Preferred Stock at an exercise price of $150 per
share. Rights do not become exercisable until eleven business days after any
person or group has acquired, commenced, or announced its intention to commence
a tender or exchange offer to acquire 15% or more of outstanding shares of St.
Francis Common Stock, or in the event a person or group owning 10% or more of
outstanding shares of St. Francis Common Stock is deemed to be "adverse" to St.
Francis. If the Rights become exercisable, holders of each Right, other than the
acquiror, upon payment of the exercise price, will have the right to purchase
shares of St. Francis Common Stock (in lieu of Series A Preferred Stock) having
a value equal to two times the exercise price. If St. Francis is acquired in a
merger, share exchange or other business combination or 50% or more of its
consolidated assets or earning power are sold, Rights holders, other than the
acquiring or adverse person or group, will be entitled to purchase the
acquiror's shares at a similar discount. If the rights become exercisable, St.
Francis may also exchange Rights, other than those held by the acquiring or
adverse person or group, in whole or in part, at an exchange ratio of one share
of St. Francis Common Stock per Right held. Rights are redeemable by St. Francis
at any time until they are exercisable at the exchange rate of $.01 per Right.
Issuance of the Rights has no immediate dilutive effect, does not currently
affect reported earnings per share, is not taxable to St. Francis or its
shareholders, and will not change the way in which St. Francis' shares are
traded. The Rights expire in ten years. See "Incorporation of Certain
Information by Reference."

CHANGES IN CONTROL

Acquisitions of control of St. Francis and St. Francis Bank are subject
to various federal and state statutory regulatory restrictions. In addition to
these restrictions, certain provisions of the St. Francis Articles and St.
Francis Bylaws and the Rights Plan may have the effect of preventing,
discouraging or delaying a change in control of St. Francis.

Regulatory Restrictions. Acquisitions of 10% or more of any class of
equity security of St. Francis generally shall be subject to prior approval of
the OTS under the Home Owners' Loan Act of 1933, as amended ("HOLA"), which
generally requires all persons seeking to obtain control of a savings bank
indirectly through its holding company to obtain regulatory approval prior to
obtaining control. "Control" for this purpose generally is defined as the power,
directly or indirectly, to direct the management or policies of the institution
or to vote 25% or more of any class of voting securities of the institution.
Under OTS regulations, persons who (i) acquire the power to vote 10% or more of
any class of voting securities (or more than 25% of any class of nonvoting
stock) of an institution, and (ii) are subject to any one of eight "control
factors," are presumed to be in control and must obtain OTS approval prior to
acquiring control unless the presumption is rebutted. Under OTS regulations, a
person also shall be deemed, subject to rebuttal, to have acquired control of a
savings bank if the acquiror, directly or indirectly, or acting in concert with
one or more persons, holds any combination of voting stock and revocable and/or
irrevocable proxies representing more than 25% of any class of voting stock of a
savings bank, excluding proxies held in connection with a solicitation by, or in
opposition to, a solicitation on behalf of management of a savings bank, but
including a solicitation in connection with any election of directors, and such
proxies would enable the acquiror to (i) elect one-third or more of a savings
bank's board of directors, (ii) cause the savings bank's shareholders to approve
the

-69-
<PAGE> 74

acquisition or corporate reorganization of the savings bank, or (iii) exert a
continuing influence on a material aspect of the business operations of a
savings bank. The OTS is specifically empowered to disapprove an acquisition of
control if it finds, among other reasons, that (i) the acquisition would
substantially lessen competition (ii) the financial condition of the acquiring
persons might jeopardize the savings bank or depositors or (iii) the competency,
experience or integrity of the acquiring person indicates that it would not be
in the best interest of the depositors, the institution or the public to permit
the acquisition of control by such person.

Authorized but Unissued Shares of Capital Stock. The St. Francis Board
has the authority to issue shares of St. Francis Preferred Stock, in any class
or series with such rights and privileges, including voting rights, and
additional shares of St. Francis Common Stock. Except as otherwise required to
approve the transaction in which the additional shares are issued, shareholder
approval generally would not be required for the issuance of these shares.
Depending on the circumstances, however, shareholder approval may be required
pursuant to the requirements for continued quotation of shares of St. Francis
Common Stock on the NASDAQ National Market System or the requirements of any
exchange on which shares of St. Francis Common Stock may be listed.

One of the effects of the existence of unissued and unreserved shares
of capital stock may be to enable the St. Francis Board to render more difficult
or to discourage an attempt to obtain control of St. Francis by means of a
merger, tender offer, proxy context or otherwise, and thereby to protect the
continuity of St. Francis' management. If, in the due exercise of its fiduciary
obligations, for example, the St. Francis Board were to determine that a
takeover proposal was not in St. Francis' best interests, such shares could be
issued by the St. Francis Board without shareholder approval in one or more
private placements or other transactions that might prevent or render more
difficult or costly the completion of the takeover transaction by diluting the
voting or other rights of the proposed acquiror or insurgent shareholder group,
by creating a substantial voting block in institutional or other hands that
might undertake to support the position of the incumbent St. Francis Board, by
effecting an acquisition that might complicate or preclude the takeover offer,
or otherwise.

Classification of Board of Directors. The St. Francis Board is divided
into three classes, each serving three-year terms, so that approximately
one-third of the number of directors of St. Francis are elected at each annual
meeting of the shareholders of St. Francis. The St. Francis Articles provide
that the number of directors is to consist of not less than seven nor more than
25 members as fixed by the St. Francis Bylaws. The Bylaws provide that any
vacancy occurring in the St. Francis Board shall be filled by a majority vote of
the directors then in office, and directors so chosen shall hold office until
the expiration of the term of office of the class to which they have been
elected by the directors. The classified board is intended to provide for
continuity of the St. Francis Board and to make it more difficult and more time
consuming for a shareholder group to fully use its voting power to gain control
of the St. Francis Board without the consent of the incumbent members of the St.
Francis Board.

Removal of Directors. The St. Francis Articles provide that a director
of St. Francis may be removed only for cause and by (i) the affirmative vote of
the holders of 80% of the issued and outstanding shares of capital stock then
entitled to vote generally in an election of directors, or (ii) a majority of
the total number of directors.

Business Combinations. The St. Francis Articles provide for the
restriction on offers and acquisitions of St. Francis by the election to be
subject to the WBCL sections restricting business combinations, as described
herein.

Under Section 180.1150(2) of the WBCL, the voting power of shares of an
"issuing public corporation," such as St. Francis, which are held by any person
in excess of 20% of the voting power in the election of directors shall be
limited (in voting on any matter) to 10% of the full voting power of such excess
shares, unless full voting rights have been restored at a special meeting of the
shareholders called for that purpose. This statute is a "scaled voting
rights/control share acquisition" statute and is designed to protect
corporations against uninvited takeover bids by reducing to one-tenth of their
normal voting power all shares in excess of 20% owned by an acquiring person.
Shares held or acquired under certain circumstances are excluded from the
application of Section 180.1150(2), including (among others) shares acquired
directly from St. Francis and shares acquired in a merger or share exchange to
which St. Francis is a party. Article IV of the St. Francis Articles provides
that St. Francis elects to be subject to the provisions of Section 180.1150 of
the WBCL, regardless of whether or not it would be deemed to be an "issuing
public corporation" for these purposes.

-70-
<PAGE> 75

Sections 180.1130 to 180.1134 of the WBCL provide generally that in
addition to the vote otherwise required by law or the articles of incorporation
of an "issuing public corporation," such as St. Francis, certain business
combinations not meeting certain fair price standards specified in the statute
must be approved by the affirmative vote of at least (i) 80% of the votes
entitled to be cast by the outstanding voting shares of the corporation, and
(ii) two-thirds of the votes entitled to be cast by the holders of voting shares
other than voting shares beneficially owned by a "significant shareholder" or an
affiliate or associate thereof who is a party to the transaction. The term
"business combination" is defined to include, subject to certain exceptions, a
merger or share exchange of the issuing public corporation (or any subsidiary
thereof) with, or the sale or other disposition of substantially all of the
property and assets of the issuing public corporation to, any significant
shareholder or affiliate thereof. "Significant shareholder" is defined generally
to mean a person that is the beneficial owner of 10% or more of the voting power
of the outstanding voting shares of the issuing public corporation. The statute
also restricts the repurchase of shares and the sale of corporate assets by an
issuing public corporation in response to a takeover offer. Article X of the St.
Francis Articles provides that St. Francis elects to be subject to the
provisions of Section 180.1130 to 180.1134 of the WBCL, regardless of whether or
not it would be deemed an "issuing public corporation" for these purposes.

Sections 180.1140 to 180.1144 of the WBCL prohibit certain "business
combinations" between a "resident domestic corporation," such as St. Francis,
and a person beneficially owning 10% or more of the voting power of the
outstanding voting stock of such corporation (an "interested shareholder")
within three years after the date such person became a 10% beneficial owner,
unless the business combination or the acquisition of such stock has been
approved before the stock acquisition date by the corporation's board of
directors. After such three year period, a business combination with the
interested shareholder may be consummated only with the approval of the holders
of a majority of the voting stock not beneficially owned by the interested
shareholder at a meeting called for that purpose, unless the business
combination satisfies certain adequacy-of-price standards intended to provide a
fair price for shares held by disinterested shareholders. Article X of the St.
Francis Articles provides that St. Francis elects to be subject to the
provisions of Sections 180.1140 to 180.1144 of the WBCL, regardless of whether
or not it would be deemed an "issuing public corporation" for these purposes.

Under the WBCL, a director or officer of the corporation, in
discharging his or her duties to the corporation and in determining what he or
she believes to be in the best interests of the corporation, may, in addition to
considering the effects of any action on shareholders, consider the effects of
the action on employees, suppliers and customers of the corporation, the effects
of the action on communities in which the corporation operates and any other
factors which the director or officer considers pertinent.

Amendment of St. Francis' Articles. The affirmative vote of the holders
of at least 80% of the issued and outstanding capital stock of St. Francis
entitled to vote generally in an election of directors is required to amend,
alter, change or repeal any provisions of the St. Francis Articles; provided,
however, that provisions relating to the corporate name and purpose must only be
approved by a majority of the total votes eligible to be cast. Notwithstanding
the foregoing, the St. Francis Articles may not be amended, altered, changed or
repealed without the vote of the holders of any class or series of St. Francis
Preferred Stock as may be required by the provisions establishing such class or
series. This requirement exceeds the majority vote of the outstanding stock that
would otherwise be required by the WBCL for the amendment or repeal of such
provisions of the St. Francis Articles.

Rights Plan. The WBCL gives Wisconsin corporations the authority to
adopt shareholder rights or option plans which adjust upon a reorganization,
merger, share exchange, sale of assets or other occurrence. Such rights or
option plans may include conditions that prevent the holder of a specified
percentage of the outstanding shares of the corporation, including subsequent
transferees of the holder, from exercising such rights or options. Generally,
these so-called "poison pill" rights or option plans give a corporation's
shareholders increased shares or value in the corporation or the acquiring
corporation and thereby make an acquisition more expensive for a hostile
acquiror. St. Francis adopted a Rights Plan on September 25, 1997. The Rights
Plan generally provides that the Rights will become exercisable when a person or
group attempts to acquire St. Francis in certain circumstances. The Rights will
cause substantial dilution to such person or group, and accordingly, the
existence of the Rights may defer certain potential acquirors from making
certain takeover proposals or tender offers. The Rights should not interfere
with any merger or business combination approved by the St. Francis Board since
the Rights may be redeemed by St. Francis. For a description of St. Francis'
Rights Plan, see "-- Rights Plan."

-71-
<PAGE> 76

COMPARISON OF SHAREHOLDERS' RIGHTS

THIS SUMMARY CONTAINS A LIST OF THE MATERIAL DIFFERENCES IN
SHAREHOLDERS' RIGHTS BUT IS NOT MEANT TO BE RELIED UPON AS AN EXHAUSTIVE LIST OR
A DETAILED DESCRIPTION OF THE PROVISIONS DISCUSSED AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO THE ST. FRANCIS ARTICLES, THE ST. FRANCIS BYLAWS, THE
RELIANCE ARTICLES, THE RELIANCE BYLAWS, THE WBCL AND THE ST. FRANCIS RIGHTS
AGREEMENT INCORPORATED BY REFERENCE HEREIN.

Upon the consummation of the Merger, shareholders of Reliance may
become shareholders of St. Francis. Since both St. Francis and Reliance are
incorporated under the laws of the State of Wisconsin, Reliance shareholders who
receive St. Francis Common Stock will continue to be subject to the privileges
and restrictions provided in the WBCL. In addition, the rights presently enjoyed
by Reliance shareholders under the relevant provisions of the Articles of
Incorporation of Reliance (the "Reliance Articles") and the Bylaws of Reliance
(the "Reliance Bylaws") differ in some respects from the rights they would have
as shareholders of St. Francis under the relevant provisions of the St. Francis
Articles and the St. Francis Bylaws.

VACANCIES ON THE BOARD OF DIRECTORS

St. Francis. The St. Francis Bylaws provide that any vacancy occurring
on the St. Francis Board may be filled by the affirmative vote of a majority of
the remaining directors, even if the number of remaining directors does not
constitute a quorum of the St. Francis Board. A director elected to fill a
vacancy shall hold office until the next succeeding annual election of directors
by the shareholders.

Reliance. The Reliance Bylaws provide that any vacancy occurring on the
Reliance Board may be filled by the affirmative vote of a majority vote of all
remaining directors, even if the number of remaining directors does not
constitute a quorum of Reliance Board; provided, however, that any vacancy
created by the removal of a director by vote of the shareholders at a meeting
called for such purpose may be filled by the vote of such shareholders at the
same meeting.

ADVANCE NOTICE OF NOMINATIONS OF DIRECTORS AND SHAREHOLDER PROPOSALS.

St. Francis. Pursuant to Article VII of the St. Francis Articles, any
shareholder nomination of a director or proposal for any business to be
considered at any annual or special meeting of shareholders must be received by
the Secretary of St. Francis not later than the close of business on the tenth
day following the day on which notice of the meeting was mailed to shareholders.

Reliance. Pursuant to Article VII of the Reliance Articles and Article
II of the Reliance Bylaws, any shareholder nomination of a director or proposal
for any business to be considered at any annual or special meeting of
shareholders must be received by Reliance: (i) with respect to proposals to be
brought before an annual meeting, not less than 60 days nor more than 90 days
prior to the date of the previous year's annual meeting of shareholders, or in
the event no annual meeting was held in the previous year, no later than ten
days following the date notice of the annual meeting is mailed to shareholders;
and (ii) with respect to proposals to be brought before a special meeting, not
later than the close of business on the tenth day following the date notice of
such special meeting is mailed to shareholders.

SHAREHOLDER RIGHTS PLAN

St. Francis. On September 25, 1997, the St. Francis Board declared a
dividend of one Right for each outstanding share of St. Francis Common Stock to
shareholders of record at the close of business on October 10, 1997. For a
description of the Rights and the related Rights Plan, together with a
discussion of the effects of the Rights, see "Description of St. Francis Capital
Stock--Rights Plan."

Reliance. The Reliance Board has not adopted a shareholder rights plan.

-72-
<PAGE> 77

BUSINESS OF THE PARTIES TO THE MERGER

ST. FRANCIS

GENERAL

St. Francis, a Wisconsin corporation, was incorporated on December 18,
1992 for the purpose of becoming the holding company for St. Francis Bank upon
St. Francis Bank's conversion from a federally-chartered mutual savings bank to
a federally-chartered stock savings bank. This transaction was completed in June
1993. In November 1994, St. Francis consummated the acquisition of the stock of
Valley Bank East Central in Kewaskum, Wisconsin as well as the acquisition of
the deposits and certain assets of the Hartford, Wisconsin branch of Valley Bank
Milwaukee. The acquired bank offices were combined as a commercial bank named
Bank Wisconsin. In February 1997, St. Francis completed the acquisition of
Kilbourn State Bank in Milwaukee, Wisconsin, which subsequently was merged into
Bank Wisconsin. In September 1997, Bank Wisconsin was merged into St. Francis
Bank, with St. Francis Bank being the surviving entity. At June 30, 1998, St.
Francis had total assets of $1.8 billion, total deposits of $1.1 billion and
shareholders' equity of $131.0 million. St. Francis has not engaged in any
significant activity other than holding the stock of St. Francis Bank. St.
Francis Bank is regulated by the OTS and its deposits are insured up to
applicable limits under the SAIF of the FDIC. St. Francis Bank's principal
business consists of attracting retail deposits from the general public and
investing those deposits, together with funds generated from other operations,
primarily to originate mortgage, consumer and other loans within its primary
market area and to invest in mortgage-backed and related securities, and to a
lesser extent, debt and equity securities. Primary areas of lending include
single-family and multi-family residential mortgages, home equity lines of
credit, second mortgages, commercial real estate and commercial loans. At June
30, 1998, St. Francis operated 25 banking offices in Wisconsin. The principal
executive offices of St. Francis are located at 13400 Bishops Lane, Suite 350,
Brookfield, Wisconsin 53005-6203, and its telephone number is (414) 486-8700.

Additional information concerning St. Francis is included in the St.
Francis 1997 Annual Report, the St. Francis Forms 10-Q for the quarters ended
December 31, 1997, March 31, 1998 and June 30, 1998. See "Incorporation of
Certain Information by Reference."

RELIANCE

GENERAL

Reliance was formed for the purpose of owning all of the outstanding
stock of Reliance Savings Bank issued in the mutual to stock conversion of the
Bank (the "Conversion"). The Conversion was consummated on April 18, 1996;
Reliance issued 2,562,344 shares of Reliance Common Stock in exchange for
proceeds of $20.5 million, and Reliance purchased all of the issued and
outstanding shares of common stock of Reliance Savings Bank for $9.5 million.
Reliance Savings Bank is regulated by the WDFI and the FDIC. Reliance Savings
Bank's deposits are insured up to the applicable limits by the SAIF of the FDIC.
Reliance Savings Bank also is a member of the FHLB system. Reliance Savings Bank
was organized in 1922, and has one full service office located in Milwaukee
County, Wisconsin. Because Reliance's only significant business operations are
that of Reliance Savings Bank, the business of Reliance Savings Bank is
essentially the only business of Reliance.

Reliance Savings Bank is a community oriented financial institution
which emphasizes retail financial services to individuals and consumers within
its market areas. Reliance Savings Bank's principal business is attracting
retail deposits from the general public and investing those deposits, together
with funds generated from other operations, primarily to originate residential
mortgage loans within its primary market areas and invest in mortgage-backed
securities and investment securities. The principal lending is on one-to
four-family owner-occupied homes, including ARM loans, and to lesser extent,
Reliance Savings Bank also originates, multi-family, other consumer, commercial
/ non-residential and residential construction loans. Reliance Savings Bank
invests a significant portion of its assets in investment securities and
mortgage-backed securities, including U.S. Government and federal agency
securities, short-term liquid assets and other marketable securities. Reliance
Savings Bank's revenues are derived principally from interest on its mortgage
loan portfolio, interest on mortgage-backed securities and interest and
dividends on its investment securities. Reliance Savings Bank's principal
sources of funds are received from deposits, repayments on loans and
mortgage-backed and related securities.

-73-
<PAGE> 78

MARKET AREA AND COMPETITION

Reliance Savings Bank offers a variety of loan and deposit products and
banking services primarily within the metropolitan Milwaukee area. Reliance
Savings Bank's office is located at 3140 South 27th Street, Milwaukee,
Wisconsin. The City of Milwaukee is located along the western shore of Lake
Michigan, and is the largest metropolitan statistical area ("MSA") within the
State of Wisconsin. The Milwaukee MSA includes Milwaukee, Waukesha, Ozaukee and
Washington counties. Reliance Savings Bank's primary market area consists of the
Milwaukee MSA, which in 1994 was the nation's 35th largest MSA. The Milwaukee
MSA includes a diverse economic base, including business, industry and
agriculture, and of the nation's 35 largest MSAs, Milwaukee ranked third in the
percentage of its work force in manufacturing. Major employers include Johnson
Controls, Inc., Harnischfeger Industries, Inc., Briggs & Stratton Corp.,
Harley-Davidson, Inc., A.O. Smith Corp., Allen-Bradley Co., GE Medical Systems,
Miller Brewing Co., Master Lock Co., W.H. Brady Co., Quad/Graphics, Inc.,
Northwestern Mutual Life Insurance Co., and the home offices of numerous other
insurance companies and financial institutions. The Milwaukee MSA has 11
colleges and universities each with enrollments exceeding 1,000 students,
including the Milwaukee campus of the University of Wisconsin and Marquette
University.

Many of Reliance Savings Bank's present customers and businesses are
centralized within Reliance Savings Bank's local market area. Reliance Savings
Bank's local market area, generally defined as an area within a three- mile
radius of Reliance Savings Bank's office, has experienced limited population
growth, reduced employment and recessionary economic conditions in recent years.
Reliance Savings Bank's local market area has experienced modest population
declines in the last five years and decreasing median household income levels in
the last five years, and both of these trends are expected to continue. The
median household and per capita income levels of Reliance Savings Bank's local
market area are below the Milwaukee MSA average, and may be a reflection of the
area's primarily blue collar labor force and the migration of a large portion of
the white collar residents to outlying suburban areas. Additionally, this local
market area has experienced a general weakening of real estate values and a
slow-down of home sales and construction. These factors, along with intensified
competition from other financial institutions and mortgage brokers, have
resulted in a diminishing demand for permanent one-to four-family mortgage loans
and for deposit products in Reliance Savings Bank's local market area.

Reliance Savings Bank's local market area has a high density of
financial institutions, most of which are significantly larger and have greater
financial resources than Reliance Savings Bank. Reliance Savings Bank has
significant competition in both its mortgage and consumer lending business, as
well as in attracting deposits. Reliance Savings Bank's competition for loans is
principally from other thrift institutions, savings banks, mortgage banking
companies, insurance companies and commercial banks. Its most direct competition
for deposits historically has come from other thrifts, savings banks, commercial
banks and credit unions. Because of the lower interest rate environment over the
past several years, Reliance Savings Bank has faced additional competition for
funds from a number of institutions, including the availability of short-term
money market funds and other corporate and government securities funds offered
by other financial service companies, such as brokerage firms and insurance
companies.

LENDING ACTIVITIES

General. Reliance Savings Bank's largest component of its gross loan
portfolio, which totaled $30.7 million at June 30, 1998, was first mortgage
loans secured by owner-occupied one-to four-family residences. At June 30, 1998,
one-to four-family mortgage loans totaled $9.3 million or 30.31% gross loans. Of
the total one-to four-family mortgage loans, $2.7 million or 29.03% were ARM
loans. Of there remaining loans held at June 30, 1998, 24.37% or $7.5 million
were in commercial real estate loans, 9.2% or $2.8 million were in residential
construction loans, 11.14% or $3.4 million were in multi-family mortgage loans,
24.42% or $7.5 million were in commercial construction and land development
loans, and the balance were in consumer loans.

The aggregate amount of loans that Reliance Savings Bank is permitted
to make under applicable state regulations to any one borrower, including
related entities, is generally an amount up to 15% of Reliance Savings Bank's
capital plus an additional 10% for loans fully secured by readily marketable
collateral. At June 30, 1998, the maximum amount which Reliance Savings Bank
could lend under these limits to any one borrower and borrower's related
entities was $3.3 million. At June 30, 1998, Reliance Savings Bank had loans or
groups of loans to related borrowers with outstanding balances of $4.3 million.
Reliance Savings Bank effectuated a $4.0 million participation agreement with
another lender to reduce the loans to below the limitation. At that date,
Reliance Savings Bank had 9 borrowers or groups of borrowers with outstanding
lending relationships in excess of $400,000, for a total of $11.5 million, all
of which loans are performing in accordance with their terms. Reliance Savings
Bank's single largest borrowing relationship at June 30, 1998 had multiple loans
aggregating $4.3 million. All of such loans are performing in accordance with
their terms.

-74-
<PAGE> 79

Composition of Loan Portfolio. The following tables sets forth the
composition of Reliance Savings Bank's loan portfolio in dollar amounts and in
percentages of the respective portfolios at the dates indicated

<TABLE>
<CAPTION>
AT JUNE 30,
----------------------------------------------------------------------------------
1996 1997 1998
------------------------- ------------------------ -------------------------
PERCENT PERCENT PERCENT
AMOUNT OF TOTAL AMOUNT OF TOTAL AMOUNT OF TOTAL
---------- ---------- ---------- ---------- ---------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
MORTGAGE LOANS:
One- to four-family ................ $ 10,745 40.46% $ 11,035 37.04% $ 9,315 30.31%
Multi-family ....................... 4,585 17.26 4,604 15.45 3,423 11.14
Commercial real estate ............. 4,163 15.68 5,376 18.05 7,489 24.37
Residential construction ........... 4,311 16.23 4,899 16.44 2,817 9.17
Commercial construction/
land development ................. 2,390 9.00 3,521 11.82 7,503 24.42
---------- ---------- ---------- ---------- ---------- ----------
Total mortgage loans ................... 26,194 98.63 29,435 98.80 30,547 99.41

CONSUMER LOANS:
Home equity ........................ 356 1.34 355 1.19 177 0.58
Other consumer ..................... 7 0.03 2 0.01 2 0.01
---------- ---------- ---------- ---------- ---------- ----------
Total consumer loans ............ 363 1.37 357 1.20 179 0.59
---------- ---------- ---------- ---------- ---------- ----------
Gross loans receivable ................. 26,557 100.00% 29,792 100.00% 30,726 100.00
========== ========== ==========

LESS:
Undisbursed loan proceeds .......... 3,366 1,890 4,595
Allowance for loan losses .......... 126 147 169
Deferred loan fees and
discounts ....................... 134 154 164
---------- ---------- ----------
Total additions/deductions ...... 3,626 2,191 4,928
---------- ---------- ----------
Loans receivable, net .................. $ 22,931 $ 27,061 25,798
========== ========== ==========
</TABLE>

Contractual Principal Repayments. The following table sets forth the
maturity or period to repricing of Reliance Savings Bank's loan portfolio at
June 30, 1998. Loans that have adjustable rates are shown as being due in the
period during which the interest rates are next subject to change. The table
does not include prepayments or scheduled principal amortization.

<TABLE>
<CAPTION>
AT JUNE 30, 1998
----------------------------------------------------------------
MULTI-
ONE- TO FAMILY/NON- CONSUMER
FOUR-FAMILY(1) RESIDENTIAL(2) LOANS TOTAL LOANS
-------------- -------------- -------------- --------------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
AMOUNTS DUE(3):
Within one year ................... $ 2,563 $ 2,798 $ 17 $ 5,378
After one year:
One to three years ............ 3,527 12,140 150 15,817
Three to five years ........... 216 74 -- 290
Five to ten years ............. 629 1,058 11 1,698
Ten to 20 years ............... 1,346 754 -- 2,100
Over 20 years ................. 4,129 1,314 -- 5,443
-------- -------- -------- --------
Total due or repricing
after one year ............ 9,847 15,340 161 25,348
-------- -------- -------- --------
Total amounts due or
repricing ................. 12,410 16,138 178 30,726
LESS:
Deferred fees and discounts ....... (50) (114) -- (164)
Allowance for loan losses ......... (66) (102) (1) (169)
-------- -------- -------- --------
Gross loans receivable ........ $ 12,294 $ 17,922 $ 177 $ 30,393
======== ======== ======== ========
</TABLE>

-75-
<PAGE> 80

The following table sets forth at June 30, 1998, the dollar amount of
all loans and mortgage-backed securities due or scheduled to reprice after one
year, and whether such loans have fixed or adjustable interest rates. Loans that
have adjustable rates are shown as being due in the period during which the
interest rates are subject to change.

<TABLE>
<CAPTION>
DUE OR REPRICING
AFTER JUNE 30, 1999
----------------------------------------
FIXED ADJUSTABLE TOTAL
---------- ---------- ----------
(IN THOUSANDS)
<S> <C> <C> <C>
Mortgage loans:
One- to four-family(1) ....................... $ 8,872 $ 975 $ 9,847
Multi-family/commercial/non-residential/
land development(1) ....................... 11,403 3,937 15,340
Consumer loans ................................... 161 -- 161
------- ------- -------
Gross loans receivable .................... 20,436 4,912 25,348
Mortgage-backed and related securities ........... 420 -- 420
------- ------- -------
Gross loans receivable and mortgage-backed
and related securities .................... $20,856 $ 4,912 $25,768
======= ======= =======
</TABLE>

- ----------

(1) Includes some construction loans.

One-to Four-Family and Residential Construction Lending. Reliance
Savings Bank originates first mortgage loans secured by one-to four-family
owner-occupied residences and residential construction loans within Reliance
Savings Bank's primary lending area. All of Reliance Savings Bank's first
mortgage loans are originated for Reliance Savings Bank's own loan portfolio. At
June 30, 1998, $12.1 million, or 39.50%, of Reliance Savings Bank's gross loan
portfolio consisted of loans secured by one-to four-family residential
properties. Of the one-to four-family residential mortgage loans in Reliance
Savings Bank's gross loan portfolio consisted of loans secured by one-to
four-family residential properties. Of the one-to four-family residential
mortgage loans in Reliance Savings Bank's gross loan portfolio, $2.8 million
were in Reliance Savings Bank's residential construction loan category. At June
30, 1998, $9.4 million, or 77.69% of Reliance Savings Bank's one-to four-family
residential mortgage loans consisted of fixed rate loans and $2.7 million, or
22.3%, consisted of balloon loans and ARM loans. At June 30, 1998, the average
outstanding one-to four-family loan balance was $75,000 and the largest
outstanding one-to four-family loan balance was $548,000.

Because of the highly competitive mortgage loan market in which
Reliance Savings Bank originates loans, a variety of mortgage products are
available from Reliance Savings Bank, with a variety of interest rates, fees and
other origination terms. Reliance Savings Bank offers conventional fixed rate
mortgage loans and ARM loans with maturity dates which typically range from 15
to 30 years. Residential mortgage loans generally are underwritten to Federal
Home Loan Mortgage Corporation ("FHLMC"), Federal National Mortgage Association
("FMNA"), and other agency guidelines. Reliance Savings Bank rarely originates
loans in excess of these agency limits; however, if Reliance Savings Bank does
originate jumbo loans, the loans are underwritten in accordance with Reliance
Savings Bank's underwriting guidelines and are retained in Reliance Savings
Bank's loan portfolio. Reliance Savings Bank charges origination fees ranging
from zero to two points on mortgage loans. The interest rates charged on
mortgage loans at any given date will vary, depending upon the amount of
origination points to be paid. The interest rate at which Reliance Savings Bank
offers to grant a mortgage loan also are determined by the secondary market
pricing for comparable mortgage-backed securities, local mortgage loan
competition and Reliance Savings Bank's yield requirements.

Mortgage loan originations are solicited from real estate brokers,
builders, developers, existing or past customers and residents of the local
communities located in Reliance Savings Bank's primary market area. Reliance
Savings Bank advertises its product offerings in newspapers and other media
circulating throughout its primary market area in addition to its officers
soliciting prospects. Upon receipt of a completed mortgage application from

-76-
<PAGE> 81

a prospective borrower, a credit report is ordered, income and other information
is verified, and, as necessary, additional financial information is requested.
An appraisal of the real estate that is to secure the loans is required. It is
Reliance Savings Bank's policy to obtain title insurance on all real estate
first mortgage loans. Borrowers must present evidence of appropriate hazard
insurance and flood insurance (if applicable) prior to the closing. The lending
policy of Reliance Savings Bank restricts mortgage loans to 80% of the lesser of
the appraised value or purchase price of the real estate to be mortgaged by
Reliance Savings Bank. Reliance Savings Bank makes mortgage loans to 95% if the
lesser of the appraised value or purchase price subject to the availability of
private mortgage insurance insuring the amount in excess of 75% of the loan.
Reliance Savings Bank reviews all the pertinent information and makes a credit
decision for approval or denial within established Reliance Savings Bank
guidelines. Most recommendations to deny applications based on underwriting
considerations are reviewed by Reliance Savings Bank's President prior to a
final loan denial. All one-to four-family mortgage loan applications are
reviewed on a monthly basis by the Board of Directors. Mortgage loans in
Reliance Savings Bank's loan portfolio include due-on-sale clauses, which
provide Reliance Savings Bank with the contractual right to deem the loan
immediately due and payable in the event the borrower transfers the ownership of
the property without Reliance Savings Bank's consent.
Reliance Savings Bank enforces the due-on-sale clauses of its mortgage loans.

Reliance Savings Bank originates one and three year ARM loans. Reliance
Savings Bank's one-year ARM loans typically adjust to a maximum of 200 basis
points per year, with a lifetime cap of approximately 600 basis points above the
interest rate established at the origination date of the ARM loan. Monthly
payments of principal and interest are adjusted when the interest rate adjusts,
in order to maintain full amortization of the mortgage loan within a maximum
30-year term. Reliance Savings Bank does not offer ARM loans which provide for
negative amortization. Reliance Savings Banks three-year ARM loans adjust
annually after the initial three year term. The initial rate offered on ARM
loans fluctuates with general interest rate changes, and are predetermined by
secondary market pricing, competitive conditions and Reliance Savings Bank's
yield requirements. Currently, Reliance Savings Bank primarily utilizes the
Seventh District Cost of Funds Index, plus a margin, in order to determine the
interest rate payable upon the adjustment date of its ARM loans outstanding. In
order to minimize the risk associated with ARM loans, borrowers under ARM
programs are qualified at the higher of the initial offering rate or the fully-
indexed rate and with a specified minimum interest rate. None of the ARM loans
are granted with conversion options. As compared to fixed rate loans, ARM loans
generally pose different risks. In a rising interest rate environment, the
underlying loan payment rises, which increases the potential for default by the
borrower. At the same time, the marketability of the underlying property may be
adversely affected by higher interest rates. In a decreasing interest rate
environment, mortgagors tend to refinance into fixed rate loans.

Reliance Savings Bank also offers one-to four-family mortgage loans
with balloon features. Under these loans, the interest rate and monthly payment
are fixed for the initial term, which is usually one to five years, and
thereafter, provided certain conditions are met at maturity, the loan would be
paid off in full or renewed at the then-current rate.

Reliance Savings Bank also offers owner-occupied one-to four-family
residential construction loans. Residential construction loans are underwritten
in conjunction with the regular first mortgage loans and terminate upon
completion of the project. At June 30, 1998, Reliance Savings Bank had 17 one-to
four-family construction loans in its portfolio, aggregating $2.8 million, and
the average outstanding residential construction loan balance was $166,000 and
the largest outstanding residential construction loan balance was $548,000.
Because most residential construction loans are ARM loans, residential
construction afford Reliance Savings Bank the opportunity to decrease the
interest rate sensitivity of its loan portfolio and to receive yields on fixed
rate loans higher than those obtainable on fixed rate loans secured by existing
one-to four-family residential properties. These higher yields, however,
correspond to the higher risks associated with residential construction loans.
Loan proceeds are disbursed in increments as construction of the residence
progresses. Title company disbursement agents are utilized to clear all lien
waivers and ensure Reliance Savings Bank's first lien position. These loans are
structured to allow borrowers to pay interest only on the funds advanced during
the construction period, which is generally six months. In most cases, Reliance
Savings Bank structures residential construction loans to automatically convert
to a regular first mortgage loan upon completion of the project and when
certification of occupancy has been obtained.

-77-
<PAGE> 82

Upon completion of construction, residential construction loans
generally become either 30-year fixed rate loans or ARM loans with one- and
three-year interest rate adjustments. Residential construction loans made in
conjunction with the first mortgage have a loan-to-value ratio limit not to
exceed 95%. As with other one-to four-family residential mortgage loans, when
the loan to value exceeds 80%, private mortgage insurance is required. Coverage
is required to reduce Reliance Savings Bank's exposure to 75% of the value or
less.

Reliance Savings Bank offers one-to four-family residential
construction loans to home builders for speculation and model homes. These
residential construction loans convert to one-year ARM loans and typically are
made at loan-to-value ratios of 80% or less. Payment terms are generally
interest only for 12 months. Thereafter, the borrower is required to begin
principal and interest payments to fully amortize the loan. Loan proceeds are
disbursed in increments as construction of the residence progresses.

Construction lending is generally considered to involve a higher degree
of credit risk than residential mortgage lending. Reliance Savings Bank's risk
of loss on a construction loan is dependent largely upon the accuracy of the
initial estimate of the property's value at completion of construction and the
estimated cost (including interest) of construction. If the estimate of the
value proves to be inaccurate, Reliance Savings Bank may be confronted with, at
or before maturity of the loan, loan security with a value that is insufficient
to assure full repayment. In addition, construction lending entails the risk
that the project may not be completed due to cost overruns or changes in market
conditions. These risks are compounded in Reliance Savings Bank's case because
it lends large amounts of money to several home builders that, in turn, use the
funds to finance the construction of homes for speculation and model homes. If a
builder experiences financial problems that affects its ability to complete
homes for which Reliance Savings Bank has advanced construction funds, Reliance
Savings Bank has more credit risk than if it had made one residential
construction loan to a single borrower because the credit is concentrated in
that single borrower. Moreover, a builder's ability to repay construction loans
will be dependent on the builder's ability to sell the newly constructed homes
upon completion, which can be adversely affected by changes in the economy, the
market for housing and the demand for, and the supply of, homes constructed by
that builder.

At June 30, 1998, the largest aggregate amount of loans outstanding to
any one borrower totaled $4.3 million, and consisted of three commercial
properties and four single family properties located in Waukesha County,
Wisconsin. At June 30, 1998, all of these loans were current and performing in
accordance with their terms. These loans did exceed the regulatory "loans to one
borrower" limitation at June 30, 1998. Reliance Savings Bank effectuated a $4.0
million participation agreement with another lender to reduce the loans to below
the limitation.

Multi-Family Lending. Reliance Savings Bank originates or participates
in fixed rate and ARM loans secured by multi-family properties. Reliance Savings
Bank holds in its loan portfolio 13 multi-family loans which at June 30, 1998
totaled $3.4 million, or 11.14% of Reliance Savings Bank's gross loans. The
average outstanding loan balance on each multi-family loans at June 30, 1998 was
$263,300. All payments under multi-family loans originated by Reliance Savings
Bank were current and performing in accordance with their terms at June 30,
1998. All of Reliance Savings Bank's multi-family loans are secured by
properties located in Reliance Savings Bank's primary market area. The rates
charged on Reliance Savings Bank's ARM multi-family loans are typically 25 to 50
basis points higher than on one-to four-family residential properties.
Multi-family ARM loans typically adjust in a manner similar to that of Reliance
Savings Bank's other ARM loans. An origination fee of 1% to 2% is usually
charged on such loans.

Multi-family loans generally are underwritten in amounts of up to 80%
of the lesser of the appraised value or purchase price of the underlying
property. The underlying properties typically are apartment buildings generally
with 24 or less units. Appraisals on properties which secure multi-family loans
are performed by an independent appraiser designated by Reliance Savings Bank at
the time the application is submitted. All appraisals on multi-family loans are
reviewed by Reliance Savings Bank management. In underwriting such loans,
Reliance Savings Bank primarily considers the net operating income generated by
the real estate to support the debt service, the financial resources and income
level of the borrower and Reliance Savings Bank's experience with the borrower.
To assess the ability of a property to adequately service debt, Reliance Savings
Bank uses debt service coverage ratios which will vary depending upon the size
of the loan, and the verification of the borrower's credit history, and analysis
of the borrower's income, personal financial statements and banking
relationships, a review of the property,

-78-
<PAGE> 83

including cash flow projections and historical operating results, and an
analysis of the borrower's experience in owning or managing similar properties.
Reliance Savings Bank evaluates all aspects of multi-family lending in order to
mitigate risk to the extent possible. Reliance Savings Bank seeks to ensure that
the property securing the loans will generate sufficient cash flow to adequately
cover operating expenses and debt service payments. Typically, individuals
guarantee all of the their multi-family loans.

Loans secured by multi-family real estate generally involve a greater
degree of credit risk than one-to four-family mortgage loans and carry larger
loan balances. This increased credit risk is a result of several factors,
including the concentration of principal in a limited number of loans and
borrowers, the effects of general economic conditions on income producing
properties and the increased difficulty of evaluating and monitoring these types
of loans. Furthermore, the repayment of loans secured by multi-family real
estate is typically dependent upon the successful operation of the related real
estate project. If the cash flow from the project is reduced, the borrower's
ability to repay the loans may be impaired. Despite the risk inherent in
multi-family real estate lending, Reliance Savings Bank's delinquent
multi-family loans as a percentage of gross loans has been minimal.

The largest multi-family loan at June 30, 1998 had an outstanding
balance of $797,800 and was secured by a 16-unit apartment building located in
Pewaukee, Wisconsin. At June 30, 1998, this loan was current and performing in
accordance with its terms.

Commercial Real Estate Lending. Reliance Savings Bank originates or
participates in commercial real estate loans secured generally by small office
buildings, apartment buildings, hotels, and small industrial/manufacturing
buildings. At June 30, 1998, Reliance Savings Bank's commercial real estate loan
portfolio consisted of 23 loans totaling $7.5 million, or 24.37%, of Reliance
Savings Bank's gross loan portfolio. Reliance Savings Bank's underwriting
standards provide that commercial real estate loans generally may be made in
amounts up to 80% of the appraised value of the property, subject to Reliance
Savings Bank's current loans-to-one-borrower limit. These loans may be made with
terms ranging from three years to 25 years, fully amortized, and generally are
offered at interest rates which are fixed at prevailing market rates or which
adjust in accordance with the Seventh District Cost of Funds index. Some of
Reliance Savings Bank's commercial loans are balloon loans. Balloon loan
payments generally are amortized on a 15-year to 25-year basis with a typical
maturity of three to five years. Reliance Savings Bank generally has required
that the properties securing commercial real estate loans have debt service
coverage ratios of at least 1.0% to 1.5%.

The average outstanding loan balance on each commercial/non-residential
loan at June 30, 1998 was $325,600. The largest commercial real estate loan at
June 30, 1998 had an outstanding balance of $1,329,000 and was secured by an
office building located in Brookfield, Wisconsin. The concentration of
commercial real estate loans to one borrower totaled $1,526,700 at June 30, 1998
and consisted of two loans secured by an office building in Brookfield,
Wisconsin. All payments under Reliance Savings Bank's commercial real estate
loans were current at June 30, 1998.

The risks associated with commercial real estate lending are similar to
the risks associated with multi-family lending. To minimize these risks,
Reliance Savings Bank generally imposes similar underwriting standards in
connection with commercial real estate lending as it does with multi-family
lending. Commercial real estate loans generally are underwritten in amounts of
up to 80% of the lesser of the appraised value or purchase price of the
underlying property. Appraisals on properties which secure commercial real
estate loans are performed by an independent appraiser designated by Reliance
Savings Bank at the time the application is submitted. All appraisals on
commercial real estate loans are reviewed by Reliance Savings Bank management.
In addition, Reliance Savings Bank's underwriting procedures require
verification of the borrower credit history, and analysis of the borrower
income, financial statements and banking relationships, a review of the
borrower's property management experience and references and a review of the
property, including cash flow projections and historical operating results.
Reliance Savings Bank evaluates all aspects of commercial real estate lending in
order to mitigate risk to the extent possible. Reliance Savings Bank seeks to
ensure that the property securing the loans will generate sufficient cash flow
to adequately cover operating expenses and debt service payments. In addition,
Reliance Savings Bank obtains financial statements on an annual basis to monitor
cash flow and financial condition.

-79-
<PAGE> 84

Commercial Construction and Land Development Lending. Reliance Savings
Bank also provides construction loans secured by multi-family projects and
commercial real estate land development loans. At June 30, 1998, Reliance
Savings Bank's commercial construction and land development loan portfolio
totaled $7.5 million of Reliance Savings Bank's gross loans. Reliance Savings
Bank's commercial construction and land development lending more than doubled
between 1998 and 1997. The construction loans secured by multi-family projects
usually will involve the construction of 8-unit to 24-unit apartment complexes.
The construction loans secured by commercial real estate properties typically
will involve hotels or motels and office and warehouse buildings. Reliance
Savings Bank will originate land development loans to local developers for the
purpose of developing the land (i.e., roads, sewer and water). Construction
loans secured by multi-family projects and commercial real estate and land
development loans generally are made to existing customers of Reliance Savings
Bank and developers and contractors with which Reliance Savings Bank has had
previous lending experience, or will involve the purchase of a participation
interest from another financial institution. Multi-family and commercial real
estate construction loans typically are originated as a one-year ARM loan, while
land development loans typically are originated as a three-year ARM loan or a
three-year fixed rate balloon loan. Multi-family and commercial real estate
construction loans and land development loans typically are originated with
interest only payments made during construction with amortization beginning upon
completion. Balloon loan payments, however, are amortized on a 15-year to
25-year basis with a typical loan maturity of three years. These loans are
priced at 250 to 350 basis points above the rate on U.S. Treasury securities for
comparable maturities. Typically, these loans are made in amounts not to exceed
80% of an independent appraisal for multi-family or commercial real estate
lending and 75% of appraisal on land development loans. These appraisals are
made to reflect absorption rates in the marketplace for both loan types and
discounted for carrying costs and cost of sale regarding land development
lending. Reliance Savings Bank monitors individual draws with funds disbursed
based on actual work in progress, a contractor's affidavit and an acceptable
on-site inspection report. All multi-family and commercial real estate
construction loans and all land development loans require a Phase I
environmental audit prior to commitment.

At June 30, 1998, Reliance Savings Bank had no multi-family
construction loans in its loan portfolio; several commercial real estate
construction loans in its loan portfolio, the largest consisting of a loan of
$1,965,000 secured by an office building construction project located in
Brookfield, Wisconsin; and two land development loans with an outstanding
balance of $3,200,000 in its loan portfolio, secured by residential subdivision
property located in Johnson Creek, Wisconsin. At June 30, 1998, all of these
loans were current and performing in accordance with their terms.

Commercial construction and land development lending generally is
considered to involve a higher degree of risk than one-to four-family mortgage
lending. Like residential construction loans to builders for speculation and
model homes, commercial construction and land development loans involve inherent
risks due to the extension of large amounts of credit to a single borrower. But
the risks associated with commercial construction and land development loans are
greater than those involved in residential construction because the individual
projects tend to be much larger. Accordingly, if the builder cannot complete the
commercial project or land development for which the loan is made, the risk of
default is high and the amount of credit advanced is large. Furthermore, even if
a commercial project is completed, repayment of the construction loan is
contingent on the builder's ability to sell the property, which in turn, is
often subject to the market prospects for leasing the property. Land development
loans are especially risky, since the credit is secured by raw land. If the
borrower were to default on the loan, Reliance Savings Bank would own the land,
which would not be as readily marketable as developed property and Reliance
Savings Bank may need to invest additional funds in the property to improve its
marketability. Reliance Savings Bank believes this lending activity affords
Reliance Savings Bank the opportunity to invest in relatively higher- yielding
assets with shorter terms to maturity and repricing than in the case with one-to
four-family mortgage lending. Therefore, Reliance Savings Bank is pursuing these
lending opportunities to increase its loan portfolio.

Other Consumer Lending. Reliance Savings Bank originates a variety of
other consumer loans, generally consisting of home improvement loans and loans
secured by savings accounts. At June 30, 1997 and 1998, Reliance Savings Bank's
consumer loans totaled $357,000 and $179,000, respectively, or 1.20% and 0.59%,
respectively, of gross loans at those dates. Home equity loans comprised 99.4%
and 98.9% of other consumer loans at June 30, 1997 and 1998, respectively.
Consumer loans generally have shorter terms and higher interest rates than
mortgage loans but generally involve more risk than mortgage loans because of
the type and nature of the collateral and, in certain cases, the absence of
collateral.

-80-
<PAGE> 85

The underwriting standards generally employed by Reliance Savings Bank
for other consumer loans include a determination of the applicant's payment
history on other debts and assessment of the borrower's ability to meet payments
on the proposed loans along with existing obligations. In addition to the
credit-worthiness of the applicant, the underwriting process also includes a
comparison of the value of the security in relation to the proposed loan amount.
Upon receipt of completed consumer loan application from a prospective borrower,
a credit report is ordered, income and other information is verified and, if
necessary, additional financial information is required.

For all consumer loans, Reliance Savings Bank's underwriters review all
pertinent information prior to making a credit decision. Consumer loans may
entail greater risk than residential mortgage loans, particularly in the case of
consumer loans which are unsecured or secured by rapidly depreciating assets
such as automobiles. Although the level of delinquencies in Reliance Savings
Bank's consumer loan portfolio has been low, there can be no assurance the
delinquencies will not increase in the future.

LOAN ORIGINATIONS, SALES AND PURCHASES

The following table sets forth Reliance Savings Bank's loan
originations and principal repayments for the periods indicated. During the
periods, Reliance Savings Bank did not purchase or sell any loans.

<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
------------------------------------------
1996 1997 1998
-------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
MORTGAGE LOANS (GROSS):
At beginning of period ............ $ 21,936 $ 26,194 $ 29,435
Mortgage loans originated:
One- to four-family ......... 3,236 233 1,992
Multi-family ................ -- 332 --
Commercial real estate ...... 1,965 200 1,352
Residential construction .... 3,160 4,815 4,095
Commercial construction/
land development .......... 940 2,893 6,206
-------- -------- --------
Total mortgage loans
originated ............. 9,301 8,473 13,645
Principal repayments ........... (5,043) (5,232) (12,533)
Sales of loans ................. -- -- --
Mortgage loans purchased(1) ....... -- -- --
-------- -------- --------
At end of period .................. $ 26,194 $ 29,435 $ 30,547
======== ======== ========

CONSUMER LOANS (GROSS):
At beginning of period ............ $ 12 $ 363 $ 357
Loans originated ............... 371 -- --
Principal repayments ........... (20) (6) (178)
-------- -------- --------
At end of period .................. $ 363 $ 357 $ 179
======== ======== ========
</TABLE>

- ----------
(1) Mortgage loan purchases consist of whole loans purchased by Reliance
Savings Bank from various other lending institutions. Mortgage loan
participation are included in the appropriate loan category.

Sale of Mortgage Loans. Reliance Savings Bank has originated
substantially all of the loans in its portfolio and holds them to maturity.
Reliance Savings Bank generally does not engage in the sale of loans. However,
from time to time, Reliance Savings Bank may sell participation interests in
loans which it has originated in order to spread risk associated with the loan
because of the size of the loan relative to the size of Reliance Savings Bank's
loan portfolio. Loan participations are sold on a non-recourse basis, and
Reliance Savings Bank retains the servicing on all loans it originates and of
which it sells participation interests. In the last five fiscal years, Reliance
Savings Bank sold one participation interest in a commercial real estate loan.
At June 30, 1998 Reliance Savings Bank's retained interest in this commercial
real estate loan was $369,200 while the sold participation interest in this loan
totaled $121,900.

-81-
<PAGE> 86

Purchase of Mortgage Loans. Reliance Savings Bank has purchased loans
or participation interests in a variety of loans originated by other lenders
from time to time. Reliance Savings Bank purchases participation interests with
servicing released. As a participant, Reliance Savings Bank acquires an
individual, non-recourse ownership interest in the loan, and thus does not have
recourse against the selling institution, but rather, has direct recourse
against the borrower. Prior to purchase, Reliance Savings Bank reviews each
purchase or participation to ensure that the underlying loan complies with
Reliance Savings Bank's lending policy and the loans-to-one borrower limit.

At June 30, 1998, Reliance Savings Bank held five participation loans
in its loan portfolio totaling $2.5 million, or 8.04%, of Reliance Savings
Bank's gross loan portfolio, as follows: a multi-family loan of $704,000 (out of
an original entire loan amount of $2.6 million) secured by a 60-unit apartment
building and originated in 1992; a commercial real estate construction loan of
$474,700 (out of an original entire loan amount of $2.9 million) secured by a
hotel and originated in 1994; a land development loan of $750,000 (out of an
original entire loan amount of $1.5 million) and originated in 1998; a
multi-family loan of $407,200 (out of an original entire loan amount of
$900,000) secured by a 24-unit apartment building and originated in 1998 and a
commercial real estate loan of $135,000 (out of an entire loan amount of
$485,000) secured by a warehouse and office building and originated in 1990.

The purchase of participation loans involves the same risks as the
origination of the same types of loans as well as additional risks related to
the purchaser's lower level of control over the origination and subsequent
administration of the loan. While Reliance Savings Bank intends to purchase
additional participation loans in the future, management does not anticipate
such activity will be significant.

Mortgage Loan Brokering Fees. Because of its loans-to-one borrower
regulatory limit, Reliance Savings Bank has from time to time received a
brokering fee from other financial institutions in exchange for the opportunity
to originate various mortgage loans from borrowers with whom Reliance Savings
Bank already has a lending relationship. For the year ended June 30, 1997,
Reliance Savings Bank did not have any loan brokering opportunities and
therefore did not receive any loan brokering fees. For the year ended June 30,
1998, Reliance Savings Bank received real estate loan brokering fees of $11,000
for loan opportunities in the aggregate amount of $2.2 million.

LOAN APPROVAL AND MONITORING

The President of Reliance Savings Bank and at least one director have
the authority to approve any consumer loan, one-to four-family mortgage loan,
residential construction loan, multi-family loan, commercial real estate loan,
commercial construction loan or land development loan, up to $150,000, provided
the loan-to-value ratio does not exceed 80%. All loans exceeding this amount and
all loans upon which the loan-to-value ratio exceeds 80% are presented to the
Board of Directors for approval. Reliance Savings Bank's Board of Directors
reviews on a monthly basis all loans made, and ratifies all actions taken
relative to loan approvals.

LOAN ORIGINATION, SERVICING AND OTHER FEES

In addition to interest earned on loans, Reliance Savings Bank receives
income through fees in connection with loan originations, loan modifications,
late payments and for miscellaneous services related to its loans. Income from
these activities varies from period to period with the volume and type of loans
originated.

In connection with the origination of mortgage loans, Reliance Savings
Bank charges points for origination and commitment, and fees for processing and
closing, in addition to requiring borrower reimbursement for out-of-pocket costs
associated with obtaining independent appraisals, credit reports, title
insurance private mortgage insurance and other items. Because of the highly
competitive mortgage market in which Reliance Savings Bank originates loans, the
point structure varies considerably, depending upon the type of mortgage loan
being made, its interest rate and other competitive factors. Reliance Savings
Bank charges origination fees ranging from zero to two points on mortgage loan
origination, and such points usually vary inversely with the interest rate on
the loan. That is, the amount of the origination fee is typically higher with
lower interest rate and lower if a higher interest rate is established for the
loan. Fees are paid by the applicant at the time of loan commitment,whereas the
origination fees are paid at the time of closing.

-82-
<PAGE> 87

Accounting standards adopted under FASB 91 prescribe the accounting
treatment for origination and commitment fees. Loan origination and commitment
fees and certain direct loan origination costs are being deferred and the net
amounts amortized as an adjustment of the related loan's yield. These amounts
are amortized to interest income using the level yield method over the
contractual life of the related loans. Deferred loan fees totaled $134,000,
$153,000 and $164,000 at June 30, 1996, 1997 and 1998, respectively. Deferred
loan origination fees and costs associated with loans sold are recognized at the
time of sale as a component of gain or loss on the sale of loans.

DELINQUENCIES, NON-PERFORMING ASSETS AND CLASSIFIED ASSETS

At June 30, 1998, Reliance Savings Bank had two loans delinquent more
than 89 days for a total of $197,000 which were classified as non-performing.
Reliance Savings Bank had no classified assets at June 30, 1998. At June 30,
1997 and 1996, Reliance Savings Bank had no nonperforming assets, classified
assets or loans delinquent more than 89 days.

Delinquent Loans. Management and Reliance Savings Bank's Board of
Directors perform a monthly review of all delinquent loans. The procedures taken
by Reliance Savings Bank with respect to delinquencies vary depending on the
type of loan, delinquent amount and age of delinquency. Reliance Savings Bank
generally requires that delinquent loans be reviewed and a written late charge
be mailed not later than the 15th day of delinquency. Reliance Savings Bank's
policies provide that telephone contact will be attempted to ascertain the
reasons for delinquency and the prospects of prompt payment. When contact is
made with the borrower at any time prior to foreclosure, Reliance Savings Bank
will attempt to obtain full payment or work out a repayment schedule with the
borrower to avoid foreclosure. It is Reliance Savings Bank's general policy to
continue to accrue interest on all loans which are past due up to 90 days. When
a loan secured by a mortgage is delinquent for 90 or more days, Reliance Savings
Bank generally will initiate foreclosure proceedings. Property acquired by
Reliance Savings Bank as a result of foreclosure on a loan is classified as
"real estate owned" and is recorded at the lower of the unpaid principal balance
or fair value less costs to sell at the date of acquisition and thereafter. Upon
foreclosure, it is Reliance Savings Bank's policy generally to require an
appraisal of the property and, thereafter, appraisal of the property on an
annual basis and external inspections on at least a quarterly basis.

-83-
<PAGE> 88
At June 30, 1996, 1997 and 1998, delinquencies in Reliance Savings
Bank's loan portfolio were as follows:

<TABLE>
<CAPTION>
AT JUNE 30, 1996
----------------------------------------------------
90 DAYS OR
60-89 DAYS MORE(1)
--------------------- -----------------------
NUMBER PRINCIPAL NUMBER PRINCIPAL
OF BALANCE OF BALANCE
LOANS OF LOANS LOANS OF LOANS
------ ------ ------ ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
MORTGAGE LOANS:
One- to four-family ....................... 0 $ -- 0 $ --
Multi-family .............................. 0 -- 0 --
Commercial real estate .................... 0 -- 0 --
Residential construction .................. 0 -- 0 --
Commercial construction/land development .. 0 -- 0 --
------ ------ ------ ------
Total mortgage loans ................... 0 -- 0 --
CONSUMER LOANS:
Home equity ............................... 0 -- 0 --
Other consumer ............................ 0 -- 0 --
------ ------ ------ ------
Total consumer loans .................... 0 -- 0 --
------ ------ ------ ------
Total gross loans .................... 0 $ -- 0 $ --
====== ------ ====== ======
Delinquent loans to gross loans
(including loans held for sale) ........... 0.00% 0.00%
====== ======

<CAPTION>
AT JUNE 30, 1997
------------------------------------------------
90 DAYS OR
60-89 DAYS MORE(1)
---------------------- ---------------------
NUMBER PRINCIPAL NUMBER PRINCIPAL
OF BALANCE OF BALANCE
LOANS OF LOANS LOANS OF LOANS
------ ---------- ------ ------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
MORTGAGE LOANS:
One- to four-family ....................... 2 $ 195 0 $ --
Multi-family .............................. 0 -- 0 --
Commercial real estate .................... 0 -- 0 --
Residential construction .................. 0 -- 0 --
Commercial construction/land development .. 0 -- 0 --
------ ------ ------ ------
Total mortgage loans ................... 2 195 0 --
CONSUMER LOANS:
Home equity ............................... 0 -- 0 --
Other consumer ............................ 0 -- 0 --
------ ------ ------ ------
Total consumer loans .................... 0 -- 0 --
------ ------ ------ ------
Total gross loans .................... 2 $ 195 0 $ --
====== ====== ====== ======
Delinquent loans to gross loans
(including loans held for sale) ........... 0.65% 0.00%
====== ======
</TABLE>

<TABLE>
<CAPTION>
AT JUNE 30, 1998
----------------------------------------------------
90 DAYS OR
60-89 DAYS MORE(1)
----------------------- -----------------------
NUMBER PRINCIPAL NUMBER PRINCIPAL
OF BALANCE OF BALANCE
LOANS OF LOANS LOANS OF LOANS
------ --------- ------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
MORTGAGE LOANS:
One- to four-family ....................... 1 $ 31 2 $ 197
Multi-family .............................. -- -- -- --
Commercial real estate .................... -- -- -- --
Residential construction .................. -- -- -- --
Commercial construction/land development .. -- -- -- --
------ ------ ------ ------
Total mortgage loans .................... 1 31 2 197
CONSUMER LOANS:
Home equity ............................... -- -- -- --
Other consumer ............................ -- -- -- --
------ ------ ------ ------
Total consumer loans .................... -- -- -- --
------ ------ ------ ------
Total gross loans ..................... 1 $ 31 2 $ 197
====== ====== ====== ======
Delinquent loans to gross loans
(including loans held for sale) ........... 0.10% 0.64%
====== ======
</TABLE>

- ---------

(1) Reliance Savings Bank discontinues the accrual of interest on loans when the
borrower is delinquent as to a contractually due principal or interest payment
by 90 days or more.

-84-
<PAGE> 89

Non-Performing Assets. Loans are placed on non-accrual status when, in
the judgment of Reliance Savings Bank management, the probability of collection
of principal or interest is deemed insufficient to warrant further accrual of
interest. Reliance Savings Bank discontinues the accrual of interest on loans
when the borrower is delinquent as to a contractually due principal or interest
payment by 90 days or more. When a loan is placed on non-accrual status, all of
the accrued interest on that loan is reversed by way of a charge to interest
income. Accrual of interest on a non-accrual loan is resumed when all
contractually past due payments are current and when management believes the
outstanding loan principal and contractually due interest is no longer doubtful
of collection.

Property acquired by Reliance Savings Bank as a result of a
foreclosure, property upon which a judgment of foreclosure has been entered but
prior to foreclosure sale and property which has been in substance foreclosed
are classified as foreclosed properties. Foreclosed properties are recorded at
the lower of the unpaid principal balance of the related loan or fair market
value. The amount by which the recorded loan balance exceeds the fair market
value at the time a property is classified as foreclosed property is charged
against the allowance for loan losses. Any subsequent reduction in the carrying
value of a foreclosed property, is charged against current earnings. At June 30,
1998, Reliance Savings Bank had no properties in foreclosed or in substance
foreclosed.

Non-performing loans include loans placed on non-accrual status and
troubled debt restructurings. Nonperforming assets consist only of
non-performing loans, since there are no foreclosed properties for the periods
indicated below. The following table sets forth non-performing loans and assets:

<TABLE>
<CAPTION>
AT JUNE 30,
----------------------------------------
1996 1997 1998
-------- -------- --------
(DOLLARS IN THOUSANDS)

<S> <C> <C> <C>
Nonaccrual mortgage loans .............. $ -- $ -- $ 197
Nonaccrual consumer loans .............. -- -- --
Real estate in judgment ................ -- -- --
-------- -------- --------
Total non-performing assets ............ $ -- $ -- $ 197
======== ======== ========

Total non-performing assets
to gross loans receivable ........... 0.00% 0.00% 0.64%
======== ======== ========

Total non-performing assets
to total assets ..................... 0.00% 0.00% 0.46%
======== ======== ========

Interest on non-performing loans
on the accrual basis ................ $ -- $ -- $ 6
Actual interest received on
non-performing loans ................ -- -- --
-------- -------- --------
Net reduction of interest income ....... $ -- $ -- $ 6
======== ======== ========
</TABLE>

There are no concentrations of loans exceeding 10% of loans which are
not otherwise disclosed as a category of loans.

As of June 30, 1998, there were no other loans not included in the
foregoing tables or discussed above where known information about the possible
credit problems of borrowers caused management to have serious doubts as to the
ability of the borrower to comply with present loan repayment terms and which
may result in disclosure of such loans in the future.

-85-
<PAGE> 90

As of June 30, 1998, Reliance Savings Bank had no real estate owned
("REO"). If Reliance Savings Bank were to acquire any REO, it would initially
record the REO at the lower of the recorded investment in the loan or the fair
market value of the assets securing the loan at the date of foreclosure, less
costs to sell. Thereafter, if there were a further deterioration in value,
Reliance Savings Bank would either rewrite down the REO directly or provide a
valuation allowance and charge operations for the reduction in value. The policy
for loans secured by real estate, which comprise the bulk of Reliance Savings
Bank's portfolio, is to establish loss reserves in accordance with Reliance
Savings Bank's loan classification process, based on GAAP. It is the policy of
Reliance Savings Bank to obtain an appraisal on all real estate acquired through
foreclosure at the time of foreclosure.

Classification of Assets. Federal regulations require that each insured
financial institution classify its assets on a regular basis. In addition, in
connection with examinations of insured institutions by regulatory authorities,
regulatory examiners have authority to identify problem assets as Substandard,
Doubtful or Loss. Substandard assets have one or more defined weaknesses and are
characterized by the distinct possibility that Reliance Savings Bank will
sustain some loss if the deficiencies are not corrected. Doubtful assets have
the weakness of Substandard assets with the additional characteristic that the
weaknesses make collection or liquidation in full, on the basis of currently
existing facts, conditions and values, questionable, and there is a high
possibility of loss. An asset classified as Loss is considered uncollectible and
of such little value that continuance as an asset of Reliance Savings Bank is
not warranted. Reliance Savings Bank has adopted an asset classification
methodology which parallels that required by federal regulations. Assets
classified as Substandard or Doubtful require Reliance Savings Bank to establish
prudent general allowances for loan losses. Assets classified as Loss must
either be charged off or must have a specific allowance established for 100% of
the asset classified as a Loss.

At June 30, 1998, based upon Reliance Savings Bank's asset
classification methodology, Reliance Savings Bank had no assets classified as
Substandard, Doubtful or Loss.

Allowance for Loan Losses. Under federal regulations, when an insured
institution classifies problem assets as with Substandard or Doubtful, it is
required to establish general allowances for loan losses in an amount deemed
prudent by management. In addition to general valuation allowances, Reliance
Savings Bank may establish specific loss reserves against specific assets in
which a loss may be realized. General allowances represent loss allowances which
have been established to recognize the inherent risks associated with lending
activities, but which, unlike specific allowances, have not been allocated to
recognize probable losses on particular problem assets. Reliance Savings Bank's
determination as to its classification of assets and the amount of its specific
and general valuation allowances are subject to review by the WDFI and the FDIC,
either of which can order the establishment of additional general or specific
loss allowances.

The FDIC, in conjunction with the other federal banking agencies, has
adopted and interagency policy statement on the allowance for loan and lease
losses. The policy statement provides guidance for financial institutions on
both the responsibilities of management for the assessment and establishment of
adequate allowances and guidance for banking agency examiners to use in
determining the adequacy of general valuation guidelines. Generally, the policy
statement recommends that institutions have effective systems and controls to
identify, monitor and address asset quality problems; management has analyzed
all significant factors that affect the collectibility of the portfolio in a
reasonable manner; and management has established acceptable allowance
evaluation processes that meet the objectives set forth in the policy statement.
While Reliance Savings Bank believes that it has established an adequate
allowance for loan losses, there can be no assurance that regulators, in
reviewing Reliance Savings Bank's loan portfolio, will not request Reliance
Savings Bank to materially increase its allowance for loan losses, thereby
negatively affecting Reliance Savings Bank's financial condition and earnings at
that time. Although management believes that adequate specific and general loan
loss allowances have been established, actual losses are dependent upon future
events and, as such, further additions to the level of specific and general loan
loss allowances may become necessary.

-86-
<PAGE> 91

The allowance for loan losses is increased by charges to income and
decreased by charge-offs (net of recoveries). Management's periodic evaluation
of the adequacy of the allowance is based on Reliance Savings Bank's past loan
loss experience, known and inherent risks in the portfolio, adverse situations
that may effect the borrower's ability to repay, the estimated value of any
underlying collateral and current economic conditions. There can be no assurance
that the allowance for loan losses will be adequate to cover losses which may in
fact be realized in the future and that additional provisions for loan losses
will not be required. The amount of the provision for loan losses for the years
ended June 30, 1996, 1997 and 1998 reflected management's intention to continue
to make annual additions to Reliance Savings Bank's allowance for loan losses
until it is equal to approximately 1.0% of Reliance Savings Bank's gross loan
portfolio. However, Reliance Savings Bank will continue to monitor its loan loss
experience, the condition and composition of its loan portfolio and general
economic conditions, and may make further additions to its allowance for loan
losses to a greater or lesser extent than it has done historically, depending
upon changes in the aforementioned conditions.

The following table sets forth Reliance Savings Bank's allowance for
loan losses at the dates indicated.

<TABLE>
<CAPTION>
AT JUNE 30,
------------------------------------------
1996 1997 1998
-------- -------- --------
(DOLLARS IN THOUSANDS)

<S> <C> <C> <C>
Balance at beginning of period ........................ $ 104 $ 126 $ 147
Provision for loan losses ............................. 22 21 22
Charge-offs net of recoveries:
Mortgage loans .................................... -- -- --
Consumer loans .................................... -- -- --
-------- -------- --------
Total charge-offs (net) ............................... -- -- --
-------- -------- --------
Balance at end of period .............................. $ 126 $ 147 $ 169
======== ======== ========
Ratio of allowance for loan losses to gross
loans receivable at the end of period ............. 0.47% 0.49% 0.55%
Ratio of allowance for loan losses to
non-performing loans at the end of period ......... 0.00% 0.00% 85.67%
Ratio of allowance for loan losses to total
non-performing assets at the end of the period .... 0.00% 0.00% 85.67%
Ratio of net charge-offs to average gross
loans during period ............................... 0.00% 0.00% 0.00%
</TABLE>

-87-
<PAGE> 92

The following table shows Reliance Savings Bank's total allowance for
loan losses and the allocation to the various categories of loans held for
investment at the dates indicated. It is not anticipated that charge-offs during
the year ending June 30, 1998 will exceed the amount allocated to any individual
category of loans.

<TABLE>
<CAPTION>
AT JUNE 30,
-----------------------------------------------------------------------------------------
1996 1997
---------------------------------------- ------------------------------------------
% OF % OF
% OF LOANS IN % OF LOANS IN
TOTAL CATEGORY TOTAL CATEGORY
LOANS TO TOTAL LOANS TO TOTAL
BY OUTSTANDING BY OUTSTANDING
BREAKDOWN OF ALLOWANCE AMOUNT CATEGORY LOANS AMOUNT CATEGORY LOANS
- ---------------------- ------ -------- ------------ ------ -------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Mortgage loans:
One- to four-family ................. $ 51 0.47% 40.46% $ 53 0.49% 36.26%
Multi-family ........................ 20 0.47 15.68 27 0.49 18.32
Commercial real estate .............. 22 0.47 17.26 23 0.49 15.95
Residential construction ............ 11 0.47 9.00 10 0.49 6.60
Commercial construction/
land development ................... 20 0.47 16.23 32 0.49 21.67
------- ------- ------- -------
Total mortgage loans ............. 124 98.63 145 98.80
Consumer loans .......................... 2 -- 1.37 2 -- 1.20
------- ------- ------- -------
Total allowance for loan losses .. $ 126 100.00% $ 147 100.00%
======= ======= ======= =======

<CAPTION>
AT JUNE 30,
---------------------------------------
1998
---------------------------------------
% OF
% OF LOANS IN
TOTAL CATEGORY
LOANS TO TOTAL
BY OUTSTANDING
BREAKDOWN OF ALLOWANCE AMOUNT CATEGORY LOANS
- ---------------------- ------ -------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Mortgage loans:
One- to four-family ................. $ 51 0.55% 30.32%
Multi-family ........................ 41 0.55 24.37
Commercial real estate .............. 19 0.55 11.14
Residential construction ............ 42 0.55 24.42
Commercial construction/
land development ................... 15 0.55 9.17
------- -------
Total mortgage loans ............. 168 99.42
Consumer loans .......................... 1 -- 0.58
------- -------
Total allowance for loan losses .. $ 169 100.00%
======= =======
</TABLE>

-88-
<PAGE> 93

INVESTMENT ACTIVITIES

General. The investment policy of Reliance Savings Bank, which is
established by the Board of Directors and implemented by Reliance Savings Bank's
management, is designed primarily to provide and maintain required liquidity,
generate a favorable return on investments without incurring undue interest rate
and credit risk and complement Reliance Savings Bank's lending activities.
Reliance Savings Bank primarily invests in mortgage-backed and related
securities. United States treasury obligations and mutual funds (the assets of
which are comprised primarily of government guaranteed mortgage-backed and
related securities).

Reliance Savings Bank's investment policy permits investment in various
types of liquid assets authorized under FDIC and state regulations, which
include U.S. Treasury obligations, securities of various agencies, certain
certificates of deposit of insured banks and savings institutions, certain
banker's acceptances and deposits at the FHLB-Chicago. Reliance Savings Bank
also is permitted to invest in commercial paper, mutual funds, investment grade
corporate debt securities and mortgage-backed and related securities. Investment
and aggregate investment limitations and credit quality parameters of each class
of investment are prescribed in Reliance Savings Bank's investment policy.
Reliance Savings Bank performs analyses on mortgage related securities prior to
purchase and on an ongoing basis to determine the impact on earnings and market
value under various interest rate and prepayment conditions. Reliance Savings
Bank's investment policy prohibits Reliance Savings Bank from engaging in
hedging activities which involve the use of options, futures, interest rate
swaps or forward commitments, and from purchasing non-investment grade corporate
debt securities. During the years ended June 30, 1996, 1997 and 1998, Reliance
Savings Bank did not hold any derivative financial instruments in its investment
portfolio to which the provisions of SFAS No. 119 would apply.

Reliance Savings Bank categorizes the securities it purchases into a "Held
to Maturity" or "Available for Sale" portfolio as follows:

1. Securities Held to Maturity. Reliance Savings Bank has the ability and
intent to hold these assets to maturity. Upon acquisition, securities
are classified as to Reliance Savings Bank's intent and a sale would
only be effected due to deteriorating investment quality. The
investment portfolio is not used for speculative purposes and is
carried at amortized cost. in the event Reliance Savings Bank sells
securities from this portfolio for other than credit quality reasons,
all activities within the investment portfolio with matching
characteristics may be reclassified as assets held for sale.

2. Securities Available for Sale. Reliance Savings Bank does not intend to
hold these assets to maturity and thus are carried at an amount which
is the lower of aggregate cost or market value with unrealized losses
recognized as a component of stockholders' equity. This portion of the
securities portfolio is designated to meet anticipated loan demand and
deposit runoff or to take advantage of market opportunities.

During the year ended June 30, 1998, Reliance Savings Bank transferred its
investments from its held-to-maturity portfolio to its available-for-sale
portfolio. This was done as the result of a sale from its held-to-maturity
portfolio of a $200,000 REMIC, on which a $1,375 realized loss was incurred, due
to the inconsistency in the nature and volatility of the investment with
Reliance Savings Bank's conservative investment objectives. The remaining
investments in the held-to-maturity portfolio transferred to the
available-for-sale portfolio had an amortized cost of $3.8 million and resulted
in an unrealized gain of $48,000.

Mortgage-Backed Securities. At June 30, 1998, Reliance Savings Bank's
mortgage-backed securities portfolio totaled $420,000, and consisted of $406,000
of GNMA participation certificates and $14,000 of FHLMC participation
certificates.

-89-
<PAGE> 94

Mortgage-backed securities represent a participation interest in a pool of
single-family or multi-family mortgage loans, the principal and interest
payments on which are passed from the mortgage loan originators through
intermediaries (generally federal government-sponsored enterprises) that pool
and repackage the participation interest in the form of securities to investors
such as Reliance Savings Bank. Such federal government-sponsored enterprises,
which guarantee the payment of principal and interest to investors include
FHLMC, FNMA and GNMA. Mortgage- backed securities generally increase the quality
of Reliance Savings Bank's assets by virtue of the guarantees that back them,
are more liquid than individual mortgage loans and may be used to collateralize
borrowings or other obligations of Reliance Savings Bank.

The actual maturity of a mortgage-backed security varies, however,
depending on when the mortgagors prepay or repay the underlying mortgage loans.
Prepayments of the underlying mortgage loans may shorten the life of the
investment, thereby adversely affecting its yield to maturity and the related
market value of the mortgage-backed security. The yield is based upon the
interest income and the amortization of the premium or accretion of the
discount, related to the mortgage-backed security. Premiums and discounts on
mortgage-backed securities are amortized or accreted over the estimated term of
the securities using a level yield method. The prepayment assumptions used to
determine the amortization period for premiums and discounts can significantly
affect the yield of the mortgage-backed security and these assumptions are
reviewed periodically to reflect the actual prepayment. The actual prepayments
of the underlying mortgage loans depend on many factors, including type of
mortgage loans and general levels of market interest rates. The difference
between the interest rates on the underlying mortgage loans and the prevailing
mortgage interest rates is an important determinant in the rate of prepayments.
During periods of falling mortgage interest rates, prepayments generally
increase. If the coupon rate of the underlying mortgage loans significantly
exceeds the prevailing market interest rate offered for mortgage loans,
refinancing generally increases and accelerates the prepayment of the underlying
mortgage loans. Prepayment experience is more difficult to estimate for
adjustable rate mortgage-backed securities. While mortgage-backed securities
carry a reduced credit risk as compared to whole loans (and generally yield less
than the loans that underlie such securities because of the cost payment
guarantees or credit enhancements that result in nominal credit risk), such
securities remain subject to the risk that a fluctuating interest rate
environment, along with other factors such as the geographic distribution of the
underlying mortgage loans, may alter the prepayment rate of such mortgage loans
and so affect both the prepayment speed and value of such securities.

Mortgage-Related Securities. At June 30, 1998, Reliance Savings Bank's had
no CMOs in its portfolio as compared to its portfolio of $100,000 as of June 30,
1997. The CMOs owned by Reliance Savings Bank at June 30, 1997 were issued by
the FHLMC.

-90-
<PAGE> 95

COMPOSITION OF RELIANCE SAVINGS BANK'S MORTGAGE-BACKED AND RELATED SECURITIES
PORTFOLIO

The table below sets forth certain information regarding the carrying
value, weighted average yields and maturities of Reliance Savings Bank's
mortgage-backed and related securities held for sale at June 30, 1998. At June
30, 1998, Reliance Savings Bank did not have any mortgage-backed and related
securities held for investment.

<TABLE>
<CAPTION>
AT JUNE 30, 1998
--------------------------------------------------------------------------------------------

ONE YEAR OVER ONE TO OVER FIVE TO
OR LESS FIVE YEARS TEN YEARS OVER TEN YEARS
----------------------- ----------------------- ---------------------- --------------

WEIGHTED WEIGHTED WEIGHTED
CARRYING AVERAGE CARRYING AVERAGE CARRYING AVERAGE CARRYING
VALUE YIELD VALUE YIELD VALUE YIELD VALUE
---------- ---------- ---------- ---------- ------- ---------- ---------
(DOLLARS IN THOUSANDS)
MORTGAGE-BACKED SECURITIES:
<S> <C> <C> <C> <C> <C> <C> <C>
GNMA ............................ $ -- -- % $ -- -- % $ 147 8.57% $ 259
FHLMC ........................... -- -- 14 9.00 -- -- --
MORTGAGE-RELATED SECURITIES:
CMOs ............................ -- -- -- -- -- -- --
----- ----- ----- ----- ----- ----- -----
Total mortgage-backed
and related securities ... $ -- -- % $ 14 9.00% $ 147 8.57% $ 259
===== ===== ===== ===== ===== ===== =====

<CAPTION>
AT JUNE 30, 1998
-------------------------------------------------------------------
MORTGAGE-BACKED AND RELATED SECURITIES

OVER TEN YEARS TOTALS
-------------- -------------------------------------------------
AVERAGE
WEIGHTED REMAINING APPROXIMATE WEIGHTED
AVERAGE YEARS TO CARRYING MARKET AVERAGE
YIELD MATURITY VALUE VALUE YIELD
------ ------------ ----------- ----------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
MORTGAGE-BACKED SECURITIES:
GNMA ............................ 10.80% 13.20 $ 406 $ 445 9.99%
FHLMC ........................... -- 2.92 14 14 9.00
MORTGAGE-RELATED SECURITIES:
CMOs ............................ -- -- -- -- --
----- ----- ----- ----- -----
Total mortgage-backed
and related securities ... 10.80% 12.75 $ 420 $ 459 9.4%
===== ===== ===== ===== =====
</TABLE>

The following table sets forth certain information regarding carrying
and market values and percentage of total carrying values of Reliance Savings
Bank's mortgage-backed and related securities portfolio.

<TABLE>
<CAPTION>
AT JUNE 30,
----------------------------------------------------------------------------------------------
1996 1997 1998
--------------------------- ----------------------------- --------------------------
CARRYING % OF MARKET CARRYING % OF MARKET CARRYING % OF MARKET
VALUE TOTAL VALUE VALUE TOTAL VALUE VALUE TOTAL VALUE
-------- -------- ------ -------- -------- ------- -------- -------- ------

(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
MORTGAGE-BACKED SECURITIES:
GNMA....................... $ 679 84.88% $ 735 568 82.92% 616 $ 406 96.67% $ 444
FHLMC...................... 21 2.62 22 17 2.48 19 14 3.33 14
MORTGAGE-RELATED SECURITIES:
CMOs....................... 100 12.5 95 100 14.60 97 -- -- --
------ ----- ------ ----- ----- ----- ----- --- ------
Total mortgage-backed
and related securities... $ 800 100.00% $ 852 $ 685 100.00% $ 732 $ 420 100.00% $ 458
====== ====== ====== ====== ======= ===== ===== ====== ======
</TABLE>

-91-
<PAGE> 96

The following table sets forth the activity in Reliance Savings Bank's
mortgage-backed and related securities portfolio during the periods indicated.

<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
---------------------------------------
1996 1997 1998
------- ------- -------
(IN THOUSANDS)
<S> <C> <C> <C>
MORTGAGE-BACKED AND RELATED SECURITIES:
At beginning of period ................. $ 1,020 $ 800 $ 685
Purchases ........................... -- -- --
Sales ............................... -- -- (100)
Repayments .......................... (221) (115) (165)
Adjustment to market value .......... -- -- 36
Premium/discount amortization ....... 1 -- --
------- ------- -------
End of period .......................... $ 800 $ 685 $ 456
======= ======= =======
</TABLE>

Reliance Savings Bank may, in future periods, leverage its capital base
by using the proceeds of borrowings from the FHLB-Chicago to purchase
mortgage-backed and related securities or investment securities. Therefore, if
the leveraging strategy is implemented, the size of Reliance Savings Bank's
mortgage-backed and related securities portfolio may increase in future periods.

Investment Securities. Reliance Savings Bank invests in various types
of liquid assets that are permissible investments for state chartered savings
banks, including United States Treasury obligations, securities of various
federal agencies, certain certificates of deposits of federally insured banks
and savings institutions and federal funds. Subject to various restrictions,
Reliance Savings Bank also may invest its assets in commercial paper, mutual
funds, and investment grade corporate debt securities. Reliance Savings Bank's
current investment policy permits purchase only of investments rated investment
grade (i.e., rated in one of the top four rating categories) by a nationally
recognized statistical rating corporation ("NRSRO") and does not permit
purchases of securities of non-investment grade quality. Investment securities
generally are carried at cost, as adjusted for amortization of premiums and
accretion of discounts, because it is management's intention to hold such
securities to maturity.

A portion of Reliance Savings Bank's investment securities portfolio
consists of U.S. government and other agency obligations and mutual fund
investments. At June 30, 1998, U.S. government and agency obligation investments
totaled $2.0 million, or 17.78% of Reliance Savings Bank's total investment
portfolio. The amount of these securities decreased significantly during the
year ended June 30, 1998 due to the repayment of borrowings. At June 30, 1998,
mutual funds investments, consisting of adjustable and floating rate mortgage
securities issued or guaranteed by the U.S. Government or its agencies, totaled
$4.7 million, or 40.81%, of Reliance Savings Bank's total investment securities
portfolio. All of Reliance Savings Bank's mutual fund investments are
permissible investments under Reliance Savings Bank's investment policy and all
other applicable regulations. Mutual fund investments are carried at market
value.

The following table sets forth investment securities issued by a single
entity with a total carrying value in excess of 10% of Reliance Savings Bank's
retained earnings at June 30, 1998 and all mutual fund investments contained in
Reliance Savings Bank's investment securities portfolio at June 30, 1998.

<TABLE>
<CAPTION>
CARRYING MARKET
VALUE AT VALUE AT
NAME OF ISSUER JUNE 30, 1998 JUNE 30, 1998
-------------- ------------- -------------
(IN THOUSANDS)
<S> <C> <C>
Federated ARMS Fund, Institutional Shares,
251,004.016 shares............................................ $2,500 $2,430
Asset Management Fund, Inc., Adjustable Rate Mortgage
(ARM) Portfolio, 122,517.732 shares........................... 1,225 1,218
Federated Short-Term Income Fund (A Portfolio of
Federated Income Securities Trust), Institutional Shares,
109,409.190 shares............................................ 1,000 956
FHLB Bond, due 06/23/2008......................................... 2,000 2,006
</TABLE>

-92-
<PAGE> 97

COMPOSITION OF RELIANCE SAVINGS BANK'S INVESTMENT SECURITIES PORTFOLIO

The following tables set forth certain information regarding the fair market
values and the amortized cost or market value of Reliance Savings Bank's
investment securities.

<TABLE>
<CAPTION>
AT JUNE 30,
---------------------------------------------------------------------------
1996 1997
----------------------------------- ------------------------------------
AMORTIZED AMORTIZED
CARRYING % OF COST OR CARRYING % OF COST OR
VALUE TOTAL MARKET VALUE VALUE TOTAL MARKET VALUE
-------- ------- ------------ --------- ------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
SECURITIES AVAILABLE FOR SALE:
U.S. Government and other agency obligations ...... $ -- -- % $ -- $ 2,592 22.58% $ 2,582
Equity securities-mutual funds .................... 5,350 67.88 5,525 5,403 47.06 5,525
Corporate debt securities ......................... 1,955 24.80 1,955 2,540 22.12 2,540
Equity securities-FHLMC stock ..................... 577 7.32 28 946 8.24 28
------- ------- ------- ------- ------- -------
Total investment securities available for sale .. $ 7,882 100.00% $ 7,508 $11,481 100.00% $10,675
======= ======= ======= ======= ======= =======

SECURITIES HELD TO MATURITY:
U.S. Government and other agency obligations ...... $11,178 96.12% $11,162 $ 3,189 86.59% $ 3,202
Certificates of deposit ........................... 294 2.53 294 294 7.98 294
FHLB stock ........................................ 157 1.35 157 200 5.43 200
------- ------- ------- ------- ------- -------
Total securities held to maturity ............... $11,629 100.00% $11,613 $ 3,683 100.00% $ 3,696
======= ======= ======= ======= ======= =======
</TABLE>

<TABLE>
<CAPTION>
AT JUNE 30,
---------------------------------------
1998
---------------------------------------
CARRYING % OF COST OR
VALUE TOTAL MARKET VALUE
-------- ------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
SECURITIES AVAILABLE FOR SALE:
U.S. Government and other agency obligations ..... $ 2,006 17.94% $ 2,000
Equity securities-mutual funds ................... 4,604 41.18 4,725
Corporate debt securities ........................ 2,585 23.12 2,585
Certificates of Deposit .......................... 493 4.41 486
Equity securities - FHLB stock ................... 200 1.79 200
Equity securities-FHLMC stock .................... 1,293 11.56 28
------- ------- -------
Total investment securities available for sale ... $11,181 100.00% $10,024
======= ======= =======
SECURITIES HELD TO MATURITY:
U.S. government and other agency obligations ..... -- -- --
Certificates of deposit .......................... -- -- --
FHLB stock ....................................... -- -- --
------- ------- -------
Total securities held to maturity ................ -- -- --
======= ======= =======
</TABLE>

-93-
<PAGE> 98

The table below sets forth certain information regarding the carrying
value or amortized cost, weighted average yields and maturities of Reliance
Savings Bank's investment securities at June 30, 1998.

<TABLE>
<CAPTION>
AT JUNE 30, 1998
---------------------------------------------------------------------------------------

OVER ONE TO FIVE OVER FIVE TO TEN
ONE YEAR OR LESS YEARS YEARS
------------------------ ---------------------------- ----------------------------

CARRYING CARRYING CARRYING
VALUE OR WEIGHTED VALUE OR WEIGHTED VALUE OR WEIGHTED
AMORTIZED AVERAGE AMORTIZED AVERAGE AMORTIZED AVERAGE
COST YIELD COST YIELD COST YIELD
---------- ---------- ---------- ---------- ---------- ----------
(DOLLARS IN THOUSANDS)

<S> <C> <C> <C> <C> <C> <C>
SECURITIES AVAILABLE FOR SALE:

U.S. Government and other
agency obligations ................. $ -- -- $ -- -- $ 2,006 6.66%

Equity securities-mutual funds ....... -- -- -- -- -- --

Corporate debt securities ............ -- -- -- -- -- --

Certificates of deposit .............. 394 6.21% 99 5.60% -- --

FHLB stock ........................... -- -- -- -- -- --

Equity securities-FHLMC
stock ............................ -- -- -- -- -- --
---------- ---------- ----------

Total securities available for
sale ............................. $ 394 6.21% $ 99 5.60% $ 2,006 6.66%
========== ========== ==========

<CAPTION>
AT JUNE 30, 1998
------------------------------------------------------------------------------------------

NO
CONTRACTUAL
OVER TEN YEARS MATURITY INVESTMENT SECURITIES TOTALS
------------------------- ---------- ------------------------------------------------

CARRYING CARRYING AVERAGE CARRYING
VALUE OR WEIGHTED VALUE OR REMAINING VALUE OR APPROX. WEIGHTED
AMORTIZED AVERAGE AMORTIZED YEARS TO AMORTIZED MARKET AVERAGE
COST YIELD COST MATURITY COST VALUE YIELD
---------- ---------- ---------- ---------- ---------- ---------- ----------

(DOLLARS IN THOUSANDS)

<S> <C> <C> <C> <C> <C> <C> <C>
SECURITIES AVAILABLE FOR SALE:

U.S. Government and other
agency obligations ................. $ -- -- $ -- 9.92 $ 2,000 $ 2,006 6.60

Equity securities-mutual funds ....... -- -- 4,604 -- 4,725 4,604 5.48

Corporate debt securities ............ 2,585 5.70% -- 23.55 2,585 2,585 5.70

Certificates of deposit .............. -- -- -- 0.56 486 493 5.96

FHLB stock ........................... -- -- 200 -- 200 200 --

Equity securities-FHLMC
stock ............................ -- -- 1,293 -- 28 1,293 39.70
---------- ---------- ---------- ----------

Total securities available for
sale ............................. $ 2,585 5.70% $ 6,097 $ 10,024 $ 11,181 5.77
========== ========== ========== ========== ==========

</TABLE>

-94-
<PAGE> 99

SOURCES OF FUNDS

General. Reliance Savings Bank's primary sources of funds for use in
lending, investing and for other general purposes are deposits, proceeds from
principal and interest payments on loans, mortgage-backed and related securities
and investment securities. Contractual loan payments are a relatively stable
source of funds, while deposit inflows and outflows and loan prepayments are
significantly influenced by general market interest rates and economic
conditions. Borrowings may be used on a short-term basis to compensate for
seasonal or other reductions in normal sources of funds or for deposit inflows
at less than projected levels. Reliance Savings Bank also has other lines of
credit available for borrowing purposes with other local financial institutions.

Deposits. Reliance Savings Bank offers a variety of deposit accounts
having a range of interest rates and terms. Reliance Savings Bank's deposits
principally consist of demand accounts (non-interest bearing checking, NOW,
MMDA, and passbook) and certificates of deposit. The flow of deposits is
influenced significantly by general economic conditions, changes in prevailing
interest rates and competition. Reliance Savings Bank's deposits are obtained
primarily from the area in which its office is located, and Reliance Savings
Bank relies principally on customer service, marketing programs and
long-standing relationships with customers to attract and retain these deposits.
Various types and limited amounts of advertising and promotion to attract and
retain deposit accounts also are used. Reliance Savings Bank does not currently
solicit or currently accept brokered deposits. Management monitors Reliance
Savings Bank's certificate accounts and based on historical experience,
management believes it will retain a large portion of such accounts upon
maturity. Management considers Bank profitability, the matching of term lengths
with assets, the attractiveness to customers and rates offered by competitors in
deposit offerings and promotions. Reliance Savings Bank has been competitive in
the types of accounts and interest rates it has offered on its deposit products.
Reliance Savings Bank intends to continue its efforts to attract deposits as a
primary source of funds for supporting its lending and investing activities.

Reliance Savings Bank sets interest rates on its deposits on a weekly
basis, based upon a number of factors, including: (i) the previous week's
deposit flow; (ii) a current survey of a selected group of competitors' rates
for similar products; (iii) external data which may influence interest rates;
(iv) investment opportunities and loan demands; and (v) scheduled maturities.

The following table presents the deposit activity of Reliance Savings
Bank for the periods indicated. During the low interest rate environment over
the past three years, Reliance Savings Bank's deposits have declined, with
depositors shifting funds from lower interest certificates of deposit to mutual
funds and other investment alternatives offering higher yields. In addition,
although Reliance Savings Bank has been competitively pricing its deposit
products over the past two years, its core deposits have continued to decline.
Reliance Savings Bank believes its office location and the characteristics of
its local market area are primary contributors to this continued decline. See
"--Market Area and Competition."

<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
-------------------------------
1996 1997 1998
------- ------- -------
<S> <C> <C> <C>
Deposits ............................... $ 2,289 $ 4,518 $ 4,429

Withdrawals ............................ 7,334 5,926 5,508
------- ------- -------

Net deposits (withdrawals) ............. (5,045) (1,408) (1,079)

Interest credited on deposits .......... 933 804 814
------- ------- -------

Total increase (decrease) in deposits .. $(4,112) $ (604) $ (265)
======= ======= =======
</TABLE>

-95-
<PAGE> 100

At June 30, 1997 and 1998, Reliance Savings Bank had outstanding $1.40
million and $1.40 million, respectively, in certificates of deposit in amounts
of $100,000 or more maturing as follows:

<TABLE>
<CAPTION>
AT JUNE 30,
----------------
1997 1998
------ ------
(IN THOUSANDS)

<S> <C> <C>
Three months or less ................... $ 100 $ --

Over three through six months .......... 112 --

Over six through twelve months ......... 843 1,196

Over twelve months ..................... 347 206
------ ------

Total .............................. $1,402 $1,402
====== ======
</TABLE>

-96-
<PAGE> 101

The following table sets forth the distribution of Reliance Savings
Bank's deposit accounts at the dates indicated and the weighted average nominal
rates on each category of deposits presented.

<TABLE>
<CAPTION>
AT JUNE 30,
-----------------------------------------------------------------------------------------------
1996 1997 1998
------------------------------- ------------------------------ --------------------------------
WEIGHTED WEIGHTED WEIGHTED
PERCENT AVERAGE PERCENT AVERAGE PERCENT AVERAGE
OF TOTAL NOMINAL OF TOTAL NOMINAL OF TOTAL NOMINAL
AMOUNT DEPOSITS RATE AMOUNT DEPOSITS RATE AMOUNT DEPOSITS RATE
------------------------------- ------------------------------ --------------------------------
(DOLLARS IN THOUSANDS)
DEMAND ACCOUNTS:

<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Non-interest bearing ........... $ 89 0.49% -- % $ 35 0.20% -- % $ 68 0.39% -- %

Interest-bearing (NOW) ......... 126 0.69 2.50 92 0.52 2.50 35 0.20 2.50

Money market ................... 952 5.23 3.45 926 5.26 3.45 852 4.92 3.40

Passbook ....................... 2,775 15.25 2.78 2,660 15.12 2.78 2,350 13.56 2.77
------- ------- ------- ------- ------- -------

Total demand accounts ........ 3,942 21.66 2.87 3,713 21.10 2.91 3,305 19.07 2.87

CERTIFICATE OF DEPOSIT ACCOUNTS:

Six months and less ............ 7,230 39.73 5.59 6,410 36.43 5.59 6,452 37.23 5.62

Six to twelve months ........... 3,533 19.41 5.49 4,326 24.58 5.49 3,972 22.91 5.66

Twelve to 36 months ............ 2,813 15.46 5.84 2,807 15.95 5.84 3,221 18.59 5.91

36 to 60 months ................ 632 3.47 6.01 289 1.65 6.01 380 2.20 6.22

60 to 90 months ................ 50 0.27 8.00 51 0.29 8.00 -- -- --

Jumbo (over 90 months) ......... -- -- -- -- -- -- -- -- --
------- ------- ------- ------- ------- -------

Total certificates of deposit .. 14,258 78.34 5.64 13,883 78.90 5.63 14,025 80.93 5.71
------- ------- ------- ------- ------- -------

Total deposit accounts ......... $18,200 100.00% 5.04 $17,596 100.00% 5.05 $17,330 100.00% 5.17
======= ======= ======= ======= ======= -------
</TABLE>

-97-
<PAGE> 102

The following table presents, by various rate categories, the amount of
certificate accounts outstanding at June 30, 1996, 1997 and 1998 and the periods
to maturity of the certificate accounts outstanding at June 30, 1998.

<TABLE>
<CAPTION>
PERIOD TO MATURITY FROM JUNE 30, 1998
AT JUNE 30, ---------------------------------------------------
------------------------------- WITHIN ONE ONE TO THREE
1996 1997 1998 YEAR YEARS THEREAFTER TOTAL
------- ------- ------- ---------- ------------- ---------- -------
(IN THOUSANDS)

<S> <C> <C> <C> <C> <C> <C> <C> <C>
CERTIFICATE OF DEPOSIT ACCOUNTS:

3.99% and less ................ $ 10 $ 11 $ 11 $ 11 $ -- $ -- $ 11

4.00% to 4.99% ................ 95 -- -- -- -- -- --

5.00% to 5.99% ................ 11,180 11,138 9,938 7,971 1,738 229 9,938

6.00% to 6.99% ................ 2,402 2,467 3,797 2,380 1,319 98 3,797

7.00% to 7.99% ................ 521 216 227 63 164 -- 227

8.00% to 8.99% ................ 50 51 52 -- -- 52 52

9.00% to 9.99% ................ -- -- -- -- -- -- --
------- ------- ------- ------- ------- ------- -------

Total ..................... $14,258 $13,883 $14,025 $10,425 $ 3,221 $ 379 $14,025
======= ======= ======= ======= ======= ======= =======
</TABLE>

-98-
<PAGE> 103

Borrowings and Other Financial Transactions. Reliance Savings Bank's
other available sources of funds include notes payable to the FHLB-Chicago and
collateralized borrowings. As a member of the FHLB-Chicago, Reliance Savings
Bank is required to own capital stock in and is authorized to apply for
borrowings from the FHLB- Chicago. Each FHLB credit program has its own interest
rate, which may be fixed or variable, and a range of maturities. The
FHLB-Chicago may prescribe the acceptable uses for these borrowings, as well as
limitations on the amount and repayment provisions. Reliance Savings Bank has
borrowed funds in the past, and will continue to monitor use of this source in
the future. At June 30, 1997 and 1998, Reliance Savings Bank had $4.0 million
and $2.0 million, respectively, outstanding from the FHLB-Chicago. Other sources
of funding are from correspondent banks on a short-term basis.

Reliance Savings Bank's borrowings from time to time include reverse
repurchase agreements and repurchase agreements. The form of reverse repurchase
agreements used by Reliance Savings Bank involves the sale of securities owned
by Reliance Savings Bank with a commitment to repurchase the same or
substantially the same securities at a predetermined price at a future date,
typically within 30 days to 12 months. The form of repurchase agreements used by
Reliance Savings Bank generally are entered into with local businesses and
institutions seeking to deposit funds in excess of insurable limits. Both of
these transactions are treated as borrowings on Reliance Savings Bank's
financial statements. These transactions are authorized by Reliance Savings
Bank's Investment policy and are governed by agreements with primary government
dealers under PSA Master Repurchase Agreements. At June 30, 1997, Reliance had
$2.0 million outstanding reverse repurchase agreements. At June 30, 1998,
Reliance had no outstanding reverse repurchase agreements.

The following table sets forth certain information regarding Reliance
Savings Bank's FHLB-Chicago advances, reverse repurchase agreements and
repurchase agreements at or for the periods ended on the dates indicated.

<TABLE>
<CAPTION>
AT OR FOR THE
YEAR ENDED JUNE 30,
---------------------------------------
1996 1997 1998
------- ------- -------
<S> <C> <C> <C>
FHLB-CHICAGO ADVANCES:
Average balance outstanding .............. $ 134 $ 1,775 $ 3,812
Maximum amount outstanding at
any month-end during the period ........ 650 4,000 4,000
Balance outstanding at end of period ..... -- 4,000 2,000
Weighted average interest rate
during the period(1) ................... 5.82% 5.91% 6.06%
Weighted average interest rate
at end of period ....................... -- 5.97% 6.19%
REVERSE REPURCHASE AGREEMENTS:
No activity
REPURCHASE AGREEMENTS:
Average balance outstanding .............. $ -- $ 1,347 $ 532
Maximum amount outstanding at any
month-end during the period ............ -- 3,000 2,000
Balance outstanding at end of period ..... -- 2,000 --
Weighted average interest rate during
the period ............................ -- 5.72% 5.80%
Weighted average interest rate at end
of period .............................. -- 5.70% --
</TABLE>

- ----------
(1) Computed on the basis of average monthly balances.

-99-
<PAGE> 104

REGULATIONS

Reliance Savings Bank consummated its conversion from a mutual to a
stock savings bank on April 18, 1996. The following discussion involves
regulations as they apply to stock savings banks and is intended to be a summary
of key regulatory issues and not a comprehensive description of all applicable
regulations.

Reliance Savings Bank is a Wisconsin-chartered stock savings bank and
its deposit accounts are insured up to applicable limits by the FDIC under the
SAIF. Reliance Savings Bank is subject to extensive regulation by the
Administrator, as its chartering agency, and by the FDIC, as its deposit insurer
and principal federal regulator. The lending and investment authority of
Reliance Savings Bank is prescribed by Wisconsin law and regulations, as well as
applicable federal law and regulations, and Reliance Savings Bank is prohibited
from engaging in any activities not permitted by such law and regulations.
Reliance is a one-bank holding company subject to regulatory oversight by the
Board of Governors of the Federal Reserve System ("FRB"), the Administrator of
the WDFI - Division of Savings Institutions ("Administrator") and the SEC.

PENDING FINANCIAL MODERNIZATION LEGISLATION

On May 13, 1998, the U.S. House of Representatives passed a sweeping
financial modernization bill, H.R. 10, "The Financial Services Act of 1998," by
a vote or 214 to 213. The bill was first proposed by the Clinton Administration
on May 21, 1997. The final House version differs in many significant respects
from the Administration's proposed bill. The House bill has been sent to the
U.S. Senate for its consideration. The Senate began hearings on the legislation
on June 17, 1998. If passed by the Senate, the bill would not become law unless
it is signed by the President. Since there are few legislative days left to act
in the 105th Congress, many observers believe there is an inadequate amount of
time for the Senate to act on the legislation in the 1998 legislative year. In
addition, the Administration has commented publicly that it will not support the
legislation in the form passed by the House. Accordingly, whether the bill will
pass in the near future remains uncertain and the ultimate form the legislation
might take if enacted cannot be predicted at this time.

The bill, among other things, addresses the ongoing debate concerning
mixing banking and commerce. Under the proposal, banks could affiliate with
insurance and securities companies in a holding company structure, subject to
functional regulation. Much of the debate concerning the legislation has
centered on whether non-banking activities can be conducted through subsidiaries
of the bank, rather than only through holding companies. In this regard, H.R. 10
requires banks to move non-banking activities to holding companies regulated by
the Board of Governors of the Federal Reserve System, thereby removing them rom
under the bank. Securities activities would be regulated by the SEC and state
regulators would oversee insurance activities. The proposal provides for further
study of the issues relating to merging the SAIF and BIF. If adopted, the
legislation would represent the most significant overhaul of financial services
laws since the 1930s when the Glass-Steagall Act of 1933 was enacted.

With respect to the thrift industry, H.R. 10 does not contain
provisions eliminating the federal thrift charter and requiring all federal
thrifts to convert into national banks within two years. The bill allows
existing unitary thrift holding companies to continue operating, but it
prohibits the establishment of any new unitary thrifts, if the application for
unitary thrift status if filed after March 31, 1998. Prior versions of the bill
would have eliminated the federal thrift charter, while allowing existing
unitary thrift holding companies to retain their status and affiliations with
nonfinancial enterprises and to engage in all currently permissible activities.

WISCONSIN SAVINGS BANK REGULATIONS

Regulations administered by the Administrator govern various aspects of
the activities and operations of Wisconsin-chartered savings banks.

Examinations and Assessments. Reliance Savings Bank is required to file
periodic reports with and is subject to examination at least once every 18-month
period by the Administrator. Savings banks are required to pay examination fees
and annual assessments to fund the supervisory operations of the Administrators.
Based on the assessment rates published by the Administrator and Reliance
Savings Bank's total assets of $43.4 million at December 31, 1997, Reliance
Savings Bank paid $1,822 in assessments for the period ended June 30, 1998.

-100-
<PAGE> 105

Loans and Investments. Under Wisconsin law, Reliance Savings Bank is
authorized to make, invest in, sell, purchase, participate or otherwise deal in
mortgage loans or interests in mortgage loans without geographic restriction,
including loans made on the security of residential and commercial property.
Savings banks may lend funds, on a secured or unsecured basis, for commercial or
consumer purposes, provided that aggregate commercial loans do not exceed 10% of
the savings bank's total assets and aggregate consumer loans do not exceed 10%
of the savings bank's total assets. Subject to certain limited exceptions,
savings banks may not make a loan secured by a first lien mortgage in an amount
in excess of 90% of the fair value of the real estate security.

Subject to statutory and regulatory limitations, savings banks may also
invest funds in certain types of debt and equity securities, including
obligations of federal, state and local governments and agencies. Subject to
prior approval of the Administrator, compliance with capital requirements, and
certain other restrictions, savings banks may invest in residential housing
development projects. Savings banks may invest in service corporations or
subsidiaries with the prior approval of the Administrator, subject to certain
restrictions. Reliance Savings Bank does not have any subsidiary operations.

The lending and investment powers of Wisconsin savings banks also are
limited by FDIC regulation and other federal law and regulations. See "Federal
Deposit Insurance Corporation Improvement Act of 1991".

Loans to One Borrower. Wisconsin-chartered savings banks may make loans
and extensions of credit, both direct and indirect, to one borrower in amounts
up to 15% of capital plus an additional 10% for loans fully secured by readily
marketable collateral. In addition, savings banks may make loans to one borrower
for any purpose in an amount not to exceed $500,000, or to develop domestic
residential housing units in an amount not to exceed the lesser of $30 million
or 30% of capital, provided certain conditions are satisfied. At June 30, 1998,
Reliance Savings Bank had loans or groups of loans totaling $4.3 million which
exceeded the loans-to-one borrower limitation of $3.3 million. Reliance Savings
Bank effectuated a $4.0 million participation agreement with another lender to
reduce the loans below the limitation.

Qualified Thrift Lender. As a Wisconsin-chartered savings bank,
Reliance Savings Bank must qualify for and maintain a level of qualified thrift
investments equal to 60% of its assets as prescribed in Section 7701(a)(19) of
the Internal Revenue Code of 1986, as amended ("Internal Revenue Code"). At June
30, 1998, Reliance Savings Bank maintained over 80% of its assets in qualified
thrift investments and therefore met the qualified thrift- requirement.

Dividend Limitations. A savings bank which meets its regulatory capital
requirement may declare dividends on capital stock based upon net profits,
provided that its paid-in surplus equals its capital stock. If the paid-in
surplus of the savings bank does not equal its capital stock, the board of
directors may not declare a dividend unless at least 10% of the net profits of
the preceding half year in the case of quarterly or semi-annual dividends, or
10% of the net profits of the preceding year in the case of annual dividends,
has been transferred to paid-in surplus. In addition, prior approval of the
Administrator is required before dividends exceeding 50% of profits for any
calendar year may be declared and before a dividend may be declared out of
retained earnings. Under the Administrator's regulations, a savings bank which
has converted from mutual to stock form also is prohibited from paying a
dividend on its capital stock if the effect thereof would cause the regulatory
capital of the savings bank to be reduced below the amount required for its
liquidation account.

Liquidity. Savings banks are required to maintain an average daily
balance of liquid assets (including cash, certain time deposits, certain
banker's acceptances, certain corporate debt securities and highly rates
commercial paper, securities of certain mutual funds and specified United States
government, state or federal agency obligations) of not less than 8% of its
average daily balance during the preceding calendar month of its net
withdrawable accounts plus its short-term borrowings. Also required is a
"primary liquid assets" ratio of at least 4% of average daily withdrawable
accounts and short-term borrowings. "Primary liquid assets" is defined as
primary short-term liquid assets and U.S. government and federal agency
securities. On June 30, 1998, Reliance Savings Bank's liquidity ratio was
78.56%.

-101-
<PAGE> 106

CERTAIN FEDERAL REGULATIONS

Provisions of federal law address risk reduction and the promotion of
standards of safety and soundness for insured depository institutions.

Examinations and Audits. Federal regulations require: (i) annual
on-site examinations for all depository institutions except those
well-capitalized institutions with assets of less than $100 million; (ii) annual
audits by independent public accountants for all insured institutions with
assets in excess of $500 million; (iii) the formation of independent audit
committees of the boards of directors of insured depository institutions for
institutions with assets equal to or in excess of $500 million; and, (iv)
management of depository institutions to prepare certain financial reports
annually and to establish internal compliance procedures.

Prompt Corrective Regulatory Action. Federal bank regulators are
required to take certain supervisory actions with respect to undercapitalized
institutions, the severity of which depends upon the institution's degree of
capitalization. Under the regulations, an institution shall be deemed to be: (i)
"well-capitalized" if it has a total risk- based capital ratio of 10.0% or more,
has Tier 1 risk-based capital of 6.0% or more, has a Tier 1 leverage capital
ratio of 5.0% or more and is not subject to specified requirements to meet and
maintain a specific capital level for any capital measure; (ii) "adequately
capitalized" if it has a total risk-based capital ratio of 8.0% or more, a Tier
1 risk-based capital ratio of 4.0% or more and a Tier 1 leverage capital ratio
of 4.0% or more (3.0% under certain circumstances) and does not meet the
definition of "well-capitalized"; (iii) "undercapitalized" if it has a total
risk- based capital ratio less than 8.0%, a Tier 1 risk-based capital ratio less
than 4.0% or a Tier 1 leverage capital ratio less than 4.0% (or less than 3.0%
under certain circumstances); (iv) "significantly undercapitalized" if it has a
total risk-based capital ratio less than 6.0%, a Tier 1 risk-based capital ratio
less than 3.0% or a Tier 1 leverage ratio less than 3.0%; and (v) "critically
undercapitalized" if it has a ratio of tangible equity to total assets equal to
or less than 2.0%.

Subject to limited exceptions, insured institutions in any of the
undercapitalized categories are prohibited from declaring dividends, making any
other capital distribution or paying a management fee to a controlling person.
Undercapitalized and significantly undercapitalized institutions are subject to
certain mandatory supervisory actions and face more severe restrictions.
Reliance Savings Bank currently exceeds all applicable regulatory capital
requirements and therefore is not subject to prompt corrective action.

At June 30, 1998, Reliance Savings Bank was a "well-capitalized"
institution under the prompt corrective actions regulations.

Brokered Deposits; Interest Rate Limitations. FDIC regulations govern
the acceptance of brokered deposits by insured depository institutions. The
capital position of an institution determines whether and with what limitations
an institution may accept brokered deposits. A "well-capitalized" institution
(one that significantly exceeds specified capital ratios) may accept brokered
deposits without restriction. "Undercapitalized" institutions (those that fail
to meet minimum regulatory requirements) may not accept brokered deposits and
"adequately capitalized" institutions (those that are not "well-capitalized" or
"undercapitalized") may only accept such deposits with the consent of the FDIC.
"Adequately capitalized" institutions may apply for a waiver by letter to the
FDIC. An institution that is not "well-capitalized", even if meeting minimum
capital requirements, may not solicit brokered or other deposits by offering
interest rates that are significantly higher than the relevant local or national
rate as determined under the regulations. As a "well-capitalized" institution,
Reliance Savings Bank may accept brokered deposits without restrictions. At June
30, 1998, Reliance Savings Bank had no brokered deposits.

Uniform Lending Standards. Savings banks must adopt and maintain
written policies that establish appropriate limits and standards for extensions
of credit secured by liens or interests in real estate or made for the purpose
of financing permanent improvements to real estate. These policies must
establish loan portfolio diversification standards, prudent underwriting
standards (including loan-to-value limits) that are clear and measurable, loan
administration procedures and documentation, approval and reporting
requirements. The real estate lending policies must reflect consideration of the
Interagency Guidelines for Real Estate Lending Policies adopted by federal bank
regulators. Reliance Savings Bank has adopted and maintains such policies.

-102-
<PAGE> 107

Standards for Safety and Soundness. On July 10, 1995, federal bank
regulators adopted the Interagency Guidelines Establishing Standards for Safety
and Soundness (the "Guidelines") and also adopted a final rule establishing
deadlines for submission and review of safety and soundness compliance plans.
Federal bank regulators are authorized, but not required, to request a
compliance plan for failure to satisfy the safety and soundness standards set
out in the Guidelines. An institution must file a compliance plan within 30 days
of a request to do so from the institution's primary federal regulators.
Regulators expect to request a compliance plan from an institution whose failure
to meet one or more of the standards is of such severity that it could threaten
the safe and sound operation of the institution.

The Guidelines prescribe operational and managerial standards for all
insured depository institutions relating to internal controls, information
systems and audit systems; loan documentation; credit underwriting; interest
rate risk exposure; asset growth; and compensation fees and benefits.

Reliance Savings Bank believes that its operational and managerial
standards substantially comply with the standards set forth in the Guidelines
and that compliance with the Guidelines will therefore not impose a significant
burden on Bank operations.

Restrictions Upon State-Chartered Banks. FDIC regulations governing
equity investments of Reliance Savings Bank prohibit certain equity investments
and generally limit the activities and equity investments of FDIC- insured
state-chartered banks and their subsidiaries to those permissible for federally
chartered national banks and their subsidiaries. Reliance Savings Bank does not
hold any impermissible equity investments.

Reliance Savings Bank must obtain the FDIC's prior approval before
directly, or indirectly through a majority-owned subsidiary, engaging "as
principal" in any activity that is not permissible for a national bank unless
certain exceptions apply. In order for a state bank to conduct an activity as
principal without the FDIC's consent, the activity must be conducted in the same
manner in which a national bank is authorized to conduct the activity. The
activity regulations provide that state banks which meet all regulatory capital
requirements may engage in certain activities that are not permissible for
national banks which are deemed not to present a significant risk to the
insurance fund, including guaranteeing certain obligations of others, activities
which the FRB has found to be closely related to banking and certain securities
activities conducted through subsidiaries. The FDIC will not approve an activity
it determines would present a significant risk to the FDIC insurance fund.
Reliance Savings Bank activities are of a type permissible under applicable
federal regulations.

CAPITAL MAINTENANCE

FDIC Regulation. FDIC-insured institutions are required to follow
certain capital adequacy guidelines which prescribe minimum levels of capital
and require that institutions meet certain risk-based capital requirements.
Reliance Savings Bank is required to meet the following capital standards: (i)
"Tier 1 capital" in an amount not less than 3% of total assets; (ii) "Tier 1
capital" in an amount not less than 4% of risk-weighted assets; and (iii) "total
capital" in an amount not less than 8% of risk-weighted assets.

FDIC-insured institutions in the strongest financial and managerial
condition (with a composite rating of "1" under the Uniform Financial
Institutions Rating System established by the Federal Financial Institutions
Examination Council) are required to maintain "Tier 1 capital" equal to at least
3% of total assets (the "leverage capital" requirement). Tier 1 capital is
defined to include the sum of stockholders' equity, noncumulative perpetual
preferred stock (including any related surplus), and minority interests in
consolidates subsidiaries, minus all intangible assets (with certain
exceptions), identified losses and qualifying investments in securities
subsidiaries. An institution that fails to meet the minimum leverage capital
requirement must file a capital restoration plan with the appropriate FDIC
regional director. At June 30, 1998, Reliance Savings Bank's ratio of Tier 1
capital to total assets was 48.92% or 45.92% in excess of the minimum leverage
capital requirement.

-103-
<PAGE> 108

FDIC-insured institutions also are required to adhere to certain
risk-based capital guidelines which are designed to provide a measure of capital
more sensitive to the risk profiles of individual banks. Under the risk-based
capital guidelines, capital is divided into two tiers: core (Tier 1) capital, as
defined above, and the supplementary capital (Tier 2). Tier 2 capital is limited
to 100% of core capital and includes cumulative preferred stock, perpetual
preferred stock, mandatory convertible securities, subordinated debt,
intermediate preferred stock and allowance for possible loan and lease losses.
Allowance for possible loan and lease losses includable in supplementary capital
is limited to a maximum of 1.25% of risk-weighted assets. Total capital is the
sum of Tier 1 and Tier 2 capital. The risk-based capital framework assigns
balance sheet assets to one of four broad risk categories which are assigned
risk- weights ranging from 0% to 100% based primarily on the degree of credit
risk associated with the obligor. Off- balance sheet items are converted to an
on-balance sheet "credit equivalent" amount utilizing certain conversion
factors. The weighted sum of the four risk-weighted categories equals
risk-weighted assets. At June 30, 1998, Reliance Savings Bank's Tier 1 capital
to risk-weighted assets was 69.71% or 65.71% in excess of the FDIC requirement,
and Reliance Savings Bank's total capital to risk-weighted assets was 49.32%, or
41.32% in excess of the FDIC requirement.

Wisconsin Regulations. Wisconsin-chartered savings banks are required
to maintain a minimum capital to assets ratio of 6% and must maintain total
capital necessary to ensure the continuation of insurance of deposit accounts by
the FDIC. If the Administrator determines that the financial condition, history,
management or earning prospects of a savings bank are not adequate, the
Commissioner may require a higher minimum capital level for the savings bank. If
a savings bank' capital ratio falls below the required level, the Administrator
may direct the savings bank to adhere to a specific written plan established by
the Administrator to correct the savings bank's operations, including a
prohibition on the declaration of dividends by the savings bank's board of
directors. At June 30, 1998, Reliance Savings Bank's total capital, as
calculated under Wisconsin law, was $21.2 million, or 51.08% of total assets,
which was 45.08% in excess of the required amount.

INSURANCE OF DEPOSITS

Reliance Savings Bank's deposits are insured to applicable limits under
the SAIF of the FDIC. The FDIC regulations assign institutions to a particular
capital group based on the level of an institution's capital--"well
capitalized", "adequately capitalized", and "under capitalized". These three
groups are then divided into three subgroups which reflect varying levels of
supervisory concern from those which are considered to be healthy to those which
are considered to be of substantial supervisory concern. The matrix so created
results in nine assessment risk classifications, with reduced insurance rates
paid by well capitalized, financially sound institutions and higher rates paid
by undercapitalized institutions those pose a substantial risk of loss to the
insurance fund unless effective corrective action is taken.

Deposit insurance premiums for Reliance Savings Bank, which is
classified as a well capitalized savings bank, are currently assessed at the
rate of 23 cents per $100 of deposits. Reliance Savings Bank's expense related
to FDIC premiums was $10,900 for the fiscal year ended June 30, 1998. Deposit
premium levels are set in order to permit the SAIF to achieve a ratio of
reserves to insured deposits of 1.25%, and the FDIC may adjust assessment rates
in order to maintain the target ratio. In addition, the FDIC may impose special
assessments on SAIF members to repay amounts borrowed from the United States
Treasury or for any other reason deemed necessary b the FDIC. While an increase
in premiums for Reliance Savings Bank could have an adverse effect on earnings,
a decrease in premiums could have a positive impact on earnings. Reliance
Savings Bank does not expect that any reasonably foreseeable increased insurance
assessments would significantly impair Reliance Savings Bank's overall financial
condition or results of operations.

The FDIC may terminate the deposit insurance of any insured depository
institution if it determines after a hearing that the institution has engaged or
is engaging in unsafe or unsound practices, is in an unsafe or unsound condition
to continue operations, or has violated any applicable law, regulation, order or
any condition imposed by an agreement with the FDIC. If insurance of accounts is
terminated, the accounts at the institution at the time of termination, less
subsequent withdrawals, shall continue to be insured for a period of six months
to two years, as determined by the FDIC. Management is aware of no existing
circumstances which could result in termination of the deposit insurance of
Reliance Savings Bank.

-104-
<PAGE> 109

REGULATORY LEGISLATION AFFECTING DEPOSIT INSURANCE

Deposits of Reliance Savings Bank currently are insured to applicable
limits by the FDIC under the SAIF. The FDIC also insures commercial bank
deposits under the Bank Insurance Fund ("BIF"). Premium levels are set in order
to permit the funds to be capitalized at a level equal to 1.25% of total fund
deposits. Assessment rate changes made in 1995 created a deposit insurance
premium disparity between the two funds; while most BIF members were paying only
a nominal $2,000 annual premium, SAIF members were paying average rates of 23.4
basis points of deposits.

On September 30, 1996, Congress passed legislation to address the
deposit insurance premium disparity. The "Deposit Insurance Funds Act of 1996"
(the "DIF Act"), included as part of an Omnibus Appropriations Bill, directed
the FDIC to impose a special assessment on SAIF-assessable deposits at a rate
that would cause the SAIF to achieve its designated reserve ratio of 1.25% of
SAIF-insured deposits as of October 1, 1996. The DIF Act required that the
special assessment be applied against the SAIF-assessable deposits held be
institutions as of March 31, 1995. Pursuant to a final rule issued by the FDIC
on October 16, 1996, the special assessment rate was determined to be 65.7 basis
points. This one-time special assessment fully capitalized the SAIF and was
collected on November 27, 1996.

The amount of the assessment to Reliance Savings Bank was $144,000. The
special assessment was recorded on September 30, 1996 and had the effect of
reducing Reliance Savings Bank's earnings and capital by the after-tax amount of
the assessment as of the date of enactment, which was $87,000 or $0.04 per
share. As described below, with the recapitalization of the SAIF, BIF and SAIF
regular premiums will be comparable and, therefore, FDIC premium expense is
expected to be reduced in future periods.

The FDIC published a final rule on December 24, 1996, establishing a
permanent base assessment schedule for the SAIF and setting assessment rates at
a range of 4 to 31 basis points. The rule provides for an adjusted assessment
schedule reducing rates by 4 basis points to reflect current conditions,
producing an effective SAIF assessment range of 0 to 27 basis points beginning
October 1, 1996. This assessment range, which applies to all SAIF institutions
other than SAIF member savings associations, is comparable to the current
schedule for BIF-institutions. A special interim rate schedule ranging from 18
to 27 basis points applied to SAIF-member savings associations for the last
quarter of 1996, reflecting the fact that assessments related to certain bond
obligations of the Financial Corporation ("FICO"), which were issued to resolve
the savings and loan crisis in the 1980's, will be included in the SAIF rates
for these institutions during that period. Because Reliance Savings Bank is a
"Sasser bank" (a bank that converted its charter from a savings association to a
state savings bank charter, yet remains a SAIF member in accordance with the
so-called "Sasser Amendment"), it was not assessed this interim rate and
received a credit in January 1997 for its entire FDIC premium for the quarter
ended December 31, 1996.

The DIF Act addressed other matters which will affect Reliance Savings
Bank. The FICO obligations are being shares by all insured depository
institutions (after December 31, 1996). This obligation had previously been the
sole responsibility of SAIF-insured institutions and had been funded through
SAIF assessments. The DIF Act eliminated the statutory link between FICO's
assessments and amounts authorized to be assessed by the SAIF. Effective January
1, 1997, all insured institutions will pay an annual assessment to fund interest
payments on the FICO bonds. BIF-member institutions will pay one-fifth the rate
to be paid by SAIF members, for the first three years. The annual FICO
assessment is 1.3 and 6.5 basis points of deposits for BIF and SAIF members,
respectively. After January 1, 2000, BIF and SAIF members will share the FICO
payments on a pro-rate basis, which is assessed at 2.4 basis points, until the
bonds mature in 2017.

In addition, the DIF Act provided for the merger of BIF and SAIF into a
single Deposit Insurance Fund. This provision will be effective January 1, 1999,
assuming that no insured depository institution is a savings association on that
date. This legislation contemplates that the savings association charter will be
phased out over that period of time. The DIF Act also calls for the Secretary of
the Treasury to undertake a study concerning the development of a common charter
for all insured depository institutions and the abolition of separate and
distinct charters for banks and savings associations.

Management does not anticipate that any of the foregoing legislation
will have a material impact on the Company's financial condition in future
periods.

-105-
<PAGE> 110

RESTRICTIONS ON LOANS TO AND TRANSACTIONS WITH INSIDERS AND AFFILIATES

FRB regulations limit the total amount a savings bank may lend to its
executive officers, directors, principal shareholders and their related
interests (collectively referred to herein as "affiliated persons"). Generally,
an affiliated person may borrow an aggregate amount not exceeding 15% of a
savings bank's unimpaired capital and unimpaired surplus on an unsecured basis
and an additional 10% on a secured basis. The regulations limit, with certain
exceptions, the aggregate amount a depository institution may lend to affiliated
persons as a class to an amount not exceeding the institution's unimpaired
capital and unimpaired surplus.

In addition, the Administrator's regulations establish restrictions on
loans and other transactions with Reliance Savings Bank's affiliated persons.
All loans to affiliated persons must be made in the "ordinary course of
business" involving not more than the "normal risks of collectibility" and not
exceeding the loan amount which would be available to members of the general
public of similar credit status, must be secured by the principal residence of
the affiliated person or deposit accounts maintained at Reliance Savings Bank
and must be approved by a majority of Reliance Savings Bank's disinterested
directors. Interest rates on loans to affiliated persons must be equal to or
greater than Reliance Savings Bank's current cost of funds, except that the
interest rate secured by a deposit account must be at least 1% above the rate of
return on the deposit account. Extensions of credit to affiliated persons for
commercial purposes, in the aggregate, may not exceed $100,000.

Reliance Savings Bank also must comply with Sections 23A and 23B of the
Federal Reserve Act relating to transactions with affiliates in the same manner
and to the same extent as if the savings bank were a Federal Reserve member
bank. Generally, Sections 23A and 23B limit the extent to which an insured
institution or its subsidiaries may engage in certain covered transactions with
an affiliate to an amount equal to 10% of such institution's capital and
surplus, plus an aggregate limit on all such transactions with affiliates to an
amount equal to 20% of such capital and surplus, and require that all
transactions be on terms substantially the same, or at least as favorable to the
institution or subsidiary, as those provided to non-affiliates. The term
"covered transaction" includes the making of loans, the purchase of assets,
issuance of a guaranty and similar other types of transactions. The
Administrator, for safety and soundness reasons, may impose more stringent
restrictions on savings banks but may not exempt transactions from or otherwise
abridge Sections 23A and 23B. Exemptions form 23A and 23B may be granted only by
the FRB.

Unless prior approval of the Administrator is obtained, a savings bank
may not purchase, lease or acquire a site for an office building or an interest
in real estate from an affiliated person, including a stockholder owning more
than 10% of its capital stock, or from any firm, corporation, entity or family
in which an affiliated person or 10% stockholder has a direct or indirect
interest. Reliance Savings Bank has not been significantly affected by such
restrictions on loans to and transactions with affiliates.

COMMUNITY REINVESTMENT ACT

Under the Community Reinvestment Act of 1977, as amended (the "CRA"),
as implemented by FDIC regulations, Reliance Savings Bank has a continuing and
affirmative obligation consistent with its safe and sound operation to help meet
the credit needs of its entire community, including low and moderate income
neighborhoods. The CRA does not establish specific lending requirements or
programs for financial institutions nor does it limit an institution's
discretion to develop the types of products and services it believes are best
suited to its particular community. The CRA requires the FDIC, in connection
with its examination of a bank, to assess the institution's record of meeting
the credit needs of its community and to take such record into account in its
evaluation of certain applications by such institution. The law requires public
disclosure of an institution's CRA rating and also requires the primary
regulator to provide a written evaluation of an institution's performance.
Reliance Savings Bank's latest CRA rating, received on December 15, 1997 was
satisfactory.

-106-
<PAGE> 111

On May 4, 1995, the federal banking regulators adopted a final rule
("Final CRA Rule") governing compliance with the CRA. The Final CRA Rule
eliminates the previous CRA regulation's 12 assessment factors and substitutes a
performance based evaluation system. The Final CRA Rule will be phased in over a
period of time and become fully effective by July 1, 1997. Under the Final CRA
Rule, an institution's performance in meeting the credit needs of its entire
community, including low- and moderate-income areas, as required by the CRA,
will generally be evaluated under three assessment tests relating to lending,
investment and service.

Management of the holding company does not anticipate that the new CRA
regulations will adversely affect Reliance Savings Bank.

FEDERAL RESERVE SYSTEM

Regulation D, promulgated by the FRB, imposes reserve requirements on
all depository institutions, including savings banks and savings institutions,
which maintain transaction accounts or non-personal time deposits. Checking
accounts, NOW accounts and certain other types of accounts that permit payments
or transfers to third parties all within the definition of transaction accounts
and are subject to Regulation D reserve requirements, as are any non-personal
time deposits (including certain money market deposit accounts) at a savings
institution. For 1998, a depository institution must maintain average daily
reserves equal to 3% of the first $52.0 million of net transaction accounts and
an initial reserve of $1.6 million, plus 10% of that portion of total
transaction accounts in excess of $52.0 million. The first $4.3 million of
otherwise reservable balances (subject to adjustment by the FRB) are exempt from
the reserve requirements. These percentages and threshold limits are subject to
adjustment by the FRB. As of June 30, 1998, Reliance Savings Bank met its
Regulation D reserve requirements.

Thrift institutions also have authority to borrow from the Federal
Reserve Bank "discount window", but FRB policy generally requires thrift
institutions to exhaust all sources before borrowing from the Federal Reserve
System.
Reliance Savings Bank had no discount window borrowings as of June 30, 1998.

FEDERAL HOME LOAN BANK SYSTEM

The Federal Home Loan Bank System, consisting of 12 FHLBs, is under the
jurisdiction of the Federal Housing Finance Board ("FHFB"). The designated
duties of the FHFB are to supervise the FHLBs; ensure that the FHLBs carry out
their housing finance mission; ensure that the FHLBs remain adequately
capitalized and able to raise funds in the capital market; and ensure that the
FHLBs operate in a safe and sound manner.

Reliance Savings Bank, as a member of the FHLB-Chicago, is required to
acquire and hold shares of capital stock in the FHLB-Chicago in an amount equal
to the greater of: (i) 1% of the aggregate outstanding principal amount of
residential mortgage loans, home purchase contracts and similar obligations at
the beginning of each year, or (ii) 1% of 30% of total assets. Reliance Savings
Bank is in compliance with this requirement with an investment in FHLB-Chicago
stock of $200,000 at June 30, 1998.

Among other benefits, the FHLBs provide a central credit facility
primarily for member institutions. It is funded primarily from proceeds derived
from the sale of consolidated obligations of the FHLB System. It makes advances
to members in accordance with policies and procedures established by the FHFB
and the Board of Directors of the FHLB-Chicago. At June 30, 1998, Reliance
Savings Bank had $2.0 million in advances outstanding from FHLB-Chicago.

HOLDING COMPANY REGULATION

Federal Regulation. Reliance is a registered bank holding company
pursuant to the Bank Holding Company Act of 1956, as amended (the "BHCA"). As
such, Reliance is subject to examination, regulation and periodic reporting
under the BHCA, as administered by the FRB. The FRB has adopted capital adequacy
guidelines for bank holding companies (on a consolidated basis) substantially
similar to those of the FDIC for Reliance Savings Bank. Reliance's total Tier 1
capital significantly exceeded such capital adequacy requirements.

-107-
<PAGE> 112

Reliance is required to obtain the prior approval of the FRB to acquire
all, or substantially all, of the assets of any bank or bank holding company.
Prior FRB approval will be required for Reliance to acquire direct or indirect
ownership or control of any voting securities of any bank holding company if,
after giving effect to such acquisition, it would directly or indirectly, own or
control more than 5% of any class of voting shares of such bank or bank holding
company. The BHCA also prohibits the acquisition by Reliance of more than 5% of
the voting shares of substantially all the assets of a bank located outside the
State of Wisconsin unless such an acquisition is specifically authorized by the
laws of the state in which such bank is located.

FRB regulations govern a variety of bank holding company matters,
including redemption of outstanding equity securities, and non-banking
activities. A bank holding company generally is prohibited from engaging in,
acquiring direct or indirect control of any company engaged in non-bank
activities. One of the principal exemptions to this prohibition is for
activities found by the FRB to be so closely related to banking or managing or
controlling banks as to be a proper incident thereto. Some of the principal
activities the FRB has determined by regulation to be so closely related to
banking are: (i) making or servicing loans; (ii) performing certain data
processing services; (iii) providing discount brokerage services; (iv) acting as
fiduciary, investment or financial advisor; (v) leasing personal or real
property; (vi) making investments in corporations or projects designed primarily
to promote community welfare; and (vii) acquiring and/or operating a savings and
loan association.

Pursuant to FRB policy, dividends should be paid only out of current
earnings and only if the prospective rate of earnings retention by the bank
holding company appears consistent with its capital needs, asset quality and
overall financial condition. The FRB policy also requires that a bank holding
company serve as a source of financial strength to its subsidiary banks by
standing ready to use available resources to provide adequate capital funds to
those banks during periods of financial stress or adversity. These policies
could affect the ability of Reliance to pay cash dividends.

Subsidiary banks of a bank holding company are subject to certain
quantitative and qualitative restrictions imposed by the Federal Reserve Act on
any extension of credit to, or purchase of assets from, or letter of credit on
behalf of, the bank holding company or its subsidiaries, and on the investment
in or acceptance of stocks or securities of such holding company or its
subsidiaries as collateral for loans. In addition, provisions of the Federal
Reserve Act and FRB regulations limit the amounts of, and establish required
procedures and credit standards with respect to, loans and other extensions of
credit to officers, directors and principal shareholders of Reliance Savings
Bank, the company, any subsidiary of Reliance and related interests of such
persons. See "Restrictions on Loans and Transactions with Insiders and
Affiliates." Moreover, subsidiaries of bank holding companies are prohibited
from engaging in certain tie-in arrangements (with Reliance or any of its
subsidiaries) in connection with any extension of credit, lease, sale of
property or furnishing of services.

Reliance and its subsidiary, Reliance Savings Bank, will be affected by
the monetary and fiscal policies of various agencies in the United States
government, including the Federal Reserve System. In view of changing conditions
in the national economy and in the money markets, it is impossible for
management of Reliance to accurately predict future changes in monetary policy
or the effect of such changes on the business or financial condition of
Reliance.

State Savings Bank Holding Company Regulation. In addition to the FRB
bank holding company regulations, a bank holding company that owns or controls,
directly or indirectly, more than 25% of the voting securities of a savings bank
also is subject to regulation as a savings bank holding company by the
Administrator.

ACQUISITION OF THE HOLDING COMPANY

Under the federal Change in Bank Control Act of 1978, as amended
("CBCA"), a notice must be submitted to the FRB if any person (including a
company), or group acting in concern, seeks to acquire 10% of more of the
outstanding shares of Reliance Common Stock, unless the FRB has found that the
acquisition will not result in a change in control of Reliance. Under the CBCA,
the FRB has 60 days within which to act on such notices, taking into
consideration convenience and needs of the communities served by Reliance and
Reliance Savings Bank, and

-108-
<PAGE> 113

the anti-trust effects of the acquisition. Under the BHCA, any company would be
required to obtain prior approval from the FRB before it may obtain "control" of
Reliance within the meaning of the BHCA. Control generally is defined to mean
the ownership or power to vote 25% or more of any class of voting securities of
Reliance or the ability to control in any manner the election of a majority of
Reliance's directors. In addition, the BHCA prohibits the acquisition of
Reliance by a bank holding company located outside the State of Wisconsin,
unless such acquisition is specifically authorized by Wisconsin Law.

EMPLOYEES

Reliance Savings Bank had 5 full-time and 2 part-time employees at June
30, 1998. The employees of Reliance Savings Bank are not represented by a
collective bargaining unit and Reliance Savings Bank believes its relationship
with its employees to be good.

PROPERTIES

Reliance Savings Bank conducts its operations through its full-service
office listed below.

<TABLE>
<CAPTION>
NET BOOK VALUE
YEAR OF PROPERTY AT
LOCATION OPENED OWNED OR LEASED JUNE 30, 1998
-------- ------ --------------- -------------
<S> <C> <C> <C>
3140 South 27th Street 1953 Owned $41,000
Milwaukee, WI 53215
</TABLE>

LEGAL PROCEEDINGS

Reliance Savings Bank is not involved in any pending legal proceedings
other than routine legal proceedings occurring in the ordinary course of
business, which in the aggregate involve amounts that are believed by management
to be immaterial to the financial condition of Reliance Savings Bank.

-109-
<PAGE> 114

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS OF RELIANCE

GENERAL

Reliance's business currently consists of the business of Reliance
Savings Bank. Reliance Savings Bank is headquartered in Milwaukee, Wisconsin and
is a community-oriented, full-service financial institution offering a variety
of retail financial services to meet the needs of the communities it serves.
Reliance Savings Bank's principal business consists of attracting funds in the
form of deposits and investing such funds in loans secured by real estate,
investment securities (including United States government and other agency
obligations and mutual funds) and mortgage-backed and related securities.

The earnings of Reliance Savings Bank depend primarily on its level of
net interest income, which is the difference between interest earned on
interest-earning assets, consisting primarily of mortgage loans, mortgage-backed
and related securities and other investment securities, and the interest paid on
interest-bearing liabilities, consisting primarily of deposits. Net interest
income is a function of Reliance Savings Bank's interest rate spread, which is
the difference between the average yield earned on interest-earning assets and
the average rate paid on interest-bearing liabilities as well as a function of
the average balance of interest-earning assets as compared to interest-bearing
liabilities. Many of Reliance Savings Bank's assets, including mortgage loans
and mortgage-backed and related securities, are subject to reinvestment risk.
During periods of falling interest rates, higher yielding loans and
mortgage-backed and related securities are more likely to prepay and Reliance
Savings Bank may not be able to reinvest the proceeds from such repayment in
loans or securities with yields similar to those prepaying. Reliance Savings
Bank's earnings also are affected by the level of its other income, including
loan servicing, commitment and origination fees and gains on sale of loans and
investments as well as its level of noninterest expenses, including employee
compensation and benefits, directors' fees, occupancy and equipment costs and
federal deposit insurance premiums. Reliance Savings Bank's operating results
are significantly affected by general economic conditions, and the monetary,
fiscal and regulatory policies of governmental agencies. Lending activities are
influenced by the demand for and supply of housing, competition among lenders,
the level of interest rates and the availability of funds. Deposit flow and cost
of funds likewise are heavily influenced by prevailing market rates of interest
on competing investment alternatives, account maturities and the levels of
personal income and savings in Reliance Savings Bank's primary market area.

The operations of Reliance rely upon computer equipment and software
programs to maintain its account records. The "Year 2000" issue concerns a
problem resulting from computer programs being written using two digits rather
than four digits to define the applicable year. Any of Reliance's software
programs, or software programs used by its third-party providers, that are
date-sensitive may recognize a date using "00" as the year 1900 rather than the
year 2000. If not corrected, this problem could cause a major system failure or
miscalculations and represent a material cost to Reliance. Reliance Savings Bank
has developed a Year 2000 Compliance Plan and has conducted a review of its
computer systems and its third-party systems identifying those that could be
affected by the "Year 2000" issue. Reliance believes that, with modifications to
existing software used by Reliance and by its third party providers, the Year
2000 problem will not pose significant operational problems for Reliance.
Reliance does not anticipate costs to remedy the "Year 2000" issue will have a
material impact of the financial condition of Reliance.

MANAGEMENT STRATEGY

For many years, Reliance Savings Bank's financial condition has been
characterized by high capital and liquidity levels. While Reliance Savings Bank
has in recent years had funds to lend, Reliance Savings Bank believes there has
been a diminishing demand for one- to four-family mortgage loans in its local
market area (generally defined as an area within a three-mile radius of Reliance
Savings Bank's office). Reliance Savings Bank intends to continue to emphasize
one- to four family mortgage lending in its local market area, but also has been
originating, and intends to continue to originate one- to four-family,
residential construction, commercial real estate, commercial construction and
land development and multi-family loans both within and outside its local market
area in suburbs surrounding the City of Milwaukee, which encompass the Wisconsin
counties of Milwaukee, Waukesha, Ozaukee and Washington, in order to generate
earnings, adequately leverage its capital and make effective use of its liquid
assets.

-110-
<PAGE> 115

Financial highlights and operating strategies of Reliance Savings Bank
include the following:

1. Profitability and Capital Strength. Reliance Savings Bank has been
profitable and has met all of its regulatory capital requirements over at least
the past 20 years. For the years ended June 30, 1997 and 1998, Reliance's net
income was $616,000 and $572,000, respectively. Reliance's return on average
assets for the years ended June 30, 1997 and 1998 was 1.32% and 1.24%,
respectively. Reliance's return on average equity for the years ended June 30,
1997 and 1998 was 2.44% and 2.43%, respectively.

At June 30, 1998, Reliance had $22.4 million of stockholders' equity,
or 52.90% of total assets, and met all of its regulatory capital requirements,
in each case on a fully phased-in basis, with GAAP capital of 52.90% of total
assets and Tier 1 capital of 48.92% of total risk-weighted assets.

2. Diversification of Lending Activities. The largest portion of
Reliance Savings Bank's loan portfolio is one- to four-family residential
mortgage loans, which amounted to $9.3 million, or 30.31% of total gross loans,
at June 30, 1998. The remaining $21.2 million, or 69.69% of total gross loans,
at June 30, 1998 consisted of $3.4 million of multi-family loans, $7.5 million
of commercial real estate loans, $2.8 million of residential construction loans,
$7.5 million of commercial construction and land development loans, and $179,000
of consumer loans.

3. Asset Quality. Reliance Savings Bank focuses on high asset quality
in its lending activities. At June 30, 1998, Reliance Savings Bank had two
non-performing loans totaling $197,000 representing only 0.46% of total assets,
and Reliance Savings Bank had no non-performing assets during the last three
fiscal years. Moreover, Reliance Savings Bank has not had any loan charge-offs
during the last three fiscal years. During the years ended June 30, 1997 and
1998, respectively, Reliance Savings Bank added $22,000 to its allowance for
loan losses and there were no charge-offs.

COMPARISON OF OPERATING RESULTS FOR THE YEARS ENDED JUNE 30, 1998 AND 1997

GENERAL

Net income for the year ended June 30, 1998 decreased 5.6% to $572,000
compared to $616,000 for the year ended June 30, 1997. The decrease in the net
income was primarily attributable to an decrease in net interest income. Net
interest income decreased 9.5% to $2.17 million for the year ended June 30, 1998
compared to $2.40 million for the year ended June 30, 1997, due primarily to a
increase in average interest-bearing liabilities, a decrease in interest-earning
assets, and a decrease in the interest rate spread. Non-interest income
increased 41.7% to $51,000 for the year ended June 30, 1998 compared to $36,000
for the year ended June 30, 1997. Non-interest expense decreased 11.8% to
$1,262,000 for the year ended June 30, 1998 compared to $1,431,000 for the year
ended June 30, 1997, primarily due to a $96,000 decrease in compensation and
benefits and a $151,000 decrease in federal insurance premiums partially offset
by a $65,000 increase in professional services. Income taxes decreased 0.3% to
$366,000 for the year ended June 30, 1998 compared to $367,000 for the year
ended June 30, 1997. The return on average assets decreased to 1.24% for the
year ended June 30, 1998 compared to 1.32% for the year ended June 30, 1997. The
return on average equity decreased to 2.43% for the year ended June 30, 1998
compared to 2.44% for the year ended June 30, 1997.

NET INTEREST INCOME

Net interest income is determined by an institution's interest rate
spread, the relative dollar amount or mix of interest-earning assets and
interest-bearing liabilities and the degree of match in the maturity and
repricing of its interest-earning assets and interest-bearing liabilities.

-111-
<PAGE> 116

Net interest income decreased $229,000 to $2.17 million for the year
ended June 30, 1998 compared to $2.40 million for the year ended June 30, 1997.
The decrease was due to a $112,000 decrease in total interest income and an
increase in total interest expense of $117,000. The decrease in net interest
income was the result of a 5.5% increase in average interest-bearing
liabilities, and a 2.4% decline in average interest-earning assets, coupled with
a 32 basis point decrease in the interest rate spread. The decrease in interest
rate spread between June 30, 1998 and 1997 was due primarily to the increase in
the average cost of deposit accounts by 11 basis points and a 77 basis point
increase in the average cost of borrowing, while the average yield on
interest-earning assets declined 6 basis points for the same period.

The decrease in average interest-earning assets over interest-bearing
liabilities between June 30, 1998 and 1997 was due to the increase in the
average borrowings between periods of $1.48 million and a decrease in the
average balances of deposits accounts of $316,000 while the average balances of
loans and investments decreased by $1.11 million for the same period. Management
believes deposits declined due to general demographic changes in Reliance
Savings Bank's local market area and due to competition from alternative
investments that were more attractive to depositors during the period.

INTEREST INCOME

Total interest income decreased $112,000, or 3.2% to $3.36 million for
the year ended June 30, 1998 compared to $3.47 million for the year ended June
30, 1997, as a result of an decrease in the average balance of interest-earning
assets and a decrease in the average yield on interest-earning assets. The
average yield on interest-earning assets decreased 6 basis points to 7.60% for
the year ended June 30, 1998 compared to 7.66% for the year ended June 30, 1997.
For the year ended June 30, 1998, Reliance Savings Bank's average yield on
investments was 5.41% compared to 6.07% for the year ended June 30, 1997. Total
interest-earning assets decreased 2.4% to $44.2 million for the year ended June
30, 1998 from $45.3 million for the year ended June 30, 1997.

Interest income on loans increased to $2.41 million for the year ended
June 30, 1998 compared to $2.23 million for the year ended June 30, 1997. The
increase was primarily due to an increase in average loan balances of $1.8
million, and an increase in the average yield of 6 basis points. Interest income
on investments decreased to $886,000 for the year ended June 30, 1998 from
$1,162,000 for the year ended June 30, 1997.

Interest income on mortgage-backed and related securities declined to
$48,000 for the year ended June 30, 1998 compared to $68,000 for the year ended
June 30, 1997. The decline was due to a reduction in the balance of
mortgage-backed and related securities.

INTEREST EXPENSE

Total interest expense consists of interest expense on deposits which
increased $4,000, or 0.4% to $915,000 for the year ended June 30, 1998 from
$911,000 for the year ended June 30, 1997 and interest expense on borrowings
which increased $113,000 to $274,000 for the year ended June 30, 1998 from
$161,000 for the year ended June 30, 1997. The general increase in market rates
of interest during the year ended June 30, 1998 resulted in increases in average
rates paid on all of Reliance Savings Bank's major categories of deposits to
5.18% for the year ended June 30, 1998 from 5.07% for the year ended June 30,
1997. This increase was partially offset by a $316,000 decrease in average
deposits to $17.7 million for the year ended June 30, 1998 from $18.0 million
for the year ended June 30, 1997. The level of deposit inflows during any given
period is heavily influenced by factors such as the general level of interest
rates in the economy as well as alternative yields that investors may obtain on
competing investment instruments. Management believes the higher returns on
equity investments over the past few years has made alternative financial
products, such as mutual funds, more competitive with Reliance Savings Bank's
traditional deposit base. In addition, Reliance Savings Bank's deposit base has
been decreasing due to general demographic changes in Reliance Savings Bank's
local market area and to competition from alternative investments that were more
attractive to depositors during the period.

-112-
<PAGE> 117

PROVISION FOR LOAN LOSSES

The provision for loan losses was $22,000 for both years ended June 30,
1998 and 1997. The allowance for loan losses is increased by charges to income
and decreased by charge-offs (net of recoveries). Management's periodic
evaluation of the adequacy of the allowance is based on Reliance Savings Bank's
past loan loss experience, known and inherent risks in the portfolio, adverse
situations that may effect the borrower's ability to repay, the estimated value
of any underlying collateral, and current economic conditions. The amount of the
provision for loan losses for both the years ended June 30, 1998 and 1997
reflect management's intention to continue to make annual additions to Reliance
Savings Bank's allowance for loan losses until it is equal to approximately 1.0%
of Reliance Savings Bank's gross loan portfolio. However, Reliance Savings Bank
will continue to monitor its loan loss experience, the condition and composition
of its loan portfolio and general economic conditions, and make further
additions to its allowance for loan losses to a greater or lesser extent than it
has done historically, depending upon changes in the aforementioned factors. The
allowance for loan losses totaled $169,000 and $147,000 at June 30, 1998 and
1997, respectively. The allowance for loan losses was 0.55% of gross loans at
June 30, 1998 and 0.49% of gross loans at June 30, 1997. Nonperforming loans
totaled $197,000 at June 30, 1998. There were no nonperforming loans at June 30,
1997. There were no charge-offs recorded by Reliance for the years ended June
30, 1998 and 1997.

NON-INTEREST INCOME

Non-interest income increased to $51,000 for the year ended June 30,
1998 compared to $36,000 for the year ended June 30, 1997. The change was due in
part to an $28,000 investment gain during the year ended June 30, 1998 compared
to an $2,000 investment gain during the year ended June 30, 1997. The remainder
of the change was due to a decrease in the cash surrender value of life
insurance of $20,000 and a increase in real estate loan brokerage fee income of
$11,000 for the year ended June 30, 1998.

NON-INTEREST EXPENSE

Non-interest expense decreased $169,000, or 11.8%, to $1,262,000 for
the year ended June 30, 1998 from $1,431,000 for the year ended June 30, 1997.
The decrease was due primarily to a decrease in compensation and benefits of
$96,000 due to decreases in ESOP expense and pension expense and a decrease in
federal insurance premiums of $151,000 partially offset by an increase in fees
for professional services of $65,000. Non-interest expense as a percentage of
average assets (on an annualized basis) was 2.73% and 3.07%, respectively, for
the years ended June 30, 1998 and 1997.

INCOME TAX EXPENSE

Income tax expense decreased $1,000, or 0.3%, to $366,000 for the year
ended June 30, 1998 from $367,000 for the year ended June 30, 1997, primarily
due to decreased income before income taxes. The decrease reflects the decrease
in income before taxes from $983,000 for the year ended June 30, 1997 to
$938,000 for the year ended June 30, 1998. Reliance's effective tax rates were
39.0% and 37.3%, respectively, for the years ended June 30, 1998 and 1997.

COMPARISON OF OPERATING RESULTS FOR THE YEARS ENDED JUNE 30, 1997 AND 1996

GENERAL

Net income for the year ended June 30, 1997 increased 20.2% to $616,000
compared to $514,000 for the year ended June 30, 1996. The increase in the net
interest was primarily attributable to an increase in net interest income. Net
interest income increased 52.8% to $2.40 million for the year ended June 30,
1997 compared to $1.57 million for the year ended June 30, 1996, due primarily
to a decrease in average interest-bearing liabilities and an increase in
interest-earning assets, and an increase in the interest rate spread.
Non-interest income increased 111.8% to $36,000 for the year ended June 30, 1997
compared to $17,000 for the year ended June 30, 1996. Non-interest

-113-
<PAGE> 118

expense increased 98.5% to $1,431,000 for the year ended June 30, 1997 compared
to $721,000 for the year ended June 30, 1996, primarily due to a $112,000
increase in the FDIC assessment, a $155,000 increase in professional services
and a $406,000 increase in compensation and benefits. Income taxes increased
10.9% to $367,000 for the year ended June 30, 1997 compared to $331,000 for the
year ended June 30, 1996. The return on average assets decreased to 1.32% for
the year ended June 30, 1997 compared to 1.40% for the year ended June 30, 1996.
The return on average equity decreased to 2.44% for the year ended June 30, 1997
compared to 3.45% for the year ended June 30, 1996.

NET INTEREST INCOME

Net interest income increased $829,000 to $2.40 million for the year
ended June 30, 1997 compared to $1.57 million for the year ended June 30, 1996.
The increase was due to a $748,000 increase in total interest income and a
decrease in total interest expense of $81,000. The increase in net interest
income was the result of a 1.5% decline in average interest-bearing liabilities,
and a 27.4% increase in average interest-earning assets, coupled with a 30 basis
point increase in the interest rate spread. The increase in interest rate spread
between June 30, 1997 and 1996 was due primarily to the decrease in the average
cost of deposit accounts by 30 basis points, while the average yield on
interest-earning assets remained level for the same period.

The increase in average interest-earning assets over interest-bearing
liabilities between June 30, 1997 and 1996 was due to the decrease in the
average balances of deposit accounts between periods of $3.20 million while the
average balances of loans and investments increased by $9.76 million for the
same period. Management believes deposits declined due to general demographic
changes in Reliance Savings Bank's local market area and due to competition from
alternative investments that were more attractive to depositors during the
period.

INTEREST INCOME

Total interest income increased $748,000, or 27.5% to $3.47 million for
the year ended June 30, 1997 compared to $2.72 million for the year ended June
30, 1996, as a result of an increase in the average balance on interest-earning
assets. The average yield on interest-earning assets remained level at 7.66% for
the years ended June 30, 1997 and 1996. For the year ended June 30, 1997,
Reliance Savings Bank's average yield on loans was 8.82% compared to 8.55% for
the year ended June 30, 1996. Total interest earning assets increased 27.5% to
$45.3 million for the year ended June 30, 1997 from $35.6 million for the year
ended June 30, 1996.

Interest income on loans increased to $2.23 million for the year ended
June 30, 1997 compared to $1.89 million for the year ended June 30, 1996. The
increase was primarily due to an increase in average loan balances of $3.2
million, and an increase in the average yield of 27 basis points. Interest
income on investments increased to $1,162,000 for the year ended June 30, 1997
from $743,000 for the year ended June 30, 1996.

Interest income on mortgage-backed and related securities declined to
$68,000 for the year ended June 30, 1997 compared to $84,000 for the year ended
June 30, 1996. The decline was due to a reduction in the balance of
mortgage-backed and related securities due to increased prepayments on a
mortgage-backed pool yielding over 10%.

INTEREST EXPENSE

Total interest expense decreased $81,000, or 7.0% to $1.07 million for
the year ended June 30, 1997 from $1.15 million for the year ended June 30,
1996. The general decrease in market rates of interest during the year ended
June 30, 1997 resulted in decreases in average rates paid on all of Reliance
Savings Bank's major categories of deposits to 5.07% for the year ended June 30,
1997 from 5.41 % for the year ended June 30, 1996. This decrease was coupled
with a $3.2 million decrease in average deposits to $18.0 million for the year
ended June 30, 1997 from $21.2 million for the year ended June 30, 1996.

-114-
<PAGE> 119

PROVISION FOR LOAN LOSSES

The provision for loan losses was $22,000 for both years ended June 30,
1997 and 1996. The allowance for loan losses is increased by charges to income
and decreased by charge-offs (net of recoveries). Management's periodic
evaluation of the adequacy of the allowance is based on Reliance Savings Bank's
past loan toss experience, known and inherent risks in the portfolio, adverse
situations that may effect the borrower's ability to repay, the estimated value
of any underlying collateral, and current economic conditions. The amount of the
provision for loan losses for both the years ended June 30, 1997 and 1996
reflect management's intention to continue to make annual additions to Reliance
Savings Bank's allowance for loan losses until it is equal to approximately 1.0%
of Reliance Savings Bank's gross loan portfolio. However, Reliance Savings Bank
will continue to monitor its loan loss experience, the condition and composition
of its loan portfolio and general economic conditions, and make further
additions to its allowance for loan losses to a greater or lesser extent than it
has done historically, depending upon changes in the aforementioned factors. The
allowance for loan losses totaled $147,000 and $126,000 at June 30, 1997 and
1996, respectively. The allowance for loan losses was 0.49% and 0.47% of gross
loans at June 30, 1997 and 1996, respectively. There were no nonperforming loans
at June 30, 1997 and 1996.. There were no charge-offs recorded by Reliance for
the years ended June 30, 1997 and 1996.

NON-INTEREST INCOME

Non-interest income increased to $36,000 for the year ended June 30,
1997 compared to $17,000 for the year ended June 30, 1996. The change was due in
part to an $2,000 investment gain during the year ended June 30, 1997 compared
to an $3,000 investment loss during the year ended June 30, 1996. The remainder
of the change was due to an increase in the cash surrender value of life
insurance of $23,000 and a decrease in real estate loan brokerage fee income of
$8,000 for the year ended June 30, 1997.

NON-INTEREST EXPENSE

Non-interest expense increased $710,000, or 98.5%, to $1,431,000 for
the year ended June 30, 1997 from $721,000 for the year ended June 30, 1996. The
increase was due primarily to a special one-time FDIC assessment of $112,000, an
increase in compensation and benefits of $406,000, and an increase in fees for
professional services of $155,000. Reliance Savings Bank anticipates a continued
increase in non-interest expense as a result of the Conversion due to
anticipated increased legal and accounting fees. Noninterest expense as a
percentage of average assets (on an annualized basis) was 3.07% and 2.06%,
respectively, for the years ended June 30, 1997 and 1996.

INCOME TAX EXPENSE

Income tax expense increased $36,000 or 10.9%, to $367,000 for the year
ended June 30, 1997 from $331,000 for the year ended June 30, 1996. The increase
reflects the increase in income before taxes from $845,000 for the year ended
June 30, 1996 to $983,000 for the year ended June 30, 1997. Reliance's effective
tax rates were 37.3% and 39.2%, respectively, for the years ended June 30, 1997
and 1996.

-115-
<PAGE> 120

FINANCIAL CONDITION

The following table summarizes certain information relating to
Reliance's statement of financial condition at the dates indicated.

<TABLE>
<CAPTION>
AT JUNE 30,
-------------------------------------
1998 1997 1996
------- ------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
ASSETS:
Cash and cash equivalents ................... $ 4,346 $ 3,048 $ 4,055
Investment securities ....................... 10,987 14,964 19,354
Mortgage-backed securities .................. 456 685 800
Loans receivable, net ....................... 25,798 27,601 22,931
LIABILITIES:
Deposits .................................... 17,330 17,596 18,200
Borrowings .................................. 2,000 6,008 --
STOCKHOLDERS' EQUITY, SUBSTANTIALLY RESTRICTED ... 22,372 22,966 29,348
</TABLE>

The statements of financial condition at June 30, 1998 and 1997 are
consolidated (see Principles of Consolidation" in the Notes to Consolidated
Financial Statements).

CASH AND CASH EQUIVALENTS

Cash and cash equivalents increased to $4.3 million at June 30, 1998 from
$3.0 million at June 30, 1997. The increase was attributable to the decrease in
investment securities during the period and the decrease in borrowings.

INVESTMENT SECURITIES

Investment securities decreased to $11.4 million at June 30, 1998 from
$15.6 million at June 30, 1997. The change was primarily due to the sale of
investment securities to repay borrowings in the aggregate amount of $4.0
million.

Mortgage-backed and related securities declined to $463,000 at June 30,
1998 from $685,000 at June 30, 1997. The decrease was the result of normal
principal payments and from the sale of the $100,000 CMO. Management decided to
reinvest the repayment and prepayment proceeds into higher yielding mortgage
loans and other investment securities.

Reliance Savings Bank may, in future periods, leverage its capital base by
using the proceeds of borrowings from the FHLB-Chicago to purchase
mortgage-backed and related securities and investment securities. Therefore, if
the leveraging strategy is implemented, the size of Reliance Savings Bank's
mortgage-backed and related securities portfolio may increase in future periods.

LOANS RECEIVABLE

Net loans receivable decreased to $25.8 million at June 30, 1998 from $27.6
million at June 30, 1997. The net change in loans arising from originations and
principal repayments for the years ended June 30, 1998 and 1997 was $(1,720,000)
and $290,000 for one- to four-family loans, respectively; $(1,181,000) and
$19,000 for multi-family loans, respectively; $1.9 million and $1.7 million for
construction and land development loans, respectively; and, $2.1 million and
$1.2 million for commercial real estate loans, respectively. There were no loans
sold during these periods. As a result of the originations and repayments during
these periods, mortgage loans increased or decreased as follows: one- to
four-family mortgage loans were $9.3 million at June 30, 1998, compared to $11.0
million at

-116-
<PAGE> 121

June 30, 1997; commercial construction and land development loans were $10.3
million at June 30, 1998, compared to $8.4 million at June 30, 1997;
multi-family loans were $3.4 million at June 30, 1998, compared to $4.6 million
at June 30, 1997; and commercial real estate loans were $7.5 million at June 30,
1998, compared to $5.4 million at June 30, 1997. The large increase in
commercial and land development loans is due to a strategic decision to pursue
these higher-yielding, shorter maturity loans.

DEPOSITS AND BORROWINGS

Deposits were $17.3 million and $17.6 million at June 30, 1998 and 1997,
respectively. Deposits are Reliance Savings Bank's primary source of externally
generated funds. The level of deposits is heavily influenced by factors such as
the general level of short and long-term interest rates, as well as alternative
yields that Investors may obtain on competing investment instruments such as
mutual funds. In recent years, the Lower yields on bank deposit products have
made alternative financial products more competitive with Reliance Savings
Bank's traditional deposit products. During the year ended June 30, 1998,
Reliance Savings Bank's certificate of deposit accounts increased by $142,000
and non-certificate accounts declined by $408,000. At June 30, 1998 and 1997,
demand accounts, which consist of interest-bearing and noninterest-bearing NOW
accounts, money market accounts and passbook accounts, were $3.3 million and
$3.7 million, respectively. The general decrease in these accounts was primarily
due to the increased competition from non-deposit accounts offering higher
yields than traditional deposit products. Reliance Savings Bank intends to focus
on increasing its core deposits in order to maintain a more stable deposit base.
However, although Reliance Savings Bank has been competitively pricing its
deposit products over the past two years, its core deposits have continued to
decline.

Reliance Savings Bank had $2.0 million and $6.0 million in outstanding
advances or other borrowings at June 30, 1998 and 1997, respectively. This
decrease is primarily attributable to the narrowing spread between the yield on
investments and the cost of borrowings and management's decision to repay the
borrowings as They came due.

STOCKHOLDERS' EQUITY

Reliance's stockholders' equity declined to $22.4 million at June 30, 1998
from $23.0 million at June 30, 1997. The decrease was primarily attributable to
the stock repurchased through the various Share repurchase programs initiated to
improve the return on equity. Stockholders' equity increased as a result of
Reliance's net income of $572,000 for the year ended June 30, 1998. In addition,
o stockholders' equity also increased by unrealized gains, net of taxes, for
Reliance Savings Bank's securities which were held as available for sale. For
the year ended June 30, 1998, the unrealized gain was $239,000, which was net of
assumed taxes of $154,000, and for the year ended June 30, 1997, the unrealized
gain was 263,000, which was net of assumed taxes of $169,000.

LIQUIDITY, CAPITAL RESOURCES AND REGULATORY CAPITAL

Reliance Savings Bank's primary source of funds are deposits, proceeds of
principal and interest payments on loans, and principal and interest payments on
mortgage-backed and related securities and investment securities. Although
maturity and scheduled amortization of loans and investments are predictable,
sources of funds, deposit flows, mortgage loan prepayments and prepayments on
mortgage-backed and related securities are influenced significantly by general
interest rates, economic conditions and competition. During the year ended June
30, 1998, rates in general declined more significantly than during the year
ended June 30, 1997 causing mortgage loan prepayments to increase more than two
times the level experienced during the preceding year. For the years ended June
30, 1998 and 1997, Reliance Savings Bank reinvested loan and mortgage-backed and
related securities repayments into new mortgage loan originations, primarily
commercial and land development loans, and investment securities. In a period of
Rising interest rates, it is anticipated that mortgage loan prepayments will
decrease, and any proceeds from such prepayments would be invested in higher
yielding loans or investments which would have the effect of increasing interest
income.

-117-
<PAGE> 122

Reliance Savings Bank is required to maintain minimum levels of liquid
assets under Wisconsin law. Savings banks are required to maintain an average
daily balance of liquid assets (including cash, certain time deposits, certain
banker's acceptances, certain corporate debt securities and highly rated
commercial paper, securities of certain mutual funds and specified United States
government, state or federal agency obligations) of not less than 8% of its
average daily balance of net withdrawable accounts plus short-term borrowings.
Reliance Savings Bank's liquidity ratios were 78.56% and 75.05%, at June 30,
1998 and 1997, respectively.

Reliance's most liquid assets are cash and cash equivalents, which include
investments in highly liquid, short-term investments. The levels of these assets
are dependent on Reliance Savings Bank's operating, financing, lending and
investing activities during any given period. At June 30, 1998 and 1997, cash
and cash equivalents were $4.3 million and $3.0 million, respectively. The
increase in cash and cash equivalents was attributable to the increase in
mortgage loan repayments during the year.

Liquidity management for Reliance Savings Bank is both a daily and
long-term component of Reliance Savings Bank's management strategy. Reliance
Savings Bank maintains liquidity levels sufficient to accommodate normal deposit
fluctuations and various funding needs, and to meet its asset and liability
management objectives. Excess funds generally are invested in short-term
investments.

The primary investing activity of Reliance Savings Bank is the origination
of loans. For the years ended June 30, 1998 and 1997, respectively, Reliance
Savings Bank originated $13.6 million and $8.5 million in mortgage loans. There
were no sales or purchases of mortgage loans during these periods. Reliance
Savings Bank also did not originate or purchase any mortgage-backed and related
securities during these periods. During the years ended June 30, 1998 and 1997,
respectively, Reliance Savings Bank received principal repayments on loans
totaling $12.5 million and $5.2 million, and principal repayments on
mortgage-backed and related securities of $166,000 and $115,000.

At June 30, 1998, Reliance Savings Bank had $946,000 in outstanding loan
commitments. Reliance Savings Bank had no commitments to purchase
mortgage-backed and related securities at that date. Reliance Savings Bank
anticipates it will have sufficient funds available to meet its current loan
commitments, including loan applications received and in process prior to the
issuance of firm commitments. Certificates of deposit which are scheduled to
mature in one year or less at June 30, 1998 were $10.4 million. Based on its
historical experience, management believes that a significant portion of such
deposits will remain with Reliance Savings Bank. Effective June 7, 1993,
Reliance Savings Bank converted from a state-chartered mutual savings and loan
regulated by the OTS to a state-chartered mutual savings bank subject to
regulation by the FDIC and the Wisconsin Department of Financial Institutions.
Applicable FDIC regulations require institutions to meet three capital
standards: (i) "Tier 1 capital" in an amount not less than 3% of total assets;
(ii) "Tier 1 capital" in an amount not less than 4% of risk-weighted assets; and
(iii) "Total Capital" in an amount not less than 8% of risk-weighted assets.
Wisconsin-chartered savings banks also are required to maintain a Minimum
capital to assets ratio of 6%. The percent of assets for Wisconsin regulatory
capital purposes is based on total unconsolidated assets. See "Regulation" for a
discussion of Reliance Savings Bank's regulatory capital requirements.

-118-
<PAGE> 123

A summary of Reliance Savings Bank's regulatory capital follows:

<TABLE>
<CAPTION>
AT JUNE 30,
-----------------------------------------------------
1997 1998
---------------------- -------------------
PERCENT PERCENT
AMOUNT OF ASSETS AMOUNT OF ASSETS
------- ------- ------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Total capital under generally accepted
accounting principles .................... $20,157 47.28% $21,026 50.67%
======= ======= ======= =======
Tier 1 capital leverage ..................... $19,670 46.18% $20,297 48.92%
Tier 1 capital leverage requirement ......... 1,278 3.00 1,245 3.00
------- ------- ------- -------
Excess ...................................... $18,392 43.18% $19,052 45.92%
======= ======= ======= =======

Tier 1 risk-based capital ................... $19,670 74.18% $20,297 69.71%
Tier 1 risk-based capital requirement ....... 1,061 4.00 1,165 4.00
------- ------- ------- -------
Excess ...................................... $18,609 70.18% $19,132 65.71%
======= ======= ======= =======

Total risk-based capital .................... $19,817 46.52% $20,466 49.32%
Total risk-based capital requirement ........ 2,122 8.00 2,329 8.00
------- ------- ------- -------
Excess ...................................... $17,695 38.52% $18,137 41.32%
======= ======= ======= =======

Wisconsin regulatory capital ................ $20,304 47.66% $21,195 51.08%
Wisconsin regulatory capital requirement .... 2,556 6.00 2,489 6.00
------- ------- ------- -------
Excess ...................................... $17,748 41.66% $18,706 45.08
======= ======= ======= =======
</TABLE>

Cash flows are categorized as to whether they relate to the operating,
investing or financing activities of Reliance Savings Bank. Cash flow from
operating activities include net income plus or minus non-cash income statement
items and cash flow related to the origination and sale of mortgage loans held
for sale. Cash flow from investing activities includes proceeds from the sale or
maturity of investment securities, principal payments collected on loans and
mortgage-backed and related securities, loan originations and purchases on
investments and mortgage-backed and related securities. Cash flow from financing
activities includes the increase or decrease in deposits, borrowings and escrows
and common stock transactions. The amount of principal repayments on loans and
mortgage-backed and related securities are heavily influenced by the general
level of interest rates in the economy. During periods in which Reliance Savings
Bank is unable to originate a sufficient amount of loans that it intends to
retain, such as ARM loans and other loans with shorter terms, and during periods
of high principal repayments, Reliance Savings Bank will increase liquid assets,
with remaining amounts invested in mortgage-backed and related securities.

Deposits were $17.3 million and $17.6 million at June 30, 1998 and
1997, respectively. Reliance Savings Bank's certificates of deposit accounts at
June 30, 1998 and 1997 were $14.0 million and $13.9 million, respectively, and
demand accounts, which consist of NOW accounts, money market accounts and
passbook accounts, were $3.3 million and $3.7 million, respectively, at June 30,
1998 and 1997. The net decrease was due to the increased competition for
nondeposit products offering higher yields than traditional deposit accounts.

DIVIDENDS

The Board of Directors of Reliance authorized a special distribution of
$3.00 per share to shareholders of record on November 8, 1996. A significant
portion of the special distribution represented a non-taxable return of capital
that resulted in a reduction in the cost basis of each share. Approximately
$0.075 of the special distribution represented the payment of a cash dividend.

-119-
<PAGE> 124

Declaration of future dividends by the Board of Directors will depend
upon a number of factors, including investment opportunities available to
Reliance and Reliance Savings Bank, capital requirements, regulatory Limitations
and Reliance Savings Bank's and Reliance's financial condition and results of
operations, tax considerations and general economic conditions. The payment of
cash dividends by Reliance Savings Bank to Reliance will be subject to
significant regulatory restrictions. No assurances can be given that any
dividends will be paid or will continue to be paid.

COMMON STOCK REPURCHASE AND PURCHASE PROGRAMS

Reliance adopted two share repurchase programs for its common stock on
August 29, 1996 and June 20, 1997. The repurchase programs were adopted to
improve earnings per share and return on equity, and represented an attractive
investment alternative compared to other available investments. The repurchased
shares became treasury shares and have been used for general corporate purposes.
Reliance has notified the Wisconsin Department of Financial Institutions, and
the FDIC of the repurchase program and has obtained regulatory approval for the
program consistent with applicable regulations.

Under the August 29, 1996 program, Reliance planned to purchase up to
5% of the outstanding shares of common stock, or approximately 128,117 shares,
at prevailing market prices. Approximately 34,000 shares were repurchased at an
approximate cost of $283,000. Under the June 20, 1997 program, up to 126,424
shares or 5% of the outstanding shares of common stock would be repurchased at
prevailing market prices commencing in late July 1997. In total, 126,424 shares
were repurchased at an approximate cost of $1,125,000.

Also on June 20, 1997, Reliance announced that the administrators of
the Reliance Savings Bank Recognition and Retention Plan (the "Retention Plan")
would begin the open market purchase of up to 75,855 shares, or 3% of the
outstanding shares of Reliance's common stock, which will be used for awards
under the Retention Plan. The purchase program calls for shares to be purchased
at prevailing market prices over a six-month period of time commencing in late
July 1997. Approximately 69,000 shares were purchased at an approximate cost of
$611,000.

IMPACT OF INFLATION AND CHANGING PRICES

Reliance's Consolidated Financial Statements and Notes thereto have
been prepared in accordance with generally accepted accounting principles
("GAAP"), which requires the measurement of financial position and operating
results in terms of historical dollars without considering changes in the
relative purchasing power of money over time due to inflation. The impact of
inflation is reflected in the increased cost of Reliance's operations. Unlike
most industrial companies, nearly all of the assets and liabilities of Reliance
are monetary in nature. As a result, interest rates have a greater impact on
Reliance's performance than do the effects of general levels on inflation.
Interest rates do not necessarily move in the same direction or to the extent as
the price of goods and services.

ACCOUNTING DEVELOPMENTS

In October, 1995, the FASB issued FAS 123, "Accounting for Stock
Compensation". The statement encourages companies to account for stock
compensation awards based on their fair value at the date the awards are
granted. The resulting compensation cost would be shown as an expense on the
income statement. FAS 123 is effective for calendar year 1996. However,
companies will be required to include in that year's financial statements
information about options granted in 1995. Companies can choose not to apply the
new accounting method and continue to apply current accounting requirements,
which generally result in no compensation cost for most fixed stock option
plans. Those that do so, however, will be required to disclose in the notes to
the financial statements what net income earnings per share would have been if
they had followed the new accounting method. Reliance Savings Bank has elected
to retain the accounting under APB Opinion No. 25.

-120-
<PAGE> 125

In June 1996, the FASB issued SFAS No. 125, "Accounting for Transfers
and Servicing of Financial Assets and Extinquishments of Liabilities." The
Statement focuses on the issues of accounting for transfers and servicing of
financial assets, extinquishments of liabilities and financial assets subject to
prepayment. SFAS No. 125 is effective for transfers and servicing of financial
assets and extinquishments of liabilities occurring after December 31, 1996. The
provisions of this statement for financial assets subject to prepayment is
effective for financial assets held on or acquired after January 1, 1997. SFAS
No. 125 is not expected to have a material impact on the financial position or
results of operations of Reliance.

FASB issued SFAS No. 128, "Earnings per Share." FASB No. 128 applies to
(a) companies with common stock or potential common stock (such as options,
warrants, or convertible securities) traded in a public market and (b) companies
that have filed or are in the process of filing with a regulatory agency to sell
securities in a public market. SFAS No. 128 requires companies to report
earnings per share data using the weighted-average number of common shares
outstanding during the period. SFAS No. 128 is effective for financial
statements issued for periods ending after December 15, 1997 may not be applied
earlier.

In June 1997, FASB issued SFAS No. 130, "Reporting Comprehensive
Income," which is effective for fiscal years beginning after December 15, 1997.
This statement establishes standards for reporting and display of comprehensive
income and its components (revenues, expenses, gains and losses) in a full set
of general-purpose financial statements. This statement requires that all items
that are required to be recognized under accounting standards as components of
comprehensive income to be reported in a financial statement that is displayed
with the same prominence as other financial statements.

In June 1997, FASB issued SFAS No. 131, "Disclosures about Segments of
an Enterprise and Related Information," which is effective for fiscal years
beginning after December 15, 1997. This statement establishes standards for the
way that public business enterprises.report information about operating segments
in annual financial statements and requires that those enterprises report
selected information about operating segments in interim financial reports
issued to shareholders. It also establishes standards for related disclosures
about products and services, geographic areas, and major customers.

In June 1998, FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which is effective for years beginning
after June 15, 1999, although earlier adoption is permitted. This standard
establishes new rules for the recognition and measurement of derivatives and
hedging activities. It requires all derivatives to be recorded on the balance
sheet at fair value, although the timing of recognition in earnings will depend
on the classification of the hedge according to criteria established by SFAS
133. Changes in fair value of derivatives that do not meet these criteria are
required to be included in earnings in the period of the change. Reliance has no
determined the impact that Statement 133 will have on its financial statements
and believes that such determination will no be meaningful until closer to the
date of initial adoption.

ASSET/LIABILITY MANAGEMENT

Reliance Savings Bank's profitability, like that of most financial
institutions, depends to a large extent upon its net interest income, which is
the difference between the interest it earns on interest-earning assets, such as
loans and investments, and the interest expense it pays on interest-bearing
liabilities, such as deposits and borrowings. The matching of assets and
liabilities may be analyzed by examining the extent to which such assets and
liabilities are "interest rate sensitive" and by monitoring an institutions'
interest rate sensitivity "gap". An asset or liability is said to be interest
rate sensitive within a specific time period if it matures or re-prices within
that time period. The interest rate sensitivity gap is defined as the difference
between the amount of interest-earning assets anticipated, based upon certain
assumptions, to mature or re-price within a specific time period and the amount
of interest-bearing liabilities anticipated, based upon certain assumptions, to
mature or re-price within that time period. A gap is considered positive when
the amount of interest rate sensitive assets exceeds the amount of interest rate
sensitive liabilities that mature or re-price within a specified time period. A
gap is considered negative when the amount of interest rate sensitive
liabilities exceeds the amount of interest rate sensitive assets that mature or
re-price within a specified time period. During a period of rising interest
rates, therefore, a negative gap theoretically would tend to adversely affect
net interest income, while a positive gap would tend to result in an increase in
net interest income. Conversely, during a period of falling interest rates, a
negative gap position would theoretically tend to result in an increase in net
interest income while a positive gap would tend to affect net interest income
adversely.

-121-
<PAGE> 126

In an attempt to manage vulnerability to interest rate changes,
management monitors Reliance Savings Bank's interest rate risk. The principal
objective of Reliance Savings Bank's interest rate risk management function is
to evaluate the interest rate risk included in certain balance sheet accounts,
determine the level of risk for Reliance Savings Bank given its operating
environment, capital and liquidity requirements and performance objectives, and
manage the risk consistent with board approved guidelines. Through such
management, Reliance Savings Bank seeks To reduce the vulnerability of its
operations to changes in interest rates. Reliance Savings Bank monitors its
interest rate risk as such risk relates to its operating strategies. Reliance
Savings Bank's Board of Directors has established an Asset/Liability Committee,
responsible for reviewing its asset/liability policies and interest rate risk
position, which meets monthly and reports trends to the Board of Directors on a
monthly basis and Reliance Savings Bank's interest rate risk position on a
quarterly basis.

Generally, Reliance Savings Bank utilizes the following strategies to
manage interest rate risk: (i) emphasizing the origination of adjustable rate
one- to four-family mortgage loans and non-one- to four-family mortgage loans
(which typically are either adjustable rate or short-term) for its loan
portfolio; (ii) holding primarily short-term mortgage-backed and related
securities and investment securities, and (iii) attempting to reduce the overall
interest rate sensitivity of liabilities by emphasizing core and longer-term
deposits. By originating ARM loans and other mortgage loans with short to medium
terms and investing in relatively short to medium term mortgage-backed and
related securities and investment securities, Reliance Savings Bank has been
able to reduce interest rate risk by more closely matching the terms and
repricing characteristics of its assets and liabilities. Although Reliance
Savings Bank has significantly increased its emphasis upon originating ARM loans
and has been developing other types of mortgage loans with shorter average lives
or terms and invests in mortgage-backed and related securities with shorter
average lives, the level of Reliance Savings Bank's portfolio of fixed rate
mortgage loans and investments with longer average lives continues to affect its
gap position. Reliance Savings Bank's ARM loans also typically have annual and
lifetime caps on interest rate increases, which reduces the extent to which they
protect Reliance Savings Bank against interest rate risk. Further,
mortgage-backed securities are subject to reinvestment risk. For example, during
periods of falling interest rates, mortgage-backed securities are more likely to
prepay, and Reliance Savings Bank may not be able to reinvest the proceeds from
prepayments in securities or other assets with yields similar to those of the
prepaying mortgage-backed securities. Mortgage-backed and related securities
also are subject to extension risk, which is the risk that the effective
maturity of the security may increase in a rising interest rate environment. The
market value of a security with a longer maturity typically is more sensitive to
changes in market rates of interest, and rising interest rates may have a more
pronounced adverse effect on the market value of mortgage-backed and related
securities than on other types of investment securities.

Reliance Savings Bank continues to closely monitor its interest rate
risk as that risk relates to its strategies. At June 30, 1998, total
interest-earning assets maturing or re-pricing within one year exceeded total
interest bearing liabilities maturing or re-pricing in the same period by $7.4
million, representing a positive cumulative one year gap ratio of 17.4%. With a
positive gap position, during periods of rising interest rates, it is projected
that the cost of Reliance Savings Bank's interest-bearing liabilities would rise
slower than the yield on its interest-earning assets, which would have a
positive effect upon net interest income. The opposite effect on net interest
income would occur in periods of falling interest rates. Reliance Savings Bank
also could experience substantial prepayments of its fixed rate mortgage loans
in periods of falling interest rates, which would likely result in the
reinvestment of such proceeds at market rates which are lower than current
rates.

ASSET/LIABILITY MANAGEMENT SCHEDULE

The following table sets forth the amounts of interest-earning assets
and interest-bearing liabilities at June 30, 1998, which are anticipated by
Reliance to mature or reprice in each of the time periods shown. Except as
stated below, the amount of assets and liabilities shown which reprice or mature
during a particular period were determined in accordance with the earlier of
term to repricing or the contractual maturity of the asset or liability. It is
intended to provide an approximation of the projected repricing of assets and
liabilities at June 30, 1998 on the basis of contractual maturities, anticipated
prepayments, and scheduled rate adjustments within a three month period and
subsequent selected time intervals. The loan amounts in the table reflect
principal balances expected to be redeployed and/or repriced as a result of
contractual amortization and anticipated prepayments of adjustable rate loans
and fixed rate loans, and as a result of contractual rate adjustments on
adjustable rate loans. For loans on residential properties, adjustable rate
loans and fixed rate loans are projected to prepay at rates between 15% and 30%
annually.

-122-
<PAGE> 127

Prepayment assumptions are based on OTS prepayment assumptions of 10% -30% based
on loan type. Mortgage-backed and related securities are projected to prepay at
rates between 23% and 29% annually. Money market savings accounts, passbook
accounts and negotiable order of withdrawal ("NOW") accounts are assumed to have
decay rates between 40% and 70% annually.

<TABLE>
<CAPTION>
AT JUNE 30, 1998
----------------------------------------------------------------------
MORE THAN MORE THAN
WITHIN FOUR TO ONE YEAR THREE YEARS
THREE TWELVE TO THREE TO FIVE OVER FIVE
MONTHS MONTHS YEARS YEARS YEARS TOTAL
------- ------- ------- ------- ------- -------
INTEREST-EARNING ASSETS(1): (DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Mortgage loans(2):
Fixed................................................... $ 1,136 $ 3,330 $ 4,644 $ 897 $ 7,079 $17,086
Variable................................................ 559 4,160 3,818 -- -- 8,537
Consumer loans(2)......................................... 23 65 81 3 5 177
Mortgage-backed and related securities ................... 7 20 53 55 285 420
Investment securities and other assets.................... 11,951 95 99 -- 3,764 15,909
------- ------- ------- ------- ------- -------
Total interest-earning assets........................... $13,676 $ 7,670 $ 8,695 $ 955 $11,133 $42,129
======= ======= ======= ======= ======= =======
INTEREST-BEARING LIABILITIES:
Deposits(3):
Interest-bearing demand NOW accounts.................... $ 10 $ 31 $ 40 $ 14 $ 8 $ 103
Money market accounts................................... 168 505 115 41 23 852
Passbook accounts....................................... 235 705 902 325 183 2,350
Certificates of deposit................................. 3,834 6,590 3,221 380 -- 14,025
FHLB advances........................................... 2,000 -- -- -- -- 2,000
------- ------- ------- ------- ------- -------
Total interest-bearing liabilities................... $ 6,247 $ 7,831 $ 4,278 $ 760 $214 $19,330
======= ======= ======= ======= ======= =======
Excess (deficiency) of interest-earning
assets over interest-bearing liabilities................ $ 7,429 ($161) $ 4,417 $ 195 $10,919 $22,799
======= ======= ======= ======= ======= =======
Cumulative excess (deficiency) of interest-earning
assets over interest-bearing liabilities................ $ 7,429 $ 7,268 $11,685 $11,880 $22,799 $22,799
======= ======= ======= ======= ======= =======
Cumulative excess (deficiency) of interest-
earning assets over interest-bearing
liabilities as a percent of total assets................ 17.57% 17.19% 27.63% 28.09% 53.91% 53.91%
======= ======= ======= ======= ======= =======
</TABLE>

- ----------

(1) Adjustable and floating rate assets are included in the period in which
interest rates are next scheduled to adjust rather than in the period
in which they are due, and fixed rate assets are included in the
periods in which they are scheduled to be repaid based on scheduled
amortization, in each case adjusted to take into account estimated
prepayments utilizing OTS prepayment assumptions of 10% - 30% based on
loan type.

(2) Balances have been reduced for undisbursed loan proceeds, unearned
interest, deferred loan fees and allowances for loan losses, which
aggregated $4,926,000 at June 30, 1998. Consumer loans include home
equity loans.

(3) Although Reliance Savings Bank's NOW accounts, money market accounts
and passbook accounts generally are subject to immediate withdrawal,
management considers a certain amount of such accounts to be core
deposits having significantly longer effective maturities and times to
repricing based on Reliance Savings Bank's historical retention of such
deposits in changing interest rate environments. NOW accounts, passbook
savings accounts and money market accounts have been assumed to be
withdrawn at annual rates of 40%, 40% and 79%, respectively, of the
declining balance of such accounts during the period shown. The
withdrawal rates are higher than Reliance Savings Bank's historical
rates but are considered by management to be more indicative of
expected withdrawal rates currently. If all of Reliance Savings Bank's
NOW accounts, passbook savings and money market deposit accounts had
been assumed to be subject to repricing within one year, the one-year
cumulative excess of interest-earning assets over interest-bearing
liabilities would have been $5.7 million or 12.9% of total assets.

-123-
<PAGE> 128
Certain shortcomings are inherent in the method of analysis presented
in the foregoing table. For example, although certain assets and liabilities may
have similar maturities or periods to repricing, they may react in different
degrees to changes in market interest rates. The interest rates on certain types
of assets and liabilities may fluctuate in advance of changes in market interest
rates, while interest rates on other types may lag behind changes in market
rates. Additionally, certain assets, such as ARM loans and mortgage-backed
securities, have features which restrict changes in interest rates on a
short-term basis and over the life of the asset. In addition, the proportion of
ARM loans and mortgage-backed securities in Reliance Savings Bank's portfolios
could decrease in future periods if market interest rates remain at or decrease
below current levels due to the exercise of conversion options and refinancing
activity. Further, in the event of a change in interest rates, prepayment and
early withdrawal levels would likely deviate significantly from those assumed in
the table. Finally, the ability of many borrowers to service their debt may
decrease in the event of an interest rate increase.

AVERAGE BALANCE SHEET

The following table sets forth certain information relating to
Reliance's average statements of financial condition and the statements of
income for the years ended June 30, 1998, 1997 and 1996, and reflects the
average yield on assets and average cost of liabilities for the periods
indicated.

<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
------------------------------------------------------------------------
1996 1997
------------------------------- ----------------------------------
AVERAGE AVERAGE
AVERAGE YIELD/ AVERAGE YIELD/
BALANCE INTEREST COST BALANCE INTEREST COST
------- ------- ------- ------- ------- -------
ASSETS: (DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans ......................................... $22,079 $ 1,887 8.55% $25,290 $ 2,230 8.82%
Mortgage-backed and related securities ........ 895 84 9.39 716 68 9.50
Investment and other securities ............... 12,444 743 5.97 19,156 1,162 6.07
Federal Home Loan Bank stock .................. 153 10 6.54 168 12 7.14
------- ------- ------- ------- ------- -------
Total interest-earning assets(1) ............ 35,571 2,724 7.66 45,330 3,472 7.66
======= =======
Non-interest earning assets ................... 1,021 -- 1,273 --
------- ------- ------- -------
Total assets ................................ $36,592 $ 2,724 $46,603 $ 3,472
======= ======= ======= =======
LIABILITIES AND RETAINED EARNINGS:
Interest-bearing liabilities:
Total deposits ................................ $21,167 $ 1,146 5.41 $17,971 $ 911 5.07
Advances from borrowers for taxes and
insurance ................................... 7 -- -- -- -- --
Borrowings .................................... 134 7 5.22 3,025 161 5.32
------- ------- ------- ------- ------- -------
Total interest-bearing liabilities .......... 21,308 1,153 4.92 20,996 1,072 5.11
======= =======
Non-interest-bearing liabilities .............. 387 -- 403 --
Retained earnings ............................. 14,897 -- 25,204 --
------- ------- ------- -------
Total liabilities and retained earnings ..... $36,592 $ 1,153 $46,603 $ 1,072
======= ======= ======= =======
Net interest income/interest rate spread(2) .. $ 1,571 2.25% $ 2,400 2.55%
======= ======= ======= =======
Net interest-earning assets/net
interest margin(3) .......................... $14,263 4.42% $24,334 5.29%
======= ======= ======= =======
Average interest-earning assets to
average interest-bearing liabilities ........ 166.9% 215.9%
======= =======

<CAPTION>
YEAR ENDED JUNE 30,
--------------------------------------
1998
--------------------------------------
AVERAGE
AVERAGE YIELD/
BALANCE INTEREST COST
------- ------- -------
ASSETS: (DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Interest-earning assets:
Loans ......................................... $27,150 $ 2,412 8.88%
Mortgage-backed and related securities ........ 506 48 9.49
Investment and other securities ............... 16,363 886 5.41
Federal Home Loan Bank stock .................. 200 9 7.00
------- ------- -------
Total interest-earning assets(1) ............ 44,219 3,360 7.60
=======
Non-interest earning assets ................... 2,013 --
------- -------
Total assets ................................ $46,232 $ 3,360
======= =======
LIABILITIES AND RETAINED EARNINGS:
Interest-bearing liabilities:
Total deposits ................................ $17,655 $ 915 5.18
Advances from borrowers for taxes and
insurance ................................... -- -- --
Borrowings .................................... 4,502 274 6.09
------- ------- -------
Total interest-bearing liabilities .......... 22,157 1,189 5.37
=======
Non-interest-bearing liabilities .............. 554 --
Retained earnings ............................. 23,521 --
------- -------
Total liabilities and retained earnings ..... $46,232 $ 1,189
======= =======
Net interest income/interest rate spread(2) .. $ 2,171 2.23%
======= =======
Net interest-earning assets/net
interest margin(3) .......................... $22,062 4.91%
======= =======
Average interest-earning assets to
average interest-bearing liabilities ........ 199.6%
=======
</TABLE>

- ----------

(1) Calculated net of deferred loan fees, loan discounts, loans in process and
allowance for loan losses.

(2) Interest rate spread represents the difference between the average yield on
interest-earning assets and the average rate paid on interest-bearing
liabilities.

(3) Net interest margin represents net interest income divided by average
interest-earning assets.

-124-
<PAGE> 129

Such yields and costs are derived by dividing income or expense by the
average balance of assets or Inabilities, respectively, for the periods shown.
Average balances are derived principally from average daily balances and include
non-accruing loans. The yields and costs include fees which are considered
adjustments to yields. The amount of interest income resulting from the
recognition of loan fees was $91,000, $68,000 and $22,000 for the years ended
June 30, 1998, 1997 and 1996, respectively. Interest income on nonaccruing loans
is reflected in the period it is collected and not in the periods it is earned.
Such amounts are not material to net interest income or net change in net
interest income in any period. Nonaccrual loans are included in the average
balances and do not have a material effect on the average yield.

RATE VOLUME ANALYSIS

The following table presents the extent to which changes in interest
rates and changes in the volume of interest-earning assets and interest-bearing
liabilities have affected Reliance's interest income and interest expense during
the periods indicated. Information is provided in each category with respect to:
(i) changes attributable to changes in volume (changes in volume multiplied by
prior rate), (ii) changes attributable to changes in rate (change in rate
multiplied by prior volume), and (iii) the net change. The changes attributable
to the combined impact of volume and rate have been allocated proportionately to
the change due to volume and the changes due to rate.

<TABLE>
<CAPTION>
YEAR ENDED JUNE 30, 1997 YEAR ENDED JUNE 30, 1996
COMPARED TO COMPARED TO
YEAR ENDED JUNE 30, 1998 YEAR ENDED JUNE 30, 1997
INCREASE (DECREASE) INCREASE (DECREASE)
--------------------------------- ---------------------------------
DUE TO DUE TO
--------------------------------- ---------------------------------
RATE VOLUME NET RATE VOLUME NET
---- ------ --- ---- ------ ---
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
INTEREST-EARNING ASSETS:
Loans .................................. $ 17 $ 165 $ 182 $ 62 $ 281 $ 343
Mortgage-backed and related securities . -- (20) (20) 1 (17) (16)
Investment and other securities ........ (117) (159) (276) 12 407 419
Federal Home Loan Bank stock ........... -- 2 2 1 1 2
----- ----- ----- ----- ----- -----
Total interest-earning assets ...... $(100) $ (12) $(112) $ 76 $ 672 $ 748
===== ===== ===== ===== ===== =====
INTEREST-BEARING LIABILITIES:
Total deposits ......................... $ 19 $ (15) $ 4 $ (70) $(165) $(235)
Advances from borrowers for taxes
and insurance ...................... -- -- -- -- -- --
Borrowings ............................. 25 88 113 -- 154 154
----- ----- ----- ----- ----- -----
Total interest-bearing liabilities ..... 44 73 117 70) (11) (81)
----- ----- ----- ----- ----- -----
Net change in net interest income ...... $(144) $ (85) $(229) $ 146 $ 683 $ 829
===== ===== ===== ===== ===== =====
</TABLE>

-125-
<PAGE> 130

STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

Shareholders of record as of the close of business on the Voting Record
Date are entitled to one vote for each share of Reliance Common Stock then held.
As of the Voting Record Date, the Company had ___________ shares of Reliance
Common Stock issued and outstanding.

The following table sets forth the beneficial ownership of shares of
Reliance Common Stock as of the Voting Record Date by each director of Reliance
and all directors and executive officers as a group. Members of the Reliance
Board also serve as directors of Reliance Savings Bank.

<TABLE>
<CAPTION>
NUMBER OF SHARES
BENEFICIALLY
NAME OWNED (1) PERCENT OF CLASS
---- ---------------- ----------------

<S> <C> <C>
Allan T. Bach (2)(3)(4)....................................... 94,314 3.89%
Carol A. Barnharst (2)(3)(4).................................. 88,945 3.67
O. William Held (2)........................................... 53,690 2.22
John T. Lynch (2)............................................. 57,821 2.39
Marjorie A. Spicuzza (2)(5)................................... 57,821 2.39
All directors and executive officers
as a group (5 persons) .................................... 352,671 14.56%
</TABLE>

- ----------

(1) Unless otherwise indicated, includes shares of Reliance Common Stock
held directly by the individuals as well as by members of such
individuals' immediate family who share the same household, shares held
in trust and other indirect forms of ownership over which shares the
individuals exercise sole or shared voting power and/or investment
power. Fractional shares of Common Stock held by certain executive
officers under the Reliance ESOP have been rounded to the nearest whole
share.

(2) Includes shares of Reliance Common Stock which the named individuals and
certain executive officers have the right to acquire within 60 days of
the Voting Record Date pursuant to the exercise of stock options: Mr.
Bach - 26,571 shares; Ms. Barnharst - 26,571 shares; Mr. Held - 26,571
shares; Mr. Lynch - 26,571 shares; and Ms. Spicuzza - 26,571 shares.
Does not include options to purchase shares of Reliance Common Stock
which do not vest within 60 days of the Voting Record Date which have
been awarded to executive officers and directors under the Reliance
Option Plan.

(3) Includes 32,786 and 21,866 shares of Reliance Common Stock awarded to
Mr. Bach and Ms. Barnharst, respectively, that have vested under the
RRP. Does not include shares of Reliance Common Stock awarded to Mr.
Bach and Ms. Barnharst, respectively, under the RRP that do not vest
within 60 days of the Voting Record Date.

(4) Includes shares of Reliance Common Stock allocated to certain executive
officers under the Reliance ESOP, for which such individuals possess
shared voting power, of which approximately 9,957 shares and 9,258
shares have been allocated to the accounts of Mr. Bach and Ms.
Barnharst, respectively.

(5) Of the 57,821 shares indicated as beneficially owned by Ms. Spicuzza,
10,000 are owned by her sister who has sole voting and investment power
over such shares, and as to which Ms. Spicuzza disclaims beneficial
ownership.

-126-
<PAGE> 131

EXPERTS

The consolidated financial statements of Reliance incorporated by reference in
Reliance's Annual Report on Form 10-KSB for the fiscal year ended June 30, 1998
have been audited Schenck & Associates, S.C., independent auditors, as set forth
in their report thereon included therein, and such consolidated financial
statements are incorporated herein by reference in reliance upon such report
given upon the authority of such firm as experts in accounting and auditing.

The consolidated financial statements of St. Francis as of September 30, 1997
and 1996, and for each of the years in the three-year period ended September 30,
1997, have been incorporated by reference herein in reliance upon the report of
KPMG Peat Marwick LLP, independent certified public accountants, incorporated by
reference herein, and upon the authority of said firm as experts in accounting
and auditing.

LEGAL MATTERS

The validity of the shares of St. Francis Common Stock to be issued in the
Merger will be passed upon for St. Francis by Michael Best & Friedrich LLP,
Milwaukee, Wisconsin. Certain legal matters will be passed upon for Reliance by
Schiff Hardin & Waite, Chicago, Illinois.

SHAREHOLDER PROPOSALS FOR THE 1999 ANNUAL MEETING

Due to the proposed Merger, Reliance does not currently expect to hold a 1999
Annual Meeting of Shareholders because Reliance will be merged with and into St.
Francis, with St. Francis as the surviving corporation following the Merger. In
the event the Merger is not consummated and such a meeting is held, the
following outlines the requirements for shareholder proposals and voting on such
proposals.

DEADLINE FOR SUBMISSION OF SHAREHOLDER PROPOSALS FOR INCLUSION IN 1999 PROXY
MATERIALS

Any proposal which a shareholder wishes to have included in the proxy materials
of Reliance relating to the 1999 annual meeting of the shareholders of Reliance,
which is scheduled to be held in October 1999, must be received at the principal
executive offices of Reliance, 3140 South 27th Street, Milwaukee, Wisconsin
53215, Attention: Carol A. Barnharst, Secretary, no later than May 20, 1999. If
such proposal is in compliance with all of the requirements of Rule 14a-8 under
the Exchange Act, it will be included in the proxy statement and set forth on
the form of proxy issued for such annual meeting of shareholders. It is urged
that any such proposals be sent certified mail, return receipt requested.

Nothing in this section shall be deemed to require Reliance to include in its
proxy statement and proxy relating to the 1999 Annual Meeting any shareholder
proposal which does not meet all of the requirements for inclusion established
by the SEC in effect at the time such proposal is received.

ADVANCE NOTICE REQUIREMENT FOR ANY PROPOSAL OR NOMINATION TO BE RAISED BY A
SHAREHOLDER

Shareholder proposals which are not submitted for inclusion in Reliance's proxy
materials pursuant to Rule 14a-8 under the Exchange Act may be brought before an
annual meeting pursuant to Article VII of the Reliance Articles, which provides
that: (i) with respect to proposals to be brought before an annual meeting, such
proposal must be received by Reliance not less than 60 days nor more than 90
days prior to the date of the previous year's annual meeting of shareholders, or
in the event no annual meeting was held in the previous year, no later than ten
days following the date notice of the annual meeting is mailed to shareholders;
and (ii) with respect to proposals to be brought before a special meeting, not
later than the close of business on the tenth day following the date notice of
such special meeting is mailed to shareholders.

-127-
<PAGE> 132

In accordance with Article VII of the Reliance Articles, the advance notice of
a proposal described above must set forth certain information, including the
shareholder's name and address, as they appear on Reliance's record of
shareholders, the class and number of shares of Reliance Common Stock
beneficially owned by such shareholder, a brief description of the proposed
business, the reason for considering the business at the shareholder meeting and
any material interest of the shareholder in the proposed business. In addition,
with respect to nominations for election to the Board of Directors made by a
shareholder, in accordance with Article VII of the Reliance Articles and Article
III of the Reliance By-laws, the following information must be provided: (i) the
name and address of the shareholder who intends to make the nomination and of
the person(s) to be nominated; (ii) a representation that the shareholder is a
holder of record of the stock of Reliance entitled to vote at such meeting and
intends to appear in person or by proxy at the meeting and to nominate the
person(s) specified in the notice; (iii) a description of all arrangements or
understandings between the shareholder and each nominee and any other person(s)
(naming such person(s)) pursuant to which the nomination(s) are to be made by
the shareholder; (iv) such other information regarding each nominee proposed by
such shareholder as would be required to be included in a proxy statement filed
pursuant to the proxy rules of the SEC; and (v) written consent of each nominee
to serve as a director of Reliance if so elected.

DISCRETIONARY VOTING OF 1999 PROXIES

Effective June 29, 1998, the SEC amended Rule 14a-4(c) under the Exchange Act
which governs a company's use of discretionary proxy voting authority with
respect to shareholder proposals that are not being included in a company's
proxy solicitation materials pursuant to Rule 14a-8 of the Exchange Act. New
Rule 14a- 4(c)(1) provides that if a shareholder fails to notify Reliance of
such proposal at least 45 days prior to the month and day of mailing of the
prior year's proxy statement, then the management proxies named in the form of
proxy distributed in connection with Reliance's proxy statement would be allowed
to use their discretionary voting authority to address the proposal submitted by
the shareholder, without discussion of the proposal in the proxy statement.
Accordingly, if a shareholder who intends to present a proposal at the 1999
Annual Meeting does not notify Reliance of such proposal on or prior to August
3, 1999, then management proxies would be allowed to use their discretionary
voting authority to vote on the proposal when the proposal is raised at the
annual meeting, even though there is no discussion of the proposal in the 1999
proxy statement.

PROPOSAL TO ADJOURN THE SPECIAL MEETING
(PROPOSAL NO. 2)

As described herein, the Reliance Board believes that shareholder approval of
the Merger proposal is in the best interests of Reliance's shareholders. Also as
noted herein, approval of the Merger proposal requires an affirmative vote of
the holders of a majority of the shares of Reliance Common Stock entitled to
vote on the Merger Agreement and Plan o Merger at the Special Meeting.

If by the date of the Special Meeting, including any adjournments thereof, the
required vote for approval of the Merger proposal has not been obtained, there
are an insufficient number of persons present or by proxy to constitute a
quorum, the parties determine that regulatory approval of the Merger will be
unduly delayed or that events subsequent to the date of this Proxy
Statement/Prospectus require St. Francis and Reliance to furnish additional
Proxy soliciting information to the Reliance shareholders and to give the
shareholders time to assimilate such information, the Reliance Board intends to
sponsor a proposal (or proposals), at such times and as often as necessary, to
adjourn the Special Meeting to a later date for the purpose of soliciting
additional votes on the Merger proposal. At any subsequent reconvening of the
Special Meeting, all proxies will be voted in the same manner as such proxies
would have been voted at the original convening of the Special Meeting (except
for any proxies which have theretofore effectively been revoked or withdrawn).
The time, date and place at and to which the Special Meeting would be reconvened
will be announced at the Special Meeting, and at any adjournments thereof. If,
however, the Special Meeting is adjourned more than 120 days after the date for
which the meeting was originally noticed, a new record date would be fixed for
the adjourned meeting and written notice of the place, date and time of the
adjourned meeting will be given.

-128-
<PAGE> 133

In order to approve a proposal for adjournment of the Special Meeting, the
affirmative vote of a majority of the total votes cast in person or by proxy
must vote in favor of the proposal. In order to allow Reliance's management to
vote proxies received by Reliance at the time of the Special Meeting in favor of
such an adjournment, in the event that Reliance determines, in its sole
discretion, that such an adjournment is in the best interests of Reliance and
its shareholders, Reliance has submitted the questions or adjournment as a
separate matter for the consideration and vote of the shareholders. The Board of
Directors of Reliance recommends that shareholders vote FOR the proposal to
adjourn the Special Meeting so that such proxies may be voted in favor of such
adjournment under the circumstances described under this Proposal No. 2.

St. Francis or Reliance may terminate the Merger Agreement if the Merger is not
consummated by February 28, 1999 (subject to extension to May 31, 1999, in the
case of a protest to the Merger under the Community Reinvestment Act of 1977, as
amended) (the "Termination Date"). If the Special Meeting is adjourned to a date
after the Termination Date, the Reliance Board would seek to obtain an extension
of the Termination Date from St. Francis. No assurances can be made that St.
Francis will agree to the extension, or that the other closing conditions would
not be adversely affected. See "Proposal To Approve The Merger--Amendment and
Waiver" and "--Termination." The fact of the possible extension of the
Termination Date will not be deemed to invalidate proxies previously received,
unless Reliance receives a later-dated proxy superseding a prior one.

OTHER MATTERS WHICH MAY PROPERLY
COME BEFORE THE SPECIAL MEETING

The Board of Directors knows of no business which will be presented for
consideration at the Special Meeting other than as stated in the Notice of
Special Meeting of Shareholders. If, however, other matters are properly brought
before the Special Meeting or any adjournments or postponements thereof, it is
the intention of the persons named in the accompanying Proxy to vote the shares
represented thereby on such matters in accordance with their best judgment.

AVAILABLE INFORMATION

St. Francis and Reliance are subject to the informational and reporting
requirements of the Exchange Act, and, in accordance therewith, file reports,
proxy statements and other information with the SEC. The reports, proxy
statements and other information filed by St. Francis and Reliance can be
inspected and copied at the following regional offices of the Commission: 7
World Trade Center, 13th Floor, New York, New York 10048 and 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of such material may be
obtained form the Public Reference Section of the Commission, Washington, D.C.
20549 at prescribed rates. Reports, proxy and information statements and
information regarding St. Francis and Reliance also may be obtained through the
Web site maintained by the Commission at http://www.sec.gov.

St. Francis has filed with the Commission a Registration Statement under the
Securities Act with respect to the St. Francis Common Stock to be issued in
connection with the Merger. This Proxy Statement/Prospectus omits certain of the
information contained in the Registration Statement in accordance with the rules
and regulations of the Commission. Reference is hereby made to the Registration
Statement and related exhibits for further information with respect to St.
Francis and the St. Francis Common Stock. Statements contained herein concerning
the provisions of any document are not necessarily complete and, in each
instance, where a copy of such document has been filed as an exhibit to the
Registration Statement or otherwise has been filed with the Commission,
reference is made to the copy so filed. Each such statement is qualified in its
entirety by such reference.

-129-
<PAGE> 134

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

Copies of Reliance's Annual Report on Form 10-KSB for the fiscal year
ended June 30, 1998 and Reliance's Quarterly Report on Form 10-QSB for the
quarter ended September 30, 1998, accompany this Proxy Statement/Prospectus.

The following documents or portions of documents filed with the
Commission by St. Francis (File No. 0- 21298) pursuant to the Exchange Act are
incorporated by reference in this Proxy Statement/Prospectus and made a part
hereof:

1. St. Francis' Annual Report on Form 10-K for the fiscal year
ended September 30, 1997 (provided, however, that the
information referred to in Item 402(a)(8) of Regulation S-K
shall not be deemed to be incorporated by reference herein);

2. St. Francis' Quarterly Reports on Form 10-Q for the quarters
ended December 31, 1997, March 31, 1998 and June 30, 1998, as
amended;

3. The description of St. Francis Common Stock and St. Francis
Series A Junior Participating Preferred Stock and Preferred
Stock Purchase Rights set forth in St. Francis' Registration
Statement on Form 8-A, dated September 25, 1997; and

4. All other reports filed by St. Francis pursuant to Section
13(a) or 15(d) of the Exchange Act since the end of the fiscal
period covered by the annual report referred to in (4) above.

The information relating to St. Francis and Reliance contained in this
Proxy Statement/Prospectus does not purport to be complete and should be read
together with the information in the documents that accompany this Proxy
Statement/Prospectus and the additional documents that are incorporated by
reference herein.

All documents filed by St. Francis pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date hereof and prior to the
Special Meeting will be deemed to be incorporated herein by reference and to be
a part hereof from the date of such filing. Any statement contained herein or in
a document incorporated or deemed to be incorporated herein by reference will be
deemed to be modified or superseded for purposes hereof to the extent that a
statement contained herein or in any other subsequently filed document which
also is, or is deemed to be, incorporated herein by reference modifies or
supersedes such statement. Any such statement so modified or superseded will not
be deemed to constitute a part hereof, except as so modified or superseded.

================================================================================
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED TO SIGN
AND PROMPTLY RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE-PAID
ENVELOPE.
================================================================================

-130-
<PAGE> 135

INDEPENDENT AUDITORS' REPORT

To the Board of Directors
Reliance Bancshares, Inc.
Milwaukee, Wisconsin

We have audited the accompanying consolidated statements of financial
condition of RELIANCE BANCSHARES, INC. as of June 30, 1998 and 1997 and the
related consolidated statements of income, retained earnings, and cash flows for
the three years in the period ended June 30, 1998. These consolidated financial
statements are the responsibility of the Bank's management. Our responsibility
is to express an opinion on these consolidated 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 consolidated financial statements referred to above
present fairly, in all material respects, the financial position of RELIANCE
BANCSHARES, INC. as of June 30, 1998 and 1997 and the results of its operations
and its cash flows for each of the three years in the period ended June 30, 1998
in conformity with generally accepted accounting principles.

SCHENCK & ASSOCIATES, SC

Brookfield, Wisconsin
July 31, 1998

F-1
<PAGE> 136

RELIANCE BANCSHARES, INC. AND SUBSIDIARY

Consolidated Statements of Financial Condition

June 30,
------------------------------------
1998 1997
--------------- ---------------
(In Thousands)
Assets:
<S> <C> <C>
Cash $ 842 $ 829
Cash equivalent interest-bearing deposits 3,504 2,219
-------- --------
Total cash and cash equivalents 4,346 3,048
Investments
Certificates of deposit 493 294
Investment securities available for sale, at fair value 10,949 11,481
Investment securities held to maturity
(estimated market value of $3,934 in 1997) - - 3,874
Federal Home Loan Bank stock - at cost 200 200
Loans receivable - net 25,798 27,601
Accrued interest receivable 87 182
Office properties and equipment 75 86
Prepaid expenses and other assets 341 243
-------- --------
Total assets $ 42,289 $ 47,009
======== ========

Liabilities and Equity:
Deposit accounts $ 17,330 $ 17,596
Borrowed funds 2,000 6,008
Income taxes:
Current 20 - -
Deferred 263 197
Accrued and other liabilities:
Interest 31 32
Other 273 210
-------- --------
Total liabilities 19,917 24,043
-------- --------

Commitments and contingencies - - - -

Stockholders' equity:
Common stock, $1.00 par value; 6,000,000 shares authorized;
2,562,344 shares issued 2,562 2,562
Additional paid-in-capital 10,001 9,947
Unearned ESOP compensation (449) (449)
Unrealized gain on securities available for sale, net of
applicable deferred income taxes 729 490
Retained earnings - substantially restricted 11,043 10,471
Treasury stock, at cost, 166,780 and 6,519 shares (1,514) (55)
-------- --------
Total stockholders' equity 22,372 22,966
-------- --------
Total liabilities and stockholders' equity $ 42,289 $ 47,009
======== ========

</TABLE>

See accompanying notes to consolidated financial statements.

F-2
<PAGE> 137

RELIANCE BANCSHARES, INC. AND SUBSIDIARY

Consolidated Statements of Income

Years Ended June 30,
-----------------------------------------
1998 1997 1996
---------- ---------- ----------
(In thousands, except per share data)

<S> <C> <C> <C>
Interest and dividend income:
Mortgage loans $ 2,412 $ 2,230 $ 1,886
Investment securities 886 1,162 743
Mortgage-backed and related securities 48 68 84
Other loans - - - - 1
Dividends on stock in Federal Home Loan Bank 14 12 10
---------- ---------- ----------
Total interest and dividends 3,360 3,472 2,724
---------- ---------- ----------

Interest expense:
Deposits and escrows 915 911 1,146
Notes payable and other borrowings 274 161 7
---------- ---------- ----------
Total interest expense 1,189 1,072 1,153
---------- ---------- ----------
Net interest income 2,171 2,400 1,571
Provision for loan losses 22 22 22
---------- ---------- ----------
Net interest income after provision for loan losses 2,149 2,378 1,549
---------- ---------- ----------

Noninterest income:
Gain (loss) on sale of investments 28 2 (3)
Other income 13 23 9
Loan fees and service charges 10 11 11
---------- ---------- ----------
Total noninterest income 51 36 17
---------- ---------- ----------
Operating income 2,200 2,414 1,566
---------- ---------- ----------

Noninterest expense:
Compensation and benefits 668 764 358
Occupancy 29 30 30
Advertising 8 7 7
Furniture and equipment 12 14 22
Federal insurance premiums 11 162 50
Professional services 251 186 31
Data processing 74 72 70
Stationery, communications, and other operating 99 96 60
Directors' fees and expenses of directors, officers
and employees 110 100 93
---------- ---------- ----------
Total noninterest expense 1,262 1,431 721
---------- ---------- ----------
Income before income taxes 938 983 845
---------- ---------- ----------

Income taxes:
Current 455 433 336
Deferred (89) (66) (5)
---------- ---------- ----------
Total income taxes 366 367 331
---------- ---------- ----------
Net income $ 572 $ 616 $ 514
========== ========== ==========

Earnings per share (basic and diluted) $ 0.24 $ 0.25 $ 0.21
========== ========== ==========

Dividends per share $ - - $ 3.00 $ - -
========== ========== ==========

</TABLE>

See accompanying notes to consolidated financial statements.

F-3
<PAGE> 138

RELIANCE BANCSHARES, INC. AND SUBSIDIARY

Consolidated Statement of Stockholders' Equity

Unrealized
Gain (Loss)
on
Securities
Available
for Sale, Net
Additional Unearned of Applicable Total
Common Paid-in ESOP Deferred Retained Treasury Stockholders'
Stock Capital Compensation Income Taxes Earnings Stock Equity
------- ---------- ------------ ------------ -------- ------ ------
(In Thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Balances at June 30, 1995
$ -- $ -- $ -- $ 83 $ 9,533 $ -- $ 9,616
Sale of 2,562,344 shares of common stock
at $8 per share, net of related expensed 2,562 17,225 (713) -- -- -- 19,074
Net income -- -- -- -- 514 -- 514
Change in unrealized gain (loss) on securities
available for sale, net of applicable deferred
income taxes of $92 -- -- -- 144 -- -- 144
-------- --------- ------- ----- ------- ------- --------

Balances at June 30, 1996 2,562 17,225 (713) 227 10,047 -- 29,348
Net income -- -- -- -- 616 -- 616
Cash dividend ($3.00 per share) -- (7,374) 249 -- (192) -- (7,317)
Purchase of treasury stock -- -- -- -- -- (283) (283)
Issuance of treasury stock for retention plan -- (15) -- -- -- 228 213
Amortization of unearned ESOP compensation -- 111 15 -- -- -- 126
Change in unrealized gain (loss) on securities
available for sale, net of applicable deferred
income taxes of $169 -- -- -- 263 -- -- 263
-------- --------- ------- ----- ------- ------- --------

Balances at June 30, 1997 2,562 9,947 (449) 490 10,471 (55) 22,966
Net income -- -- -- -- 572 -- 572
Purchase of treasury stock -- -- -- -- -- (1,736) (1,736)
Issuance of treasury stock for retention and
option plans -- -- -- -- -- 277 277
Amortization of unearned ESOP compensation -- 54 -- -- -- -- 54
Change in unrealized gain (loss) on securities
available for sale, net of applicable deferred
income taxes of $154 -- -- -- 239 -- -- 239
-------- --------- ------- ----- ------- ------- --------

Balances at June 30, 1998 $2,562 $10,001 $(449) $ 729 $11,043 $(1,514) $ 22,372
======== ========= ======= ===== ======= ======= ========
</TABLE>

See accompanying notes to consolidated financial statements.

F-4
<PAGE> 139

RELIANCE BANCSHARES, INC. AND SUBSIDIARY

Consolidated Statements of Cash Flows

Years Ended June 30,
------------------------------------------
1998 1997 1996
----------- ----------- -----------
(In Thousands)

<S> <C> <C> <C>
Cash Flows from Operating Activities:
Net Income $ 572 $ 616 $ 514
Adjustments to reconcile net income to net cash provided (used)
by operating activities:
Provision for depreciation 16 18 23
Provision for loan losses 22 22 22
Amortization of premiums, discounts and fees - net (100) (79) (33)
ESOP expenses 54 126 --
Increase (decrease) in income taxes payable 20 (5) (59)
Provision for (reduction of) deferred income taxes (89) (66) (4)
(Increase) decrease in interest receivable 95 (9) (78)
Net increase (decrease) in accrued/other liabilities 62 126 15
Net (increase) decrease in prepaid expense and other assets (98) (31) 9
Loss (gain) on investments (28) (2) 3
---------- ---------- ----------
Net cash provided (used) by operating activities 526 716 412
---------- ---------- ----------

Cash Flows from Investing Activities:
Purchases of Federal Home Loan Bank stock -- (43) (5)
Proceeds from sale/maturities of investment securities
held to maturity -- 9,460 5,434
Purchase of investment securities held to maturity -- (1,000) (12,188)
Proceeds from sale/maturities of investment securities
available for sale 11,371 3,192 1,505
Purchase of investment securities available for sale (7,000) (6,818) (4,994)
Net (increase) decrease in loans 1,873 (4,624) (1,896)
Principal payments collected on mortgage-backed
securities 266 115 220
Purchase of fixed assets (5) (20) --
---------- --------- ---------
Net cash provided (used) by investing activities 6,505 262 (11,924)
--------- ---------- ----------

Cash Flows from Financing Activities:
Net proceeds from issuance of common stock -- -- 19,074
Purchase of treasury stock (1,736) (283) --
Treasury stock issued 277 213 --
Repayments of short-term borrowing (2,000) -- (650)
Proceeds from short-term borrowing -- 4,000 650
Proceeds from securities sold under repurchase agreements -- 4,053 --
Payments on securities sold under repurchase agreements (2,008) (2,046) --
Increase (decrease) in deposit accounts (266) (605) (4,112)
Increase (decrease) in advance payments by borrowers -- -- (172)
Payment of cash dividend -- (7,317) --
---------- ---------- ----------
Net cash provided (used) by financing activities (5,733) (1,985) 14,790
---------- ---------- ----------
Increase (decrease) in cash and cash equivalents 1,298 (1,007) 3,278

Cash and Cash Equivalents at beginning of period 3,048 4,055 777
---------- ---------- ----------

Cash and Cash Equivalents at end of period $ 4,346 $ 3,048 $ 4,055
========== ========== ==========

</TABLE>

See accompanying notes to consolidated financial statements.

F-5
<PAGE> 140

RELIANCE BANCSHARES, INC. AND SUBSIDIARY

Consolidated Statements of Cash Flows

Years Ended June 30,
------------------------------------------

1998 1997 1996
----------- ----------- -----------
(In Thousands)
<S> <C> <C> <C>
Supplemental Cash Flow Information:
Cash paid during the period for:
Interest on deposit accounts $ 147 $ 148 $ 183
Income taxes 436 438 395
Interest on borrowings 274 161 18

Noncash investing activities:
Loans transferred to foreclosed properties and real
estate in judgment - - - - - -

Total increase in unrealized gain on securities available
for sale 398 432 236

Investments transferred to available-for-sale from
held-to-maturity, at cost 3,818 - - - -

Accounting Policies Note: Cash equivalents include demand deposits at other financial institutions and
the Federal Home Loan Bank.

</TABLE>

See accompanying notes to consolidated financial statements.

F-6
<PAGE> 141

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accounting policies of Reliance Bancshares, Inc. and Subsidiary (the
Company) conform to generally accepted accounting principles and prevailing
practices within the thrift industry. A summary of the more significant
accounting policies follows:

PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements include the accounts of
Reliance Bancshares, Inc. and its wholly-owned subsidiary, Reliance Savings Bank
(the Bank). All significant intercompany accounts and transactions have been
eliminated in consolidation.

BUSINESS

Reliance Bancshares, Inc. provides a full range of financial services to
individual customers in southeastern Wisconsin through its wholly-owned insured
banking subsidiary, Reliance Savings Bank. The Bank is a state chartered stock
savings bank which conducts its business through one facility. The Bank
emphasizes permanent and construction loans secured by real estate. The Bank's
primary deposit products are savings accounts and certificates of deposit.

ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles requires 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 and
the reported amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates.

INVESTMENTS IN SECURITIES

The Company's investments in securities are classified in two categories and
accounted for as follows:

SECURITIES HELD TO MATURITY - Debt and mortgage-backed securities for
which the Company has the positive intent and ability to hold to maturity
are reported at cost, adjusted for amortization of premiums and accretion
of discounts, which are recognized in interest income using the interest
method over the period to maturity.

SECURITIES AVAILABLE FOR SALE - Securities available for sale consist of
equity securities and certain debt and mortgage-backed securities not
classified as securities held to maturity. Unrealized holding gains and
losses, net of tax, on securities available for sale are reported as a net
amount in a separate component of stockholders' equity until realized, if
judged to be temporary.

The Company does not hold any trading securities at June 30, 1998.

Gains and losses on the sale of securities available for sale are determined
using the specific identification method.

F-7
<PAGE> 142

MORTGAGED-BACKED SECURITIES

The Company has a portfolio of mortgage-backed certificates which bear interest
at stated rates ranging from 8.5% to 15% and which mature between 2005 and 2020.
Most of the pools were acquired at a discount; a few were acquired at a nominal
premium. Mortgage-backed certificates acquired at a discount after July 1, 1982
are being amortized and included in the Company's gross income using the
interest method. Prior year discounts are being amortized on a straight-line
basis over eleven to twelve years. The difference in prior year discount
amortization on a straight-line basis versus the interest method is not
material. The Company will continue to amortize discounts on mortgage-backed
certificates purchased prior to July 1, 1982 on a straight-line basis. Premium
amortizations are not material in amount. The Company has adequate liquidity and
capital, and it is generally management's intention to hold such assets to
maturity. Should any be sold, gains and losses will be recognized based on the
specific identification method.

At June 30, 1998 and 1997, the Company had no outstanding commitments to sell
loans or securities.

LOANS RECEIVABLE

Loans receivable are stated at unpaid principal balances, less the allowance for
loan losses, and net deferred loan-origination fees and discounts.

INTEREST ON LOANS

Interest on loans is recorded as income as the borrowers' payments become due.
Interest collected in advance of the payment due date is deferred until the
payment is due. Uncollected interest on loans in excess of 90 days delinquent is
fully reserved (June 30, 1998 - $5,687, June 30, 1997 - $0).

LOAN-ORIGINATION FEES AND RELATED COSTS

Prior to July 1, 1988, the Bank recognized loan origination fees as income over
a period of ten years at ten percent a year, the related costs associated with
these loans were expensed as incurred.

Loan fees received on or after July 1, 1988, are accounted for in accordance
with FASB Statement No. 91, "Accounting for Nonrefundable Fees and Costs
Associated with Originating or Acquiring Loans and Initial Direct Costs of
Leases."

Accordingly, loan origination fees and certain direct loan origination costs are
being deferred and the net amount amortized as an adjustment of the related
loan's yield. The Bank is generally amortizing these amounts over the
contractual life of the related loans.

F-8
<PAGE> 143

OFFICE PROPERTIES AND EQUIPMENT

Office properties and equipment are stated at cost less accumulated depreciation
and include expenditures for new facilities and items which substantially
increase the useful lives of existing buildings and equipment. Building and
equipment are depreciated on the straight-line method over the estimated lives
of the assets. Expenditures for normal repairs and maintenance are charged to
operations as incurred. When properties are retired or otherwise disposed of,
the related costs and accumulated depreciation are removed from the respective
accounts and the resulting gain or loss is recorded in income. The estimated
useful lives used to compute depreciation for financial reporting purposes are
as follows:

Office, buildings and improvements 10 - 42 years

Furniture, fixtures and equipment 5 - 10 years

Automobile 6 years

INCOME TAXES

Deferred income taxes have been provided under the liability method. Deferred
tax assets and liabilities result primarily from the Company and the Bank
reporting taxable income using the cash basis method of accounting which differs
from the accrual method used in reporting income on the financial statements, as
measured by the enacted tax rates which will be in effect when these differences
are expected to reverse.

REAL ESTATE OWNED/REAL ESTATE IN JUDGMENT

Property acquired in settlement of loans is recorded at the lower of the related
principal balance upon foreclosure or its fair value. Costs of developing and
improving such properties are to be capitalized. Expenses related to holding
such real estate, net of rental and other income, are charged against income as
incurred. A provision for estimated losses is recorded when it is known that the
net realizable value is less than the carrying value.

Profit on the sale of real estate is recognized as income in the year sold only
to the extent that cash is received. Excess profit, if any, is deferred and
recognized as income as principal payments are made on the loan or contract.

EARNINGS PER SHARE

On April 18, 1996, Reliance Savings Bank converted from a state-chartered mutual
savings bank to a state-chartered stock savings bank with the concurrent
formation of a holding company. As part of this conversion, Reliance Bancshares,
Inc. sold 2,562,344 shares of stock.

Earnings per share are based on the weighted average number of common shares
outstanding during each period and common stock equivalent shares, using the
treasury share method. ESOP shares that are committed to be released are
considered to be outstanding. Primary and fully diluted earnings per share are
the same. The common stock equivalents consist entirely of stock options. The
resulting weighted average number of shares used in computing earnings per share
for the year ended June 30, 1998 and 1997 is 2,399,250 and 2,456,131 shares of
common stock.

F-9
<PAGE> 144

Earnings per share of common stock for the year ended June 30, 1996, were
computed based on consolidated net income and weighted average outstanding
shares of common stock computed as if Reliance Bancshares, Inc. initial public
offering had taken place on July 1, 1995. In this computation, net income was
not adjusted for the additional income which could have been earned had the net
proceeds from the offering been available for investment as of July 1, 1995.
Uncommitted ESOP shares (89,125) were not included in the weighted average
outstanding shares per SOP 93-6. The resulting weighted average number of shares
of common stock is 2,473,219.

ACCOUNTING FOR STOCK-BASED COMPENSATION

In October 1995, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 123, "Accounting for Stock-Based Compensation." SFAS No. 123 establishes
financial accounting and reporting standards for stock-based employee
compensation plans. SFAS No. 123 defines a fair value based method of accounting
for an employee stock option or similar equity instrument and encourages all
entities to adopt that method of accounting for all of their employee stock
compensation plans. However, it also allows an entity to continue to measure
compensation cost for those plans using the intrinsic value based method of
accounting prescribed by Accounting Principles Board ("APB") Opinion No. 25,
"Accounting for Stock Issued to Employees." Entities electing to retain the
accounting under APB Opinion No. 25 must make pro forma disclosures of net
income and earnings per share, as if the fair value based method of accounting
under SFAS No. 123 had been applied. Reliance Bancshares, Inc. has elected to
retain the intrinsic value based method of accounting. See Note 12 for
additional information concerning SFAS No. 123.

RECLASSIFICATIONS

Certain prior year items have been reclassified to conform to current year
presentation.

F-10
<PAGE> 145

NOTE 2 - INVESTMENT SECURITIES AVAILABLE FOR SALE

The carrying value (amortized cost) and estimated market values of investment
securities available-for-sale are as follows:

June 30, 1998
--------------------------------------------------------------------------------
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
----------- ------------ ---------- -----------
(In thousands)
<S> <C> <C> <C> <C>
Equity securities - common stock $ 28 $ 1,265 $ -- $ 1,293

Mortgage-backed securities 423 40 -- 463

U. S. Government and other marketable securities 4,585 5 -- 4,590

Equity securities - mutual funds 4,725 -- 122 4,603

-------- ----------- ------ ----------
Total $ 9,761 $ 1,310 $ 122 $ 10,949
======== =========== ====== ==========

<CAPTION>
June 30, 1997
--------------------------------------------------------------------------------
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
----------- ------------ ---------- ----------
(In thousands)
<S> <C> <C> <C> <C>
Equity securities - common stock $ 28 $ 918 $ -- $ 946

Corporate debt securities 5,122 12 2 5,132

Equity securities - mutual funds 5,525 -- 122 5,403
-------- ----------- ------ ----------

Total $ 10,675 $ 930 $ 124 $ 11,481
======== =========== ====== ==========
</TABLE>

Detail of sales of investment securities available-for-sale are as follows:

Proceeds
from Gross Gross
Sales Gains Losses
-------------------- -------------------- --------------------
(In thousands)
<S> <C> <C> <C>
Year Ended:
June 30, 1998 $ 11,046 $ 32 $ 4
June 30, 1997 3,652 2 --
June 30, 1996 500 -- 3
</TABLE>

F-11
<PAGE> 146

NOTE 3 - INVESTMENT SECURITIES HELD TO MATURITY

The amortized cost and estimated market values of investment securities
held-to-maturity are as follows:

June 30, 1997
----------------------------------------------------------------------------------
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
-------------------- -------------------- -------------------- -------------------
(In thousands)
<S> <C> <C> <C> <C>
Mortgage-backed securities $ 685 $ 50 $ 3 $ 732

U.S. Treasury obligations and
obligations of U.S. agencies 3,189 13 -- 3,202
------------------- ----------------- ------------------ ------------------

$ 3,874 $ 63 $ 3 $ 3,934
=================== ================= ================== ==================
</TABLE>

The amortized cost and estimated market value of investment securities by
contractual maturity are shown below. Expected maturities will differ from
contractual maturities on those securities where the borrowers may have the
right to call or prepay obligation with or without call or prepayment penalties.

Contractual maturities are as follows:

June 30, 1998
-------------------------------------------------------------------------------
Held to maturity Available for sale
----------------------------------------- -------------------------------------
Estimated Estimated
Amortized Market Amortized Market
Cost Value Cost Value
-------------------- -------------------- -------------------- ----------------
(In thousands)
<S> <C> <C> <C> <C>
Within one year or no maturity $ -- $ -- $ 4,753 $ 5,896
Greater than one year but less
than five years -- -- 14 15
Greater than five years but less
than ten years -- -- 147 160
Greater than ten years -- -- 4,847 4,878
------------------ --------------- ----------------- -----------------

Total $ -- $ -- $ 9,761 $ 10,949
================== =============== ================= =================
</TABLE>

F-12
<PAGE> 147

NOTE 4 - LOANS RECEIVABLE

Loans receivable are summarized as follows:

June 30,
---------------------------------------
1998 1997
------------------ ------------------
(In thousands)
<S> <C> <C>
First mortgage loans:
One-to-four family residential $ 9,315 $ 11,035
Multi-family residential 3,423 4,604
Commercial 7,489 5,376
Construction 10,320 8,420
Consumer and other loans:
Savings account 2 2
Second mortgages 177 355
----------------- ------------------
Total loans 30,726 29,792
----------------- ------------------

Less:
Undisbursed loan proceeds 4,595 1,890
Deferred loan fees 164 154
Allowance for loan losses 169 147
----------------- ------------------
4,928 2,191
----------------- ------------------

Loans receivable - net $ 25,798 $ 27,601
================= ==================
</TABLE>

Activity in the allowance for loan losses is summarized as follows:

Year Ended June 30,
-------------------------------------------------------------
1998 1997 1996
------------------- ------------------- -------------------
(In thousands)
<S> <C> <C> <C>
Balance at beginning of year $ 147 $ 126 $ 104

Provisions charged against income 22 21 22
Charge-offs and recoveries - net -- -- --
------------------ ------------------ ------------------

Balance at end of year $ 169 $ 147 $ 126
================== ================== ==================
</TABLE>

The existing allowance for loan losses is considered neither inadequate nor
excessive relative to credit risk.

Loans receivable from officers and directors aggregated $19,090, and $154,801 at
June 30, 1998 and 1997.

The Bank did not have any specific allowance for loan losses at June 30, 1998
and 1997. The Bank's policy is to set up a specific loss allowance when it
becomes evident that a specific loan would be disposed of at a loss.

The majority of the Bank's lending activity is with borrowers located in
metropolitan Milwaukee, Wisconsin. Although the Bank has a diversified
portfolio, a substantial portion of its debtors' ability to honor their
contracts is dependent upon the general economic conditions of the area.

F-13
<PAGE> 148

NOTE 5 - ACCRUED INTEREST RECEIVABLE

Accrued interest receivable is summarized as follows:

June 30,
--------------------------------------
1998 1997
----------------- ------------------
(In thousands)
<S> <C> <C>
Investment securities $ 40 $ 107
Mortgage-backed securities 3 5
Loans receivable 44 70
----------------- ------------------

$ 87 $ 182
================= ==================
</TABLE>

NOTE 6 - OFFICE PROPERTIES AND EQUIPMENT

Office properties and equipment are summarized by major classifications as
follows:

June 30,
--------------------------------------
1998 1997
----------------- ------------------
(In thousands)
<S> <C> <C>
Land $ 7 $ 7
Office building 147 147
Furniture, fixtures and equipment 116 111
Automobile 32 32
----------------- ------------------
302 297
Less: accumulated depreciation 227 211
----------------- ------------------

$ 75 $ 86
================= ==================
</TABLE>

Depreciation charged to operations totaled $16,000, $18,000, and $23,000 for the
years ended June 30, 1998, 1997, and 1996.

F-14
<PAGE> 149

NOTE 7 - DEPOSIT ACCOUNTS

Deposits are summarized as follows:

At June 30,
-----------------------------------------------------------------------------------------------------
1998 1997
--------------------------------------------- ---------------------------------------------------
Weighted Weighted
Percent Average Percent Average
of Total Nominal of Total Nominal
Amount Deposits Rate Amount Deposits Rate
--------------- --------------- -------------- --------------- --------------- ----------
(In thousands)
<S> <C> <C> <C> <C> <C> <C>
Demand accounts:
Non-interest bearing $ 68 0.39% -- $ 35 0.20% --
NOW 35 0.20% 2.50% 92 0.52% 2.50%
Passbook 2,350 13.56% 2.77% 2,660 15.13% 2.78%
Money market 852 4.92% 3.40% 926 5.26% 3.45%
--------------- --------------- --------------- ---------------

Total demand accounts $ 3,305 19.07% 2.87% $ 3,713 21.10% 2.89%
--------------- --------------- --------------- ---------------

Certificate accounts:
3.00% to 3.99% $ 11 0.06% 3.40% $ 11 0.06% 3.40%
4.00% to 4.99% -- -- -- -- -- --
5.00% to 5.99% 9,938 57.35% 5.50% 11,138 63.30% 5.52%
6.00% to 6.99% 3,797 21.91% 6.15% 2,467 14.02% 6.10%
7.00% to 7.99% 227 1.31% 7.30% 216 1.23% 7.30%
8.00% to 8.99% 52 0.30% 8.00% 51 0.29% 8.00%
--------------- --------------- --------------- ---------------

Total certificates $ 14,025 80.93% 5.71% $ 13,883 78.90% 5.65%
--------------- --------------- --------------- ---------------

Total deposit accounts $ 17,330 100.00% 5.17% $ 17,596 100.00% 5.07%
=============== =============== =============== ===============
</TABLE>

Deposit accounts with individual balances of $100,000 or more totaled $1,402,000
and $1,402,000 at June 30, 1998 and 1997, respectively.

On June 30, 1998, certificate accounts have scheduled maturity dates as follows:

Year Ending June 30,
-----------------------------------------------------------------------------------------------------------------
1999 2000 2001 2002 2003 Thereafter Totals
------------- ---------------- ---------------- ---------------- --------------- ---------------- ----------
(In thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
3.00% to 3.99% $ 11 $ -- $ -- $ -- $ -- $ -- $ 11
4.00% to 4.99% -- -- -- -- -- -- --
5.00% to 5.99% 7,971 1,457 281 20 209 -- 9,938
6.00% to 6.99% 2,380 826 493 5 93 -- 3,797
7.00% to 7.99% 63 164 -- -- -- -- 227
8.00% to 8.99% -- -- -- -- 52 -- 52

------------- ---------------- ---------------- ---------------- --------------- ---------------- ----------
$ 10,425 $ 2,447 $ 774 $ 25 $ 354 $ -- $ 14,025
============= ================ ================ ================ =============== ================ ==========
</TABLE>

Interest expense on deposit accounts consists of the following:

Years Ended June 30,
---------------------------------------------------------------------------------------
1998 1997 1996
---------------- --------------- ----------------
(In thousands)
<S> <C> <C> <C>
Passbook, money market, and
certificate accounts $ 913 $ 908 $ 1,144
NOW accounts 2 3 2
---------------- --------------- ----------------

$ 915 $ 911 $ 1,146
================ =============== ================
</TABLE>

F-15
<PAGE> 150

NOTE 8 - BORROWINGS

At June 30,
-----------------------------------------------------------------------
1998 1997
-------------------------------- ---------------------------------
Weighted Weighted
Average Average
Maturity Amount Rate Amount Rate
---------------- ---------------- --------------- ---------------- ---------------
(In thousands)
<S> <C> <C> <C> <C> <C>
Securities sold under
agreements to repurchase 1998 $ -- -- $ 2,007 5.70%

Advances from the
Federal Home Loan Bank 1998 2,000 6.19% 4,000 5.97%
---------------- ----------------

$ 2,000 $ 6,007 5.84%
================ ================
</TABLE>

The securities underlying the repurchase agreement are book entry securities.
The dealer may sell, loan or otherwise dispose of such securities to other
parties in the normal course of their operations, but have agreed to resell to
Reliance Bancshares, Inc. identical or substantially the same securities upon
the maturities of the agreements. Securities sold under repurchase agreements
averaged $532,000 for the year ended June 30, 1998, and the maximum outstanding
at any month-end during 1998 was $2.0 million.

FHLB advances are collateralized by residential real estate loans with a
carrying value of $12.4 million at June 30, 1998, and all Federal Home Loan Bank
stock.

In addition, the Company has a $2.0 million line of credit with Bank One,
Milwaukee. Any advances bear interest based on either the LIBOR or prime rate.
Reliance Bancshares, Inc. has the option to select the interest rate.

NOTE 9 - STOCKHOLDERS' EQUITY

At the time of its stock conversion, the Bank established a liquidation account
in an amount equal to its total net worth as of the date of the latest statement
of financial condition. The amount of the liquidation account was determined to
be $10,049,000. The liquidation account will be maintained for the benefit of
eligible account holders who continue to maintain their accounts at the Bank
after the conversion. The liquidation account will be reduced annually to the
extent that eligible account holders have reduced their qualifying deposits.
Subsequent increases will not restore an eligible account holder's interest in
the liquidation account. In the event of a complete liquidation, each account
holder will be entitled to receive a distribution from the liquidation account
in an amount proportionate to the current adjusted qualifying balances for
accounts then held. Except for the purchase of stock and payment of dividends by
the Bank, the existence of the liquidation account will not restrict use or
application of stockholders' equity.

F-16
<PAGE> 151

In connection with the insurance of its deposits by the Federal Deposit
Insurance Corporation, the Bank is required to maintain a minimum level of
capital. Also, Wisconsin chartered savings banks are required to meet minimum
capital levels of 6%. The following table summarizes the Bank's capital
requirements and ratios:

At June 30, 1998
-------------------------------------------------------------------------------------------------
Amount Ratios
Actual Required Excess Actual Required Excess
--------------- --------------- --------------- --------------- --------------- ---------
(In thousands)
<S> <C> <C> <C> <C> <C> <C>
Tier 1 risk-based capital $ 20,297 $ 1,165 $ 19,132 69.71% 4.00% 65.71%
Total risk-based capital 20,466 2,329 18,137 49.32% 8.00% 41.32%
Leverage ratio 20,297 1,245 19,052 48.92% 3.00% 45.92%
State of Wisconsin 21,195 2,489 18,706 51.08% 6.00% 45.08%
</TABLE>

The Bank's capital exceeds all of the fully phased-in capital requirements
imposed by federal and Wisconsin law and regulation.

The following table summarizes the differences between the Company's
stockholders' equity and the Bank's regulatory capital at June 30, 1998:

Tier 1 Total
Risk-Based Risk-Based Leverage State of
Capital Capital Ratio Wisconsin
---------------- ---------------- -------------- ---------------
(In thousands)
<S> <C> <C> <C> <C>
Total consolidated stockholders' equity $ 22,372 $ 22,372 $ 22,372 $ 22,372

Holding Company stockholders' equity
not available for regulatory purposes (1,346) (1,346) (1,346) (1,346)

General loss allowances -- 169 -- 169

Unrealized gain on securities available for sale (729) (729) (729) --
---------------- ---------------- -------------- ---------------

$ 20,297 $ 20,466 $ 20,297 $ 21,195
================ ================ ============== ===============
</TABLE>

NOTE 10 - INCOME TAXES

The provision for income taxes consists of the following:

Years Ended June 30,
-------------------------------------------------------------
1998 1997 1996
------------------- ------------------- -------------------
(In thousands)
<S> <C> <C> <C>
Current tax provision:
Federal $ 360 $ 341 $ 264
State 95 92 72
------------------- ------------------- -------------------
Total current $ 455 $ 433 $ 336
=================== =================== ===================

Deferred tax provision (credit):
Federal (71) (52) (4)
State (18) (14) (1)
------------------- ------------------- -------------------
Total deferred $ (89) $ (66) $ (5)
=================== =================== ===================

Total provision for income taxes $ 366 $ 367 $ 331
=================== =================== ===================
</TABLE>

At June 30, 1998, the Bank has a net capital loss carryforward for tax return
purposes of $14,781 which, if unused, $591 expires in 1999, $11,172 expires in
2000, and $3,018 expires in 2001.

F-17
<PAGE> 152

Actual income tax expense differs from the "expected" income tax expense,
computed by applying the federal income tax rate of 34% to income before income
taxes as follows:

Increase (decrease) resulting from:
State income taxes - net of
federal income tax benefit 49 51 44
Increase in cash value of life insurance (1) (9) --
Other - net (1) (9) --
------------------- ------------------- -------------------

Provision for income taxes $ 366 $ 367 $ 331
=================== =================== ===================
</TABLE>

The tax effects of temporary differences that give rise to significant portions
of deferred tax assets and deferred tax liabilities are presented below:

June 30,
----------------------------------------
1998 1997
------------------- -------------------
(In thousands)
<S> <C> <C>
Deferred tax assets:
Deferred loan fees $ 65 $ 60
Allowance for loan losses 58 49
Accrued expenses 43 37
Deferred compensation 72 47
Other 14 10
------------------- -------------------
Gross deferred tax assets $ 252 $ 203
=================== ===================

Deferred tax liabilities:
Accrued income $ 38 $ 75
FHLB stock dividends 6 6
Depreciation 1 3
Unrealized gain on securities 470 316
------------------- -------------------
Gross deferred tax liabilities $ 515 $ 400
=================== ===================

Net deferred tax asset (liability) $ (263) $ (197)
=================== ===================
</TABLE>

Previously, the Bank qualified under provisions of the Internal Revenue Code
which permitted as a deduction from taxable income allowable bad debt deductions
which significantly exceeded actual experience and the financial statement loan
loss provisions. A deferred tax liability was not required on these excess tax
bad debt reserves. At June 30, 1998, the Bank's tax bad debt reserves were
approximately $1,401,000. The Bank is now required to establish a deferred tax
liability for the excess of its tax bad debt reserves over the balance at the
close of the base year. The amount of the base year reserves is considered to
meet the indefinite reversal criteria of Accounting Principles Board Opinion No.
12, "Accounting for Income Taxes - Special Areas," and accordingly, is not
subject to deferred taxes. The Bank's base year tax bad debt reserves were
approximately $1,401,000. Income taxes would be imposed at the then-applicable
rates if the Bank were to use these reserves for any other purpose other than to
absorb bad debt losses. In August 1996, federal legislation was enacted which
repealed the favorable bad debt method for savings and loan associations.
Subsequent to this repeal, the Bank continues to be subject to this potential
tax liability to the extent payments or distributions of these appropriated
earnings occur.

F-18
<PAGE> 153

NOTE 11 - FORECLOSED PROPERTIES AND REAL ESTATE IN JUDGMENT

Foreclosed properties and real estate in judgment is summarized as follows:

June 30,
--------------------------------------
1998 1997
------------------ -----------------
(In thousands)
<S> <C> <C>
Real estate in judgment subject to redemption $ -- $ --
Foreclosed properties -- --
Allowance for losses -- --
------------------ -----------------
$ -- $ --
================== =================
</TABLE>

NOTE 12 - OFFICER, DIRECTOR AND EMPLOYEE BENEFIT PLAN

The Bank is a participant in the multi-employer Financial Institutions
Retirement Fund ("FIRF"). The FIRF covers substantially all of the Bank's
employees and provides benefits based on compensation and years of service for
employees age 21 and over after one year of eligibility service. The Bank's
contributions are determined by FIRF and generally represent the normal cost of
the plan. The plan provides benefits of approximately 1.5% of the average of the
five highest years of compensation times the number of years of service. Pension
costs and funding include normal costs and amortization of prior service costs
over 15 years. The FIRF does not make separate actuarial valuations or segregate
plan assets by participating employer. As a result, disclosures required by SFAS
No. 87, "Employer's Accounting for Pensions," cannot be made. Significant
actuarial assumptions for the FIRF include a 7.5% return on plan investments.
Pension expense is based on the Bank's contributions as determined by the FIRF.
The market value of the net assets of the fund exceeds the liabilities for the
present value of accrued benefits in the aggregate. Contributions of $1,000,
$31,000 and $29,000 were made for the years ended June 30, 1998, 1997 and 1996,
respectively.

Concurrent with the conversion from a mutual savings bank to a stock savings
bank, the Bank borrowed funds from the holding company to purchase 89,125 shares
of Reliance Bancshares, Inc. common stock to establish an Employee Stock
Ownership Plan (ESOP) for substantially all of its employees. The loan is to be
repaid over fifteen years and bears interest at 7.0%. Unallocated ESOP shares
are reflected as a reduction from stockholders' equity in the Company's
consolidated statements of financial condition. 6,164 and 16,196 shares were
allocated to participants for the year ended June 30, 1998 and 1997. Expense to
the ESOP was $54,000, and $127,000 for 1998 and 1997. ESOP shares as of June 30
were as follows:

June 30,
---------------------------------------
1998 1997
------------------ ------------------
<S> <C> <C>
Allocated shares 22,360 16,196
Shares ratably released for allocation -- --
Unreleased shares 66,765 72,929
------------------ ------------------
Total ESOP shares 89,125 89,125
================== ==================

Fair value of unreleased shares at June 30 $ 550,811 $ 610,780
================== ==================
</TABLE>

F-19
<PAGE> 154

The Bank has a nonqualified deferred retirement plan for directors. The Plan was
approved by the Commissioner of Savings and Loan of the State of Wisconsin on
June 20, 1994. The Plan provides for each director to receive additional
benefits at retirement. In the event of death during service, the same amounts
are payable to a director designated beneficiary. The Bank has acquired
permanent life insurance policies on the individuals to fund the Plans. The cash
value of the policies totaled $219,000 at June 30, 1998. The directors have no
rights, title or interest in the insurance policies. The deferred compensation
liabilities are being accrued ratably from July 1994 to the respective normal
retirement dates. As of June 30, 1998 and 1997, $121,114 and $88,450 had been
accrued for the Plan.

RECOGNITION AND RETENTION PLAN

The Recognition and Retention Plan of the Bank was adopted on May 15, 1997 to
enable the Bank to reward and retain key officers. A total of 81,980 shares of
common stock were awarded. One-third of the shares become vested on date of
adoption, one-third vested on May 15, 1998, and the remaining one-third will
vest on May 15, 1999. Compensation expense for stock rewarded under this plan is
recorded over the vesting periods, and totaled $211,000 and $242,000 for the
years ended June 30, 1998 and 1997. Since the plan was adopted during 1997,
there are no expenses for the year ended June 30, 1996.

STOCK OPTION PLAN

The Stock Option Plan of the Company was adopted on May 15, 1997. A total of
256,234 shares of common stock were authorized to be reserved for the grant of
both incentive and nonincentive stock options to officers and directors. The
option exercise price is equal to the fair market value of the common stock on
the date of the grant ($7.81 on May 15, 1997). The option term cannot exceed ten
years. A total of 221,066 shares of common stock were granted under the plan on
May 15, 1997. On April 8, 1998, 38,204 shares were granted under the plan. The
options vested one-third on May 15, 1997 and one-third on May 15, 1998, and will
vest one-third on May 15, 1999.

As disclosed in Note 1, the Company has elected to follow APB Opinion No. 25
"Accounting for Stock Issued to Employees," and related interpretations for
accounting for its stock option grants. Accordingly, no compensation expense has
been recognized for the Company's stock option grants. Had compensation cost for
the Company's 1998 and 1997 grant for stock-based compensation plans been
determined consistent with SFAS No. 123, the Company's net income and earnings
per share would have been reduced by $96,000 and $171,000 and $.04 and $.07.
Assumptions used to estimate the value was a risk free interest rate of 5.44%,
expected life of ten years, volatility of 21% and no expected dividends.

The following is a summary of stock option transactions for the year ended June
30, 1998:

Weighted
Average
Number of Exercise
Shares Price
------------------- -------------------
<S> <C> <C>
Initial grant date - May 15, 1997 221,066 $ 7.81
Granted 38,204 9.25
Exercised (8,137) 7.81
Forfeited (4,036) 7.81
------------------ ------------------
Outstanding at June 30, 1998 247,097 $ 8.03
================== ==================

Available for future grant at year-end 1,000
==================
</TABLE>

F-20
<PAGE> 155

NOTE 13 - FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK AND OTHER
COMMITMENTS

The Bank is party to financial instruments with off-balance sheet risk in the
normal course of business to meet the financing needs of its customers. The
financial instrument consists of commitments to extend credit. This instrument
involves, to varying degrees, elements of credit and interest rate risk in
excess of the amount recognized in the statement of financial condition. The
contract amounts reflect the extent of involvement the Bank has in the
particular class of financial instrument. The Bank's maximum exposure to credit
loss for commitments to extend credit is represented by the contract amount of
those instruments.

Financial instruments whose contract amounts represent credit risk are as
follows:

June 30,
----------------------------------------
1998 1997
------------------- -------------------
(In thousands)
<S> <C> <C>
Commitments to extend credit
Fixed Rate $ 946 $ 1,890
</TABLE>

Commitments to extend credit are agreements to lend to a customer as long as
there is no violation of any condition established in the contract. Commitments
generally have fixed expiration dates or other termination clauses and generally
require payment of a fee. As some commitments expire without being drawn upon,
the total commitment amounts do not necessarily represent future cash
requirements. The Bank evaluates the creditworthiness of each customer on a case
by case basis. The Bank generally extends credit only on a secured basis.
Collateral obtained varies, but consists primarily of one-to-four family
residences.

Commitments to extend credit on a fixed-rate basis expose the Bank to a certain
amount of interest rate risk if market rates of interest substantially increase
during the commitment period.

The Bank is a party to various legal actions normally associated with financial
institutions, the aggregate effect of which, in management's and legal counsel's
opinion, would not be material to the financial condition of Reliance
Bancshares, Inc.

NOTE 14 - DISCLOSURE ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

Statement No. 107, ("Disclosures about Fair Value of Financial Instruments"),
requires disclosure of fair value information about financial instruments,
whether or not recognized in the balance sheet, for which it is practicable to
estimate that value. In cases where quoted market prices are not available, fair
values are based on estimates using present value or other valuation techniques.
Those techniques are significantly affected by the assumptions used, including
the discount rate and estimates of future cash flows. In that regard, the
derived fair value estimates cannot be substantiated by comparison to
independent markets and, in many cases, could not be realized in immediate
settlement of the instrument. Statement No. 107 excludes certain financial
instruments and all nonfinancial instruments from its disclosure requirements.
Accordingly, the aggregate fair value amounts presented do not necessarily
represent the underlying value of Reliance Bancshares, Inc. Reliance Bancshares,
Inc. does no routinely measure the market value of financial instruments because
such measurements represent point-in- time estimates of value. It is generally
not the intent of Reliance Bancshares, Inc. to liquidate and therefore realize
the difference between market value and carrying value and even if it were,
there is no assurance that the estimated market values could be realized. Thus,
the information

F-21
<PAGE> 156

presented is not particularly relevant to predicting Reliance Bancshares, Inc.'s
future earnings or cash flows.

The following methods and assumptions were used by Reliance Bancshares, Inc. in
estimating its fair value disclosures for financial instruments:

CASH AND SHORT-TERM INVESTMENTS

The carrying values approximate the fair values for these assets.

SECURITIES AVAILABLE FOR SALE, INVESTMENTS, AND MORTGAGE-BACKED SECURITIES

Fair values are based on quoted market prices, where available. If a quoted
market price is not available, fair value is estimated using quoted market
prices for similar securities.

LOANS

Fair values are based on quoted market prices for loans with similar financial
characteristics.

DEPOSITS

The fair value of deposits with no stated maturity, such as noninterest-bearing
demand deposits, savings, NOW accounts, money market, and checking accounts, is
the amount payable on demand at the reporting date. The fair value of fixed rate
time deposits is calculated using discounted cash flows applying interest rates
currently being offered on similar certificates.

BORROWINGS

The carrying amounts of short-term borrowings approximate their fair values.

F-22
<PAGE> 157

OFF-BALANCE SHEET INSTRUMENTS

The fair value of commitments is estimated using the fees currently charged to
enter into similar agreements, taking into account the remaining terms of the
agreements and the present creditworthiness of the counterparties. The fair
value of these off-balance-sheet items approximates the recorded amounts of the
related fees and is not material.

The carrying amounts and estimated fair value of financial instruments were as
follows:

June 30,
----------------------------------------------------------------------------------
1998 1997
---------------------------------------- ----------------------------------------
Carrying Estimated Carrying Estimated
Amount Fair Value Amount Fair Value
------------------- ------------------- ------------------- -------------------
(In thousands)
<S> <C> <C> <C> <C>
Financial Assets:
Cash and cash equivalents $ 4,346 $ 4,346 $ 3,048 $ 3,048
Certificates of deposit 493 493 294 294
Securities available for sale 10,949 10,949 11,481 11,481
Securities held to maturity - - - - 3,874 3,934
Loans receivable 25,798 26,947 27,601 28,859

Financial Liabilities:
Deposits:
Demand deposits 3,305 3,305 3,713 3,713
Certificates 14,025 14,921 13,883 14,609
Borrowed funds 2,000 2,000 6,008 6,008
</TABLE>

F-23
<PAGE> 158

NOTE 15 - CONDENSED PARENT COMPANY ONLY FINANCIAL STATEMENTS

The following condensed statements of financial condition as of June 30, 1998
and 1997 and condensed statements of income and cash flows for the period then
ended for Reliance Bancshares, Inc. should be read in conjunction with the
consolidated financial statements and the notes thereto.

CONDENSED STATEMENT OF FINANCIAL CONDITION
(In thousands)
June 30,
-----------------------------------------
1998 1997
-------------------- --------------------
<S> <C> <C>
ASSETS
Cash $ 49 $ 416
Cash equivalent interest-bearing deposits 1,950 936
Investment securities available for sale -- 1,005
Investment securities held to maturity -- 1,992
Investment in savings bank subsidiary 21,026 20,157
Loan to ESOP 449 449
Other assets 107 28
-------------------- --------------------
Total assets $ 23,581 $ 24,983
==================== ====================

LIABILITIES AND STOCKHOLDERS' EQUITY
Borrowed funds $ -- $ 2,008
Liabilities 8 9
-------------------- --------------------
Total liabilities 8 2,017

Stockholders' equity 23,573 22,966
-------------------- --------------------
Total liabilities and stockholders' equity $ 23,581 $ 24,983
==================== ====================

CONDENSED STATEMENT OF INCOME
(In thousands)
Year Ended Year Ended
June 30, June 30,
1998 1997
-------------------- --------------------
<S> <C> <C>
Interest income $ 180 $ 404
Interest expense 34 75
-------------------- --------------------
Net interest income 146 329

Non-interest income -- 2
-------------------- --------------------
Operating income 146 331

Non-interest expense
Compensation and employee benefits 11 6
Professional services 94 88
Other 43 34
-------------------- --------------------
Total non-interest expense 148 128
-------------------- --------------------
Income (loss) before income taxes and equity
in undistributed earnings of subsidiary (2) 203

Income tax (1) 80
-------------------- --------------------
Income (loss) before equity in undistributed
earnings of subsidiary (1) 123

Equity in undistributed earnings of subsidiary 815 753
-------------------- --------------------

Net income $ 814 $ 876
==================== ====================
</TABLE>

F-24
<PAGE> 159

CONDENSED STATEMENT OF CASH FLOWS
(In thousands)

<TABLE>
<CAPTION>
Year Ended Year Ended
June 30, June 30,
1998 1997
-------------------- --------------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 814 $ 876
Adjustments to reconcile net income to
net cash provided by operating activities:
Equity in undistributed earnings of subsidiary (869) (1,114)
Amortization (8) (7)
ESOP expenses 54 126
Net (increase) decrease in other assets (79) 22
Net increase (decrease) in other liabilities 1 (5)
Loss (gain) on investments -- (2)
-------------------- --------------------
Net cash provided by operating activities (87) (104)
-------------------- --------------------

Cash flows from investing activities:
Purchase of investment securities available for sale -- (4,000)
Proceeds from sales/maturities of investment securities
available for sale 3,000 3,462
Proceeds from sales/maturities of investment securities
held to maturity -- 5,000
Payment received on loan to ESOP -- 248
-------------------- --------------------
Net cash provided (used) by investing activities 3,000 4,710
-------------------- --------------------

Cash flows from financing activities:
Net proceeds from issuance of common stock upon conversion -- --
Cash dividends -- (7,317)
Purchase of treasury stock (526) (283)
Treasury stock issued 268 213
Proceeds from securities sold under repurchase agreements - - 4,053
Payments on securities sold under repurchase agreements (2,008) (2,046)
-------------------- --------------------
Net cash provided (used) by financing activities (2,266) (5,380)
-------------------- --------------------

Increase (decrease) in cash and cash equivalents 647 (774)

Cash and cash equivalents at beginning of year 1,352 2,126
-------------------- --------------------

Cash and cash equivalents at end of year $ 1,999 $ 1,352
==================== ====================
</TABLE>

F-25
<PAGE> 160

NOTE 16 - QUARTERLY CONSOLIDATED FINANCIAL INFORMATION (UNAUDITED)

Three Months Ended
-----------------------------------------------------------------------------
Sept. 30, Dec. 31, Mar. 31, June 30,
1997 1997 1998 1998
--------------- -------------------- -------------------- -------------------
(In thousands)
<S> <C> <C> <C> <C>
Interest and divided income $ 856 $ 837 $ 849 $ 818
Interest expense 315 302 286 286
--------------- --------------- --------------- --------------
Net interest income 541 535 563 532
Provision for loan losses 5 5 6 6
--------------- --------------- --------------- --------------
Net interest income after provision for
loan losses 536 530 557 526
Non-interest income (2) 16 2 35
Non-interest expense 253 341 332 336
--------------- --------------- --------------- --------------
Income before income taxes 281 205 227 225
Income taxes 118 76 80 92
--------------- --------------- --------------- --------------
Net income $ 163 $ 129 $ 147 $ 133
=============== =============== =============== ==============

<CAPTION>
Three Months Ended
-----------------------------------------------------------------------------
Sept. 30, Dec. 31, Mar. 31, June 30,
1996 1996 1997 1997
--------------- -------------------- -------------------- --------------
(In thousands)
<S> <C> <C> <C> <C>
Interest and dividend income $ 836 $ 891 $ 839 $ 906
Interest expense 231 252 281 308
--------------- --------------- --------------- --------------
Net interest income 605 639 558 598
Provision for loan losses 5 6 6 5
--------------- --------------- --------------- --------------
Net interest income after provision for
loan losses 600 633 552 593
Non-interest income 3 5 2 26
Non-interest expense 346 229 262 594
--------------- --------------- --------------- --------------
Income before income taxes 257 409 292 25
Income taxes 98 156 116 (3)
--------------- --------------- --------------- --------------
Net income $ 159 $ 253 $ 176 $ 28
=============== =============== =============== ==============
</TABLE>

The following schedule is a summary of earnings per share and market information
during the years ended June 30, 1998 and 1997.

Three Months Ended
-----------------------------------------------------------------------------------
Sept. 30, Dec. 31, Mar. 31, June 30,
1997 1997 1998 1998
-------------------- -------------------- -------------------- --------------------
<S> <C> <C> <C> <C>
Earnings per share $ 0.07 $ 0.05 $ 0.07 $ 0.05
Dividends paid -- -- -- --

Market information:
Trading range
High 9.000 9.750 10.125 8.875
Low 7.750 8.250 8.750 8.063
Close 8.500 9.500 8.875 8.250

Three Months Ended
-----------------------------------------------------------------------------------
Sept. 30, Dec. 31, Mar. 31, June 30,
1996 1996 1997 1997
-------------------- -------------------- -------------------- --------------------
Earnings per share $ 0.06 $ 0.10 $ 0.07 $ 0.02
Dividends paid -- 3.00 -- --

Market information:
Trading range
High 8.750 10.250 7.750 8.500
Low 7.625 6.125 6.375 7.000
Close 8.625 6.750 7.250 8.375
</TABLE>

F-26
<PAGE> 161

NOTE 17 - FEDERAL DEPOSIT INSURANCE CORPORATION SPECIAL ASSESSMENT

Federal legislation enacted on September 30, 1996 addressed inadequate funding
of the Savings Association Insurance Fund ("SAIF"), which had resulted in a
large deposit insurance premium disparity between banks insured by the Bank
Insurance Fund ("BIF") and SAIF insured thrifts. As a result of this new
legislation, a one-time special assessment was imposed on thrift institutions,
and the Company recognized a $144,000 pretax charge for the year ended June 30,
1997 for assessment on its savings bank subsidiary. The after tax impact on
earnings amounted to $87,000. The legislation also provides for a reduction in
deposit insurance premiums in subsequent periods and other regulatory reforms.

NOTE 18 - PENDING MERGER

On June 30, 1998, the Company signed a definitive Agreement and Plan of
Reorganization that provides for the acquisition of the Company and thus the
Bank by St. Francis Capital Corporation ("St. Francis"). Under the terms of the
definitive agreement, St. Francis will acquire all of the outstanding shares of
the Company through a merger transaction pursuant to which the Company's
shareholders will elect to receive either cash or shares of St. Francis's common
stock in exchange for their shares (the "Merger"). Consummation of the
transaction is subject to regulatory approval, approval of the Company's
shareholders and the satisfaction of certain other conditions.

F-27
<PAGE> 162
EXHIBIT A

AGREEMENT AND PLAN OF REORGANIZATION

BETWEEN

ST. FRANCIS CAPITAL CORPORATION

AND

RELIANCE BANCSHARES, INC.

Dated as of June 30, 1998
<PAGE> 163
TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE ONE

THE REORGANIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
1.01 Plan of Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
1.02 Effective Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
1.03 Manner of Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
1.04 Effect of Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-2
1.05 Conversion of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-2
1.06 Election Procedures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-4
1.07 Exchange Procedures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-6
1.08 No Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-8
1.09 Dissenting Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-8
1.10 Withholding Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-8
1.11 Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-9
1.12 Bank Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-9

ARTICLE TWO

REPRESENTATIONS AND WARRANTIES OF ACQUIROR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-10
2.01 Organization; Qualification; Good Standing; Corporate Power . . . . . . . . . . . . . . . . . . A-10
2.02 Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-10
2.03 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-10
2.04 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-11
2.05 Absence of Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-11
2.06 No Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-11
2.07 Consents and Approvals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-12
2.08 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-12
2.09 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-12
2.10 Compliance with Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-14
2.11 Shares to be Issued in Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-14
2.12 Broker's Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-14
2.13 Acquiror Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-14
2.14 Regulatory Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-14
2.15 Community Reinvestment Act Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-15
2.16 Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-15
2.17 Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-15

ARTICLE THREE

REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-15
3.01 Organization; Qualification; Good Standing; Corporate Power . . . . . . . . . . . . . . . . . . A-15
3.02 Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-16
3.03 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-16
3.04 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-17
3.05 Absence of Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-18
3.06 No Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-18
3.07 Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-19
3.08 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-19
3.09 Taxes, Returns and Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-19
3.10 Corporate Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-20
3.11 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-21
</TABLE>

i
<PAGE> 164
<TABLE>
<S> <C>
3.12 Brokerage Commissions and Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-22
3.13 Certain Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-22
3.14 Governing Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-23
3.15 Orders, Injunctions, Decrees; Compliance With Applicable Laws . . . . . . . . . . . . . . . . . A-23
3.16 Shareholders of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-23
3.17 Regulatory Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-23
3.18 Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-24
3.19 Loan Portfolio; Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-24
3.20 Mortgage-Backed and Related Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-24
3.21 Allowance for Loan Losses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-24
3.22 Conduct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-25
3.23 Fiduciary Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-25
3.24 Compliance With Environmental Laws and Health and Safety Laws . . . . . . . . . . . . . . . . . A-25
3.25 Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-26
3.26 Insider Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-27
3.27 No Sensitive Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-27
3.28 Community Reinvestment Act Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-27
3.29 Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-27
3.30 Qualified Thrift Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-27
3.31 The ESOP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-27
3.32 Absence of Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-27
3.33 Liquidation Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-27
3.34 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-28
3.35 Derivative Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-28
3.36 Company Pension Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-28
3.37 Director Deferred Retirement Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-28

ARTICLE FOUR

COVENANTS OF ACQUIROR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-28
4.01 Conduct Of Business: Certain Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-28
4.02 SEC Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-29
4.03 Authorization, Reservation and Listing of Common Stock . . . . . . . . . . . . . . . . . . . . A-29
4.04 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-29
4.05 Regulatory Application and Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-29
4.06 Employment Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-30
4.07 Negative Covenant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-30
4.08 Advisory Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-30
4.09 Qualifying the Merger for Tax-Free Status . . . . . . . . . . . . . . . . . . . . . . . . . . A-30
4.10 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-30

ARTICLE FIVE

COVENANTS OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-31
5.01 Registration Statement and Shareholders Meeting. . . . . . . . . . . . . . . . . . . . . . . . A-31
5.02 Conduct Of Business, Certain Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-31
5.03 Confirming and Conforming Accounting and Reserve Policies; Integration . . . . . . . . . . . . A-35
5.04 Information, Access Thereto . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-35
5.05 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-35
5.06 Recommendation of Merger to Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . A-36
5.07 Litigation Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-36
5.08 Bank Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-36
5.09 No Solicitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-36
5.10 Other Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-36
5.11 Best Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-36
</TABLE>

ii
<PAGE> 165
<TABLE>
<S> <C>
5.12 Termination and Other Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-36
5.13 Voting Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-37
5.14 Advise of Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-37

ARTICLE SIX

ADDITIONAL COVENANTS AND AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-37
6.01 Regulatory Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-37
6.02 Legal Conditions to Reorganization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-38
6.03 Subsequent SEC Filings; Press Releases. . . . . . . . . . . . . . . . . . . . . . . . . . . . A-38
6.04 Additional Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-38
6.05 Advice of Changes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-38
6.06 Current Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-38
6.07 Termination of Regulatory Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-39
6.08 Tax Returns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-39
6.09 Compensation and Benefit Plans; Existing Agreements. . . . . . . . . . . . . . . . . . . . . . A-39
6.10 Environmental Studies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-40

ARTICLE SEVEN

CONDITIONS TO OBLIGATIONS OF EACH OF THE PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-41
7.01 Regulatory Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-41
7.02 Federal Tax Opinion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-41
7.03 Registration Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-42
7.04 Orders, Decrees and Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-42
7.05 NASDAQ Listing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-42

ARTICLE EIGHT

FURTHER CONDITIONS TO THE OBLIGATIONS OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-42
8.01 Compliance by Acquiror . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-42
8.02 Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-42
8.03 Officers' Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-42
8.04 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-42
8.05 No Environmental Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-43
8.06 Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-43
8.07 Absence of Certain Changes or Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-43
8.08 Accountant's Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-43

ARTICLE NINE

FURTHER CONDITIONS TO THE OBLIGATIONS OF ACQUIROR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-43
9.01 Compliance by the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-43
9.02 Accuracy of Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-43
9.03 Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-44
9.04 Sufficiency of Documents, Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-44
9.05 Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-44
9.06 Officers' Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-44
9.07 Absence of Certain Changes or Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-44
9.08 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-44
9.09 Agreements of Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-45
9.10 Bank Merger Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-45
9.11 Consents Under Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-45
9.12 Accountant's Letter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-45
9.13 Approval by Affirmative Vote of Shareholders; Exercise of Dissenters' Rights . . . . . . . . . A-45
9.14 Nonperforming Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-45
</TABLE>

iii
<PAGE> 166
<TABLE>
<S> <C>
ARTICLE TEN

TERMINATION AND AMENDMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-46
10.01 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-46
10.02 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-47
10.03 Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-47

ARTICLE ELEVEN

MODIFICATIONS, AMENDMENTS AND WAIVER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-48
11.01 Modifications, Amendments and Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-48

ARTICLE TWELVE

MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-49
12.01 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-49
12.02 Articles of Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-49
12.03 Further Acts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-49
12.04 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-49
12.05 Alternative Structure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-50
12.06 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-50
12.07 Nonsurvival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . A-50
12.08 Discussions With Other Banks, Bank Holding Companies, Savings Associations and
Bank-Related Businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-50
12.09 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-50
12.10 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-50
12.11 Binding Effect and Parties in Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-50
12.12 Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-51
12.13 Relief Due to Breach. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-51
12.14 Invalidity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-51
12.15 Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-51
12.16 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-51

</TABLE>

EXHIBIT A: Agreement and Plan of Merger
EXHIBIT B: Bank Merger Agreement
EXHIBIT C: Form of Employment Agreement
EXHIBIT D: Form of Voting Agreements
EXHIBIT E: Legal Opinion
EXHIBIT F: Legal Opinion
EXHIBIT G: Affiliates' Letter

APPENDIX I: Disclosure Schedules

iv
<PAGE> 167
AGREEMENT AND PLAN OF REORGANIZATION

THIS AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") by and between
ST. FRANCIS CAPITAL CORPORATION, a Wisconsin corporation ("Acquiror"), and
RELIANCE BANCSHARES, INC., a Wisconsin corporation (the "Company"), is made and
entered into this 30th day of June, 1998.

W I T N E S S E T H:

WHEREAS, Acquiror and the Company desire that the Company be merged with
and into Acquiror in accordance with the applicable statutes of the State of
Wisconsin and in accordance with an Agreement and Plan of Merger (the "Plan of
Merger") substantially on the terms and in the form attached hereto as Exhibit
A (the merger provided for therein being called the "Merger"); and

WHEREAS, immediately upon the Merger, Acquiror and the Company intend
that Reliance Savings Bank, a wholly-owned subsidiary of the Company (the
"Merging Bank"), shall merge (the "Bank Merger" and such transaction together
with the Merger, the "Reorganization") with and into St. Francis Bank, F.S.B.,
a wholly-owned subsidiary of Acquiror ("Acquiror- Bank");

NOW, THEREFORE, in consideration of the premises and the mutual and
dependent promises hereinafter contained, the parties do represent, warrant,
covenant and agree as follows:

ARTICLE ONE

THE REORGANIZATION

1.01 Plan of Merger. The Company and Acquiror hereby adopt and agree to
execute the Plan of Merger substantially in the form attached hereto as Exhibit
A, subject to the satisfaction (or lawful waiver) of each of the conditions to
the obligations of the parties to this Agreement.

1.02 Effective Time. The Merger shall be consummated upon the filing of
appropriate Articles of Merger with the Wisconsin Department of Financial
Institutions ("WDFI") in the form and manner required by the Wisconsin Business
Corporation Law ("WBCL"). The close of business on the date on which such
Articles of Merger shall have been filed is herein referred to as the
"Effective Time," unless some other date is agreed upon by the parties hereto
and is specified therein. Unless otherwise mutually agreed to in writing by
Acquiror and the Company, and subject to the terms and conditions hereof, the
Effective Time shall occur on the Closing Date (as defined in Section 12.01
hereof) or the next succeeding business day thereafter.

1.03 Manner of Merger. At the Effective Time, the Company shall be
merged with and into Acquiror in accordance with applicable provisions of the
WBCL and on the terms and subject to the conditions contained in this Agreement
and the Plan of Merger. Simultaneously with the effectiveness of the Merger,
(a) the separate existence of the Company shall cease, and (b) Acquiror, as the
surviving corporation (the "Surviving Corporation"), shall continue to exist
under and be governed by the WBCL. The Merger is intended to be treated by the
parties as a reorganization within the meaning of Section 368 of the Internal
Revenue Code of 1986, as amended (the "Code"). Upon the effectiveness of the
Merger, the articles of incorporation and bylaws of the Surviving Corporation
shall be the form of the articles of incorporation and bylaws of Acquiror as in
effect immediately prior to the Merger. Upon the effectiveness of the Merger,
the directors and officers of the Surviving Corporation shall be the persons
serving in such positions at Acquiror immediately prior to such effectiveness.

A-1
<PAGE> 168
1.04 Effect of Merger. Upon the Merger becoming effective:

(a) The separate existence of the Company shall cease and be
merged with and into Acquiror, as the Surviving Corporation, which shall
possess all of the rights, privileges, immunities, powers and franchises
of a public as well as of a private nature, and shall be subject to all
of the restrictions, disabilities and duties of each of the Company and
Acquiror; and all singular rights, privileges, immunities, powers and
franchises of each of the Company and Acquiror, and all property, real,
personal and mixed, and all debts due to either the Company or Acquiror
in whatever amount, including subscriptions to shares, and all other
things in action or belonging to each of the Company and Acquiror shall
be vested in the Surviving Corporation; and all property, rights,
privileges, immunities, powers and franchises, and all and every
interest, shall be thereafter as effectually the property of the
Surviving Corporation as they were of the Company and Acquiror and the
title to any real estate, or interest therein, vested by deed or
otherwise, in either of the Company and Acquiror shall not revert or be
in any way impaired by reason of the Merger.

(b) All rights of creditors and all liens upon any property of
the Company or Acquiror shall be preserved unimpaired and all debts,
liabilities and duties of the Company or Acquiror shall thenceforth
attach to the Surviving Corporation and may be enforced against the
Surviving Corporation to the same extent as if said debts, liabilities
and duties had been incurred or contracted by it; provided, however, that
all such liens shall attach only to those assets to which they were
attached prior to the Effective Time.

(c) Any action or proceeding, whether civil, criminal or
administrative, instituted, pending or threatened by or against either
the Company or Acquiror or relating to their assets, liabilities or
shares of common stock shall be prosecuted as if the Merger had not taken
place, and the Surviving Corporation may be substituted as a party in
such action or proceeding in place of the Company.

1.05 Conversion of Securities. At the Effective Time, by virtue of the
Merger and without any action on the part of Acquiror, the Company or the
holder of any of the following securities, the shares of Acquiror and the
Company shall be converted as follows:

(a) Each share of the common stock, $.01 par value per share
("Acquiror Common Stock"), of Acquiror issued and outstanding immediately
prior to the Effective Time shall remain outstanding and shall be
unchanged after the Merger; and

(b) Each share of the common stock, $1.00 par value per share
("Company Common Stock"), of the Company issued and outstanding
immediately prior to the Effective Time (other than any shares held by
the Company as treasury shares or owned by Acquiror or any of its
wholly-owned subsidiaries, but in each case other than Trust Account
Shares or DPC Shares (each as defined below), which shall be canceled,
and other than any Dissenting Shares (as defined in Section 1.09)) shall
cease to be outstanding and shall be converted into and become, as the
holder thereof shall elect or be deemed to have elected pursuant to
Section 1.06(f) hereof, but subject to all the provisions of Section
1.06(g), (h) and (i) hereof:

(1) the right to receive an amount in cash (the "Per Share
Cash Distribution") equal to:

(a) $10.00, if the Acquiror Average Stock Price as
calculated herein is between $32.41 and $40.00;

(b) an amount equal to .250 of the Acquiror Average
Stock Price, if the Acquiror Average Stock Price as
calculated herein is between $40.01 and $42.00;

(d) an amount equal to .2295 of the Acquiror Average
Stock Price, if the Acquiror Average Stock Price as
calculated herein is $45.75 or more;

A-2
<PAGE> 169
(e) If the Acquiror Average Stock Price is $32.40 or
less, then the Acquiror has the option of completing the
Merger using a Per Share Cash Distribution of $10.00 or
terminating the Agreement pursuant to Section 10.01(e) of the
Agreement; or

(2) the right to receive the following (the "Per Share
Stock Distribution):

(a) if the Acquiror Average Stock Price as calculated
hereunder is between $32.41 and $40.00, a fractional share of
Acquiror Common Stock as determined by a fraction the
numerator of which is $10.00 and the denominator of which is
the Acquiror Average Stock Price;

(b) if the Acquiror Average Stock Price is between
$40.01 and $42.00, .250 shares of Acquiror Common Stock;

(c) if the Acquiror Average Stock Price is between
$42.01 and $45.74 per share, a fractional share of Acquiror
Common Stock as determined by a fraction the numerator of
which is $10.50 and the denominator of which is the Acquiror
Average Stock Price;

(d) if the Acquiror Average Stock Price is $45.75 or
more, .2295 shares of Acquiror Common Stock;

(e) if the Acquiror Average Stock Price is $32.40 or
less then the Acquiror has the option of completing the
Merger using a modification of the Per Share Stock
Distribution equal to a fractional share of Acquiror Common
Stock as determined by a fraction the numerator of which is
$10.00 and the denominator of which is the Acquiror Average
Stock Price or terminating the Agreement pursuant to the
provisions of Section 10.01(e) hereof.

(c) If subsequent to the date of this Agreement but prior to the
Effective Time, Acquiror should split or combine its common stock, or pay
a dividend or other distribution in such common stock, then the Per Share
Stock Distribution shall be appropriately adjusted to reflect such split,
combination, dividend or distribution.

(d) "Acquiror Average Stock Price" means the average (rounded to
the nearest whole cent) of the last sale price of the day of one share of
Acquiror Common Stock as reported in The Wall Street Journal for the ten
consecutive trading days ending on the fifth business day preceding the
Effective Time, or in the absence of such report for any trading day in
The Wall Street Journal, the last sale price reported for such trading
day by NASDAQ, the automated quotation system of the National Association
of Securities Dealers, Inc., or in the absence thereof the mean of the
reported closing bid and asked quotations on such trading day as reported
in The Wall Street Journal or in the absence thereof, by NASDAQ; or in
the absence thereof from such other source upon which Acquiror and the
Company shall mutually agree.

(e) At the Effective Time, all shares of Company Common Stock
that are owned by the Company as treasury stock and all shares of Company
Common Stock that are owned directly or indirectly by Acquiror or the
Company or any of their respective wholly-owned subsidiaries (other than
shares of Company Common Stock held directly or indirectly in trust
accounts, managed accounts and the like or otherwise held in a fiduciary
capacity that are beneficially owned by third parties (any such shares,
and shares of Acquiror Common Stock which are similarly held, whether
held directly or indirectly by Acquiror or the Company or any of their
respective wholly-owned subsidiaries, as the case may be, being referred
to herein as "Trust Account Shares"), and other than any shares of
Company Common Stock held by Acquiror or the Company or any of their
respective wholly-owned subsidiaries in respect of a debt previously
contracted (any such shares of Company Common Stock, and shares of
Acquiror Common Stock which are similarly held, whether held directly or
indirectly by Acquiror or the Company or any of their respective
wholly-owned subsidiaries, being referred to herein as "DPC Shares"))
shall be cancelled and shall cease to exist and no stock of Acquiror or
other consideration shall be delivered in exchange therefor.

A-3
<PAGE> 170
All shares of Acquiror Common Stock that are owned by the Company or any
of its wholly-owned subsidiaries (other than Trust Account Shares and DPC
Shares) shall become treasury stock of Acquiror.

(f) There shall be included with each share of Acquiror Common
Stock issued in the Merger an equal number of any share purchase rights
(the "Rights") issued pursuant to the Rights Agreement (as defined in
Section 2.03). All references in this Agreement to Acquiror Common Stock
to be received pursuant to the Merger should be deemed to include the
Rights.

1.06 Election Procedures.

(a) On a date at least 30 days prior to the anticipated Closing
Date or on such other date as the Company and Acquiror may mutually agree
("Mailing Date"), the Exchange Agent (as defined below) shall mail to
each holder of record of the Company Common Stock, as of three business
days prior to the Mailing Date, an election form, a letter of transmittal
(which shall specify that delivery shall be effected, and risk of loss
and title to certificates previously representing the Company Common
Stock shall pass only upon delivery of such certificate to the Exchange
Agent) and other appropriate transmittal materials ("Election Form").
"Exchange Agent" means Firstar Trust Co. or such other bank or trust
company selected by Acquiror, and acceptable to the Company, to effect
the exchange of certificates. The Mailing Date may be the date of
mailing of the Proxy Statement/Prospectus, as defined in Section 6.01.

(b) An Election Form shall specify the method by which the amount
of the Per Share Cash Distribution will be calculated and the method by
which the Per Share Stock Distribution will be calculated, and shall
permit holders (or in the case of nominee record holders, the beneficial
owner through proper instructions and documentation), except for the
Reliance Savings Bank Employee Stock Ownership Plan (the "ESOP") which
shall receive the Per Share Cash Distribution in exchange for its shares
of Company Common Stock, to elect to receive (A) the Per Share Cash
Distribution with respect to a specified number of shares of Company
Common Stock (the "Cash Election Shares"), (B) the Per Share Stock
Distribution with respect to a specified number of shares of Company
Common Stock (the "Stock Election Shares"), or (C) indicate that such
holder makes no election with respect to a specified number of shares of
Company Common Stock (the "No Election Shares"). Each holder of shares
of Company Common Stock may elect to receive either the Per Share Cash
Distribution or the Per Share Stock Distribution for each share of
Company Common Stock held. However, each individual beneficial owner of
shares of Company Common Stock may only choose a combination of the Per
Share Cash Distribution and the Per Share Stock Distribution relating to
all of the shares of Company Common Stock beneficially owned by him, her
or it, if he, she or it chooses the Per Share Stock Distribution for a
sufficient number of shares to result in the issuance of at least 50
shares of Acquiror Common Stock. If the Exchange Agent determines that
the above share limit has not been complied with, the shares of Company
Common Stock to which the improper election has been made shall be deemed
No Election Shares.

(c) Any shares of Company Common Stock with respect to which the
holder thereof shall not, as of the Election Deadline (as defined below),
have made such an election by submission to the Exchange Agent of an
effective, properly completed Election Form shall be deemed to be No
Election Shares. "Election Deadline" means 4:00 p.m., Milwaukee time, on
a day 30-45 days following the Mailing Date, but which also shall be at
least one business day prior to the date of the Shareholders Meeting (as
defined in Section 5.01). Acquiror shall make an Election Form available
to all persons who become holders of Company Common Stock between the
date three business days prior to the Mailing Date and the close of
business on the day prior to the Election Deadline, and the Company will
provide to the Exchange Agent in a timely manner all information
necessary to comply with this provision.

(d) Any Dissenting Shares, as defined in Section 1.09, shall be
deemed Cash Election Shares, and with respect to such shares, the holders
thereof shall in no event be deemed to hold Stock Designee Shares
(defined below).

A-4
<PAGE> 171
(e) Any election as between the Per Share Cash Distribution or
the Per Share Stock Distribution shall have been properly made only if
the Exchange Agent shall have received a properly completed Election Form
by the Election Deadline. An Election Form will be properly completed
only if accompanied by certificates representing all shares of the
Company Common Stock covered thereby. An Election Form may be revoked or
changed by the person submitting such Election Form to the Exchange Agent
by written notice to the Exchange Agent, provided such notice is received
by the Exchange Agent at or prior to the Election Deadline. All Election
Forms shall be deemed revoked if the Exchange Agent is notified in
writing by Acquiror or the Company that this Agreement has been
terminated. The certificate or certificates representing the Company
Common Stock relating to any revoked Election Form shall be promptly
returned without charge to the person submitting such Election Form to
the Exchange Agent. The Exchange Agent shall have reasonable discretion
to determine when any election, modification or revocation is received
and whether any such election, modification or revocation has been
properly made.

(f) The aggregate amount of consideration, including amounts
payable in respect of Dissenting Shares and amounts paid in lieu of
fractional shares ("Consideration"), to be received by the Company
shareholders in exchange for their Company Common Stock shall consist of
cash and Acquiror Common Stock, to be determined as follows:

(1) the aggregate amount of Consideration that shall be payable
to Company shareholders, including the ESOP, in cash (the "Cash
Amount") shall be no greater than 40% of the aggregate value of all
of the Consideration to be issued or paid in connection with the
Merger;

(2) the total number of shares of Acquiror Common Stock to be
issued in connection with the Merger (the "Stock Amount") shall be
that number of whole shares of Acquiror Common Stock that has an
aggregate value, valuing such stock at the Acquiror Average Stock
Price for this purpose, at least equal to 60.0%, of the aggregate
value of all of the Consideration to be issued or paid in
connection with the Merger;

(3) the calculation of the aggregate amount of Consideration, the
Cash Amount and the Stock Amount shall be made by Acquiror. The
relative percentages that the Cash Amount (i.e. 0% to 40.0%) and
the Stock Amount (i.e. 60.0% to 100%) bear to the aggregate amount
of Consideration to be issued or paid in connection with the Merger
shall be determined as follows:

(i) The aggregate value of the Cash Amount shall
be 40.0% or less of the aggregate amount of
Consideration and shall be determined by
multiplying the Per Share Cash Distribution
by the number of Cash Election Shares and No
Election Shares converted to a right to
receive the Per Share Cash Distribution;

(ii) The aggregate value of the Stock Election
Shares, valuing each such Stock Election
Share as the product of the Acquiror Average
Stock Price multiplied by the Per Share Stock
Distribution, shall be 60.0% or more of the
aggregate value of all of the Consideration
to be issued or paid in connection with the
Merger, with the Stock Amount being equal to
the number of whole shares of Acquiror Common
Stock to be issued or paid in connection with
the Merger; and

(g) Within five business days after the Effective Time, the
Exchange Agent shall effectuate the allocation among holders of the
Company Common Stock of the right to receive the Cash Election Shares
and/or the Stock Election Shares in the Merger in accordance with the
Election Form as follows:

(i) if the number of shares of Acquiror Common
Stock that would be issued upon conversion in
the Merger of the Stock Election Shares is
less than the Stock Amount, then

(A) all shares of Company Common
Stock electing Stock Election Shares
will be converted into the right to
receive the Per Share Stock
Distribution,

A-5
<PAGE> 172
(B) subject to Section 1.06(d), the
Exchange Agent will select first from
among the No Election Shares, by random
selection, and then (if necessary) from
among the Cash Election Shares, pro rata
in accordance with the number of shares
of Company Common Stock beneficially
owned by each Company shareholder and
designated as Cash Election Shares
("Stock Designee Shares"), in each case
subject to the requirement for issuance
pursuant to Section 1.06(b) of at least
50 shares of Acquiror Common Stock to
each recipient thereof, such that the
number of Stock Designee Shares will,
when added to the number of Stock
Election Shares, equal the minimum Stock
Amount percentage, and the appropriate
number of Stock Designee Shares will be
converted into the right to receive the
Per Share Stock Distribution (provided,
however, that no particular holder of
Cash Election Shares will be required to
designate all or a portion of his, her
or its Cash Election Shares as Stock
Designee Shares if such designation
would threaten satisfaction of any of
the conditions to the consummation of
the Merger set forth in Article Seven),
and

(C) Cash Election Shares and the No
Election Shares not designated Stock
Designee Shares will be converted into
the right to receive the Per Share Cash
Distribution; or

(ii) if the number of shares of Acquiror Common
Stock that would be issued upon conversion of
the Stock Election Shares is equal to or
greater than the Stock Amount, then all
shares of Company Common Stock electing Stock
Election Shares will be converted into the
right to receive the Per Share Stock
Distribution and all Cash Election Shares and
No Election Shares will be converted into the
right to receive the Per Share Cash
Distribution.

(h) The random selection process to be used by the
Exchange Agent to select among the No Election Shares shall
be as the Exchange Agent deems equitable, or as may be
mutually determined by the Company and Acquiror and as shall
be further described in the Election Form. The pro rata
process to be used by the Exchange Agent to designate Stock
Designee Shares in order to reach the Stock Amount shall be
based on the proportion that the number of Cash Election
Shares beneficially owned by each Company shareholder, bears
to the total number of Cash Election Shares (excluding
Dissenting Shares).

(i) The extent to which elections by holders of Company
Common Stock will be accommodated will depend upon the
respective number of shares of Company Common Stock electing
cash or stock (or making no election). Accordingly, a
holder of shares of Company Common Stock who elects cash, or
a combination of cash and shares of Acquiror Common Stock,
may instead receive just shares of Acquiror Common Stock, or
a combination of cash and shares of Acquiror Common Stock,
or a different combination of cash and shares of Acquiror
Common Stock. In addition, if so directed by the Acquiror,
the Exchange Agent may alter the selection and pro rata
process in order to ensure that all of the conditions to
consummation of the Merger set forth in Article Seven may be
complied with.

1.07 Exchange Procedures.

(a) At the Effective Time, there shall be issued the
Stock Amount and the amount of cash payable in the Merger ("Exchange
Fund"). Upon completion of the allocation procedures described above,
Acquiror shall, if necessary, issue to the Exchange Agent any
additional shares of Acquiror Common Stock in exchange for cash or
issue to the Exchange Agent any additional cash in exchange for
Acquiror Common Stock.

A-6
<PAGE> 173
and/or the amount of cash into which the Certificate surrendered shall
have been converted pursuant to this Agreement and, if such holder's
Company Common Stock has been converted into Acquiror Common Stock,
any other distribution theretofore declared and not yet paid with
respect to the Acquiror Common Stock issuable in the Merger, in each
case without interest. The Exchange Agent shall not be entitled to
vote or exercise any rights of ownership with respect to the shares of
Acquiror Common Stock held by it from time to time hereunder, except
that it shall receive and hold all dividends or other distributions
paid or distributed with respect to such shares for the account of the
persons entitled thereto. No dividends or other distributions payable
after the Effective Time with respect to Acquiror Common Stock shall
be paid to the holder of any unsurrendered Certificate until the
holder thereof shall duly surrender such Certificate in accordance
with this Article One. After the surrender of a Certificate in
accordance with this Article One, the record holder thereof shall be
entitled to receive any dividends or other distributions, with any
interest thereon, which became payable with respect to the shares of
Acquiror Common Stock represented by such Certificate after the
Effective Time but on or before the time of such surrender. No holder
of an unsurrendered Certificate shall be entitled, until the surrender
of such Certificate, to vote the shares of Acquiror Common Stock into
which his or her Company Common Stock shall have been converted.

(c) The Exchange Agent shall accept such certificates
upon compliance with such reasonable terms and conditions as the
Exchange Agent may impose to effect an orderly exchange thereof in
accordance with customary exchange practices. Each outstanding
certificate that, prior to the Effective Time, represented Company
Common Stock shall, except as otherwise provided in this Agreement and
until duly surrendered to the Exchange Agent, be deemed to evidence
ownership of the consideration into which such Company Common Stock
shall have been converted. After the Effective Time, there shall be
no further transfer on the records of the Company of certificates
representing Company Common Stock, and if such certificates are
presented to the Company for transfer, they shall be canceled against
delivery of the consideration provided therefor in this Agreement. No
dividends declared will be remitted to any person entitled to receive
Acquiror Common Stock under this Agreement until such person
surrenders the certificate or certificates representing Company Common
Stock, at which time such dividends shall be remitted to such person,
without interest and less any taxes that may have been imposed
thereon. Neither the Exchange Agent, Acquiror nor the Company shall
be liable to any holder of Company Common Stock for any consideration
paid to a public official pursuant to applicable abandoned property,
escheat or similar laws. Acquiror and the Exchange Agent shall be
entitled to rely upon the stock transfer books of the Company to
establish the identity of those persons entitled to receive
consideration specified in this Agreement, which books shall be
conclusive with respect thereto. In the event of a dispute with
respect to ownership of any shares of Company Common Stock, Acquiror
and the Exchange Agent shall be entitled to deposit any consideration
represented thereby in escrow with an independent third party and
thereafter be relieved with respect to any claims thereto.

(d) If any certificate representing shares of Acquiror
Common Stock is to be issued in a name other than that in which the
Certificate surrendered in exchange therefor is registered, it shall
be a condition of the issuance thereof that the Certificate so
surrendered shall be properly endorsed (or accompanied by an
appropriate instrument of transfer) and otherwise in proper form for
transfer, and that the person requesting such exchange shall pay to
the Exchange Agent in advance any transfer or other taxes required by
reason of the issuance of a certificate representing shares of
Acquiror Common Stock in any name other than that of the registered
holder of the Certificate surrendered, or required for any other
reason, or shall establish to the satisfaction of the Exchange Agent
that such tax has been paid or is not payable.

A-7
<PAGE> 174
(e) Any portion of the Exchange Fund that remains
unclaimed by the shareholders of the Company for six months after the
Effective Time, including dividends received pursuant to section
1.07(b) and any interest paid on the Exchange Fund, shall be remitted
back to Acquiror. Any shareholders of the Company who have not
theretofore complied with this Article One shall thereafter look only
to Acquiror for payment for their shares of Company Common Stock.
Notwithstanding the foregoing, neither the Acquiror, the Company, the
Exchange Agent, or any other person shall be liable to any former
holder of shares of Company Common Stock for any amount properly
delivered to a public official pursuant to applicable abandoned
property, escheat or similar laws.

(f) In the event any Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by
the person claiming such Certificate to be lost, stolen or destroyed
and, if required by Acquiror, the posting by such person of a bond in
such amount as Acquiror may direct as indemnity against any claim that
may be made against it with respect to such Certificate, the Exchange
Agent will issue in exchange for such lost, stolen or destroyed
Certificate the shares of Acquiror Common Stock or cash and cash in
lieu of fractional shares and unpaid dividends and distributions on
Acquiror Common Stock deliverable in respect thereof pursuant to this
Agreement.

1.08 No Fractional Shares. Notwithstanding any other provision
of this Agreement, neither certificates nor scrip for fractional shares of
Acquiror Common Stock shall be issued in the Merger. Each holder of shares of
Company Common Stock who otherwise would have been entitled to a fraction of a
share of Acquiror Common Stock shall receive in lieu thereof cash (without
interest) in an amount determined by multiplying the fractional share interest
to which such holder would otherwise be entitled by the Acquiror Average Stock
Price. No such holder shall be entitled to dividends, voting rights or any
other rights in respect of any fractional share.

1.09 Dissenting Shares.

(a) "Dissenting Shares" means any shares held by any
holder who becomes entitled to payment of the fair value of such
shares under the WBCL. Any holder of Dissenting Shares shall be
entitled to payment for such shares only to the extent permitted by
and in accordance with the provisions of the WBCL; provided, however,
that if, in accordance with the WBCL, any holder of Dissenting Shares
shall forfeit such right to payment of the fair value of such shares,
such shares shall thereupon be deemed to have been converted into and
to have become exchangeable for, as of the Effective Time, the right
to receive cash and/or Acquiror Common Stock in accordance with the
applicable provisions of this Agreement. If such holder of Dissenting
Shares shall effectively withdraw or lose (through failure to perfect
or otherwise) his or her right to such payment after the Effective
Time, such shares of Company Common Stock of such holder shall be
converted on a share by share basis into the right to receive the Per
Share Cash Distribution and/or the Per Share Stock Distribution as the
Acquiror shall determine.

(b) The Company shall give Acquiror prompt notice of any
written objections to the Merger and any written demands for the
payment of the fair value of any shares, withdrawals of such demands,
and any other instruments received by the Company pursuant to the
WBCL, and the opportunity to direct all negotiations and proceedings
with respect to such demands under the WBCL. The Company shall not
voluntarily make any payment with respect to any demands for payment
of fair value and shall not, except with the prior written consent of
Acquiror, settle or offer to settle any such demands.

1.10 Withholding Rights. Acquiror shall be entitled to deduct
and withhold from any amounts otherwise payable pursuant to this Agreement to
any holder of shares of Company Common Stock such amounts as Acquiror is
required under the Code or any provision of state, local or foreign tax law to
deduct and withhold with respect to the making of such payment. Any amounts so
withheld shall be treated for all purposes of this Agreement as having been
paid to the holder of Company Common Stock in respect of which such deduction
and withholding was made by Acquiror.

A-8
<PAGE> 175
1.11 Options.

(a) The Acquiror shall, as of the Closing Date, convert the
outstanding and unexercised options granted by the Company for the purchase of
shares of Company Common Stock, whether or not the option is then exercisable
under the terms of the Reliance Bancshares, Inc. 1997 Stock Option Plan (the
"Option Plan"), into cash in an amount equal to the excess of the Per Share
Cash Distribution over the exercise price of such option, multiplied by the
number of shares subject to such option, and such cash, net of any amount that
must be withheld for federal, state or local tax purposes, shall be paid to the
holder of such option within five (5) business days of the Closing Date,
whereupon such option shall terminate; provided that any holder of outstanding
and unexercised options granted by the Company to purchase Company Common Stock
who, by reason of their employment or other status with the Acquiror or
Acquiror-Bank after the Closing Date, would be eligible to participate in the
Acquiror's stock option plan may, on or prior to the Election Deadline, notify
Acquiror as to whether such holder elects to have his or her options converted
into options to purchase shares of Acquiror Common Stock, rather than into
cash, at an exercise price as determined below:

(i) The number of shares of Acquiror Common Stock to be
subject to the converted option shall be equal to the number of shares
of Company Common Stock subject to the original option multiplied by a
fraction determined by application of Section 1.05(b)(2) hereof,
provided that any fractional shares of Acquiror Common Stock resulting
from such multiplication shall be rounded down to the nearest whole
share; and

(ii) The exercise price per share of Acquiror Common Stock
under the converted option shall be equal to the exercise price per
share of Company Common Stock under the original option divided by a
fraction determined by application of Section 1.05(b)(2) hereof,
provided that such exercise price shall be rounded up to the nearest
cent.

(iii) The Acquiror agrees that a director of
Reliance who becomes a member of the Advisory Board, as defined in
Section 4.08 hereof, shall be deemed an "Outside Director" under the
terms of the Acquiror's option plan for purposes of being eligible to
have any options to purchase shares of Company Common Stock which are
converted, under (i) and (ii) above, into options for the purchase of
Acquiror's Common Stock administered under the terms of Acquiror's
plan.

(b) The adjustment provided herein with respect to any options
which are "incentive stock options" (as defined in Section 422 of the Code)
shall be and is intended to be effected in a manner which is consistent with
Section 424(a) of the Code and is not intended as a modification of such option
(as defined in section 424(h)(3) of the Code). The duration and other terms of
the converted option shall be the same as the original option, except that all
references to the Company shall be deemed to be references to Acquiror.

(c) If Acquiror merges the Option Plan with its own option
plan, each converted option shall be subject to the terms, benefits, rights and
features of the Acquiror's option plan and the related agreement evidencing the
grant of such option thereunder from and after the Closing Date.

(d) All options which are issued and outstanding as of the date
hereof under the terms of the Option Plan will become fully vested and
exercisable as of the Closing Date.

(e) The Surviving Corporation may, at its option, merge the
Option Plan with its own plan or continue the Option Plan after the Effective
Time provided that such merger or continuance shall not reduce the vesting
credit earned by holders of converted options under the Option Plan prior to
the Closing Date.

1.12 Bank Merger. The Company and the Acquiror intend to take
all action necessary and appropriate to cause, including causing the entering
into of a merger agreement (the "Bank Merger Agreement"), substantially on the
terms and in the form attached hereto as Exhibit B, pursuant to which the
Acquiror-Bank and the Merging Bank shall merge immediately following the Merger
or as soon as practicable thereafter with the Acquiror-Bank being the surviving
bank ("Surviving Bank") thereof pursuant to the provisions of applicable law.
At the effective time of the Bank Merger, the charter and

A-9
<PAGE> 176
bylaws of the Surviving Bank shall be the articles of association and by-laws
of the Acquiror-Bank in effect immediately prior to the effective time of the
Bank Merger. At the effective time of the Bank Merger, the directors and
officers of the Surviving Bank shall be the directors and officers of the
Acquiror-Bank immediately prior to the effective time of the Bank Merger,
except that, provided the Surviving Bank can obtain all necessary regulatory
approvals, one outside director of the Merging Bank, as selected by the Board
of Directors of the Merging Bank, shall become a director of the Surviving Bank
as soon as practicable after the effective date of the Bank Merger.

ARTICLE TWO

REPRESENTATIONS AND WARRANTIES OF ACQUIROR

Acquiror represents and warrants to the Company as follows:

2.01 Organization; Qualification; Good Standing; Corporate Power.

(a) Acquiror is a corporation validly existing and in
good standing (meaning that it has filed its most recent required
annual report, has not filed articles of dissolution and all franchise
taxes due and owing have been paid) under the laws of the state of
Wisconsin and is a registered savings and loan holding company under
the Home Owners' Loan Act of 1933, as amended ("HOLA"). Acquiror has
the corporate power and authority to carry on its business as now
conducted, and to own, lease and operate its properties. The Articles
of Incorporation and Bylaws of Acquiror, copies of which previously
have been made available to the Company, are true, correct and
complete copies of such documents in effect as of the date of this
Agreement.

(b) Acquiror-Bank is a federally chartered stock savings
association duly organized and in existence under the laws of the
United States.

(c) Acquiror, and each of its subsidiaries (including the
Acquiror-Bank and all other direct and indirect subsidiaries of the
Acquiror, the "Subsidiaries"), hold all licenses, certificates,
permits, franchises and rights from all appropriate federal, state or
other public authorities necessary for the conduct of its and their
businesses, except where the failure to so hold would not have a
material adverse effect on Acquiror.

2.02 Authorization. The execution, delivery and performance of
this Agreement and the Plan of Merger by Acquiror and the consummation of the
Reorganization and the transactions contemplated hereby and thereby have been
and will be duly authorized and approved by all necessary corporate action, and
this Agreement and the Plan of Merger and the Bank Merger Agreement are and
will be legally binding on and enforceable against Acquiror in accordance with
their terms, and except as enforceability may be limited by bankruptcy laws,
insolvency laws or other laws affecting creditors' rights generally. The
execution and delivery of this Agreement and the Plan of Merger do not, and the
consummation of the Merger will not, violate the provisions of Acquiror's
Articles of Incorporation or Bylaws.

2.03 Capitalization. The authorized capital stock of Acquiror
consists of 12,000,000 shares of Acquiror Common Stock, par value $.01 per
share, of which 5,186,683 shares were issued and outstanding as of the date of
this Agreement; and 6,000,000 shares of Preferred Stock, par value $1.00 per
share ("Acquiror Preferred Stock") of which none are issued and outstanding as
of the date hereof. Except as provided herein, the Acquiror's stock option
plan, and the Rights Agreement dated September 25, 1997 by and between Acquiror
and Firstar Trust Company N.A. (the "Rights Agreement"), there are no
outstanding warrants, options, rights, calls or other commitments of any nature
relating to the issuance or sale of any other class of equity securities of
Acquiror, as of the date hereof. All of the 5,186,683 outstanding shares of
Acquiror Common Stock are duly authorized, validly issued, fully paid and
nonassessable, subject to a limitation contained in Section 180.0622(2)(b) of
the WBCL, as judicially interpreted, which provides that shareholders of
Wisconsin corporations may be personally liable for all debts owing to
employees of the corporation for services performed for such corporation for up
to six months' service in any one case, but not in an amount greater than the
consideration paid for such shares.

A-10
<PAGE> 177
2.04 Financial Statements.

(a) Acquiror has furnished to the Company true, correct
and complete copies of the audited Consolidated Statements of
Financial Condition of Acquiror as of the fiscal years ended September
30, 1996 and 1997 and the related Consolidated Statements of Income,
Consolidated Statements of Changes in Shareholders' Equity and the
Consolidated Statements of Cash Flows for the fiscal years ended
September 30, 1997, including the respective notes thereto, together
with the reports of KPMG Peat Marwick LLP relating thereto (the
"Financial Statements"). Such Financial Statements fairly present the
consolidated financial position of Acquiror as of and for the periods
ended on their respective dates and the consolidated operating results
and changes in financial position of Acquiror for the indicated
periods in conformity with generally accepted accounting principles
("GAAP") applied on a consistent basis. Since September 30, 1997 to
the best of Acquiror's knowledge, there have not been any material
changes in Acquiror's consolidated financial condition, assets,
liabilities or business, other than changes in the ordinary course of
business.

(b) Acquiror shall furnish the Company with copies of its
unaudited Quarterly Reports on Form 10-Q as filed with the Securities
and Exchange Commission (the "SEC") for each quarterly period
subsequent to September 30, 1997 and Annual Reports on Form 10-K for
fiscal years after September 30, 1997 and each financial report it or
any of its Subsidiaries file with the OTS subsequent to September 30,
1997, until the Closing Date (as defined in Section 12.01)
("Subsequent Financial Statements").

(c) All of the aforesaid Financial Statements have been,
and, with respect to the Subsequent Financial Statements, will be,
prepared in accordance with GAAP, utilizing accounting practices
consistent with prior years except as otherwise disclosed, and comply
or will comply with applicable accounting requirements and with the
rules and regulations of the SEC with respect thereto. All of the
aforesaid Financial Statements present fairly, and all of the
Subsequent Financial Statements will present fairly, the financial
position of the Acquiror and its subsidiaries taken as a whole and the
results of its and their operations and changes in its and their
financial position as of and for the periods ending on their
respective dates. The books and records of the Acquiror and its
Subsidiaries have been and are being maintained in all material
respects in accordance with GAAP and all other applicable legal
accounting requirements and reflect only actual transactions. Subject
to such changes which may result from an audit of any Subsequent
Financial Statements (which changes in the aggregate will not be
material), the allowance for loan losses in such Financial Statements
is, and, with respect to the Subsequent Financial Statements will be,
adequate under the standards applied by the OTS and based on past loan
loss experiences and potential losses in current portfolios to cover
all known or anticipated loan losses. Except with respect to this
Agreement and the transactions contemplated herein, there are, and
with respect to the Subsequent Financial Statements will be, no
agreements, contracts or other instruments to which the Acquiror or
its subsidiaries are a party or by which it or they or (to the
knowledge of the Acquiror) any of the officers, directors, employees
or shareholders of the Acquiror or its Subsidiaries have rights which
would have a material adverse effect on the consolidated financial
position of the Acquiror or the financial position of its subsidiaries
which are not disclosed herein or reflected in the Financial
Statements and the Subsequent Financial Statements.

2.05 Absence of Undisclosed Liabilities. Except as and to the
extent fully reflected or reserved against in the Financial Statements or the
Subsequent Financial Statements, neither the Acquiror nor its Subsidiaries had,
nor with respect to the Subsequent Financial Statements will have, any
liabilities or obligations, of any nature, secured or unsecured (whether
accrued, absolute, contingent or otherwise) including, without limitation, any
tax liabilities due or to become due. Except as set forth on Schedule 2.05,
the Acquiror further represents and warrants that it does not know or have
reason to believe that there is or will be any basis for assertion against it
or its Subsidiaries as of the date of execution of this Agreement, or as of the
date of any Subsequent Financial Statements, of any liability or obligation of
any nature or any amount not fully reflected or reserved against in the
Financial Statements as of said dates and for subsequent periods or in the
footnotes thereto.

2.06 No Violation. Except as set forth on Schedule 2.06, neither
the execution and delivery of this Agreement by the Acquiror, the consummation
by Acquiror and Acquiror-Bank of the transactions contemplated hereby or
thereby, nor compliance by the Acquiror with any of the terms or provisions
hereof or thereof, will (a) violate any provision of the Articles of
Incorporation or Bylaws of Acquiror or the stock charter, bylaws or similar

A-11
<PAGE> 178
governing documents of Acquiror-Bank, or (b) assuming that the consents and
approvals referred to in Section 2.07 hereof are duly obtained, (i) violate any
statute, code, ordinance, rule, regulation, judgment, order, writ, decree or
injunction applicable to Acquiror or Acquiror-Bank, or (ii) violate, conflict
with, result in a breach of any material provision of or the loss of any
material benefit, constitute a default (or an event which, with notice or lapse
of time, or both, would constitute a default) under, result in the termination
of or a right of termination or cancellation under, accelerate the performance
required by, or result in the creation of any material lien, pledge, security
interest, charge or other encumbrance upon any of the respective properties or
assets of Acquiror or Acquiror-Bank or any of their subsidiaries under any of
the material terms, conditions or provisions of any material note, bond,
mortgage, indenture, deed of trust, license, lease, agreement or other
instrument or obligation to which Acquiror or Acquiror-Bank is a party, except
for such violations, conflicts, breaches or defaults which, either individually
or in the aggregate, would not have or be reasonably likely to have a material
adverse effect on Acquiror.

2.07 Consents and Approvals. Except for (a) the filing of
applications, notices or other documents necessary to obtain, and the receipt
of, the Requisite Regulatory Approvals (as defined in Section 7.01), (b) the
filing with the SEC of any necessary Registration Statement (as defined in
Section 6.01), (c) the filing of Articles of Merger with the WDFI pursuant to
the provisions of the WBCL, (d) such filings and approvals as are required to
be made or obtained under the securities or "Blue Sky" laws of various states
in connection with the issuance of the shares of Acquiror Common Stock pursuant
to this Agreement, and (e) such filings, authorizations or approvals as may be
set forth on Schedule 2.07, no consents or approvals of or filings or
registrations with any governmental entity or with any third party are
necessary in connection with the execution and delivery by Acquiror of this
Agreement, or the consummation by Acquiror of the Reorganization.

2.08 Litigation. As of the date of this Agreement, except as set
forth on Schedule 2.08, there are no legal, administrative or other actions,
suits, proceedings or investigations of any kind or nature pending or, to the
knowledge of Acquiror, threatened against Acquiror that challenge the validity
or propriety of the transactions contemplated by this Agreement or which would
have a material adverse effect on Acquiror's consolidated financial condition,
assets, liabilities or business. Neither Acquiror nor Acquiror-Bank is subject
to, or in default with respect to, nor are any of its or their assets subject
to, any outstanding judgment, order or decree of any court or of any
governmental agency or instrumentality that has or is reasonably expected to
have a material adverse effect on Acquiror's consolidated financial condition,
assets, liabilities or business.

2.09 Employee Benefit Plans.

(a) All bonus, deferred compensation, pension,
retirement, profit-sharing, thrift savings, employee stock ownership,
stock bonus, stock purchase, restricted stock and stock option plans,
all employment or severance contracts, other material employee benefit
plans and any applicable "change in control" or similar provisions in
any plan, program, policy, contract or arrangement which cover
employees or former employees of the Acquiror and its ERISA Affiliates
(defined below) and all other benefit plans, contracts, programs,
policies or arrangements covering directors, employees or former
employees of the Acquiror or its ERISA Affiliates (the "Acquiror
Employees"), including, but not limited to, "employee benefit plans"
within the meaning of Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") (collectively, the
"Acquiror Compensation and Benefit Plans") are listed on Schedule
2.09. True and complete copies of all Acquiror Compensation and
Benefit Plans and such contracts or arrangements, including, but not
limited to, any trust instruments and/or insurance and investment
contracts, if any, forming a part of any such Acquiror Compensation
and Benefit Plans and agreements, and all amendments thereto,
including, but not limited to (i) the actuarial report for such Plan
(if applicable) and the annual report (Form 5500 series) for each of
the last two years, (ii) the current summary plan description, and
(iii) the most available recent determination letter from the Internal
Revenue Service (the "IRS") (if applicable) for such Plan shall be
available to the Company.

(b) Acquiror Compensation and Benefit Plans, other than
"Multi-Employer Plans" within the meaning of Sections 3(37) or
4001(a)(3) of ERISA (the "Acquiror Plans"), covering Employees are in
substantial compliance with ERISA and all other applicable laws and
regulations. Each Acquiror Plan which is an "employee pension benefit
plan" within the meaning of Section 3(2) of ERISA ("Acquiror Pension
Plan") and which is intended to be qualified under Section 401(a) of
the Code, has received or

A-12
<PAGE> 179
applied for a favorable determination letter from the IRS, and the
Acquiror is not aware of any circumstances likely to result in
revocation of any such favorable determination letter. The Acquiror's
Employee Stock Ownership Plan satisfies the requirements for an
employee stock ownership plan under Section 4975(e)(7) of the Code.
There is no material pending or threatened litigation relating to the
Acquiror Plans. Neither the Acquiror nor any of its ERISA Affiliates
has engaged in a transaction with respect to any Acquiror Plan that,
could subject the Acquiror or any of its ERISA Affiliates or any other
party to a tax or penalty imposed by Section 4975 of the Code or
Section 502(i) or 502(l) of ERISA in an amount which would be
material.

(c) No liability under Subtitle C or D of Title IV of
ERISA has been or is expected to be incurred by the Acquiror or any of
its ERISA Affiliates with respect to any ongoing, frozen or
terminated "single- employer plan," within the meaning of Section
4001(a)(15) of ERISA, currently or formerly maintained by any of them,
or the single-employer plan of any entity which is considered one
employer with the Acquiror or any of its ERISA Affiliates under
Section 4001 of ERISA or Section 414 of the Code (an "ERISA
Affiliate"). Neither the Acquiror nor any of its ERISA Affiliates
has incurred or expects to incur any withdrawal liability with respect
to a Multi-Employer Plan under Subtitle E of Title IV of ERISA
(regardless of whether based on contributions of an ERISA Affiliate).
No notice of a "reportable event", within the meaning of Section 4043
of ERISA, for which the 30-day reporting requirement has not been
waived has been required to be filed for any Acquiror Plan or by any
ERISA Affiliate within the twelve-month period ending on the date
hereof.

(d) All contributions required to be made under the terms
of any Acquiror Plan have been timely made. Neither any Acquiror Plan
nor any single-employer plan of an ERISA Affiliate has an "accumulated
funding deficiency" (whether or not waived) within the meaning of
Section 412 of the Code or Section 302 of ERISA. Neither the Acquiror
nor any of its ERISA Affiliates has provided, or is required to
provide, security to any Acquiror Plan or to any single-employer plan
of an ERISA Affiliate pursuant to Section 401(a)(29) of the Code.

(e) Except as set forth on Schedule 2.09, neither the
Acquiror nor any of its ERISA Affiliates has any obligations for
retiree health and life benefits under any Acquiror Plan. Except as
set forth on Schedule 2.09, there are no restrictions on the rights of
the Acquiror or its ERISA Affiliates to amend or terminate any such
Acquiror Plan without incurring any liability thereunder.

(f) No matter is pending relating to any of the Acquiror
Plans before any court or government agency.

(g) Neither the Acquiror nor any of its ERISA Affiliates
presently contributes to or is currently a party to any Multi-Employer
Plan.

(h) Neither the Acquiror nor any of its ERISA Affiliates
is a party to, or is bound by, any collective bargaining agreement,
contract or other agreement or understanding with a labor union or
labor organization nor is the Acquiror or any of its ERISA Affiliates
the subject of any material proceeding asserting that the Acquiror or
any such ERISA Affiliate has committed an unfair labor practice or
seeking to compel the Acquiror or such ERISA Affiliate to bargain with
any labor organization as to wages or conditions of employment, nor is
there any strike involving the Acquiror or any of its ERISA Affiliates
pending or threatened, nor is the Acquiror or any of its ERISA
Affiliates aware of any activity involving its or any of its ERISA
Affiliates' employees seeking to certify a collective bargaining unit
or engaging in any other organizational activity.

(i) Neither the Acquiror nor any ERISA Affiliate
presently contributes to any Acquiror Plan that is or was subject to
Title IV of ERISA.

A-13
<PAGE> 180
(j) Except as set forth in Schedule 2.09, the
consummation of the transactions contemplated by this Agreement will
not, either alone, or in combination with another event (i) entitle
any current or former employee or officer of the Acquiror or an ERISA
Affiliate to severance pay, unemployment compensation or any other
payment, except as expressly provided in this Agreement or (ii)
accelerate the time of payment or vesting, or increase the amount, of
compensation due any such employee or officer.

(k) No Acquiror Plan provides for payment of an amount
which taken by itself would exceed amounts deductible for federal
income tax purposes by virtue of Section 280(G) of the Code.

2.10 Compliance with Environmental Laws. Except as set forth on
Schedule 2.10, to Acquiror's knowledge, as of the date of this Agreement:

(a) The operations of Acquiror and its subsidiaries
comply and have complied with all Environmental Laws (as defined in
Section 3.24); none of the Acquiror or any of its subsidiaries'
operations are the subject of, nor is the Acquiror or any of its
subsidiaries a party to, any judicial or administrative proceeding,
alleging the violation of Environmental Laws; neither the Acquiror nor
any of its subsidiaries is the subject of a federal, state or local
investigation, pending or threatened, evaluating whether any remedial
action is needed to respond to a release of any Hazardous Material (as
defined in Section 3.24); and neither Acquiror nor any of its
subsidiaries have reported a spill, emission or release of a Hazardous
Material.

(b) Except as set forth on Schedule 2.10, all real
property owned directly by Acquiror and its subsidiaries (the "Real
Property") is in compliance in all material respects with all
Environmental Laws; neither Acquiror nor any of its subsidiaries has
any notice or knowledge regarding the Real Property or its past use(s)
which indicates noncompliance with Environmental Laws; the Real
Property is not subject to any judicial or administrative proceedings
alleging the violation of Environmental Laws; the Real Property is not
contaminated by any Hazardous Material; the Real Property is not the
subject of a federal, state or local investigation evaluating whether
any remedial action is needed to respond to a release, emission or
discharge of any Hazardous Material into the environment; neither the
Acquiror nor any of its subsidiaries have transported any Hazardous
Material to the Real Property or from the Real Property to any waste
treatment, storage or disposal facility.

2.11 Shares to be Issued in Merger. The Acquiror Common Stock,
which certain shareholders of the Company will be entitled to receive upon
consummation of the Merger pursuant to the terms of the Plan of Merger, will,
at the Effective Time, be duly authorized and will, when issued pursuant to the
Plan of Merger, be validly issued, fully paid and nonassessable (subject to the
limitations provided in Section 180.0622(2)(b) of the WBCL).

2.12 Broker's Fees. Neither Acquiror, nor any of its
subsidiaries, nor any of their respective officers or directors, has employed
any broker or finder or incurred any liability for any broker's fees,
commissions or finder's fees in connection with any of the transactions
contemplated by this Agreement.

2.13 Acquiror Information. The information relating to Acquiror
and its subsidiaries to be contained or incorporated by reference in the Proxy
Statement/Prospectus (as defined in Section 6.01) and the Registration
Statement (as defined in Section 6.01) will not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements therein not misleading. The Registration Statement (except for such
portions thereof that relate only to the Company or any of its subsidiaries)
will comply in all material respects with the provisions of the Securities Act
of 1933, as amended (the "Securities Act") and the Securities Exchange Act of
1934, as amended (the "Exchange Act") and the rules and regulations thereunder.

2.14 Regulatory Filings. Schedule 2.14 is an accurate listing of
each registration statement, prospectus, report, schedule, proxy statement,
information statement or other shareholder communication used, circulated or
filed after January 1, 1997 by the Acquiror or any of its subsidiaries, copies
of which have been made available to the Company. The Acquiror and its
subsidiaries have filed and will continue to file in a timely manner all
required filings with (a) the SEC, (b) the Federal Reserve Board ("FRB"), (c)
the FDIC, and (d) the OTS (and will furnish Company with copies of all such
filings made subsequent to the date hereof until the Effective Time), and all
such filings were or will be, complete and accurate in all material respects as
of the dates of the filings, and no such filing

A-14
<PAGE> 181
made or will make any untrue statement of a material fact or omitted or will
omit to state a material fact necessary in order to make the statements made,
in the light of the circumstances under which they were made, not misleading.
Except for normal examinations conducted by the IRS, the OTS, the FDIC in the
regular course of the business of the Acquiror or its subsidiaries, no federal,
state or local governmental agency, commission or other entity has initiated
any proceeding or, to the best of the knowledge and belief of the Acquiror,
investigation into the business or operations of the Acquiror or its
subsidiaries within the past five years. Except as set forth on Schedule 2.14,
there is no unresolved violation, criticism or exception by the SEC, the FRB,
the FDIC, the OTS or other agency, commission or entity with respect to any
report or statement referred to herein. Since the date of any such filings,
there has been no material change in the condition of the Acquiror or any of
its Subsidiaries, financial or otherwise, such that, had such change occurred
prior to any such filing, such change would have been required to be disclosed
or described therein. Except as otherwise disclosed on Schedule 2.14, there is
no unresolved violation, criticism or exception by any regulatory agency with
respect to any report or statement relating to any examinations of the Acquiror
or any of its subsidiaries.

2.15 Community Reinvestment Act Compliance. Except as set forth
on Schedule 2.15, the Acquiror-Bank is in compliance with the applicable
provisions of the Community Reinvestment Act of 1977, as amended ("CRA") and
the regulations promulgated thereunder, and is not aware of any state of facts
or circumstances related to any planned or threatened CRA protest. As of the
date of this Agreement, the Acquiror-Bank has not been advised of the existence
of any act or circumstance or set of facts or circumstances which, if true,
would cause it to fail to be in compliance with the CRA or any federal or state
fair lending laws. The Acquiror Bank has not received a CRA rating from the
OTS which is less than "satisfactory."

2.16 Approvals. The Acquiror knows of no reason why the Requisite
Regulatory Approvals (as defined in Section 7.01) necessary to permit Acquiror
consummation of the transactions contemplated hereby in the manner provided
herein should not be obtained.

2.17 Other Information. No representation or warranty by the
Acquiror contained in this Agreement, or disclosure in any Schedule hereto
prepared by the Acquiror, certificate or other instrument or document furnished
or to be furnished by or on behalf of the Acquiror pursuant to this Agreement
and no information furnished or to be furnished by the Acquiror for use in the
Prospectus/Proxy Statement (as defined in Section 6.01) or the Registration
Statement (as defined in Section 6.01) or the regulatory filings contains or
will contain any untrue statement of a material fact or omits or will omit to
state any material fact required to be stated herein or therein which is
necessary to make the statements contained herein or therein. The
Prospectus/Proxy Statement (except for such portions thereof that relate solely
to the Company) will comply in all respects with the provisions of all
applicable laws, including the Securities Act and the Exchange Act.

ARTICLE THREE

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to Acquiror as follows:

3.01 Organization; Qualification; Good Standing; Corporate Power.

(a) The Company is a corporation duly organized, validly
existing and in good standing (meaning that it has filed its most
recent required annual report, has not filed articles of dissolution
and that all franchise taxes due and owing have been paid) under the
laws of the state of Wisconsin and the Company is duly qualified to do
business and is in good standing in all jurisdictions (whether
federal, state, local or foreign) where its ownership or leasing of
property or the conduct of its business requires it to be qualified
and in which the failure to be duly qualified would have a material
adverse effect upon the financial condition, results of operations or
business of the Company, taken as a whole. The Company is a
registered bank holding company and has the corporate power and
authority to carry on its business as it is now conducted and to own,
lease and operate its assets, properties and business. The Company
has the corporate power and authority to execute and deliver this
Agreement and the power to consummate the transactions contemplated
hereby.

A-15
<PAGE> 182
(b) The Merging Bank is a state-chartered stock savings
bank duly organized, validly existing and in good standing under the
laws of the State of Wisconsin. Set forth on Schedule 3.01 is a list
of all direct and indirect subsidiaries of the Company, including the
Merging Bank (collectively, the "Subsidiaries"), and the states of
incorporation or organization for each of its Subsidiaries and states
in which each of its Subsidiaries is qualified to do business. Each
of its Subsidiaries has the corporate power and authority to carry on
its business as it is now conducted and to own, lease and operate
their properties, and are duly qualified to do business and are in
good standing in each jurisdiction where its ownership or leasing of
property or the conduct of its business requires it to be qualified
and in which the failure to be duly qualified would have a material
adverse effect upon its financial condition, results of operation or
business. The deposit accounts of the Merging Bank are insured by the
Federal Deposit Insurance Corporation ("FDIC") through the Savings
Association Insurance Fund (the "SAIF") to the fullest extent
permitted by law, and all premiums and assessments required in
connection therewith have been paid by the Merging Bank. The Merging
Bank is the only direct subsidiary of the Company, and is the only
subsidiary of the Company that is a "Significant Subsidiary" as such
term is defined in Regulation S-X promulgated by the SEC.

(c) The Company and its Subsidiaries hold all licenses,
certificates, permits, franchises and rights from all appropriate
federal, state or other public authorities necessary for the conduct
of its and their respective business, and a list of such licenses,
certificates, permits, franchises and rights is attached hereto as
Schedule 3.01. The Company and its Subsidiaries each have conducted
its and their business so as to comply with all applicable federal,
state and local statutes, ordinances, regulations or rules, and except
as set forth on Schedule 3.01, neither the Company nor any of its
Subsidiaries is presently charged with, or, to the Company's
knowledge, under governmental investigation with respect to, any
actual or alleged material violations of any statute, ordinance,
regulation or rule; and except as set forth on Schedule 3.01, neither
the Company nor its Subsidiaries are the subject of any pending or
threatened proceeding by any regulatory authority having jurisdiction
over its or their business, properties, assets or operations.

3.02 Authorization. The execution, delivery and performance of
this Agreement and the Plan of Merger by the Company and the consummation of
the Reorganization and the transactions contemplated hereby and thereby have
been and will be duly authorized and approved by all necessary corporate
action, and this Agreement, the Plan of Merger and the Bank Merger Agreement
are and will be legally binding on and enforceable against the Company and the
Merging Bank in accordance with their terms, subject to the approval of the
shareholders of the Company, and no other corporate proceedings on the part of
the Company or the Merging Bank are or will be necessary to approve this
Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the Plan of Merger do not, and the
consummation of the Merger will not, violate the Company's Articles of
Incorporation or Bylaws. The execution and delivery of the Bank Merger
Agreement do not, and the consummation of the Bank Merger will not, violate the
Merging Bank's stock charter or Bylaws.

3.03 Capitalization.

(a) The authorized capitalization of the Company consists
of (i) 6,000,000 shares of Company Common Stock, $1.00 par value per
share, of which 2,562,344 shares are issued and of which 2,403,701
shares are outstanding, which includes 40,000 shares which are held by
the trust maintained pursuant to the Reliance Savings Bank Employee
Stock Ownership Plan (the "ESOP"), and 166,780 shares are held by the
Company as treasury shares, and (ii) 2,000,000 shares of Preferred
Stock, $1.00 par value per share, of which no shares are issued and
outstanding. The Company has no other class of stock and there are,
and as of the Effective Time there will be, no fractional shares of
Company Common Stock issued or outstanding.

(b) There are outstanding options for the purchase of
208,893 shares of Company Common Stock granted to certain past and
present directors, officers and employees of the Company pursuant to
the Reliance Bancshares, Inc. 1997 Stock Option Plan (the "Option
Plan") (the option rights granted pursuant to the Option Plan as of
the date hereof are sometimes collectively referred to herein as the
"Options"), and an additional 38,204 Options that have been granted
subject to completion of the Merger, to certain current directors,
officers and employees of the Company and its subsidiaries pursuant to
the Option Plan. The names of the Optionees, the date of each Option
to purchase, the number of shares subject to each such

A-16
<PAGE> 183
Option, the expiration date of each such Option, and the price at
which each such Option may be exercised are set forth in Schedule
3.03. In addition, the Company has awarded 81,980 shares as stock
awards to certain officers and employees of the Company pursuant to
the Reliance Savings Bank Recognition and Retention Plan (the "RRP"),
and an additional 20,514 shares have been awarded, subject to
completion of the Merger to certain Officers of the Company pursuant
to the RRP, and has purchased 102,494 shares of Company Common Stock
(the "Restricted Stock") to fund such obligations. The names of the
recipients of Restricted Stock under the RRP, the date of grant, the
number of shares received and the vesting schedule for each award are
set forth on Schedule 3.03. Except with respect to the Options and
pursuant to the RRP and the terms of this Agreement, neither the
Company nor its Subsidiaries have granted any outstanding warrants,
options, rights, calls, agreements, understandings or other
commitments of any nature relating to the authorization, issuance,
sale or repurchase of any equity securities of the Company or its
Subsidiaries. Except as otherwise provided in the Articles of
Incorporation of the Company and except as set forth on Schedule 3.03,
only the 2,403,701 issued and outstanding shares of Company Common
Stock will be entitled to vote to approve this Agreement and the Plan
of Merger.

(c) The Company owns directly or indirectly all of the
issued and outstanding shares of capital stock of its Subsidiaries.
Schedule 3.03 accurately identifies the number of shares of authorized
and outstanding capital stock of its Subsidiaries. Except as set
forth on Schedule 3.03, neither the Company nor any of its
Subsidiaries owns directly or indirectly any debt, equity or other
proprietary interest in any other corporation, joint venture,
partnership, entity, association or other business.

(d) All of the outstanding shares of the Company and its
Subsidiaries are validly issued, fully paid, nonassessable (subject to
a limitation with respect to Company Common Stock and capital stock of
its Subsidiaries which are Wisconsin corporations contained in Section
180.0622(2)(b) of the WBCL, as judicially interpreted, which provides
that shareholders of Wisconsin corporations may be personally liable
for all debts owing to employees of the corporation for services
preformed for the corporation for up to six months' in any one case,
but not in an amount greater than the consideration paid for each such
shares) and free of preemptive rights and, in the case of the shares
of its Subsidiaries, are owned free and clear of all liens, charges or
encumbrances.

3.04 Financial Statements.

(a) The Company has furnished to Acquiror true, correct
and complete copies of: (i) the audited Consolidated Statements of
Financial Condition of the Company as of the fiscal years ended June
30, 1995, 1996 and 1997, and the related Consolidated Statements of
Income Consolidated Statements of Shareholders' Equity and
Consolidated Statements of Cash Flows for each of the three fiscal
years ended June 30, 1995, 1996, and 1997, including the respective
notes thereto, together with the reports of Meier, Clancy, George &
Co. LLP relating thereto; and (ii) the unaudited Consolidated
Statements of Financial Condition as of September 30, 1997 and
December 31, 1997 and March 31, 1998, and the related unaudited
Consolidated Statements of Income, Consolidated Statements of
Shareholders' Equity and Consolidated Statements of Cash Flow for the
periods then ended ("Company Financial Statements"). Such Company
Financial Statements fairly present the financial position of the
Company and its Subsidiaries as of and for the periods ended on their
respective dates and the operating results of the Company and its
Subsidiaries for the indicated periods in conformity with GAAP applied
on a consistent basis. Since March 31, 1998 there have not been any
changes in the Company's consolidated financial condition, assets,
liabilities or business, other than changes in the ordinary course of
business and as set forth in the Company Financial Statements.

(b) The Company will furnish Acquiror with copies of its
audited and unaudited Consolidated Statements of Financial Condition,
Consolidated Statements of Income Consolidated Statements of
Shareholders' Equity and Consolidated Statements of Cash Flows for
each quarterly and yearly period subsequent to March 31, 1998, to be
contained in the Company's Form 10-QSB or Form 10-KSB as filed with
the SEC for each quarterly or yearly period subsequent to June 30,
1997 and each financial report it or any of its Subsidiaries files
with the OTS, subsequent to June 30, 1997 until the Closing Date (as
defined in Section 12.01) ("Subsequent Company Financial Statements").

A-17
<PAGE> 184
(c) All of the aforesaid Company Financial Statements
have been, and, with respect to the Subsequent Company Financial
Statements, will be, prepared in accordance with GAAP, utilizing
accounting practices consistent with prior years except as otherwise
disclosed, and comply or will comply with applicable accounting
requirements and with the rules and regulations of the SEC with
respect thereto. All of the aforesaid Company Financial Statements
present fairly, and all of the Subsequent Company Financial Statements
will present fairly, the financial position of the Company and its
Subsidiaries taken as a whole and the results of its and their
operations and changes in its and their financial position as of and
for the periods ending on their respective dates. The books and
records of the Company and the Merging Bank have been and are being
maintained in all material respects in accordance with GAAP and all
other applicable legal accounting requirements and reflect only actual
transactions. Subject to such changes which may result from an audit
of any Subsequent Company Financial Statements (which changes in the
aggregate will not be material), the allowance for loan losses in such
Company Financial Statements is, and, with respect to the Subsequent
Company Financial Statements will be, adequate under the standards
applied by the WDFI and FDIC and based on past loan loss experiences
and potential losses in current portfolios to cover all known or
anticipated loan losses. Except with respect to this Agreement and
the transactions contemplated herein, there are, and with respect to
the Subsequent Financial Statements will be, no agreements, contracts
or other instruments to which the Company or its Subsidiaries are a
party or by which it or they or (to the knowledge of the Company) any
of the officers, directors, employees or shareholders of the Company
or its Subsidiaries have rights which would have a material adverse
effect on the consolidated financial position of the Company or the
financial position of the Merging Bank which are not disclosed herein
or reflected in the Company Financial Statements and the Subsequent
Company Financial Statements.

3.05 Absence of Undisclosed Liabilities. Except as and to the
extent fully reflected or reserved against in the Company Financial Statements
or the Subsequent Company Financial Statements, neither the Company nor its
Subsidiaries had, nor with respect to the Subsequent Company Financial
Statements will have, any liabilities or obligations, of any nature, secured or
unsecured (whether accrued, absolute, contingent or otherwise) including,
without limitation, any tax liabilities due or to become due. Except as set
forth on Schedule 3.05, the Company further represents and warrants that it
does not know or have reason to believe that there is or will be any basis for
assertion against it or its Subsidiaries as of the date of execution of this
Agreement, or as of the date of any Subsequent Company Financial Statements, of
any liability or obligation of any nature or any amount not fully reflected or
reserved against in the Company Financial Statements as of said dates and for
subsequent periods or in the footnotes thereto.

3.06 No Violation. Except as set forth on Schedule 3.06, neither
the execution and delivery of this Agreement by the Company nor the
consummation by the Company and the Merging Bank of the transactions
contemplated hereby nor compliance by the Company with any of the terms or
provisions hereof will (a) violate any provision of the Articles of
Incorporation or Bylaws of the Company or the stock charter, bylaws or similar
governing documents of the Merging Bank, or (b) assuming that the consents and
approvals referred to in Section 3.07 hereof are duly obtained, (i) violate any
statute, code, ordinance, rule, regulation, judgment, order, writ, decree or
injunction applicable to the Company or the Merging Bank, or any of their
subsidiaries or any of their respective properties or assets, or (ii) violate,
conflict with, result in a breach of any provision of or the loss of any
benefit under, constitute a default (or an event which, with notice or lapse of
time, or both, would constitute a default) under, result in the termination of
or a right of termination or cancellation under, accelerate the performance
required by, or result in the creation of any lien, pledge, security interest,
charge or other encumbrance upon any of the respective properties or assets of
the Company or the Merging Bank or any of their subsidiaries, under any of the
terms, conditions or provisions of any note, bond, mortgage, indenture, deed of
trust, license, lease, agreement or other instrument or obligation to which the
Company or the Merging Bank or any of their subsidiaries is a party, or by
which they or any of their respective properties or assets may be bound or
affected, except (in the case of clause (ii above) for such violations,
conflicts, breaches or defaults which, either individually or in the aggregate,
would not have or be reasonably likely to have a material adverse effect on the
Company, the Merging Bank or any of their subsidiaries.

A-18
<PAGE> 185
3.07 Consents and Approvals. Except for (a) the filing of
applications, notices or other documents necessary to obtain, and the receipt
of, the Requisite Regulatory Approvals (as defined in Section 7.01), (b) the
filing with the SEC of a proxy statement in definitive form relating to any
meeting of the Company's shareholders to be held in connection with this
Agreement and the transactions contemplated hereby, (c) the approval of this
Agreement by the requisite vote of the shareholders of the Company, (d) the
filing of the Articles of Merger with the WDFI pursuant to applicable
provisions of the WBCL, and (e) such consents, filings, authorizations or
approvals as may be set forth on Schedule 3.07, no consents or approvals of or
filings or registrations with any court, administrative agency or commission or
other governmental authority or instrumentality or with any third party are
necessary in connection with (i) the execution and delivery by the Company of
this Agreement, (ii) the consummation by Company of the Merger, and (iii) the
consummation by the Merging Bank of the Bank Merger and the other transactions
contemplated hereby.

3.08 Litigation. Except as set forth on Schedule 3.08, there are
no legal, quasijudicial, administrative, or other actions, suits, proceedings
or investigations of any kind or nature pending or, to the knowledge of the
Company, threatened against the Company or its Subsidiaries that challenge the
validity or legality of the transactions contemplated by this Agreement or
which would have a material adverse effect on the financial condition, assets,
liabilities or business of the Company or its Subsidiaries, including any suits
involving a "lender liability" cause of action. Schedule 3.08 accurately
describes all litigation against the Company or its Subsidiaries in which the
amount claimed is in excess of $25,000 which is pending or, to the knowledge of
the Company, threatened against the Company or its Subsidiaries, including any
suits involving a "lender liability" cause of action. Except as set forth on
Schedule 3.08, neither the Company nor its Subsidiaries is subject to or in
default with respect to, nor are any of its or their assets subject to, any
outstanding judgment, order, decree or regulatory restriction of any court or
of any governmental agency or instrumentality.

3.09 Taxes, Returns and Reports.

(a) Schedule 3.09 provides a listing of the Federal,
state, county, local and foreign tax returns filed by the Company and
any of its Subsidiaries for the fiscal years ended June 30, 1997, 1996
and 1995 copies of which have been made available to the Acquiror.
The reserve for taxes in the Company Financial Statements is, and the
reserve for taxes in the Subsequent Company Financial Statements will
be, adequate to cover all tax liabilities of the Company and its
Subsidiaries (including, without limitation, income taxes and
franchise fees) that may become payable in future years in respect to
any transactions consummated prior to June 30, 1997 or, in the case of
the Subsequent Company Financial Statements prior to the dates
thereof. Neither the Company nor any of its Subsidiaries has or, to
the best of the Company's knowledge, will have any liability for taxes
of any nature for or in respect of the operation of its business or
ownership of its or their assets from October 1, 1997 up to and
including the Effective Time, except to the extent reflected in the
Subsequent Company Financial Statements for income taxes arising from
the conduct of the Company's business and ownership of its properties
and are not yet due as of the date of this Agreement, or as otherwise
set forth on Schedule 3.09. Except as set forth on Schedule 3.09,
neither the Company nor any of its Subsidiaries is a party to any
action or proceeding, nor is any such action or proceeding, to the
Company's knowledge, threatened, by any governmental entity for the
assessment or collection of any taxes, and no deficiency notices or
reports have been received by the Company or any of its Subsidiaries
in respect of any deficiencies for any tax, assessment or government
charges.

(b) Except as may be reflected on Schedule 3.09, each of
the Company and its Subsidiaries has duly and timely filed all
Federal, state, county, local and foreign tax returns including,
without limitation, information returns and returns of estimated tax,
required to be filed by it on or prior to the date hereof (all such
returns being accurate and complete) and has duly paid or made
adequate provision for the payment of all Taxes (as defined below)
that have been incurred by it or are due or claimed to be due from it
by Federal, state, county, local or foreign taxing authorities on or
prior to the date of this Agreement (including, without limitation, if
and to the extent applicable, those due in respect of its properties,
income, business, capital stock, deposits, franchises, licenses, sales
and payrolls) other than Taxes that are being contested in good faith
(and which are set forth on Schedule 3.09). The income tax returns of
the Company and its Subsidiaries have not been examined by the IRS for
the last 10 years. Except as may be reflected on Schedule 3.09, there
are no material disputes pending, or claims asserted, relating to
Taxes or

A-19
<PAGE> 186
assessments upon the Company or any of its Subsidiaries, nor does the
Company or any of its Subsidiaries have outstanding any currently
effective waivers extending the statutory period of limitation
applicable to any Federal, state, county, local or foreign income tax
return for any period. In addition, (i) proper and accurate amounts
have been withheld by the Company and its Subsidiaries from their
employees, customers, depositors, shareholders and others from whom
they are required to withhold Tax in compliance with all applicable
Federal, state, county, local and foreign laws, except where the
failure to do so would not have a material adverse effect on the
Company or its Subsidiaries, the Acquiror or the Surviving
Corporation, and (ii) there are no Tax liens upon any property or
assets of the Company or its Subsidiaries except liens for current
Taxes not yet due. Except as, in the aggregate, would not have a
material adverse effect on the Company or its Subsidiaries, the
Acquiror or the Surviving Corporation, or as disclosed on Schedule
3.09, to the best of the Company's knowledge, (i) no property of the
Company or any of its Subsidiaries is property that the Company or any
of its Subsidiaries is required to treat as "tax-exempt use property"
within the meaning of Section 168(h) of the Code, (ii) neither the
Company nor any of its Subsidiaries has been required to include in
income any adjustment pursuant to Section 481 of the Code by reason of
a voluntary change in accounting method initiated by the Company or
any of its Subsidiaries, and the IRS has not initiated or proposed any
such adjustment or change in accounting method; and (iii) neither the
Company nor any of its Subsidiaries has entered into a transaction
which is being accounted for as an installment obligation under
Section 453 of the Code.

(c) As used in this Agreement, the term "Tax" or "Taxes"
means all Federal, state, county, local, and foreign income, excise,
gross receipts, ad valorem, profits, gains, transfer gains, property,
sales, transfer, use, payroll, employment, severance, withholding,
backup withholding, intangibles, franchise and other taxes,
governmental charges, levies or like assessments, together with all
penalties and additions to Tax and interest thereon.

(d) The Merging Bank, at the close of its most recent
taxable year, qualified, and on the Closing Date will qualify, either
as a "domestic building and loan association" within the meaning of
Section 7701(a)(19) of the Code or as a "mutual savings bank" within
the meaning of Section 591(b) of the Code that meets the requirements
of Section 7701(a)(19)(C) of the Code.

3.10 Corporate Properties.

(a) Schedule 3.10 accurately identifies: (i) all real
property owned, beneficially or otherwise, or controlled by the
Company or its Subsidiaries, whether owned outright, as a joint
venture, or owned or controlled in a fiduciary capacity, including
properties now held by the Company (or any Subsidiary) as a result of
foreclosure or repossession or carried on the books of the Company (or
any Subsidiary) as "other property owned" ("REO") or leased by the
Company or its Subsidiaries (all of which shall be defined as "Real
Estate") and such Schedule 3.10 sets forth a complete legal
description of the Real Estate and a brief description of any
buildings located thereon; and (ii) all known copyrights, patents,
trademarks, trade names, franchises and related applications and all
other similar intangible assets owned by the Company and its
Subsidiaries. Except as set forth on Schedule 3.10, all of the
Company's or its Subsidiaries' properties, leasehold improvements and
equipment are in good operating condition, and all known copyrights,
patents, trademarks, trade names, franchises and related applications
are valid and in full force and effect in accordance with their terms,
and neither the Company nor any of its Subsidiaries knows of any
conflict with respect thereto that asserts the rights of others. To
the best of the Company's knowledge, neither the Company nor any of
its Subsidiaries has received or been threatened with a complaint that
the Company or its Subsidiaries are in violation of applicable
building, zoning, environmental, safety, or similar laws, ordinances,
or regulations in respect of their buildings or equipment, or the
operation thereof. To the best of the Company's knowledge, neither
the Company nor any of its Subsidiaries is in violation of any such
law, ordinance, or regulation, except as disclosed on Schedule 3.10.
To the knowledge of the Company, no proceedings to take all or any
part of the properties of the Company or its Subsidiaries (whether
leased or owned) by condemnation or right of eminent domain are
pending or threatened.

A-20
<PAGE> 187
(b) Except as set forth on Schedule 3.10 and except for
property in foreclosure proceedings, the Company and its Subsidiaries
have good and marketable title to all their real and personal
property, free, clear and discharged of, and from, any and all liens,
mortgages, charges, encumbrances and/or security interests of any
kind.

(c) The Company or any of its Subsidiaries (as the case
may be), as lessee, has the right under valid and subsisting leases to
occupy, use, possess and control all property leased by the Company or
any of its Subsidiaries, qualified only by the written terms of such
leases, copies of which are attached to Schedule 3.10.

3.11 Employee Benefit Plans.

(a) Set forth on Schedule 3.11 is an accurate description
of all bonus, deferred compensation, pension, retirement,
profit-sharing, thrift savings, employee stock ownership, stock bonus,
stock purchase, restricted stock and stock option plans, all
employment or severance contracts, other material employee benefit
plans and any applicable "change in control" or similar provisions in
any plan, contract or arrangement which cover employees or former
employees of the Company and its Subsidiaries, and all other benefit
plans, contracts or arrangements covering directors, employees or
former employees of the Company or its ERISA Affiliates (the
"Employees"), including, but not limited to, "employee benefit plans"
within the meaning of Section 3(3) of ERISA (collectively, the
"Compensation and Benefit Plans"). True and complete copies of all
Compensation and Benefit Plans including, but not limited to, any
trust instruments and/or insurance and investment contracts, if any,
forming a part of any such Compensation and Benefit Plans and
agreements, and all amendments thereto, including, but not limited to
(i) the actuarial report for such Plan (if applicable) and the annual
report (Form 5500 series) for each of the last two years, (ii) the
current summary plan description, and (iii) the most recent
determination letter from the IRS (if applicable) for such plan, shall
be available to the Acquiror.

(b) Company Compensation and Benefit Plans, other than
"Multi-Employer Plans" within the meaning of Sections 3(37) or
4001(a)(3) of ERISA, covering Employees (the "Plans"), are in
substantial compliance with ERISA. Each Plan which is an "employee
pension benefit plan" within the meaning of Section 3(2) of ERISA
("Pension Plan") and which is intended to be qualified under Section
401(a) of the Code, has received a favorable determination letter from
the IRS, and the Company is not aware of any circumstances likely to
result in revocation of any such favorable determination letter. The
ESOP satisfies the requirements for an employee stock ownership plan
under Section 4975(e)(7) of the Code. There is no pending or
threatened litigation relating to the Plans. Neither the Company nor
any of its ERISA Affiliates has engaged in a transaction with respect
to any Plan that could subject the Company or any of its ERISA
Affiliate or any other party to a tax or penalty imposed by Section
4975 of the Code or Section 502(i) of ERISA in an amount which would
be material.

(c) No liability under Subtitle C or D of Title IV of
ERISA has been or is expected to be incurred by the Company or any of
its ERISA Affiliates with respect to any ongoing, frozen or terminated
"single- employer plan", within the meaning of Section 4001(a)(15) of
ERISA, currently or formerly maintained by any of them, or the
single-employer plan of any entity which is considered one employer
with the Company or any of its ERISA Affiliates. Neither the Company
nor any of its ERISA Affiliates has incurred or expects to incur any
withdrawal liability with respect to a Multi-Employer Plan under
Subtitle E of Title IV of ERISA (regardless of whether based on
contributions of an ERISA Affiliate). No notice of a "reportable
event," within the meaning of Section 4043 of ERISA, for which the
30-day reporting requirement has not been waived, has been required to
be filed for any Pension Plan or by any ERISA Affiliate within the
twelve-month period ending on the date hereof.

(d) All contributions required to be made under the terms
of any Plan have been timely made. Neither any Pension Plan nor any
single-employer plan of an ERISA Affiliate has an "accumulated funding
deficiency" (whether or not waived) within the meaning of Section 412
of the Code or Section 302 of ERISA. Neither the Company nor any of
its ERISA Affiliates has provided, or is required to provide, security
to any Pension Plan or to any single-employer plan of an ERISA
Affiliate pursuant to Section 401(a)(29) of the Code.

A-21
<PAGE> 188
(e) Neither the Company nor any of its ERISA Affiliates
has any obligations for retiree health and life benefits under any
Plan, except as set forth on Schedule 3.11. Except as set forth on
Schedule 3.11, there are no restrictions on the rights of the Company
or its ERISA Affiliates to amend or terminate any such Plan without
incurring any liability thereunder.

(f) Neither the Company nor any of its Subsidiaries is a
party to, or is bound by, any collective bargaining agreement,
contract, or other agreement or understanding with a labor union or
labor organization, nor is the Company or any of its Subsidiaries the
subject of any material proceeding asserting that the Company or any
such Subsidiary has committed an unfair labor practice or seeking to
compel the Company or such Subsidiary to bargain with any labor
organization as to wages or conditions of employment, nor is there any
strike involving the Company or any of its Subsidiaries pending or
threatened, nor is the Company aware of any activity involving its or
any of its Subsidiaries' employees seeking to certify a collective
bargaining unit or engaging in any other organizational activity.

(g) No matter is pending relating to any of the Company
Plans before any court or government agency.

(h) Neither the Company nor any of its ERISA Affiliates
presently contributes to or is currently a party to any Multi-Employer
Plan.

(i) Neither the Company nor any ERISA Affiliate presently
contributes to any Company Plan that is or was subject to Title IV of
ERISA.

(j) No amounts payable under any of the Company Plans
which taken by itself will fail to be deductible for federal income
tax purposes by virtue of Section 280(G) of the Code.

3.12 Brokerage Commissions and Fees.

(a) All negotiations relating to this Agreement and the
Plan of Merger and the transactions contemplated herein and therein
have been and will be carried on by the Company its counsel,
accountants, financial advisor and other representatives directly with
Acquiror, its counsel, accountants and other representatives in such a
manner as not to give rise to any claim against Acquiror or the
Company for any brokerage commission, finder's fee, investment
advisor's fee or other like payment, except that the Company has
agreed to make payment to Robert W. Baird & Co., Incorporated for
services rendered as financial advisor in connection with the
transactions contemplated herein pursuant to a letter agreement dated
as of May 22, 1998, a copy of which is attached as Schedule 3.12.

(b) The Company has fee agreements with all outside
attorneys, accountants and other independent experts and advisors it
has used or plans to use in connection with the transactions
contemplated in this Agreement, which provide that such attorneys,
accountants and other independent experts and advisors will be
compensated only at their normal hourly or per diem rates plus
reasonable out-of-pocket expenses.

3.13 Certain Agreements. Schedule 3.13 accurately identifies all
of the following agreements, contracts, or other instruments written or, to the
knowledge of the Company, oral, to which the Company or its Subsidiaries are a
party or by which any of them are bound or affected or by which any of the
stock, properties, or assets of the Company or its Subsidiaries are bound or
affected, or under which any of their officers, directors, employees, or
shareholders have rights: (a) all material contracts (as defined in Item
601(b)(10) of Regulation S-K promulgated by the SEC under the Securities Act)
to be performed after the date of this Agreement; (b) any agreements, plans or
arrangements under or pursuant to which any of the benefits of which will be
increased, or the vesting of benefits of which will be increased or
accelerated, by the occurrence of any of the transactions contemplated by this
Agreement, or the value of any of the benefits of which will be calculated on
the basis of any of the transactions contemplated by this Agreement; and (c)
except as entered into with respect to loan transactions or workouts in the
ordinary course of business by the Company, any agreement, instrument or
understanding of the Company or its Subsidiaries, whether or not made in the
ordinary and regular course of business, involving an aggregate amount in

A-22
<PAGE> 189
excess of $25,000 per annum, or which materially restricts the conduct of any
line of business by the Company or its Subsidiaries. True, complete and
correct copies of all of the written agreements, contracts, or other
instruments, and written descriptions of the material details of any oral
agreements or instruments identified on Schedule 3.13, are attached to Schedule
3.13. Except as otherwise specifically disclosed on Schedule 3.13, all such
agreements, contracts or other instruments are valid and binding and are in
full force and effect and neither the Company nor any of its Subsidiaries is in
default under, or is in violation of, any such agreement, contract or other
instrument to which they are a party or by which they may be bound.

3.14 Governing Documents. Attached as Schedule 3.14 are true,
complete and correct copies of the following: (a) the Articles of Incorporation
or Charter, as the case may be, and all amendments thereto, of the Company and
its Subsidiaries; (b) the Bylaws of the Company and its Subsidiaries, as
amended to date; and (c) a specimen certificate for each type of outstanding
security of the Company and its Subsidiaries. The minute books of the Company,
the Merging Bank and its Subsidiaries accurately reflect all corporate actions
held or taken by their respective shareholders and Board of Directors since
January 1, 1994, including committees of their respective Boards of Directors.

3.15 Orders, Injunctions, Decrees; Compliance With Applicable
Laws.

(a) Except as set forth on Schedule 3.15, neither the
Company nor any of its Subsidiaries is subject to any order,
injunction or decree, written agreement, consent agreement, or
memorandum of understanding of any governmental body or court, or is
in violation of any order, injunction, or decree, written agreement,
consent agreement or memorandum of understanding, or any other
requirement of any governmental body or court.

(b) Except as set forth on Schedule 3.15, neither the
Company nor any of its Subsidiaries is subject to any cease-and-desist
or other order issued by, or is a party to any written agreement,
consent agreement or memorandum of understanding with, or is a party
to any commitment letter or similar undertaking to, or is subject to
any order or directive by, or is a recipient of any extraordinary
supervisory letter from, or has adopted any board resolutions at the
request of (each, whether or not set forth on Schedule 3.15, a
"Regulatory Agreement"), any regulatory agency or other governmental
entity that restricts the conduct of its business or that in any
manner relates to its capital adequacy, its credit policies, its
management or its business, nor has the Company or any of its
Subsidiaries been advised by any regulatory agency or other
governmental entity that it is considering issuing or requesting any
Regulatory Agreement.

(c) The Company and its Subsidiaries hold, and have at
all times held, all licenses, franchises, permits and authorizations
necessary for the lawful conduct of their respective businesses under
and pursuant to all, and have complied with and are not in default in
any respect under any, applicable laws, statutes, orders, rules,
regulations, policies and/or guidelines of any governmental entity,
and neither the Company nor any of its Subsidiaries knows of, or has
received notice of any violations of, any of the above.

3.16 Shareholders of the Company. As of the date of this
Agreement, Schedule 3.16 accurately identifies the names and addresses of all
of the shareholders who, to the Company's knowledge, beneficially own more than
5% of Company Common Stock and the number of shares Company Common Stock
believed to be beneficially owned by each such shareholder and by each director
and officer of the Company.

3.17 Regulatory Filings. Schedule 3.17 is an accurate and
complete listing of each registration statement, prospectus, report, schedule,
proxy statement, information statement or other shareholder communication used,
circulated or filed after January 1, 1997 by the Company or any of its
Subsidiaries copies of which have been made available to the Acquiror. The
Company and its Subsidiaries have filed and will continue to file in a timely
manner all required filings with (a) the SEC, (b) the Federal Reserve Board
("FRB"), (c) the FDIC, and (d) the WDFI (and will furnish Acquiror with copies
of all such filings made subsequent to the date hereof until the Effective
Time), and all such filings were or will be, complete and accurate in all
material respects as of the dates of the filings, and no such filing made or
will make any untrue statement of a material fact or omitted or will omit to
state a material fact necessary in order to make the statements made, in the
light of the circumstances under which they were made, not misleading. Except
for normal examinations conducted by the IRS, the FRB, the FDIC or the WDFI in
the

A-23
<PAGE> 190
regular course of the business of the Company or its Subsidiaries, no federal,
state or local governmental agency, commission or other entity has initiated
any proceeding or, to the best of the knowledge and belief of the Company,
investigation into the business or operations of the Company or its
Subsidiaries within the past five years. Except as set forth on Schedule 3.17,
there is no unresolved violation, criticism or exception by the SEC, the
Federal Reserve, the FDIC, the WDFI or other agency, commission or entity with
respect to any report or statement referred to herein. Since the date of any
such filings, there has been no material change in the condition of the
Company, the Merging Bank, or any of its Subsidiaries, financial or otherwise,
such that, had such change occurred prior to any such filing, such change would
have been required to be disclosed or described therein. Except as otherwise
disclosed on Schedule 3.17, there is no unresolved violation, criticism or
exception by any regulatory agency with respect to any report or statement
relating to any examinations of the Company or any of its Subsidiaries.

3.18 Loans. All loans and loan commitments extended by the
Company and its Subsidiaries have been made in all material respects in
accordance with customary lending standards in the ordinary course of business.
The loans and loan commitments are evidenced in all material respects by
appropriate and sufficient documentation (including any and all documentation
required by applicable banking laws), and constitute valid and binding
obligations of the borrowers enforceable in accordance with their terms, except
as limited by applicable bankruptcy, insolvency, or other similar laws
affecting the enforcement of creditors' rights and remedies generally from time
to time in effect and by applicable law which may affect the availability of
equitable remedies. All such loans and loan commitments are, and at the
Effective Time will be, free and clear of any security interest, lien,
encumbrance or other charge, and the Company and its Subsidiaries have
complied, and at the Effective Time will have complied, in all material
respects with all laws and regulations relating to such loans and loan
commitments. Except as set forth on Schedule 3.18, the loans and loan
commitments are not subject to any offsets, or to the knowledge of the Company,
claims of offset, or claims of other liability on the part of the Company or
any of its Subsidiaries.

3.19 Loan Portfolio; Reports. Except as set forth on Schedule
3.19, as of March 31, 1998, neither the Company nor any of its Subsidiaries is
a party to any written or oral (a) loan agreement, note or borrowing
arrangement (including, without limitation, leases, credit enhancements,
commitments, guarantees and interest-bearing assets) (collectively, "Loans"),
other than Loans the unpaid principal balance of which does not exceed $25,000,
under the terms of which the obligor was, as of March 31, 1998, over 90 days
delinquent in payment of principal or interest or in default under any other
provision, or (b) Loans to any director, executive officer or ten percent
shareholder of the Company or any of its Subsidiaries or, to the knowledge of
the Company, any person, corporation or enterprise controlling, controlled by
or under common control with any of the foregoing. Schedule 3.19 sets forth:
each of the Loans of the Company or any of its Subsidiaries with an unpaid
principal amount in excess of $25,000 and that as of the date of this Agreement
are internally classified as (a) "Substandard," "Doubtful," "Loss" or
"Classified," (b) "Criticized," "Other Loans Especially Mentioned" or "Special
Mention," or (c) "Credit Risk Assets," "Concerned Loans," "Watch List" or words
of similar import, in each case together with the principal amount of and
accrued and unpaid interest on each of such Loans and the identity of the
borrower thereunder; together with the aggregate principal amount of and
accrued and unpaid interest on all such Loans by category. The Company shall
promptly inform Acquiror of any Loans that become classified in the manner
described in the previous sentence, or any Loans the classification of which is
changed at any time after the date of this Agreement. The Company and its
Subsidiaries have internally classified, in the manner described above, all
Loans that any auditor or government examiner has criticized or classified, and
the internal classification of such Loans is at least as strict as the
criticism or classification thereof by an auditor or government examiner.

3.20 Mortgage-Backed and Related Securities and Investment
Securities. Schedule 3.20 sets forth the book and market value as of March 31,
1998 of the mortgage-backed and related securities, securities held for sale
and investment securities of the Company and its Subsidiaries. Schedule 3.20
also lists a mortgage-backed and related securities and investment securities
report which lists the securities descriptions, CUSIP numbers, pool face
values, book values, coupon rates and current market values.

3.21 Allowance for Loan Losses. The allowances for loan losses
set forth in the Company's Financial Statements and Subsequent Financial
Statements were established in accordance with the past practices and
experiences of the Company and its Subsidiaries.

A-24
<PAGE> 191
3.22 Conduct. Except as set forth on Schedule 3.22, since June
30, 1997, neither the Company nor any of its Subsidiaries has (a) conducted its
business or entered into any transaction other than in the ordinary course of
business consistent with prudent banking practices, or incurred or became
subject to any liabilities or obligations except liabilities incurred in the
ordinary course of business consistent with prudent banking practices; (b)
suffered any labor trouble, or any event or condition of any character
materially adversely affecting its business or prospects; (c) discharged or
satisfied any lien or encumbrance or paid any obligation or liability other
than those presented in the Company Financial Statements or incurred after the
date thereof in the ordinary course of business consistent with prudent banking
practices; (d) mortgaged, pledged, or subjected to lien, charge or other
encumbrance any part of its assets, or sold or transferred any such assets,
except in the ordinary course of business consistent with prudent banking
practices; (e) made or permitted an amendment or termination of any contract to
which it is a party except in the ordinary course of business consistent with
prudent banking practices; (f) issued, agreed to issue or sold any of its
capital stock or corporate debt obligations (whether authorized and unissued or
held in the treasury); (g) granted any options, warrants or other rights for
the purchase of its capital stock; (h) declared, agreed to declare, set aside
or paid any dividend or other distribution in respect of its or their capital
stock, or directly or indirectly purchased, redeemed or otherwise acquired or
agreed to purchase or redeem or otherwise acquire any shares of such stock; (i)
entered into any employment contract with any officer or salaried employee,
made any accrual or arrangement for or payment of bonuses or special
compensation of any kind or any severance or termination pay to any of its
present or former officers or employees, increased the rate of compensation
payable or to become payable by them to any of its officers or employees, or
instituted or made any increase in any employee welfare, retirement or similar
plan or arrangement, in each case other than in the ordinary course of business
consistent with prudent banking practices or as contemplated pursuant to such
contract, plan or arrangement, or suffered any strike, work stoppage, slow-down
or other labor disturbance; or (j) entered into any other transaction other
than in the ordinary course of business consistent with prudent banking
practices.

3.23 Fiduciary Responsibilities. The Company and its Subsidiaries
have performed all of their duties in their capacities as trustees, executors,
administrators, registrars, guardians, custodians, escrow agents, receivers or
any other fiduciary capacity in a manner which complies with all applicable
laws, regulations, orders, agreements, wills, instruments and common law
standards. The Company and the Merging Bank have properly administered all
accounts for which it acts as a fiduciary, including, but not limited to,
accounts for which it serves as a trustee, agent, custodian, personal
representative, guardian, conservator or investment adviser, in accordance with
the terms of the governing documents and applicable state and federal law and
regulation and common law. Neither the Company nor the Merging Bank nor any of
their respective directors, officers or employees has committed any breach of
trust with respect to any such fiduciary account which has had or could
reasonably be expected to have a material adverse effect on the Company, and
the accountings for each such fiduciary account are true and correct and
accurately reflect the assets of such fiduciary account. Neither the Company
nor the Merging Bank in the capacity as fiduciary of an IRA account or other
tax qualified plan maintained with the Merging Bank has permitted the
acquisition of shares of Company Common Stock into such IRA account or plan.

3.24 Compliance With Environmental Laws and Health and Safety
Laws. For purposes of this Agreement, the term "Environmental Laws" shall mean
any and all federal, state and local laws including statutes, regulations,
ordinances, codes, rules, orders, directives and other governmental
restrictions and requirements (including, but not limited to, those contained
in or evidenced by permits, temporary permits or exemption letters) relating to
the discharge, emission or release of air pollutants, water pollutants, solid
wastes or process waste water or otherwise relating to the environment,
hazardous wastes, hazardous materials, hazardous substances, toxic substances,
asbestos, petroleum or any fraction thereof, or any operations of or use of
property by the Company or its Subsidiaries that has an impact on the
environment, including, but not limited to, the Federal Solid Waste Disposal
Act, the Federal Clean Air Act, the Federal Clean Water Act, the Federal
Resource Conservation and Recovery Act of 1976, the Federal Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the Toxic
Substances Control Act, the Federal Water Pollution Control Act, the National
Environmental Policy Act, the Federal Occupational Safety and Health Act, the
Emergency Planning and Community Right-to-Know Act, regulations of the
Environmental Protection Agency, regulations of the Nuclear Regulatory Agency,
or any applicable federal or state regulatory or administrative agency with
authority over natural resources or environmental protection now in effect or
presently scheduled to come into effect, all as presently amended. For the
purposes of this Agreement, the term "Hazardous Material" means any substance
or material, whether liquid, solid or gas which is listed, defined, designated
or classified as hazardous substance, hazardous waste, pollutant, contaminate,
toxic substance, toxic waste,

A-25
<PAGE> 192
radioactive substance, radioactive material, radioactive waste or dangerous
substance under any Environmental Laws (as defined herein). The term
"Hazardous Material" shall include, but not be limited to the following:
petroleum or fraction thereof, underground storage tank, aboveground storage
tank, asbestos or asbestos-containing materials, polychlorinated byphenyls
("PCBs") and medical waste.

(a) Except as set forth on Schedule 3.24, to the Company's
knowledge, as of the date of this Agreement:

(i) The operations of the Company and its Subsidiaries
comply and have complied with all Environmental Laws
and all health and safety statutes and regulations;
none of the Company's or its Subsidiaries' operations
are the subject of, nor is the Company or any of its
Subsidiaries a party to, any judicial or
administrative proceeding, pending or threatened,
alleging the violation of any health or safety
statute or regulation or Environmental Laws; neither
the Company nor its Subsidiaries are the subject of a
federal, state or local investigation, pending or
threatened, evaluating whether any remedial action is
needed to respond to a release of any Hazardous
Material; neither the Company nor its Subsidiaries
have generated Hazardous Materials except for those
Hazardous Materials and quantities typically
associated with the business of the Company; neither
the Company nor its Subsidiaries have arranged for
the treatment or disposal of any Hazardous Material
except for those Hazardous Materials and quantities
typically associated with the business of the
Company; neither the Company nor its Subsidiaries
have transported any Hazardous Material for
treatment, storage or disposal; and neither the
Company nor its Subsidiaries have reported a spill,
emission or release of a Hazardous Material.

(ii) All Real Estate (as defined in Section 3.10) is in
compliance in all material respects with all
Environmental Laws; neither the Company nor any of
its Subsidiaries has any notice or knowledge
regarding the Real Estate or its past use(s) which
indicates noncompliance, or potential noncompliance,
with any Environmental Law; the Real Estate is not
subject to any judicial or administrative proceedings
alleging the violation of any federal, state or local
health or safety statute or regulation or any
Environmental Laws; the Real Estate is not
contaminated by any Hazardous Material; the Real
Estate is not the subject of a federal, state or
local investigation evaluating whether any remedial
action is needed to respond to a release, emission or
discharge of any Hazardous Material into the
environment; neither the Company nor its Subsidiaries
have generated any Hazardous Material on the Real
Estate; neither the Company nor any of its
Subsidiaries has transported any Hazardous Material
to the Real Estate or from the Real Estate to any
waste treatment, storage or disposal facility; to the
knowledge of the Company and its Subsidiaries the
Real Estate and buildings occupied by the Company and
its Subsidiaries contain no urea-formaldehyde
insulation, asbestos or asbestos by-products, lead or
regulated levels of PCBs; the Real Estate contains no
fill material; and the Real Estate does not face any
risk of contamination by a Hazardous Material from
any nearby property.

(b) Environmental Studies. The Acquiror shall have the
right to conduct such environmental studies in connection with the
Company's representations and warranties as set forth in this Section
3.24 pursuant to the terms of Section 6.10 hereof.

3.25 Other Information. No representation or warranty by the Company
contained in this Agreement, or disclosure in any Schedule hereto prepared by
the Company or certificate or other instrument or document furnished or to be
furnished by or on behalf of the Company pursuant to this Agreement and no
information furnished or to be furnished by the Company for use in the
Prospectus/Proxy Statement (as defined in Section 6.01) or the Registration
Statement (as defined in Section 6.01) or the regulatory filings contains or
will contain any untrue statement of a material fact or omits or will omit to
state any material fact required to be stated herein or therein which is
necessary to make the statements contained herein or therein. The
Prospectus/Proxy Statement (except for

A-26
<PAGE> 193
such portions thereof that relate solely to the Acquiror) will comply in all
respects with the provisions of all applicable laws, including the Securities
Act and the Exchange Act.

3.26 Insider Interests. Except as set forth on Schedule 3.26, all
loans, extensions of credit and other contractual arrangements (including
deposit relationships) between the Company or its Subsidiaries and any officer
or director, of the Company or its Subsidiaries, or any affiliate of any such
officer or director, conform to applicable rules and regulations and
requirements of all applicable regulatory agencies, and all such loans,
extensions of credit and other contractual arrangements are described on
Schedule 3.26. Except as set forth on Schedule 3.26: (a) no officer or
director of the Company or its Subsidiaries has any interest in any property,
real or personal, tangible or intangible, used in or pertaining to the business
of the Company or its Subsidiaries; and (b) there are no transactions or
business relationships between the Company or its Subsidiaries and their
respective directors and executive officers which would require disclosure in
the Company's proxy statements, the Registration Statement or the Proxy
Statement/Prospectus pursuant to Item 404 of Regulation S-K promulgated by the
SEC. The Company does not have a written insider trading policy.

3.27 No Sensitive Transactions. Except as set forth on Schedule
3.27, within the past five years, neither the Company nor its Subsidiaries nor,
to the Company's knowledge, any director, employee, or agent of the Company or
its Subsidiaries, has directly or indirectly used funds or other assets of the
Company or its Subsidiaries for (a) illegal contributions, gifts,
entertainment, or other expenses related to political activities; (b) payments
to or for the benefit of any governmental official or employee, other than
payments required or permitted by law; (c) illegal payments to or for the
benefit of any person, firm, corporation or other entity, or any officer,
employee, agent or representative thereof; or (d) the establishment or
maintenance of an illegal secret or unrecorded fund.

3.28 Community Reinvestment Act Compliance. Except as set forth
on Schedule 3.28, the Merging-Bank is in compliance with the applicable
provisions of the Community Reinvestment Act of 1977, as amended ("CRA") and
the regulations promulgated thereunder, and is not aware of any state of facts
or circumstances related to any planned or threatened CRA protest. As of the
date of this Agreement, the Merging Bank has not been advised of the existence
of any act or circumstance or set of facts or circumstances which, if true,
would cause it to fail to be in compliance with the CRA or any federal or state
fair lending laws. The Merging Bank has not received a CRA rating from the
FDIC which is less than "satisfactory."

3.29 Approvals. The Company knows of no reason why the Requisite
Regulatory Approvals (as defined in Section 7.01) necessary to permit Acquiror
consummation of the transactions contemplated hereby in the manner provided
herein should not be obtained.

3.30 Qualified Thrift Lender. The Merging Bank is a "Qualified
Thrift Lender" as defined under Section 10(m) of the HOLA, codified at 12 USC
Sec. 1467a(m).

3.31 The ESOP. The Company is the sole lender to the ESOP.
Accelerated cash payments under the loan agreement entered into between the
Company and the ESOP (the "ESOP Loan") are not required by virtue of the
acquisition of the Company by Acquiror, except as otherwise provided in this
Agreement.

3.32 Absence of Agreements. Except as set forth in Schedule 3.32,
neither the Company nor any of its Subsidiaries: (a) is a party to any
agreement or arrangement entered into in connection with the consummation of a
federally or state assisted acquisition of a depository institution pursuant to
which the Company or any of its Subsidiaries is entitled to receive financial
assistance or indemnification from any governmental agency; or (b) is a party
to any agreement, option or contract, the subject of which involves or relates
to the merger, consolidation or sale of assets or stock of the Company or any
subsidiary other than this Agreement; and (c) there are no negotiations pending
relating to any such agreement, option or contract to which the Company or any
Subsidiary is a party.

3.33 Liquidation Account. The liquidation account established by
the Merging Bank in connection with its conversion from the mutual to stock
form has been maintained since its establishment in accordance with applicable
laws.

A-27
<PAGE> 194
3.34 Insurance. Schedule 3.34 contains a true, correct and
complete list of all insurance policies and bonds maintained by the Company and
its Subsidiaries, including the name of the insurer, the policy number, the
type of policy and any applicable deductibles, and all such insurance policies
and bonds are in full force and effect and have been in full force and effect
at all times during which the Company or any Subsidiary had any insurable
interest in the subject of such insurance policies and bonds. As of the date
hereof, neither the Company nor any Subsidiary has received any notice of
cancellation or amendment of any such policy or bond or is in default under any
such policy or bond, no coverage thereunder is being disputed and all material
claims thereunder have been filed in a timely fashion and all premiums due
thereon on or prior to the date of Closing have been paid as and when due. The
existing insurance carried by the Company and its Subsidiaries is and will
continue to be, in respect of the nature of the risks insured against and the
amount of coverage provided, substantially similar in kind and amount to that
customarily carried by parties similarly situated who own properties and engage
in businesses substantially similar to that of the Company and its
Subsidiaries. True and complete copies of all such policies and bonds
reflected on Schedule 3.34 are available for inspection by Acquiror.

3.35 Derivative Transactions. Schedule 3.35 sets forth all
holdings by the Company or any of its Subsidiaries of positions in forwards,
futures, options on futures, swaps and any other instrument within the scope of
the Company's Board-approved investment policy ("Derivative Instruments").
Except as set forth on Schedule 3.35, since June 30, 1997, neither the Company
nor any of its Subsidiaries has engaged in any transactions in or involving
Derivative Instruments. None of the counterparties to any contract or
agreement with respect to any such instrument is in default with respect to
such contract or agreement and no such contract or agreement, were it to be a
Loan held by the Company or any of its Subsidiaries, would be classified as
"Other Loans Especially Mentioned," "Special Mention," "Substandard,"
"Doubtful," "Loss," "Classified," "Criticized," "Credit Risk Assets,"
"Concerned Loans" or words of similar import. The financial position of the
Company and its Subsidiaries on a consolidated basis under or with respect to
each such instrument has been reflected in the books and records of the Company
and such Subsidiaries in accordance with generally accepted accounting
principles consistently applied, and no open exposure of the Company or any of
its Subsidiaries with respect to any such instrument (or with respect to
multiple instruments with respect to any single counterparty) exceeds $25,000.

3.36 Company Pension Plan. The Company will withdraw from the
Savings Association Retirement Fund ("Company Pension Plan"), as adopted by the
Company effective July 1, 1967, prior to the Effective Time. No additional
contributions are required or shall be made under or to the Company Pension
Plan from the date of execution of the Agreement through the Effective Time and
there are no accrued service or other funding deficiencies or liabilities of
whatsoever kind or nature related to the Company Pension Plan or to the
Company's withdrawal therefrom.

3.37 Director Deferred Retirement Plan. Except as identified in
Schedule 3.37, all obligations of the Company under the Reliance Savings Bank
Non-Qualified Deferred Retirement Plan for Directors have been fully funded
through the purchase of single-premium life insurance policies purchased by the
Company and/or the Merging Bank and maintained for such purpose.

ARTICLE FOUR

COVENANTS OF ACQUIROR

Acquiror hereby covenants and agrees with the Company as follows:

4.01 Conduct Of Business: Certain Covenants. From and after the
execution and delivery of this Agreement and until the Effective Time, Acquiror
and each of its subsidiaries will:

(a) Conduct its business and operate in the usual
ordinary course in accordance with prudent and sound banking and
business practices; and

(b) Use its best efforts to remain in good standing with
all applicable banking regulatory authorities to the extent required
to continue the operation of their respective businesses which are
material to the Acquiror's operations as a whole.

A-28
<PAGE> 195
4.02 SEC Registration. Acquiror shall file with the SEC, as soon
as practicable after the execution of this Agreement but in no event later than
90 days from the date of this Agreement, any necessary Registration Statement
(as defined in Section 6.01(a)) covering the Acquiror Common Stock to be issued
pursuant to this Agreement and the Plan of Merger (provided that the Company
has given to Acquiror all information concerning the Company which is required
for inclusion in the Registration Statement), and shall use its best efforts
to cause the same to become effective and thereafter, until the Effective Time
or termination of this Agreement, to keep the same effective and, if necessary,
amend and supplement the same. Acquiror shall, as soon as practicable after
the execution of this Agreement, take all actions necessary to have the shares
of Acquiror Common Stock to be delivered in exchange for Company Common Stock
qualified or registered for offering and sale, or to identify and perfect an
exemption therefrom, under the securities or "Blue Sky" laws of each
jurisdiction within the United States in which shareholders of the Company
reside. In advance of filing the Registration Statement, Acquiror shall
provide the Company and its counsel with a copy of the Registration Statement
and an opportunity to comment thereon. Acquiror shall advise the Company,
promptly after Acquiror receives notice thereof, of the time when the
Registration Statement has become effective or any supplement or amendment has
been filed, of the issuance of any stop order or the suspension of
qualification of Acquiror Common Stock for offering or sale in any
jurisdiction, of the initiation or threat of any proceeding for any such
purpose, or of any request by the SEC for the amendment or supplement of the
Registration Statement or for additional information. None of the information
furnished by the Acquiror for inclusion in the Registration Statement, when it
shall become effective, and at all times subsequent to such effectiveness, or
the Proxy Statement/Prospectus (as defined in Section 6.01(a)), when mailed or
at the time of the Shareholders Meeting (as defined in Section 5.01(a)), or in
the case of any other document filed with the SEC or any state securities
commission, at the respective times at which such documents are filed with the
SEC or such state securities commission, shall contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.

4.03 Authorization, Reservation and Listing of Common Stock. By
appropriate resolution, the Board of Directors of Acquiror shall, prior to the
Effective Time, authorize and reserve the required number of shares of Acquiror
Common Stock to be issued pursuant to this Agreement and the Plan of Merger.
Acquiror also shall use all reasonable efforts to cause the shares of Acquiror
Common Stock to be issued pursuant to the Plan of Merger to be approved for
listing on the Nasdaq National Market subject to official notice of issuance,
prior to the Effective Time.

4.04 Confidentiality. Acquiror shall cause all internal,
nonpublic financial and business information obtained by it from the Company
and its Subsidiaries to be treated confidentially (exercising the same degree
of care as it uses to preserve and safeguard its own confidential information);
provided, however, that notwithstanding the foregoing, nothing contained herein
shall prevent or restrict Acquiror from making such disclosure thereof as may
be required by law in connection with the offering and sale of Acquiror Common
Stock pursuant to this Agreement or as may be required in the performance of
this Agreement. Furthermore, Acquiror shall have no obligation to keep
confidential any information that (a) was already known to Acquiror and was
received from a source other than the Company or any of its Subsidiaries,
directors, officers, employees or agents, provided that the source making such
information available was not bound by a confidentiality agreement or other
contractual, legal or fiduciary obligation of confidentiality with respect to
such information, or (b) is or becomes generally available to the public other
than as a result of a disclosure by the parties hereto to one another. If the
Merger shall not be consummated, all nonpublic financial statements, documents
and materials and all copies thereof shall be returned to the Company or
destroyed by Acquiror and shall not be used by Acquiror in any way that could
be reasonably expected to be detrimental to the Company and will not be
disclosed to others except as specifically permitted above.

4.05 Regulatory Application and Filings. As soon as practicable
after the execution of this Agreement but in no event later than 90 days from
the date of this Agreement (subject to receipt by Acquiror from the Company of
all information of the Company and the Merging Bank as requested), Acquiror
shall submit and file all necessary applications, notices or statements with
the appropriate regulatory agencies and governmental entities for approval of
the transactions contemplated by this Agreement.

A-29
<PAGE> 196
4.06 Employment Agreements. Acquiror agrees to provide an
employment agreement between Ms. Carol A. Barnharst and Acquiror, which
agreement shall commence as of the Effective Time and run for an initial term
of three (3) years at her current base salary level and shall be in the form
attached hereto as Exhibit C. Acquiror further agrees to honor the provisions
of the present contract between Mr. Allan T. Bach and the Company, including
those that relate to a termination of employment following a change-in-control
of the Company.

4.07 Negative Covenant. From and after the date of this
Agreement, Acquiror shall not take any action, or agree to take any action,
which constitutes a material breach or default of its obligations under this
Agreement.

4.08 Advisory Board. Acquiror shall create an advisory board (the
"Advisory Board") to (a) assist in the integration of the operations of the
Merging Bank into those of the Acquiror-Bank, and (b) advise with respect to
community relations within the market presently served by the Merging Bank.
The Advisory Board shall consist of all current members of the Board of
Directors of the Merging Bank who are members of such Board as of the Effective
Time and who do not become, as of the Effective Time, a member of a Board of
Directors within the organizational structure of Acquiror and its affiliates.
Advisory Board members shall receive a retainer fee of $10,000 per year
commencing at the Effective Time and continuing until such time as the Advisory
Board is discontinued and payable in monthly installments to each Advisory
Board member. The Advisory Board shall initially meet with the same frequency
(although not necessarily on the same dates) as there are regularly scheduled
meetings of the Board of Directors of the Acquiror Bank, or more frequently at
the request of Acquiror. Acquiror shall review the Advisory Board function
annually to consider its continuation and frequency of meetings and intends to
continue the Advisory Board subject to annual appointment of its members for at
least 3 years following the Effective Time. The Advisory Board shall report to
Acquiror through Ms. Carol A. Barnharst, who shall be the Advisory Board's
liaison for reporting purposes.

4.09 Qualifying the Merger for Tax-Free Status. Acquiror and its
Subsidiaries shall not take or cause to be taken any action which would
disqualify the Merger as a tax-free reorganization under Section 368 of the
Code.

4.10 Indemnification. In the event of any threatened or actual
claim, action, suit, proceeding or investigation, whether civil, criminal or
administrative, including, without limitation, any such claim, action, suit,
proceeding or investigation in which any individual who is now, or has been at
any time prior to the date of this Agreement, or who becomes prior to the
Effective Time, a director or officer or employee of the Company or its
Subsidiaries (the "Indemnified Parties"), is, or is threatened to be, made a
party based in whole or in part on, or arising in whole or in part out of, or
pertaining to (i) the fact that he or she is or was a director, officer or
employee of the Company or its Subsidiaries or any of their respective
predecessors, or (ii) this Agreement or the Plan of Merger or any of the
transactions contemplated hereby or thereby, whether in any case asserted or
arising before or after the Effective Time, Acquiror agrees to cooperate and
use reasonable efforts to defend against and respond thereto. It is understood
and agreed that after the Effective Time, Acquiror shall (and shall cause the
Surviving Corporation to) indemnify and hold harmless, as and to the fullest
extent permitted by law, each such Indemnified Party against any losses,
claims, damages, liabilities, costs, expenses (including payment of reasonable
attorney's fees and expenses and other costs in advance of the final
disposition of any claim, suit, proceeding or investigation incurred by each
Indemnified Party to the fullest extent permitted by law upon receipt of any
undertaking required by applicable law), judgments, fines and amounts paid in
settlement in connection with any such threatened or actual claim, action,
suit, proceeding or investigation, and in the event of any such threatened or
actual claim, action, suit, proceeding or investigation (whether asserted or
arising before or after the Effective Time), the Indemnified Parties may retain
counsel reasonably satisfactory to them after consultation with the Surviving
Corporation; provided, however, that (A) Acquiror shall have the right to
assume the defense thereof and upon such assumption Acquiror shall not be
liable to any Indemnified Party for any legal expenses of other counsel or any
other expenses subsequently incurred by any Indemnified Party in connection
with the defense thereof, except that if Acquiror elects not to assume such
defense or counsel for the Indemnified Parties reasonably advises the
Indemnified Parties that there are issues that raise conflicts of interest
between Acquiror and the Indemnified Parties, the Indemnified Parties may
retain counsel reasonably satisfactory to them after consultation with
Acquiror, and Acquiror shall pay the reasonable fees and expenses of such
counsel for the Indemnified Parties, (B) Acquiror shall be obligated pursuant
to this paragraph to pay for only one firm of counsel for all Indemnified
Parties, unless an Indemnified Party shall have reasonably concluded, based on
an opinion of counsel, that there is a material conflict of interest between
the

A-30
<PAGE> 197
interests of such Indemnified Party and the interests of one or more other
Indemnified Parties and that the interests of such Indemnified Party will not
be adequately represented unless separate counsel is retained, in which case,
Acquiror shall be obligated to pay such separate counsel, (C) Acquiror shall
not be liable for any settlement effected without its prior written consent
(which consent shall not be unreasonably withheld) and (D) Acquiror shall have
no obligation hereunder to any Indemnified Party when and if a court of
competent jurisdiction shall ultimately determine, and such determination shall
have become final and nonappealable, that indemnification of such Indemnified
Party in the manner contemplated hereby is prohibited by applicable law. Any
Indemnified Party wishing to claim Indemnification under this Section 4.10,
upon learning of any such claim, action, suit, proceeding or investigation,
shall notify Acquiror thereof, provided that the failure to so notify shall not
affect the obligations of Acquiror under this Section 4.10 except to the extent
such failure to notify materially prejudices Acquiror. The Acquiror's
obligations under this Section 4.10 shall continue in full force and effect for
the period of the applicable statute of limitations; provided, however, that
all rights to indemnification in respect of any claim (a "Claim") asserted or
made within such period shall continue until the final disposition of such
Claim.

ARTICLE FIVE

COVENANTS OF THE COMPANY

The Company hereby covenants and agrees with Acquiror as follows:

5.01 Registration Statement and Shareholders Meeting.

(a) The Company shall cause a meeting of its shareholders
(the "Shareholders Meeting") to be held after the execution of this
Agreement and upon availability of the Proxy Statement/Prospectus (as
defined in Section 6.01(a)) for the purpose of acting upon this
Agreement and the Plan of Merger, and in connection therewith shall
distribute the Proxy Statement/Prospectus and any amendments or
supplements thereto as prepared by Acquiror in cooperation with the
Company. The Company shall solicit proxies from its shareholders in
accordance with applicable law, including the rules and regulations of
the SEC, shall cooperate with the Acquiror to have the Registration
Statement declared effective, and shall furnish all information
concerning the Company and its shareholders (but not including the
names and addresses of its shareholders) as may be requested by
Acquiror in connection with any such action. In addition, if so
requested by Acquiror, the Company shall retain a proxy solicitation
firm acceptable to Acquiror, for the purpose of soliciting proxies in
connection with the Shareholders Meeting. The cost of the proxy
solicitation firm shall be borne solely by the Company.

(b) None of the information furnished by the Company for
inclusion in the Registration Statement, when it shall become
effective, and at all times subsequent to such effectiveness, or the
Proxy Statement/Prospectus, when mailed or at the time of the
Shareholders Meeting, or in the cases of any other document filed with
the SEC or any state securities commission, at the respective times at
which such documents are filed with the SEC or such State securities
commission, shall contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements contained therein, in light of the
circumstances under which they are made, not misleading.

5.02 Conduct Of Business, Certain Covenants.

(a) From and after the execution and delivery of this
Agreement and until the Effective Time, the Company and each of its
Subsidiaries shall:

(i) conduct its business and operate in the usual
ordinary course of business in accordance with
prudent and sound banking and business practices,
including charging off all loans required to be
charged off by federal and state regulators and
regulations, statutes and sound banking practices
and maintain its and their books and records, in
accordance with GAAP;

A-31
<PAGE> 198
(ii) maintain an allowance for loan losses deemed by
management of the Company to be adequate based on
GAAP;

(iii) remain in good standing with all applicable federal
and state regulatory authorities and preserve each
of its and their existing banking locations;

(iv) use its and their best efforts to retain the
services of its and their present officers and
employees;

(v) maintain insurance covering the performance of
its and their directors, officers and employees and
maintain in full force and effect all of the
insurance policies reflected on Schedule 3.34
hereto;

(vi) take no action which would adversely affect or
delay the ability of the Company or Acquiror to
obtain any necessary approvals, consents or waivers
of any governmental authority required for the
transactions contemplated hereby;

(vii) consult with Acquiror prior to acquiring any
interest in real property, except in the ordinary
course of business or entering into any contract or
agreement having a term of more than one year;

(viii) take no action which would cause the termination
or cancellation by the FDIC of insurance in respect
of the Merging Bank's deposits; and

(ix) cooperate with the Acquiror to provide timely
notice to its data processor of the Merging Bank's
intent to terminate its data processing agreement
(the "Data Processing Agreement") on or about the
Effective Time. The Company shall use its
reasonable best efforts to make arrangements such
that the services provided under the Data
Processing Agreement continue to be provided up to
the Effective Time.

(b) From and after the execution and delivery of this
Agreement and until the Effective Time, the Company and its
Subsidiaries shall not, without the prior consent of Acquiror:

(i) amend its or their Articles of Incorporation,
Charter or Bylaws;

(ii) except in connection with the exercise of
previously granted Options, issue, deliver or sell,
or authorize or propose the issuance, delivery or
sale of, any shares of its or their capital stock,
or issue or grant any stock options, warrants,
rights, calls or commitments of any character
calling for or permitting the issue or sale of its
or their capital stock (or securities convertible
into or exchangeable, with or without additional
consideration, for shares of such capital stock) or
any stock appreciation rights;

(iii) make payment of any cash dividend, or institute
any other form of dividend or distribution, with
respect to the Company's or its Subsidiaries'
capital stock;

(iv) increase or reduce the number of shares of its or
their capital stock issued or outstanding by
repurchase, split-up, reverse split,
reclassification, distribution of stock dividends,
or change of par or stated value;

(v) except in connection with the exercise of
previously granted Options, purchase, permit the
conversion of or otherwise acquire or transfer for
any consideration any outstanding shares of its or
their capital stock or securities carrying the
right to acquire, or convert into or exchange for
such stock, with or without additional
consideration;

A-32
<PAGE> 199
(vi) make or grant any general or individual wage or
salary increase or fringe benefit increase, or
increase in any manner the compensation or fringe
benefits of any of its directors, officers or
employees, or pay any bonus, pension or retirement
allowance to any such directors, officers or
employees, except in accordance with any plan or
agreement set forth on Schedule 5.02(b)(vi), or
become a party to, adopt, amend or otherwise modify
or make any contribution outside the ordinary
course of business to any Compensation and Benefit
Plan, any bonus, pension, profit sharing,
retirement or other compensation plan or enter into
any contract of employment with any officer which
is not terminable at will without cost or other
liability (other than benefits accrued as of the
date of such termination), or enter into, modify,
or renew any contract, agreement, commitment or
arrangement providing for the payment to any
director, officer or employee of such party of
compensation or benefits contingent, or the terms
of which are materially altered, upon the
occurrence of any of the transactions contemplated
by this Agreement; provided however, that (i) the
annual compensation of officers employed by the
Company and Merging Bank as of July 1, 1998 may be
increased effective as of such date in a manner
consistent with prior practice of the Company and
the Merging Bank, provided that the combined amount
of the annual increases put into effect for all
such officers shall not exceed, in the aggregate,
5% of the total amount paid to such officers for
the year ended June 30, 1998, and (ii) the Company
and the Merging Bank may pay to their employees
year-end bonuses for the 1998 fiscal year, in a
manner and amount consistent with prior practice of
the Company and the Merging Bank;

(vii) incur any obligations or liabilities or make any
capital expenditures except in the ordinary course
of business or make any equity investment or
commitment to make such an investment in real
estate or in any real estate development project,
other than in connection with foreclosure,
settlements in lieu of foreclosure or troubled loan
or debt restructurings in the ordinary course of
business consistent with prudent banking practices;

(viii) mortgage, pledge (except pledges required for
Federal Home Loan Bank ("FHLB") advances or pledges
of such assets as may be required to permit the
Merging Bank to accept deposits of public funds) or
subject to any material lien (excluding mechanics'
liens), charge, permit a security interest on, or
encumber any of its or their assets, properties or
other rights, except for liens for taxes not yet
due and payable;

(ix) transfer or lease any of its or their assets or
property except in the ordinary course of business,
or close any banking office, or file any
application to relocate or terminate the operations
of any office of it or its Subsidiaries;

(x) transfer or grant any rights under any leases,
licenses or agreements, other than in the ordinary
course of business;

(xi) other than with respect to loan transactions
(including, without limitation, letters of credit
and purchase of leases), the purchase of
obligations of the government of the United States
or agencies of the United States, sales for less
than $25,000 of real estate owned by the Company or
its Subsidiaries, make or enter into any
transaction, contract or agreement or incur any
other commitment where the amount involved exceeds
$50,000 or the term exceeds 1 year;

A-33
<PAGE> 200
(xii) incur any indebtedness for borrowed money, assume,
guarantee, endorse or otherwise as an accommodation
become responsible for the obligations of any other
individual, corporation or other entity, except for
deposit liabilities and except for indebtedness
incurred for liquidity purposes in the ordinary
course of business and consistent with the
Company's and its Subsidiaries' past practice with
respect to the incurrence of indebtedness, the
repayment term of which does not exceed nine
months; provided, however, that nothing in this
Section shall prohibit the Company from incurring
FHLB advances in the ordinary course of business
for liquidity purposes, in amounts consistent with
approvals of the Board of Directors existing on the
date hereof and disclosed to Acquiror on Schedule
5.02(b)(xii) hereof;

(xiii) cancel or compromise any debt or claim which has
not previously been charged off other than in the
ordinary course of business in an aggregate amount
which is not materially adverse to the Company or
any of its Subsidiaries, or settle any claim,
action or proceeding involving any liability of the
Company or its Subsidiaries for money damages or
material restrictions upon the operation of the
Company or any of its Subsidiaries;

(xiv) enter into any transaction other than in the
ordinary course of business or enter into any new,
or materially alter or expand any present, line of
business or change any of its methods of accounting
(except as required by changes in GAAP or
regulatory accounting principles as concurred in by
Acquiror's independent auditors or by Section
5.03(a)) or change any of its methods of reporting
income and deductions for income tax purposes from
those employed in the preparation of its income tax
returns for the fiscal year ended June 30, 1997,
except as required by law;

(xv) take any action which constitutes a breach or
default of its obligations under this Agreement or
which is reasonably likely to delay or jeopardize
the receipt of any of the Requisite Regulatory
Approvals (as defined in Section 7.01) required
hereby or cause any of the other conditions set
forth in Articles Seven or Nine hereof to fail or
take any action that is intended or could
reasonably be expected to result in any of its
representations or warranties set forth in this
Agreement being or becoming untrue in any material
respect;

(xvi) make or commit to make any loan over $150,000;

(xvii) purchase or commit to purchase any bulk loan
servicing portfolio;

(xviii) make any payment to any director, officer, employee
or independent contractor, in connection with or as
a result of the transactions contemplated by this
Agreement, or otherwise, that is not deductible
under either Sections 162(a)(1) or 404 of the Code
or is not an ordinary business expense for travel,
meals or entertainment authorized by the Company in
furtherance of the duties of the director, officer
or employee; provided, however, that payment of the
out-of-pocket expenses of the Company's
professional advisors shall not be restricted by
this paragraph (xviii);

(xix) take or cause to be taken any action which would
disqualify the Merger as a tax-free reorganization
under Section 368 of the Code; or

(xx) fail to comply in any material respect with any
laws, regulations or governmental actions
applicable to it or to the conduct of its business.

A-34
<PAGE> 201
5.03 Confirming and Conforming Accounting and Reserve Policies;
Integration.

(a) Notwithstanding the Company's belief that it has
established all reserves and taken all provision for possible loan
losses required by GAAP and applicable laws, rules and regulations,
the Company recognizes that Acquiror may have adopted different loan,
accrual and reserve policies (including loan classifications and
levels of reserves for possible loan losses). At the request of
Acquiror, the Company shall, within five days prior to the Closing
Date, use its best efforts to (i) establish and take such reserves and
accruals as Acquiror shall request to conform, on a mutually
satisfactory basis, the Company's loan, accrual and reserve policies
to Acquiror's policies, and (ii) establish and take such accruals,
reserves and charges in order to implement such policies in respect of
excess facilities and equipment capacity, severance costs, litigation
matters, write-off or write-down of various assets and other
appropriate accounting adjustments, and to recognize for financial
accounting purposes the expenses of the Reorganization; provided,
however that the Company shall not be required to take any action that
(i) is not consistent with GAAP, (ii) would materially impair its
regulatory capital, or (iii) that is inconsistent with any formal or
informal undertaking by the Company to any banking regulatory agency
which has been disclosed in writing to the Company.

(b) During the period from the date of this Agreement to
the Effective Time, the Company shall, and shall cause its
Subsidiaries and its officers, directors and employees to, cooperate
with and assist the Acquiror in the formulation of a plan of
integration for Acquiror and the Company, and Acquiror Bank and the
Merging Bank.

5.04 Information, Access Thereto. Acquiror, its representatives
and agents shall, at all times during normal business hours prior to the
Effective Time, have full and continuing access to the facilities, employees,
operations, records and properties of the Company and its Subsidiaries.
Acquiror, its representatives and agents may, prior to the Effective Time, make
or cause to be made such investigation of the operations, records and
properties of the Company and its Subsidiaries, and of its and their financial
and legal condition as Acquiror shall deem necessary or advisable to
familiarize itself with such records, properties and other matters. Upon
request, the Company and its Subsidiaries shall furnish Acquiror or its
representatives or agents, its and their attorneys, responses to auditors'
requests for information and such financial and operating data and other
information requested by Acquiror, developed by the Company or its
Subsidiaries, its and their auditors, accountants or attorneys, and will permit
Acquiror, its representatives or agents to discuss such information directly
with any individual or firm performing auditing or accounting functions for the
Company or its Subsidiaries, and such auditors and accountants shall be
directed to furnish copies of any reports or financial information as developed
to Acquiror or its representatives or agents. Acquiror and Acquiror's agents,
contractors and environmental consultants also shall have the right of access
to the Real Estate before the Effective Time for the purpose of undertaking
such environmental investigation and testing as Acquiror deems necessary or
appropriate pursuant to Section 6.10. Acquiror and Acquiror's agents,
contractors and environmental consultants also shall have the right of access
to the Company's and its Subsidiaries records or employees for the purpose of
carrying out necessary investigation and testing. No investigation by Acquiror
shall affect the representations and warranties made by the Company herein.

5.05 Confidentiality. The Company shall cause all internal,
nonpublic financial and business information obtained by it from Acquiror or
any of its Subsidiaries to be treated confidentially (exercising the same
degree of care as it uses to preserve and safeguard its own confidential
information); provided, however, that notwithstanding the foregoing, nothing
contained herein shall prevent or restrict the Company from making such
disclosure thereof as may be required by law in connection with the
consummation of the Reorganization or as may be required in performance of this
Agreement. Furthermore, the Company shall have no obligation to keep
confidential any information that (a) was already known to the Company and was
received from a source other than the Acquiror or any of its Subsidiaries,
directors, officers, employees or agents, provided that the source making such
information available was not bound by a confidentiality agreement or other
contractual, legal or fiduciary obligation of confidentiality with respect to
such information, or (b) is or becomes generally available to the public other
than as a result of a disclosure by the parties hereto to one another. If the
Merger shall not be consummated, all nonpublic financial and business
information, documents and material and all copies thereof shall be returned to
Acquiror, or destroyed by the Company, and shall not be used by the Company in
any way that reasonably could be expected to be detrimental to Acquiror and
will not be disclosed to others except as specifically permitted above.

A-35
<PAGE> 202
5.06 Recommendation of Merger to Shareholders. The Board of
Directors of the Company shall recommend in the Proxy Statement/Prospectus,
consistent with its fiduciary duties, approval of this Agreement, the Plan of
Merger and the Merger to all shareholders of the Company entitled to vote
thereon.

5.07 Litigation Matters. The Company shall consult with Acquiror
about any proposed settlement or lack thereof, or any disposition of, any
litigation matter in which it or any of its Subsidiaries is or becomes involved
and the amount involved exceeds $50,000.

5.08 Bank Merger. The Company shall cause the Merging Bank to
take all such corporate action as is required to complete the Bank Merger,
including approval by the Board of Directors of the Merging Bank and execution
by appropriate officers of the Merging Bank of the Bank Merger Agreement.

5.09 No Solicitation. From and after the date hereof until
termination of this Agreement, neither the Company, its Subsidiaries, nor any
of their respective officers, directors, employees, agents or affiliates
(including, without limitation, any investment banker, attorney, accountant or
representative retained by the Company or any of its Subsidiaries) will,
directly or indirectly, initiate, solicit or knowingly encourage (including by
way of furnishing nonpublic information or assistance), or take any other
action to facilitate knowingly, any inquiries or the making of any proposal
that constitutes, or may reasonably be expected to lead to, any Acquisition
Proposal (as defined below), or enter into or maintain or continue discussions
or negotiate with any person or entity in furtherance of such inquiries or to
obtain an Acquisition Proposal or agree to or endorse any Acquisition Proposal,
or authorize or permit any of its officers, directors or employees or any of
its Subsidiaries or any investment banker, financial advisor, attorney,
accountant or other representative retained by any of its Subsidiaries to take
any such action. The Company shall notify Acquiror orally (within one business
day) and in writing (as promptly as practicable) of all relevant details
relating to all inquiries and proposals which it or any of its Subsidiaries or
any such officer, director, employee, investment banker, financial advisor,
attorney, accountant or other representative may receive relating to any of
such matters and if such inquiry or proposal is in writing, the Company shall
deliver promptly to Acquiror a copy of such inquiry or proposal.
Notwithstanding the foregoing, the Company may enter into discussions or
negotiations or provide information in connection with an unsolicited
Acquisition Proposal if the Board of Directors of the Company has been advised
in writing by such Board's outside legal counsel that in the exercise of its
fiduciary obligations such discussions or negotiations should be commenced or
such information should be furnished. For purposes of this Agreement,
"Acquisition Proposal" shall mean any of the following involving the Company or
any of its Subsidiaries (other than the transactions contemplated hereunder):
(a) any merger, consolidation, share exchange, business combination or other
similar transaction; (b) any sale, lease, exchange, mortgage, pledge, transfer
or other disposition of 10% or more of the assets of the Company and its
Subsidiaries, taken as a whole, in a single transaction or series of
transactions; (c) any tender offer or exchange offer for 10% or more of the
outstanding shares of capital stock of the Company or the filing of a
registration statement under the Securities Act in connection therewith; or (d)
any public announcement of a proposal, plan or intention to do any of the
foregoing or any agreement to engage in any of the foregoing.

5.10 Other Approvals. The Company shall cooperate and use its
best efforts to obtain all written consents and approvals of other persons in
connection with any lease or other agreement, the benefits of which cannot be
retained upon consummation of the transactions contemplated hereby without such
written consent or approval.

5.11 Best Efforts. The Company agrees to use its best efforts to
cause the conditions contained in Articles Seven and Nine to be satisfied and
to effect the Reorganization.

5.12 Termination and Other Payments. Notwithstanding anything in
this Agreement to the contrary, all severance and termination payments,
benefits, acceleration of benefit vesting and other compensation paid by the
Company or any of its Subsidiaries, as provided for in this Agreement or
otherwise, shall not exceed the level of payments and benefits which would be
deductible under Section 280G of the Code, giving effect to any obligations of
Acquiror or any subsidiary thereof, as provided herein.

A-36
<PAGE> 203
5.13 Voting Agreements. Within 20 days of the date of this
Agreement, the Company shall obtain and deliver to Acquiror signed voting
agreements ("Voting Agreements"), substantially in the form attached hereto as
Exhibit D, from each of its executive officers and directors in their
individual capacity, to the effect that he or she will vote the shares of
Company Common Stock beneficially owned by him or her in favor of the Merger
and all transactions related thereto, and he or she will not dispose of any
shares of Company Common Stock beneficially owned by him or her prior to the
Effective Time, subject to certain exceptions as provided in the Voting
Agreements.

5.14 Advise of Changes. Between the date hereof and the Closing
Date, the Company shall promptly advise Acquiror in writing of any fact or
document which, if existing or known as of the date hereof, would have been
required to be set forth, disclosed, or made available to Acquiror pursuant to
this Agreement or of any fact which, if existing or known as of the date
hereof, would have made any of the representations contained herein materially
untrue.

ARTICLE SIX

ADDITIONAL COVENANTS AND AGREEMENTS

6.01 Regulatory Matters.

(a) The Acquiror shall prepare and file with the SEC a
registration statement on Form S-4 covering the Acquiror Common Stock
to be issued pursuant to this Agreement and the Plan of Merger (the
"Registration Statement"), and the Company shall give to Acquiror all
information concerning the Company which is required for inclusion in
the Registration Statement. The Registration Statement shall include
a proxy statement/prospectus (the "Proxy Statement/Prospectus")
prepared for use in connection with the Shareholders Meeting, all in
accordance with the rules and regulations of the SEC. Acquiror shall
use all reasonable efforts to obtain all necessary state securities
law or "Blue Sky" permits and approvals required to carry out the
transactions contemplated by this Agreement, and the Company shall
furnish all information concerning the Company and the holders of
Company Common Stock as may be requested in connection with any such
action.

(b) The parties hereto shall cooperate with each other
and use their reasonable best efforts to promptly prepare and file all
necessary documentation, effect all applications, notices, petitions
and filings, and obtain as promptly as practicable all Requisite
Regulatory Approvals, permits, consents, approvals and authorizations
of all third parties, regulatory agencies and governmental entities
which are necessary or advisable to consummate the transactions
contemplated by this Agreement. The Company and Acquiror shall have
the right to review in advance, and to the extent practicable each
will consult the other on, in each case subject to applicable laws
relating to the exchange of information, all the information relating
to the Company or Acquiror, as the case may be, and any of their
respective subsidiaries, which appear in any filing made with, or
written materials submitted to, any third party, regulatory agency or
governmental entity in connection with the transactions contemplated
by this Agreement; provided, however, that nothing contained herein
shall be deemed to provide either party with a right to review any
information provided to any regulatory agency or governmental entity
on a confidential basis in connection with the transactions
contemplated hereby. In exercising the foregoing right, each of the
parties hereto shall act reasonably and as promptly as practicable.
The parties hereto agree that they will consult with each other with
respect to the obtaining of all Requisite Regulatory Approvals,
permits, consents, approvals and authorizations of all third parties,
regulatory agencies and governmental entities necessary or advisable
to consummate the transactions contemplated by this Agreement and each
party will keep the other apprised of the status of matters relating
to completion of the transactions contemplated herein.

A-37
<PAGE> 204
(c) Acquiror and the Company shall, upon request, furnish
each other with all information concerning themselves, their
subsidiaries, directors, officers and shareholders and such other
matters as may be reasonably necessary or advisable in connection with
the Registration Statement or any other statement, filing, notice or
application made by or on behalf of Acquiror, the Company or any of
their respective subsidiaries to any regulatory agency or governmental
entity in connection with the Reorganization and the other
transactions contemplated by this Agreement.

(d) The Acquiror and the Company shall promptly advise
each other upon receiving any communication relating to the
transactions contemplated herein from any regulatory agency or
governmental entity whose consent or approval is required for
consummation of the transactions contemplated by this Agreement.

6.02 Legal Conditions to Reorganization. Each of Acquiror and the
Company shall, and shall cause its subsidiaries to, use their reasonable best
efforts (a) to take, or cause to be taken, all actions necessary, proper or
advisable to comply promptly with all legal requirements which may be imposed
on such party or its subsidiaries with respect to the Reorganization and,
subject to the conditions set forth in Articles Seven, Eight and Nine hereof,
to consummate the transactions contemplated by this Agreement, and (b) to
obtain (and to cooperate with the other party to obtain) any Requisite
Regulatory Approval, consent, authorization, order or approval of, or any
exemption by, any governmental entity and any other third party which is
required to be obtained by the Company or Acquiror or any of their respective
subsidiaries in connection with the Reorganization and the other transactions
contemplated by this Agreement.

6.03 Subsequent SEC Filings; Press Releases. As soon as
reasonably available, but in no event more than three business days after the
filing thereof with the SEC, Acquiror shall deliver to the Company and the
Company shall deliver to Acquiror their respective reports, including Forms
8-K, 10-Q, 10-K, proxy statements (and the small business issuer equivalents),
as filed with the SEC under the Exchange Act. In addition, from and after the
date of this Agreement through the Effective Time, the Company and the Acquiror
shall promptly deliver to the other copies of all press releases issued by it
or any of its Subsidiaries. Neither party will issue any release or other
publicity about the Merger or the transactions contemplated by this Agreement
without prior notice to the other.

6.04 Additional Agreements. In case at any time after the
Effective Time any further action is necessary or desirable to carry out the
purposes of this Agreement, or to vest the Acquiror with full title to all
properties, assets, rights, approvals, immunities and franchises of the Company
or any of its Subsidiaries, the proper officers and directors of each party to
this Agreement and their respective subsidiaries shall take all such necessary
action as may be requested by Acquiror.

6.05 Advice of Changes. The Company shall promptly advise
Acquiror of any change or event having a material adverse effect on it or which
it believes would or would be reasonably likely to cause or constitute a
material breach of any of its representations, warranties or covenants
contained herein, and Acquiror shall promptly advise the Company of any change
or event having a material adverse effect on it or which it believes would or
would be reasonably likely to cause or constitute a material breach of its
representatives, warranties or covenants contained herein. From time to time
prior to the Effective Time, the Company and Acquiror shall promptly supplement
or amend their respective Disclosure Schedules delivered in connection with the
execution of this Agreement to reflect any matter which, if existing, occurring
or known at the date of this Agreement, would have been required to be set
forth or described in such Disclosure Schedules or which is necessary to
correct any information in such Disclosure Schedules which has been rendered
inaccurate thereby.

6.06 Current Information. During the period from the date of this
Agreement to the Effective Time, the Company shall cause one or more of its
designated representatives to confer on a regular and frequent basis (not less
than monthly) with representatives of Acquiror and to report (a) the general
status of the ongoing operations of the Company and its Subsidiaries, and (b)
the status of, and the action proposed to be taken with respect to, those loans
held by the Company or any of its Subsidiaries which, individually or in
combination with one or more other loans to the same borrower thereunder, have
an unpaid principal amount of $50,000 or more and are non-performing assets.
The Company shall promptly notify Acquiror of any material change in the normal
course of business or in the operation or the properties of the Company or any
of its Subsidiaries and of any governmental complaints,

A-38
<PAGE> 205
investigations or hearings (or communications indicating that the same may be
contemplated), or the institution or the threat of material litigation
involving the Company or any of its Subsidiaries, and shall keep Acquiror fully
informed of such events.

6.07 Termination of Regulatory Agreements. The Company and the
Merging Bank shall use their reasonable best efforts to cause all regulatory
agreements, which have or reasonably could be expected to have a material
adverse effect on the Company taken as a whole, to which the Company or the
Merging Bank is or becomes subject to be terminated and to be of no further
force and effect at or prior to the Effective Time.

6.08 Tax Returns. The Company shall prepare and file, as approved
or as may be directed by Acquiror, any tax returns with respect to the Merger.

6.09 Compensation and Benefit Plans; Existing Agreements.

(a) RRP. All shares of Company Common Stock awarded pursuant to
the RRP shall become fully vested and nonforfeitable prior to or at the
Effective Time as provided in the RRP. Recipients of shares awarded pursuant
to the RRP (including recipients who become vested in the RRP shares after the
date of this Agreement, including at the Effective Time) shall be entitled to
elect cash or Acquiror Common Stock in the same manner as the holders of
Company Common Stock. No additional shares of Company Common Stock shall be
granted after the date of this Agreement pursuant to the RRP. The RRP shall be
terminated as soon as practicable after the Effective Time and all remaining
unallocated shares held by the RRP, if any, shall be extinguished as of the
Effective Time. All shares of Company Common Stock awarded, pursuant to the
RRP shall be considered issued and outstanding shares at the Effective Time for
all purposes and in particular for purposes of Article I of this Agreement.

(b) ESOP. The ESOP shall receive the Per Share Cash Distribution
in exchange for its shares of Company Common Stock. As of the Effective Time,
the Reliance Savings Bank Employee Stock Ownership Plan ("ESOP") shall be
terminated as Acquiror and the Company shall mutually determine, and the loan
between Reliance Bancshares, Inc. and the ESOP shall be repaid in full with
cash consideration received by the ESOP with respect to unallocated shares of
Company Common Stock held in a suspense account under the ESOP. Any cash
consideration received with respect to such Company Common Stock held in the
suspense account under the ESOP, remaining after such repayment, shall be
allocated to the ESOP accounts of those Company Employees who are ESOP
participants and beneficiaries ("ESOP participants") in accordance with the
terms of the ESOP as amended with respect to such termination. All ESOP
participants shall fully vest and have a nonforfeitable interest in their
accounts under the ESOP, determined as of the Effective Time. As soon as
practicable after the receipt of a favorable determination letter from the IRS
as to the tax qualified status of the ESOP upon its termination under Sections
401(a) and 4975(e) of the Code (the "Final Determination Letter"), distribution
of the benefits under the ESOP shall be made to ESOP participants. From and
after the date of this Agreement, and in anticipation of such determination and
distribution, Acquiror, Company and their respective representatives, prior to
the Effective Time, and Acquiror and its representatives after the Effective
Time, shall use their best efforts to apply for and obtain such favorable Final
Determination Letter from the IRS. In the event that Acquiror, Company and
their respective representatives prior to the Effective Time, and Acquiror and
its representatives after the Effective Time, reasonably determine that the
ESOP cannot obtain a favorable Final Determination Letter, or that the amounts
held therein cannot be so applied, allocated or distributed without causing the
ESOP to lose its tax qualified status, the Company prior to the Effective Time,
and Acquiror after the Effective Time, shall take such action as they may
determine with respect to the distribution of benefits to the ESOP
participants, provided that the assets of the ESOP shall be held or paid for
the benefit of the ESOP participants, and provided further that in no event
shall any portion of the amounts held in the ESOP revert, directly or
indirectly to the Company or any affiliate thereof or to Acquiror or any
affiliate thereof.

(c) Company Pension Plan. All participants in the Company
Pension Plan shall be fully vested as of the Effective Time in their accrued
benefits thereunder, and all amounts contributed by the Company to the Company
Pension Plan prior to the Effective Time shall be applied to provide benefits
to participants. As of the Effective Time, the Company's participation in the
Company Pension Plan shall terminate.

A-39
<PAGE> 206
(d) Non-Qualified Deferred Retirement Plan for Directors.
Acquiror agrees to assume the obligations of the Company under the Reliance
Savings Bank Non-Qualified Deferred Retirement Plan for Directors, as in effect
on the date hereof, and from and after the Effective Time to continue to
perform and satisfy the terms and obligations thereof. Acquiror agrees that
the transactions contemplated by this Agreement constitute a change of control
of the Company for purposes of such Plan.

(e) Benefit Plans. At the Effective Time, each Employee of the
Company and its Subsidiaries shall immediately become entitled to participate
in each of the Acquiror Plans, including without limitation, group
hospitalization, medical, life and disability insurance plans, severance plans,
qualified retirement, ESOP and savings plans, stock option plans, and
management recognition plans, in which similarly situated employees of Acquiror
and its Subsidiaries participate and to the same extent as such employees of
Acquiror. The period of employment and compensation of each Employee of the
Company and its Subsidiaries with the Company and its Subsidiaries shall be
counted for all purposes (except for purposes of benefit accrual) under the
Acquiror Plans, including without limitation, for purposes of vesting and
eligibility. Any expenses incurred by an Employee of the Company or its
Subsidiaries under the Company's welfare benefit plans (such as deductibles or
co-payments) shall be counted for all purposes under the Acquiror Plans.
Acquiror shall waive any preexisting condition exclusions for conditions
existing on the Effective Time and actively at work requirements for periods
ending on the Effective Time contained in the Acquiror Plans as they apply to
Employees of the Company and its Subsidiaries and former employees and their
dependents; provided that the Acquiror's waiver of preexisting conditions shall
not extend to any condition which has prevented an Employee's coverage under
comparable benefit plans of the Company or the Merging Bank. Notwithstanding
anything in this Section 6.09 to the contrary, participation by the Employees
in any of the Acquiror Plans with respect to which the eligibility of employees
of Acquiror to participate is at the sole discretion of Acquiror, shall be at
the sole discretion of the Acquiror applied in the same manner as such
discretion is applied to similarly situated employees of Acquiror. Also, not
withstanding anything in this Section 6.09 to the contrary, Acquiror shall have
sole discretion with respect to the determination whether to terminate, merge
or continue any employee benefit plan or program of the Company or any of its
Subsidiaries (other than the ESOP, the Company Pension Plan or the
Non-Qualified Deferred Retirement Plan for Directors); provided, however, that
Acquiror shall continue to maintain Company plans other than stock-based
incentive plans and the tax qualified plans of the Company until the Employees
are permitted to participate in similar Acquiror Plans. At the Effective Time,
Acquiror or a subsidiary thereof shall be substituted for the Company as the
sponsoring employer under those plans with respect to which the Company or a
Subsidiary is a sponsoring employer immediately prior to the Effective Time,
and which plan is assumed by the Acquiror pursuant to the terms of this
Agreement, and Acquiror or a subsidiary thereof shall assume and be vested with
all of the powers, rights, duties, obligations, and liabilities previously
vested in the Company or a Subsidiary with respect to each such plan.

(f) Retiree Medical Coverage. From and after the Effective Time,
Acquiror shall maintain post-retirement medical and health coverage no less
favorable than that maintained by the Company at the Effective Time, as
described in Schedule 6.09(f), with respect to former and current officers and
employees and current non-employee directors of the Company and its
Subsidiaries, and their dependents, who satisfy the requirements for coverage
under such program.

(g) Successors of Acquiror. The provisions of this Section 6.09
shall be binding upon and inure to the benefit of any successor to the
Acquiror.

6.10 Environmental Studies.

(a) The Acquiror may in its discretion retain an
environmental consultant or consulting firm to perform an
Environmental Survey of any Real Estate (as defined in Section 3.10).
Acquiror acknowledges receipt of a Phase I Environmental Site
Assessment of the property located at 3140 South 27th Street, dated
June 5, 1998, which Assessment has been paid for by the Company. The
term "Environmental Survey" includes, but shall not be limited to: a
public records search; review of Company documents; interviewing
Company employees; on- site physical examination of premises;
surveying; soil boring; analytical testing of the Real Estate; and
report preparation. The Company shall provide site access and other
cooperation as required to perform the Environmental Survey. Acquiror
shall have sole direction over the performance and completion of the
Environmental Survey and the costs of any phase I environmental audit
shall be borne solely by the Company, with the costs of any further
environmental

A-40
<PAGE> 207
evaluation work to be shared equally by the Acquiror and the Company.
Within one week of receipt, the party receiving any environment
evaluation report shall deliver copies of all reports and analytical
data to the other.

(b) In the event the Environmental Survey identifies an
Environmental Condition (as defined herein), which in the opinion of
Acquiror may have a material adverse effect on the business of the
Company or any of its Subsidiaries, the Acquiror may terminate this
Agreement pursuant to Section 10.01(h) hereof; or upon Acquiror's
demand made within three weeks of receipt of the Environmental Survey,
the Company shall cure, abate, correct or remedy such Environmental
Condition to the satisfaction of the Acquiror prior to the Effective
Time, and if the Company shall not cure, abate, correct, remedy such
Environmental Condition to the satisfaction of the Acquiror prior to
the Effective Time, the Acquiror shall have the right to terminate
this Agreement pursuant to Section 10.01(h) hereof. The term
"Environmental Condition" means any condition in, on or directly
related to the Real Estate which requires cleanup, remedy, abatement
or restoration of any structure, surface water, groundwater, soil or
any natural resource under any Environmental Law.

(c) If the Acquiror elects to terminate this Agreement
pursuant to paragraph (b) above, the Company shall indemnify and hold
harmless Acquiror and its successors, assigns, lessees and licensees,
and also the officers, employees, and shareholders of any of them,
from and against all claims, administrative orders, actions,
proceedings, demands, assessments, judgments, debts, damages, costs,
charges and expenses, including but not limited to court costs,
attorneys' fees, interest and penalties, and from and against all
liabilities, obligations, losses and damages of whatever nature that
may be made against it or them or which they may sustain or be put to
arising from or by reason of any contamination or Environmental
Condition of the Real Estate.

ARTICLE SEVEN

CONDITIONS TO OBLIGATIONS OF EACH OF THE PARTIES

The obligation of each of the parties hereto to consummate the
transactions contemplated by this Agreement are subject to the satisfaction of
the following conditions at or prior to the Effective Time:

7.01 Regulatory Approvals. The parties hereto shall have received
all regulatory approvals, consents and waivers required to consummate the
transactions contemplated by this Agreement (including the transactions
contemplated by the Plan of Merger) from the appropriate regulatory agencies
and governmental entities, including the OTS, the FDIC, the WDFI and any other
state and banking authorities, and each such approval shall remain in full
force and effect and all statutory waiting periods in connection therewith
shall have expired and such approvals and the transactions contemplated thereby
shall not have been contested by any federal or state governmental authority or
any other third party by formal proceeding; provided, however, that no
approval, consent or waiver shall be deemed to have been received if it shall
include any condition or requirement that, in the opinion of the Acquiror,
would so adversely affect the economic or business benefits of the transactions
contemplated by this Agreement to Acquiror so as to render inadvisable the
consummation of the transactions contemplated herein (all such approvals and
expiration of applicable waiting periods referred to as "Requisite Regulatory
Approvals").

7.02 Federal Tax Opinion. The Company and Acquiror shall have
received from Michael Best & Friedrich, an opinion, dated the Effective Time,
in form and substance reasonably satisfactory to the Company and Acquiror, to
the effect that, on the basis of the facts, representations and assumptions set
forth in such opinion, (a) the Merger will for federal income tax purposes
constitute a reorganization within the meaning of Section 368, or any successor
thereto, of the Code, and (b) that, except with respect to holders of Company
Common Stock who exercise dissenters' rights and except for cash payments,
including cash in lieu of a fractional share interest and cash paid to those
holders of Company Common Stock who receive the Per Share Cash Consideration,
(i) no gain or loss will be recognized by a holder of Company Common Stock upon
conversion in the Merger of Company Common Stock into Acquiror Common Stock,
(ii) the basis of Acquiror Common Stock to be received in the Merger by a
holder of Company Common Stock will be the same as such holder's basis in the
Company Common Stock exchanged therefor, and (iii) the holding period of
Acquiror Common Stock to be received in the Merger by a holder

A-41
<PAGE> 208
of Company Common Stock will include the period during which such holder held
the Company Common Stock exchanged therefor, provided that such Company Common
Stock was held as a capital asset immediately prior to the consummation of the
Merger. In rendering such opinion, Michael Best & Friedrich may rely upon
representations contained in certificates of officers of Acquiror, the Company
and others.

7.03 Registration Statement. The Registration Statement filed by
Acquiror with the SEC with respect to the Acquiror Common Stock to be issued
pursuant to this Agreement and the Plan of Merger shall have become effective
and no stop order proceedings with respect thereto shall be pending or
threatened.

7.04 Orders, Decrees and Judgments. Consummation of the
transactions contemplated by this Agreement shall not violate any order, decree
or judgment of any court or governmental body having competent jurisdiction.
No order, injunction or decree issued by any court or agency of competent
jurisdiction or other legal restraint or prohibition preventing the
consummation of the Merger or any of the other transactions contemplated by
this Agreement shall be in effect. No statute, rule, regulation, order,
injunction or decree shall have been enacted, entered, promulgated or enforced
by any governmental entity which prohibits, materially restricts or makes
illegal the consummation of the Merger.

7.05 NASDAQ Listing. The shares of Acquiror Common Stock which
shall be issued to the shareholders of the Company upon consummation of the
Merger shall have been authorized for listing on the Nasdaq National Market,
subject to official notice of issuance.

ARTICLE EIGHT

FURTHER CONDITIONS TO THE OBLIGATIONS OF THE COMPANY

The obligation of the Company to consummate the transactions
contemplated by this Agreement is further subject to the satisfaction of the
following conditions:

8.01 Compliance by Acquiror. (a) All material terms, covenants and
conditions of this Agreement required to be complied with and satisfied by
Acquiror at or prior to the Effective Time shall have been duly complied with
and satisfied in all material respects, and (b) the representations and
warranties made by Acquiror, as may be updated pursuant to Section 6.05 hereof,
shall be true and correct in all material respects at and as of the Effective
Time, except for those specifically relating to a time or times other than the
Effective Time (which shall be true and correct in all material respects at
such time or times), and except for those matters which in the aggregate do not
have a material adverse effect on the consolidated financial condition and
earnings of Acquiror and its subsidiaries taken as a whole. The Company shall
have received a certificate signed on behalf of the Acquiror by the Chief
Executive Officer and the Chief Financial Officer to the foregoing effects.

8.02 Opinion of Counsel. There shall have been delivered and
addressed to the Company an opinion of Michael Best & Friedrich, in the form
attached hereto as Exhibit E, dated as of the Closing Date.

8.03 Officers' Certificate. Acquiror shall deliver to the Company
a certificate signed by its President or any Executive Vice President and by
its Secretary or Assistant Secretary, dated the Closing Date, certifying in
their official capacity to his or her respective best knowledge and belief,
that Acquiror has met and complied with all conditions necessary to make this
Agreement and the Plan of Merger effective as to it.

8.04 Litigation. Acquiror shall not be made a party to, or to the
knowledge of Acquiror threatened by, any actions, suits, proceedings,
litigation or legal proceedings which, in the reasonable opinion of the Company
have or are likely to have a material adverse effect on the consolidated
assets, properties, business, operations or condition, financial or otherwise,
of Acquiror. No action, suit, proceeding or claim shall have been instituted,
made or threatened by any person relating to the Merger or the validity or
propriety of the transactions contemplated by this Agreement or the Plan of
Merger which would make consummation of the Merger inadvisable in the
reasonable opinion of the Company.

A-42
<PAGE> 209
8.05 No Environmental Condition. At the Effective Time, there
shall be no Environmental Condition existing with respect to any Real Property,
which has or is likely to have a material adverse effect on the consolidated
assets, properties, business, operations or condition, financial or otherwise,
of Acquiror, and with respect to which Acquiror has not taken reasonable steps
to cure, abate, correct or remedy such Environmental Condition to the
reasonable satisfaction of the Company. For purposes of this Section 8.05, a
"material adverse effect" shall mean the existence of an Environmental
Condition where the amount which is likely to be charged to Acquiror exceeds 1%
of Acquiror's total shareholders' equity.

8.06 Opinion. The Company will receive an opinion from Robert W.
Baird & Co. Incorporated, dated as of the date of the Proxy
Statement/Prospectus, to the effect that, subject to the terms, conditions and
qualifications set forth therein, the consideration as set forth herein to be
received by the shareholders of the Company pursuant to the Merger is fair to
such shareholders from a financial point of view.

8.07 Absence of Certain Changes or Events. As of the Closing Date,
there shall have been no "Material Adverse Change in the Acquiror" (as defined
below) from that which was represented and warranted on the date of this
Agreement pursuant to this Agreement and the Schedules provided on the date of
this Agreement, it being understood that any updates provided pursuant to
Section 6.05 hereof do not constitute a waiver or other consent to any Adverse
Change in the Acquiror. For purposes of this Section 8.07, a "Material Adverse
Change in the Acquiror" shall mean any adverse change in the business,
financial condition, operating results or prospects of the Acquiror (other than
general economic or business conditions) or the existence of any pending or
threatened litigation or administrative action which (i) creates any reasonable
possibility that the Acquiror may incur a material loss that has not been
reserved against; (ii) challenges any portion of the Reorganization and which,
in the reasonable opinion of the Company, would be likely to enjoin
consummation, or result in rescission, of any part of the Reorganization; or
(iii) the Company's board of directors reasonably determines, in good faith and
in the exercise of its fiduciary duty, would render consummation of the
Reorganization adverse in a material manner to the best interests of the
Company's shareholders.

8.08 Accountant's Letter. The Acquiror shall have caused to be
delivered to the Company letters from the Acquiror's independent public
accountants, KPMG Peat Marwick LLP, dated the date on which the Registration
Statement shall become effective, and dated the Effective Time, and addressed
to the Company and the Acquiror, with respect to the Acquiror's consolidated
financial position and results of operation, and which describes procedures
which shall be consistent with applicable professional standards for letters
delivered by independent accountants in connection with comparable
transactions.

ARTICLE NINE

FURTHER CONDITIONS TO THE OBLIGATIONS OF ACQUIROR

The obligation of Acquiror to consummate the transactions contemplated
by this Agreement is further subject to the satisfaction of the following
conditions:

9.01 Compliance by the Company. (a) All material terms, covenants
and conditions of this Agreement required to be complied with and satisfied by
the Company at or prior to the Effective Time shall have been duly complied
with and satisfied in all material respects, and (b) the representations and
warranties made by the Company, as may be updated pursuant to Section 6.05
hereof, shall be true and correct in all material respects at and as of the
Effective Time, except for those specifically relating to a time or times other
than the Effective Time (which shall be true and correct at such time or
times), and except for those matters which in the aggregate do not have a
material adverse effect on the consolidated financial condition and earnings of
the Company and its subsidiaries taken as a whole. The Acquiror shall have
received a certificate signed on behalf of the Company by the Chief Executive
Officer and the Chief Financial Officer to the foregoing effects.

9.02 Accuracy of Financial Statements. The Company Financial
Statements and Subsequent Company Financial Statements heretofore or hereafter
furnished to Acquiror shall not be inaccurate in any material respect.

A-43
<PAGE> 210
9.03 Net Worth. As of the close of business on the day
immediately preceding the Effective Time, the Company's net worth, as shown by
the sum of its total shareholders' equity plus the allowance for loan losses
but excluding any adjustments made as a result of the application of SFAS No.
115, "Accounting for Certain Investments in Debt and Equity Securities", any
adjustments recorded pursuant to Section 5.03(a), plus an allowance of up to
$210,000 for legal, accounting, and investment advisor/fairness opinion fees
incurred in connection with the transactions contemplated by this Agreement,
shall not be less than the amount set forth in the Company's Consolidated
Statement of Financial Condition at March 31, 1998. The Company shall deliver
to Acquiror a certificate signed by its Chief Financial Officer, dated the
Closing Date, certifying to such effect.

9.04 Sufficiency of Documents, Proceedings. All documents
delivered by and proceedings of the Company in connection with the transactions
contemplated by this Agreement and the Plan of Merger shall be reasonably
satisfactory to Acquiror.

9.05 Opinion of Counsel. There shall have been delivered to
Acquiror an opinion of Schiff, Hardin & Waite, legal counsel to the Company, in
the form attached hereto as Exhibit F, dated the Closing Date.

9.06 Officers' Certificate. The Company shall deliver to Acquiror
a certificate signed by its Chairman of the Board, President and Chief
Executive Officer and Secretary, dated the Closing Date certifying in their
official capacity to their respective best knowledge and belief that the
Company has met and complied with all conditions necessary to make this
Agreement and the Plan of Merger effective as to the Company. The Company also
shall have delivered all such other certificates and documents with respect to
the Company as may have been requested by Acquiror.

9.07 Absence of Certain Changes or Events. As of the Closing
Date, there shall have been no "Material Adverse Change in the Company" (as
defined below) from that which was represented and warranted on the date of
this Agreement pursuant to this Agreement and the Schedules provided on the
date of this Agreement, it being understood that any updates provided pursuant
to Section 5.14 and 6.05 hereof do not constitute a waiver or other consent to
any Material Adverse Change in the Company. For purposes of this Section 9.07,
a "Material Adverse Change in the Company" shall mean any adverse change in the
business, financial condition, operating results or prospects of the Company
(other than general economic or business conditions) and its Subsidiaries or
the existence of any pending or threatened litigation or administrative action
which (i) creates any reasonable possibility that the Company or its
Subsidiaries may incur a material loss that has not been reserved against; (ii)
materially challenges any portion of the Reorganization and which, in the
reasonable opinion of Acquiror, would be likely to enjoin consummation, or
result in rescission, of any part of the Reorganization; or (iii) Acquiror's
board of directors reasonably determines, in the exercise of its fiduciary
duty, would render consummation of the Reorganization adverse in a material
manner to the best interests of Acquiror's shareholders.

9.08 Litigation. Neither the Company nor its Subsidiaries shall
be made a party to, or to the knowledge of the Company, threatened by, any
actions, suits, proceedings, litigation or legal proceedings which, in the
reasonable opinion of Acquiror, have or are likely to have a material adverse
effect on the consolidated assets, properties, business, operations or
condition, financial or otherwise, of the Company or the assets, properties,
business, operations or condition, financial or otherwise, of the Merging Bank,
nor shall any director or officer or former director or officer of the Company
or its Subsidiaries be made a party to, or threatened by, any actions, suits,
proceedings, litigation or legal proceedings relating to their performance or
nonperformance of their legal or fiduciary duties as directors and officers of
the Company or its Subsidiaries which in the reasonable opinion of the Board of
Directors of Acquiror is likely to have a material adverse effect on the
Company or the Merging Bank. No action, suit, proceeding or claim shall have
been instituted, made or threatened by any person relating to the Merger or the
validity or propriety of the transactions contemplated by this Agreement or the
Plan of Merger or the Bank Merger Agreement which would make consummation of
the Reorganization inadvisable in the reasonable opinion of Acquiror.

A-44
<PAGE> 211
9.09 Agreements of Affiliates.

(a) As soon as practicable after the Mailing Date, the
Company shall deliver to Acquiror a letter identifying all persons who
the Company believes to be, at the time this Agreement is submitted to
a vote of the shareholders of the Company, "affiliates" of the Company
for purposes of Rule 145 under the Securities Act. The Company shall
use its best efforts to cause each person who is identified as an
"affiliate" in the letter referred to above to deliver to Acquiror
prior to the Effective Time a written agreement, in substantially the
form attached hereto as Exhibit G, providing that each such person
will agree not to sell, pledge, transfer or otherwise dispose of the
shares of Acquiror Common Stock to be received by such person in the
Merger except in compliance with the applicable provisions of the
Securities Act. Prior to the Effective Time, the Company shall amend
and supplement such letter and use its best efforts to cause each
additional person who is identified as an "affiliate" to execute a
written agreement in substantially the form of Exhibit G.

(b) As soon as practicable after the Mailing Date,
Acquiror and the Company shall identify all shareholders of the
Company who may be required to make certain representations and
covenants such that the Merger will be treated as a reorganization
within the meaning of Section 368 of the Code, and the Company shall
use its best efforts to cause each of these shareholders to sign a
written agreement containing such representations and covenants.

9.10 Bank Merger Agreement. The Bank Merger Agreement shall have
been duly authorized and approved by the Merging Bank so as to permit the Bank
Merger to be consummated as contemplated thereby.

9.11 Consents Under Agreements. The consent, approval or waiver
of each person whose consent or approval shall be required in order to permit
the succession by the Surviving Corporation pursuant to the Merger or by the
Acquiror-Bank pursuant to the Bank Merger Agreement to any obligation, right or
interest of the Company or any of its Subsidiaries under any loan or credit
agreement, note, mortgage, indenture, lease, license or other agreement or
instrument shall have been obtained, except where the failure to obtain such
consent, approval or waiver would not materially adversely affect the economic
or business benefits of the transactions contemplated by this Agreement to
Acquiror.

9.12 Accountant's Letter. The Company shall have caused to be
delivered to Acquiror letters from the Company's independent public
accountants, Schenck & Associates, S.C. dated the date on which the
Registration Statement shall become effective, and dated the Effective Time,
and addressed to Acquiror and the Company, with respect to the Company's
consolidated financial position and results of operation, and which describes
procedures which shall be consistent with applicable professional standards for
letters delivered by independent accountants in connection with comparable
transactions.

9.13 Approval by Affirmative Vote of Shareholders; Exercise of
Dissenters' Rights. This Agreement and the Plan of Merger shall have been duly
approved, confirmed and ratified by the requisite majority vote of the
shareholders of the Company.

9.14 Nonperforming Assets. At the end of each of the Company's
fiscal quarters commencing December 31, 1997, the aggregate amount of all
nonperforming assets does not exceed 0.5% of the Company's total assets.

A-45
<PAGE> 212
ARTICLE TEN

TERMINATION AND AMENDMENT

10.01 Termination. This Agreement may be terminated and the Plan
of Merger abandoned at any time prior to the filing of the Articles of Merger
(whether before or after approval of this Agreement and the Plan of Merger by
the shareholders of the Company):

(a) by written agreement between Acquiror and the Company
authorized by a majority of the entire Board of Directors of each;

(b) by Acquiror, (i) provided Acquiror has used its best
efforts to ensure that all of the conditions set forth in Articles
Seven and Eight have been fulfilled, if any of the conditions set
forth in Articles Seven or Nine hereof shall not have been fulfilled
and shall not have been waived or shall have become impossible of
fulfillment or (ii) if the Company shall have failed to perform and
comply with, in all material respects, its agreements and covenants
hereunder and such failure to perform or comply shall not have been
remedied within thirty (30) days after receipt by the Company of
notice in writing from the Acquiror, specifying the nature of such
failure and requesting that it be remedied;

(c) by the Company, (i) provided the Company has used its
best efforts to ensure that all of the conditions set forth in
Articles Seven and Nine have been fulfilled, if any of the conditions
set forth in Articles Seven or Eight hereof shall not have been
fulfilled and shall not have been waived or shall have become
impossible of fulfillment or (ii) if the Acquiror shall have failed to
perform and comply with, in all material respects, its agreements and
covenants hereunder and such failure to perform or comply shall not
have been remedied within thirty (30) days after receipt by the
Acquiror of notice in writing from the Company, specifying the nature
of such failure and requesting that it be remedied;

(d) by either Acquiror or the Company if the Merger is
not consummated on or before February 28, 1999, unless the failure to
consummate shall be due to the failure of the party seeking to
terminate to perform or observe the covenants and agreements of such
party set forth herein; provided, however, that if the Requisite
Regulatory Approvals have not been obtained due to a protest under the
Community Reinvestment Act, such deadline shall automatically be
extended to May 31, 1999;

(e) by Acquiror in the event the Acquiror Average Stock
Price is $32.40 or less;

(f) by either Acquiror or the Company upon written notice
to the other party (i) 90 days after the date on which any request for
application shall have been withdrawn at the request or recommendation
of the regulatory agency or governmental entity which must grant a
Requisite Regulatory Approval, or a Requisite Regulatory Approval
shall have been denied, unless within the 90-day period following such
denial or withdrawal, a petition for rehearing or an amended
application has been filed with the applicable regulatory agency or
governmental entity, provided, however, that no party shall have the
right to terminate this Agreement pursuant to this Section 10.01(f) if
such denial or request or recommendation for withdrawal shall be due
to the failure of the party seeking to terminate this Agreement to
perform or observe the covenants and agreements of such party set
forth herein; or (ii) if any court, regulatory agency or governmental
entity of competent jurisdiction shall have issued a final
nonappealable order enjoining or otherwise prohibiting the
consummation of any of the transactions contemplated by this
Agreement;

(g) by Acquiror if notice of changes to any of the
Company's Disclosure Schedules is provided by the Company, and
Acquiror reasonably determines that such changes would have a material
adverse effect upon the business of the Company or its Subsidiaries if
the transactions contemplated by this Agreement were consummated;

A-46
<PAGE> 213
(h) by Acquiror within three weeks of receipt of the
Environmental Survey pursuant to the provisions of Section 6.10(b)
hereof in the event an Environmental Survey identifies an
Environmental Condition, or by Acquiror if upon the Acquiror's
request, the Company shall not have cured, abated, corrected or
remedied an Environmental Condition to the satisfaction of the
Acquiror prior to the Effective Time; or

(i) by the Company if notice of changes to any of
Acquiror's Disclosure Schedules is provided by Acquiror and the
Company reasonably determines that such changes would have a material
adverse effect upon the business of Acquiror and its subsidiaries if
the transactions contemplated by this Agreement were consummated.

(j) by the Company, if the Board of Directors of the
Company shall determine in good faith and in the exercise of
reasonable judgment (based on the advice of independent financial
advisors and counsel) that a bona fide, written and unsolicited
proposal or offer made by a corporation (excluding the Acquiror or any
of its Subsidiaries or affiliates), partnership, person, other entity,
or group (as defined in Section 13(d)(3) of the Exchange Act) with
respect to an Acquisition Proposal is more favorable to the Company
and its shareholders than the transactions contemplated hereby.

(k) by the Acquiror, if a Company Purchase Event as
defined in Section 10.03(b) occurs prior to the termination of this
Agreement.

10.02 Effect of Termination. In the event this Agreement and the
Plan of Merger are terminated as provided herein, this Agreement and the Plan
of Merger shall become void and of no further force and effect without any
liability on the part of the terminating party or parties or their respective
shareholders, directors or officers; provided, however, that Sections 4.04,
5.05, 10.02, 10.03, 12.06 and 12.13 of this Agreement shall survive any such
termination and, except if the Company pays the Acquiror the Fee, as defined in
Section 10.03(a), and expenses under Section 12.06, that no party shall be
relieved or released from any liability or damages arising out of its willful
breach of any provision of this Agreement. In the event of termination of this
Agreement, written notice thereof and the reasons therefor shall be given to
the other parties by the terminating party.

10.03 Fee.

(a) The Company hereby agrees to pay Acquiror and
Acquiror shall be entitled to receipt of a fee (the "Fee") of $875,000
in the event of:

(i) termination by the Company as provided in
Section 10.01(j);

(ii) termination by the Acquiror as provided in
Section 10.01(k);

(iii) the Merger contemplated herein not being
consummated because the Company materially
breaches its obligations under this
Agreement; or

(iv) following the occurence of a Company Purchase
Event as defined in Section 10.03(b), at any
time within twelve (12) months of the date of
termination of this Agreement pursuant to
Sections 10.01(b)(ii), 10.01(g), by the
Company pursuant to Section 10.01(f)(i) or
pursuant to Section 10.01(b)(i) because the
condition of Section 9.13 is not satisfied.

Such payment shall be made in immediately available funds within five
business days after delivery of notice of entitlement by Acquiror.

(b) The term "Company Purchase Event" shall mean any of
the following events, or the Company or any of its Subsidiaries
agreeing to, orally or in writing, to enter into an agreement relating
to any of the following events:

A-47
<PAGE> 214
(i) the acquisition by any person, other than Acquiror
or any of its subsidiaries, alone or together with
such person's affiliates and associates or any
group, of beneficial ownership of 25% or more of
the Company Common Stock (for purposes of this
Subsection (b)(i), the terms "group" and
"beneficial ownership" shall be as defined in
Section 13(d) of the Exchange Act and regulations
promulgated thereunder and as interpreted
thereunder);

(ii) a merger, consolidation, share exchange, business
combination or any other similar transaction
involving the Company or the Merging Bank, other
than a transaction involving the Acquiror or any of
its Subsidiaries;

(iii) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition of 50% or more of the
assets of the Company or the Merging Bank, in a
single transaction or series of transactions, other
than a transaction involving the Acquiror or any of
its Subsidiaries; or

(iv) the Board of Directors of the Company does not
recommend approval of the Reorganization to their
shareholders and the transactions contemplated
thereby unless Acquiror has materially breached its
representations, warranties or covenants provided
herein and has not attempted to cure such breach to
the reasonable satisfaction of the Company.

(c) The Company shall notify Acquiror promptly in writing
of its knowledge of the occurrence of any Company Purchase Event;
provided, however, that the giving of such notice by the Company shall
not be a condition to the right of Acquiror to the Fee.

(d) Notwithstanding Section 12.13 and any provision in
this Agreement to the contrary, payment by the Company to the Acquiror
of the Fee and expenses (as provided in Section 12.06) shall relieve
the Company of any claim for damages by the Acquiror or any other
remedy.

ARTICLE ELEVEN

MODIFICATIONS, AMENDMENTS AND WAIVER

11.01 Modifications, Amendments and Waiver. At any time prior to
the Effective Time and before or after shareholder approval of this Agreement
and the Plan of Merger by the Company's shareholders, the Company and Acquiror
may (a) by written agreement executed by a duly authorized officer of each,
extend the time for the performance of any of the obligations or other acts of
the parties hereto, (b) by written notice executed by a duly authorized officer
of the party adversely affected waive compliance in whole or in part with any
of the covenants, agreements or conditions contained in this Agreement or the
Plan of Merger, or (c) by written agreement executed by a duly authorized
officer of each, make any other amendment or modification of this Agreement or
the Plan of Merger; provided, however, that, after Company shareholder approval
of this Agreement, no such extension, waiver, amendment or modification shall
adversely affect the amount of the consideration to be received in the Merger
by the shareholders of the Company. Any such extension, waiver, amendment or
modification shall be conclusively evidenced by the execution and delivery of
the same by the President or any Executive Vice President in the case of
Acquiror, or the President or any Vice President in the case of the Company,
attested to by the Secretary or Assistant Secretary of each party. The failure
of any party at any time or times to require performance of any provision
hereof shall in no manner affect such party's right at a later time to enforce
the same. No waiver by any party of any condition or of the breach of any term
contained in this Agreement or the Plan of Merger, whether by conduct or
otherwise, in any one or more instances shall be deemed to be or construed as a
further or continuing waiver of any such condition or a waiver of any other
condition or of the breach of any other term of this Agreement or the Plan of
Merger.

A-48
<PAGE> 215
ARTICLE TWELVE

MISCELLANEOUS

12.01 Closing. A closing (the "Closing") of the transactions
provided for herein shall take place on a date chosen by mutual agreement of
the Company and Acquiror, upon the satisfaction or waiver of all of the
conditions to the Merger set forth herein and in the Plan of Merger but in no
event later than the last business day of the month in which all conditions to
the Merger set forth herein and in the Plan of Merger have been satisfied or
waived (the "Closing Date"), at the offices of Michael Best & Friedrich in
Milwaukee, Wisconsin. At the Closing, the parties will exchange the
certificates, opinions and other documents called for herein. Subject to the
terms and conditions hereof, consummation of the Merger in the manner described
herein shall be accomplished as soon as practicable after the exchange of the
documents at the Closing has been completed.

12.02 Articles of Merger. Subject to the provisions of this
Agreement, on the Closing Date, as herein defined, the Articles of Merger shall
be signed, verified and affirmed as required by the WBCL and duly filed with
the WDFI.

12.03 Further Acts. Each of the parties (a) shall perform such
further acts and execute such further documents as may be reasonably required
to effect the Merger (including, without limitation, the certification,
execution, acknowledgement and filing of the Plan of Merger) and to effect the
Bank Merger, and (b) shall use all reasonable efforts to satisfy or obtain the
satisfaction of the conditions set forth in Articles Seven, Eight and Nine
hereof.

12.04 Notices. All documents, notices, requests, demands and other
communications that are required or permitted to be delivered or given under
this Agreement and the Plan of Merger shall be in writing and shall be deemed
to have been duly delivered or given upon the delivery or mailing thereof, as
the case may be, if delivered personally or sent by registered or certified
mail, return receipt requested, postage prepaid:

(a) if to the Company, to:
Allan T. Bach
President and Chief Executive Officer
Reliance Bancshares, Inc.
3140 South 27th Street
Milwaukee, Wisconsin 53215

with a copy to:
Christopher J. Zinski
Schiff Hardin & Waite
7300 Sears Tower
Chicago, Illinois 60606

(b) and if to Acquiror to:
Mr. Thomas R. Perz
President and Chief Executive Officer
St. Francis Capital Corporation
13400 Bishops Lane, Suite 350
Brookfield, Wisconsin 53005-6203

with a copy to:
W. Charles Jackson
Michael Best & Friedrich LLP
100 East Wisconsin Avenue
Milwaukee, Wisconsin 53202

or to such other person or address as a party hereto shall specify hereunder.

A-49
<PAGE> 216
12.05 Alternative Structure. Notwithstanding anything to the
contrary contained in this Agreement, prior to the Effective Time, Acquiror
shall be entitled to revise the structure of the Merger and related
transactions, provided however, that the transactions comprising such revised
structure shall not delay the Closing Date or prevent the Merger from being
deemed a reorganization within the meaning of Section 368 of the Code and that
Acquiror shall bear the costs of effecting any such revision. This Agreement
and any related documents shall be appropriately amended in order to reflect
any such revised structure.

12.06 Expenses. Unless otherwise specifically referred herein, the
Company and Acquiror each shall pay all of their own fees and expenses incident
to the negotiation, preparation, execution and performance of this Agreement,
the Bank Merger Agreement and the Shareholders Meeting, including the fees and
expenses of their own counsel, accountants, investment bankers and other
experts, whether or not the transactions contemplated by this Agreement are
consummated, except that the parties agree to divide equally the costs of
printing the Registration Statement and the Proxy Statement/Prospectus and the
cost of filing the Registration Statement with the SEC and listing the
additional shares of Acquiror Common Stock with NASDAQ; provided, however, in
the event this Agreement is terminated by either party hereto pursuant to
Sections 10.01(b)(i) or (c)(i) because the condition in Section 8.06 shall not
have been fulfilled, or pursuant to Sections 10.01(b), (c), (g), (h) or (i), or
in the event the Company is obligated to pay the Acquiror the Fee pursuant to
Section 10.03, the terminating party shall be entitled to recover from the
other party the actual fees and expenses incurred by the terminating party
incident hereto provided, however, that in no event will either party be
required to reimburse the other for its fees and expenses in excess of $80,000.

12.07 Nonsurvival of Representations and Warranties. All
representations, warranties and agreements in this Agreement or in any
instrument delivered by the Company or the Acquiror pursuant to or in
connection with this Agreement shall expire at the Effective Time, except that
the agreements of the parties which by their terms are to be performed in whole
or in part after the Effective Time shall survive the Effective Time, shall be
enforceable only by the parties hereto, but shall not create any third party
beneficiary rights.

12.08 Discussions With Other Banks, Bank Holding Companies, Savings
Associations and Bank-Related Businesses. Acquiror now or in the future may be
discussing possible acquisition of other financial institutions or their
holding companies or bank-related businesses but such discussions, if any, are
preliminary in nature and there can be no assurance at this time that
agreements for affiliation will be reached, or if reached, will be consummated.
However, it is agreed that additional financial institutions or their holding
companies or bank-related businesses may become affiliated with or acquired by
Acquiror prior to, concurrently with, or after the date hereof, on such terms
as Acquiror and any such other financial institutions or their holding company
or bank-related businesses may in their discretion agree. Acquiror agrees that
no such affiliation or acquisition shall result in the undue delay in the
affiliation of Acquiror and the Company.

12.09 Entire Agreement. This Agreement (including the Acquiror and
Company disclosure schedules and Exhibits attached hereto and as subsequently
may be amended pursuant to the terms hereof), the Plan of Merger and the Bank
Merger Agreement constitute the entire agreement and understanding of the
parties with respect to the transactions contemplated hereby and thereby,
supersede any and all prior agreements and understandings relating to the
subject matter hereof and thereof and may not be modified, amended or
terminated except in writing signed by each of the parties hereto.

12.10 Governing Law. This Agreement, the Plan of Merger and the
Bank Merger Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of Wisconsin as such laws are applied to
contracts entered into to be performed entirely within Wisconsin.

12.11 Binding Effect and Parties in Interest. This Agreement and
the Plan of Merger may not be assigned by any party hereto without the written
consent of the other parties. This Agreement and the Plan of Merger shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns. Nothing in this Agreement,
expressed or implied, is intended to confer upon any other person any rights or
remedies of any nature whatsoever under or by reason of this Agreement and the
Plan of Merger otherwise than as specifically provided herein.

A-50
<PAGE> 217
12.12 Captions. The caption headings of the Articles, Sections and
subsections of this Agreement are for convenience of reference only and are not
intended to be, and should not be construed as, a part of this Agreement or the
Plan of Merger.

12.13 Relief Due to Breach.

(a) Notwithstanding anything in this Agreement to the
contrary and except as provided below, the Company and its
Subsidiaries and Acquiror and its subsidiaries agree that irreparable
damage would occur in the event that the provisions of this Agreement
were not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that each of the
Acquiror and the Company shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any court of the
United States or any state having jurisdiction, this being in addition
to any other remedy to which they are entitled at law or in equity.

(b) If this Agreement is terminated by reason of a
willful breach by the Company or any of its Subsidiaries, then the
Company or any of its Subsidiaries shall be liable to the Acquiror for
all actual, consequential and incidental damages suffered by the
Acquiror arising from such willful breach.

(c) If this Agreement is terminated by reason of a
willful breach by the Acquiror or any of its subsidiaries, then
Acquiror or its subsidiaries shall be liable to the Company for all
actual, consequential and incidental damages suffered by the Company
arising from such willful breach.

12.14 Invalidity. If any provision is invalid or unenforceable,
the parties hereto shall use their best efforts to modify or amend the
provision to be valid and enforceable and to properly reflect the intention of
the parties in the first instance.

12.15 Publicity. Except as otherwise required by law, so long as
this Agreement is in effect, neither Acquiror nor the Company shall, nor shall
permit any of its Subsidiaries to, issue or cause the publication of any press
release or other written statement for general circulation with respect to the
transactions contemplated by this Agreement, without the consent of the other
party, which consent shall not be unreasonably withheld.

12.16 Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original instrument and
all of which together shall constitute a single agreement.

A-51
<PAGE> 218
IN WITNESS WHEREOF, each of the parties hereto has duly executed this
Agreement as of the date set forth hereafter.

ST. FRANCIS CAPITAL CORPORATION

Dated: June 30, 1998 By:
------------------------------------------------
Thomas R. Perz, President and Chief
Executive Officer

Attest:
---------------------------------------

RELIANCE BANCSHARES, INC.

Dated: June 30, 1998 By:
------------------------------------------------
Allan T. Bach, President and Chief
Executive Officer

Attest:
---------------------------------------

A-52
<PAGE> 219
EXHIBIT B

AGREEMENT AND PLAN OF MERGER

This Agreement and Plan of Merger (the "Plan of Merger") is made and
entered into as of September 22, 1998, between St. Francis Capital
Corporation, a Wisconsin corporation ("Acquiror"), and Reliance Bancshares,
Inc., a Wisconsin corporation (the "Company"). Acquiror and the Company are
hereinafter sometimes collectively referred to as the "Constituent
Corporations."

RECITALS

Acquiror is a corporation duly organized, validly existing and in good
standing under the laws of the State of Wisconsin. As of the date hereof, the
authorized capital stock of Acquiror consists of 12,000,000 shares of common
stock, $.01 par value per share ("Acquiror Common Stock"), of which 5,186,683
shares were issued and outstanding at June 30, 1998; and 6,000,000 shares of
Preferred Stock, $1.00 par value per share, of which none are outstanding as of
the date hereof.

The Company is a corporation duly organized and validly existing under
the laws of the State of Wisconsin. As of the date hereof, the authorized
capital stock of the Company consists of 6,000,000 shares of Company common
stock, $1.00 par value per share ("Company Common Stock"), of which 2,562,344
shares were issued and 2,403,701 more outstanding at June 30, 1998; and
2,000,000 shares of Preferred Stock, $1.00 par value per share, of which none
are outstanding as of the date hereof.

Acquiror and the Company have entered into an Agreement and Plan of
Reorganization, dated June 30, 1998 (the "Agreement"), setting forth certain
representations, warranties, covenants and agreements in connection with the
transactions therein and herein contemplated and which contemplates the merger
of the Company with and into Acquiror (the "Merger") in accordance with this
Plan of Merger.

Immediately following the Merger or as soon as practicable thereafter,
Acquiror and the Company intend that Reliance Savings Bank, a wholly-owned
subsidiary of the Company (the "Merging Bank"), shall merge (the "Bank Merger"
and such transaction together with the Merger, the "Reorganization") with and
into St. Francis Bank, F.S.B., a wholly-owned subsidiary of Acquiror
("Acquiror-Bank").

The respective Boards of Directors of the Company and Acquiror deem
the Merger advisable and in the best interest of each such corporation and
their respective shareholders. The respective Boards of Directors of the
Company and Acquiror, by resolutions duly adopted, have approved the Agreement
and Plan of Merger and the transactions contemplated thereby and hereby, and
the Agreement and Plan of Merger have been submitted to and approved by the
requisite vote of the Company's shareholders.

Therefore, in consideration of the premises and the mutual covenants
and agreements contained herein, Acquiror and the Company hereby covenant and
agree as follows:

ARTICLE I

1.01 Merger of the Company into Acquiror. The Company shall be
merged with and into Acquiror at the Effective Time (as defined in Section
1.02) in accordance with the applicable provisions of the Wisconsin Business
Corporation Law (the "WBCL") and on the terms and subject to the conditions
contained in the Agreement. Simultaneously with the effectiveness of the
Merger, (a) the separate existence of the Company shall cease, and (b)
Acquiror, as the surviving corporation (the "Surviving Corporation"), shall
continue to exist under and be governed by the WBCL.

B-1
<PAGE> 220
1.02 Effective Time. The Merger shall be consummated upon the
filing of appropriate Articles of Merger with the Wisconsin Department of
Financial Institutions ("WDFI") in the form and manner required by the WBCL.
The close of business on the date on which such Articles of Merger shall have
been filed is herein referred to as the "Effective Time," unless some other
date is agreed upon by Acquiror and the Company. Unless otherwise mutually
agreed upon in writing by the parties, and subject to the terms and conditions
hereof, the Effective Time shall occur on the Closing Date (as defined in
Section 12.01 of the Agreement) or the next succeeding business day thereafter.

1.03 Effect of the Merger. Upon the Effective Time:

(a) The separate existence of the Company shall cease and
be merged with and into Acquiror, as the Surviving Corporation, which
shall possess all of the rights, privileges, immunities, powers and
franchises of a public as well as of a private nature, and shall be
subject to all of the restrictions, disabilities and duties, of each
of the Company and Acquiror; and all singular rights, privileges,
immunities, powers and franchises of each of the Company and Acquiror,
and all property, real, personal and mixed, and all debts due to
either the Company or Acquiror in whatever amount, including
subscriptions to shares, and all other things in action or belonging
to each of the Company and Acquiror shall be vested in the Surviving
Corporation; and all property, rights, privileges, immunities, powers
and franchises, and all and every interest, shall be thereafter as
effectually the property of the Surviving Corporation as they were of
the Company and Acquiror and the title to any real estate, or interest
therein, vested by deed or otherwise, in either of the Company and
Acquiror shall not revert or be in any way impaired by reason of the
Merger.

(b) All rights of creditors and all liens upon any
property of the Company or Acquiror shall be preserved unimpaired and
all debts, liabilities and duties of the Company or Acquiror shall
thenceforth attach to the Surviving Corporation and may be enforced
against the Surviving Corporation to the same extent as if said debts,
liabilities and duties had been incurred or contracted by it,
provided, however, that all such liens shall attach only to those
assets to which they were attached prior to the Effective Time.

(c) Any action or proceeding, whether civil, criminal or
administrative, instituted, pending or threatened by or against either
the Company or Acquiror or relating to their assets, liabilities or
shares of common stock shall be prosecuted as if the Merger had not
taken place, and the Surviving Corporation may be substituted as a
party in such action or proceeding in place of the Company.

1.04 Additional Actions. If, at any time after the Effective Time,
the Surviving Corporation shall consider or be advised that any further
assignments or assurances in law or any other acts are necessary or desirable
to (a) vest, perfect or confirm, of record or otherwise, in the Surviving
Corporation its rights, title or interest in, to or under any of the rights,
properties or assets of the Company acquired or to be acquired by the Surviving
Corporation as a result of, or in connection with, the Merger, or (b) otherwise
carry out the purposes of the Agreement and this Plan of Merger, the Company
and its proper officers and directors shall be deemed to have granted to the
Surviving Corporation an irrevocable power of attorney to execute and deliver
all such proper deeds, assignments and assurances in law and to do all acts
necessary or proper to vest, perfect or confirm title to and possession of such
rights, properties or assets in the Surviving Corporation and otherwise to
carry out the purposes of the Agreement and this Plan of Merger; and the proper
officers and directors of the Surviving Corporation are fully authorized in the
name of the Company or otherwise to take any and all such action.

ARTICLE II

2.01 Name. The name of the Surviving Corporation shall be "St.
Francis Capital Corporation."

2.02 Articles of Incorporation. The Articles of Incorporation of
Acquiror, as in effect immediately prior to the Effective Time shall, from and
after the Effective Time, be and continue to be the Articles of Incorporation
of the Surviving Corporation until the same are duly amended in accordance with
applicable law.

B-2
<PAGE> 221
2.03 Bylaws. The Bylaws of Acquiror, as in effect immediately
prior to the Effective Time shall, from and after the Effective Time, be and
continue to be the Bylaws of the Surviving Corporation until the same are
amended as provided therein or provided in the Articles of Incorporation of the
Surviving Corporation.

2.04 Officers and Directors. On and after the Effective Time, the
officers and directors of the Surviving Corporation shall be the persons
serving in such positions of Acquiror immediately prior to the Effective Time.

ARTICLE III

3.01 Conversion of Securities. At the Effective Time, by virtue of
the Merger and without any action on the part of Acquiror, the Company or the
holder of any of the following securities, the shares of Acquiror and the
Company shall be converted as follows:

(a) Each share of the common stock, $.01 par value per
share ("Acquiror Common Stock"), of Acquiror issued and outstanding
immediately prior to the Effective Time shall remain outstanding and
shall be unchanged after the Merger; and

(b) Each share of the common stock, $1.00 par value per
share ("Company Common Stock"), of the Company issued and outstanding
immediately prior to the Effective Time (other than any shares held by
the Company as treasury shares or owned by Acquiror or any of its
wholly-owned subsidiaries, but in each case other than Trust Account
Shares or DPC Shares (each as defined below), which shall be canceled,
and other than any Dissenting Shares (as defined in Section 3.05(a)
hereof)) shall cease to be outstanding and shall be converted into and
become, as the holder thereof shall elect or be deemed to have elected
pursuant to Section 3.02(f) but subject to all the provisions of
Section 3.02(g), (h) and (i) hereof;

(1) The right to receive an amount in cash (the
"Per Share Cash Distribution") equal to:

(a) $10.00, if the Acquiror Average
Stock Price as calculated herein is between $32.41
and $40.00;

(b) an amount equal to .250 of the
Acquiror Average Stock Price, if the Acquiror Average
Stock Price as calculated herein is between $40.01
and $42.00;

(d) an amount equal to .2295 of the
Acquiror Average Stock Price, if the Acquiror Average
Stock Price as calculated herein is $45.75 or more;

(e) If the Acquiror Average Stock Price
is $32.40 or less, then the Acquiror has the option
of completing the Merger using a Per Share Cash
Distribution of $10.00 or terminating the Agreement
pursuant to Section 10.01(e) of the Agreement; or

(2) the right to receive the following (the "Per
Share Stock Distribution):

(a) if the Acquiror Average Stock Price as
calculated hereunder is between $32.41 and $40.00, a
fractional share of Acquiror Common Stock as
determined by a fraction the numerator of which is
$10.00 and the denominator of which is the Acquiror
Average Stock Price;

(b) if the Acquiror Average Stock Price is
between $40.01 and $42.00, .250 shares of Acquiror
Common Stock;

B-3
<PAGE> 222
(c) if the Acquiror Average Stock Price is
between $42.01 and $45.74 per share, a fractional
share of Acquiror Common Stock as determined by a
fraction the numerator of which is $10.50 and the
denominator of which is the Acquiror Average Stock
Price;

(d) if the Acquiror Average Stock Price is
$45.75 or more, .2295 shares of Acquiror Common
Stock;

(e) if the Acquiror Average Stock Price is
$32.40 or less, then the Acquiror has the option of
completing the Merger using a modification of the Per
Share Stock Distribution equal to a fractional share
of Acquiror Common Stock as determined by a fraction
the numerator of which is $10.00 and the denominator
of which is the Acquiror Average Stock Price or
terminating the Agreement pursuant to the provisions
of Section 10.01(e) of the Agreement.

(c) If subsequent to the date of this Agreement but prior
to the Effective Time, Acquiror should split or combine its common
stock, or pay a dividend or other distribution in such common stock,
then the Per Share Stock Distribution shall be appropriately adjusted
to reflect such split, combination, dividend or distribution.

(d) "Acquiror Average Stock Price" means the average
(rounded to the nearest whole cent) of the last sale price of the day
of one share of Acquiror Common Stock as reported in The Wall Street
Journal for the ten consecutive trading days ending on the fifth
business day preceding the Effective Time, or in the absence of such
report for any trading day in The Wall Street Journal, the last sale
price reported for such trading day by NASDAQ, the automated quotation
system of the National Association of Securities Dealers, Inc., or in
the absence thereof the mean of the reported closing bid and asked
quotations on such trading day as reported in The Wall Street Journal
or in the absence thereof, by NASDAQ; or in the absence thereof from
such other source upon which Acquiror and the Company shall mutually
agree.

(e) At the Effective Time, all shares of Company Common
Stock that are owned by the Company as treasury stock and all shares
of Company Common Stock that are owned directly or indirectly by
Acquiror or the Company or any of their respective wholly-owned
subsidiaries (other than shares of Company Common Stock held directly
or indirectly in trust accounts, managed accounts and the like or
otherwise held in a fiduciary capacity that are beneficially owned by
third parties (any such shares, and shares of Acquiror Common Stock
which are similarly held, whether held directly or indirectly by
Acquiror or the Company or any of their respective wholly-owned
subsidiaries, as the case may be, being referred to herein as "Trust
Account Shares"), and other than any shares of Company Common Stock
held by Acquiror or the Company or any of their respective
wholly-owned subsidiaries in respect of a debt previously contracted
(any such shares of Company Common Stock, and shares of Acquiror
Common Stock which are similarly held, whether held directly or
indirectly by Acquiror or the Company or any of their respective
wholly-owned subsidiaries, being referred to herein as "DPC Shares"))
shall be cancelled and shall cease to exist and no stock of Acquiror
or other consideration shall be delivered in exchange therefor. All
shares of Acquiror Common Stock that are owned by the Company or any
of its wholly- owned subsidiaries (other than Trust Account Shares and
DPC Shares) shall become treasury stock of Acquiror.

(f) There shall be included with each share of Acquiror
Common Stock issued in the Merger an equal number of any share
purchase rights (the "Rights") issued pursuant to the Rights
Agreement (as defined in Section 2.03 of the Agreement). All
references in this Merger Agreement to Acquiror Common Stock to be
received pursuant to the Merger should be deemed to include the
Rights.

3.02 Election Procedures.

B-4
<PAGE> 223
and risk of loss and title to certificates previously representing the
Company Common Stock shall pass only upon delivery of such certificate
to the Exchange Agent) and other appropriate transmittal materials
("Election Form"). "Exchange Agent" means Firstar Trust Co. or such
other bank or trust company selected by Acquiror, and acceptable to
the Company, to effect the exchange of certificates. The Mailing Date
may be the date of mailing of the Proxy Statement/Prospectus, as
defined in Section 6.01 of the Agreement.

(b) An Election Form shall specify the method by which
the amount of the Per Share Cash Distribution will be calculated and
the method by which the Per Share Stock Distribution will be
calculated, and shall permit holders (or in the case of nominee record
holders, the beneficial owner through proper instructions and
documentation), except for the Reliance Savings Bank Employee Stock
Ownership Plan (the ESOP") which shall receive the Per Share Cash
Distribution in exchange for its shares of Company Common Stock, to
elect to receive (A) the Per Share Cash Distribution with respect to a
specified number of shares of Company Common Stock (the "Cash Election
Shares"), (B) the Per Share Stock Distribution with respect to a
specified number of shares of Company Common Stock (the "Stock
Election Shares"), or (C) indicate that such holder makes no election
with respect to a specified number of shares of Company Common Stock
(the "No Election Shares"). Each holder of shares of Company Common
Stock may elect to receive either the Per Share Cash Distribution or
the Per Share Stock Distribution for each share of Company Common
Stock held. However, each individual beneficial owner of shares of
Company Common Stock may only choose a combination of the Per Share
Cash Distribution and the Per Share Stock Distribution relating to all
of the shares of Company Common Stock beneficially owned by him, her
or it, if he, she or it chooses the Per Share Stock Distribution for a
sufficient number of shares to result in the issuance of at least 50
shares of Acquiror Common Stock. If the Exchange Agent determines
that the above share limit has not been complied with, the shares of
Company Common Stock to which the improper election has been made
shall be deemed No Election Shares.

(c) Any shares of Company Common Stock with respect to
which the holder thereof shall not, as of the Election Deadline (as
defined below), have made such an election by submission to the
Exchange Agent of an effective, properly completed Election Form shall
be deemed to be No Election Shares. "Election Deadline" means 4:00
p.m., Milwaukee time, on a day 30-45 days following the Mailing Date,
but which also shall be at least one business day prior to the date of
the Shareholders Meeting (as defined in Section 5.01 of the
Agreement). Acquiror shall make an Election Form available to all
persons who become holders of Company Common Stock between the date
three business days prior to the Mailing Date and the close of
business on the day prior to the Election Deadline, and the Company
will provide to the Exchange Agent in a timely manner all information
necessary to comply with this provision.

(d) Any Dissenting Shares shall be deemed Cash Election
Shares, and with respect to such shares, the holders thereof shall in
no event be deemed to hold Stock Designee Shares (defined below).

(e) Any election as between the Per Share Cash
Distribution or the Per Share Stock Distribution shall have been
properly made only if the Exchange Agent shall have received a
properly completed Election Form by the Election Deadline. An
Election Form will be properly completed only if accompanied by
certificates representing all shares of the Company Common Stock
covered thereby. An Election Form may be revoked or changed by the
person submitting such Election Form to the Exchange Agent by written
notice to the Exchange Agent, provided such notice is received by the
Exchange Agent at or prior to the Election Deadline. All Election
Forms shall be deemed revoked if the Exchange Agent is notified in
writing by Acquiror or the Company that this Agreement has been
terminated. The certificate or certificates representing the Company
Common Stock relating to any revoked Election Form shall be promptly
returned without charge to the person submitting such Election Form to
the Exchange Agent. The Exchange Agent shall have reasonable
discretion to determine when any election, modification or revocation
is received and whether any such election, modification or revocation
has been properly made.

(f) The aggregate amount of consideration, including
amounts payable in respect of Dissenting Shares and amounts paid in
lieu of fractional shares ("Consideration"), to be received by the
Company shareholders in exchange for their Company Common Stock shall
consist of cash and Acquiror Common Stock, to be determined as
follows:

B-5
<PAGE> 224
(1) the aggregate amount of Consideration that shall be
payable to Company shareholders, including the ESOP, in cash
(the "Cash Amount") shall be no greater than 40% of the
aggregate value of all of the Consideration to be issued or
paid in connection with the Merger;

(2) the total number of shares of Acquiror Common Stock
to be issued in connection with the Merger (the "Stock
Amount") shall be that number of whole shares of Acquiror
Common Stock that has an aggregate value, valuing such stock
at the Acquiror Average Stock Price for this purpose, at least
equal to 60.0%, of the aggregate value of all of the
Consideration to be issued or paid in connection with the
Merger;

(3) the calculation of the aggregate amount of
Consideration, the Cash Amount and the Stock Amount shall be
made by Acquiror. The relative percentages that the Cash
Amount (i.e. 0% to 40.0%) and the Stock Amount (i.e. 60.0% to
100%) bear to the aggregate amount of Consideration to be
issued or paid in connection with the Merger shall be
determined as follows:

(g) Within five business days after the Effective Time,
the Exchange Agent shall effectuate the allocation among holders of
the Company Common Stock of the right to receive the Cash Election
Shares and/or the Stock Election Shares in the Merger in accordance
with the Election Form as follows:

(i) if the number of shares of Acquiror Common
Stock that would be issued upon conversion in
the Merger of the Stock Election Shares is
less than the Stock Amount, then

(A) all shares of Company Common
Stock electing Stock Election Shares
will be converted into the right to
receive the Per Share Stock
Distribution,

(B) subject to Section 3.02(d), the
Exchange Agent will select first
from among the No Election Shares,
by random selection, and then (if
necessary) from among the Cash
Election Shares, pro rata in
accordance with the number of shares
of Company Common Stock beneficially
owned by each Company shareholder
and designated as Cash Election
Shares ("Stock Designee Shares"), in
each case subject to the requirement
for issuance pursuant to Section
3.06(b) of at least 50 shares of
Acquiror Common Stock to each
recipient thereof, such that the
number of Stock Designee Shares
will, when added to the number of
Stock Election Shares, equal the
minimum Stock Amount percentage, and
the appropriate number of Stock
Designee Shares will be converted
into the right to receive the Per
Share Stock Distribution (provided,
however, that no particular holder
of Cash Election Shares will be
required to designate all or a
portion of his, her or its Cash
Election Shares as Stock Designee
Shares if such designation would
threaten satisfaction of any of the
conditions to the consummation of
the Merger set forth in Article
Seven of the Agreement), and

B-6
<PAGE> 225
(C) Cash Election Shares and the No
Election Shares not designated Stock
Designee Shares will be converted
into the right to receive the Per
Share Cash Distribution; or

(h) The random selection process to be used by the
Exchange Agent to select among the No Election Shares shall be as the
Exchange Agent deems equitable, or as may be mutually determined by
the Company and Acquiror and as shall be further described in the
Election Form. The pro rata process to be used by the Exchange Agent
to designate Stock Designee Shares in order to reach the Stock Amount
shall be based on the proportion that the number of Cash Election
Shares beneficially owned by each Company shareholder, bears to the
total number of Cash Election Shares (excluding Dissenting Shares).

(i) The extent to which elections by holders of Company
Common Stock will be accommodated will depend upon the respective
number of shares of Company Common Stock electing cash or stock (or
making no election). Accordingly, a holder of shares of Company
Common Stock who elects cash, or a combination of cash and shares of
Acquiror Common Stock, may instead receive just shares of Acquiror
Common Stock, or a combination of cash and shares of Acquiror Common
Stock, or a different combination of cash and shares of Acquiror
Common Stock. In addition, if so directed by the Acquiror, the
Exchange Agent may alter the selection and pro rata process in order
to ensure that all of the conditions to consummation of the Merger set
forth in Article Seven of the Agreement may be complied with.

3.03 Exchange Procedures.

(b) After the Effective Time, each previous holder of a
certificate that, prior to the Effective Time, represented the Company
Common Stock ("Certificate") that prior thereto surrendered or
thereafter surrenders such a Certificate to the Exchange Agent will,
upon acceptance thereof by the Exchange Agent, be entitled to a
certificate or certificates representing the number of full shares of
Acquiror Common Stock and/or the amount of cash into which the
Certificate surrendered shall have been converted pursuant to this
Agreement and, if such holder's Company Common Stock has been
converted into Acquiror Common Stock, any other distribution
theretofore declared and not yet paid with respect to the Acquiror
Common Stock issuable in the Merger, in each case without interest.
The Exchange Agent shall not be entitled to vote or exercise any
rights of ownership with respect to the shares of Acquiror Common
Stock held by it from time to time hereunder, except that it shall
receive and hold all dividends or other distributions paid or
distributed with respect to such shares for the account of the persons
entitled thereto. No dividends or other distributions payable after
the Effective Time with respect to Acquiror Common Stock shall be paid
to the holder of any unsurrendered Certificate until the holder
thereof shall duly surrender such Certificate in accordance with this
Article Three. After the surrender of a Certificate in accordance
with this Article Three, the record holder thereof shall be entitled
to receive any dividends or other distributions, with any interest
thereon, which became payable with respect to the shares of Acquiror
Common Stock represented by such Certificate after the Effective Time
but on or before the time of such surrender. No holder of an
unsurrendered Certificate shall be entitled, until the surrender of
such Certificate, to vote the shares of Acquiror Common Stock into
which his or her Company Common Stock shall have been converted.

B-7
<PAGE> 226
(c) The Exchange Agent shall accept such certificates
upon compliance with such reasonable terms and conditions as the
Exchange Agent may impose to effect an orderly exchange thereof in
accordance with customary exchange practices. Each outstanding
certificate that, prior to the Effective Time, represented Company
Common Stock shall, except as otherwise provided in this Agreement and
until duly surrendered to the Exchange Agent, be deemed to evidence
ownership of the consideration into which such Company Common Stock
shall have been converted. After the Effective Time, there shall be
no further transfer on the records of the Company of certificates
representing Company Common Stock, and if such certificates are
presented to the Company for transfer, they shall be canceled against
delivery of the consideration provided therefor in this Agreement. No
dividends declared will be remitted to any person entitled to receive
Acquiror Common Stock under this Agreement until such person
surrenders the certificate or certificates representing Company Common
Stock, at which time such dividends shall be remitted to such person,
without interest and less any taxes that may have been imposed
thereon. Neither the Exchange Agent, Acquiror nor the Company shall
be liable to any holder of Company Common Stock for any consideration
paid to a public official pursuant to applicable abandoned property,
escheat or similar laws. Acquiror and the Exchange Agent shall be
entitled to rely upon the stock transfer books of the Company to
establish the identity of those persons entitled to receive
consideration specified in this Agreement, which books shall be
conclusive with respect thereto. In the event of a dispute with
respect to ownership of any shares of Company Common Stock, Acquiror
and the Exchange Agent shall be entitled to deposit any consideration
represented thereby in escrow with an independent third party and
thereafter be relieved with respect to any claims thereto.

(e) Any portion of the Exchange Fund that remains
unclaimed by the shareholders of the Company for six months after the
Effective Time, including dividends received pursuant to section
3.03(b) and any interest paid on the Exchange Fund, shall be remitted
back to Acquiror. Any shareholders of the Company who have not
theretofore complied with this Article Three shall thereafter look
only to Acquiror for payment for their shares of Company Common Stock.
Notwithstanding the foregoing, neither the Acquiror, the Company, the
Exchange Agent, or any other person shall be liable to any former
holder of shares of Company Common Stock for any amount properly
delivered to a public official pursuant to applicable abandoned
property, escheat or similar laws.

3.04 No Fractional Shares. Notwithstanding any other provision of
this Agreement, neither certificates nor scrip for fractional shares of
Acquiror Common Stock shall be issued in the Merger. Each holder of shares of
Company Common Stock who otherwise would have been entitled to a fraction of a
share of Acquiror Common Stock shall receive in lieu thereof cash (without
interest) in an amount determined by multiplying the fractional share interest
to which such holder would otherwise be entitled by the Acquiror Average Stock
Price. No such holder shall be entitled to dividends, voting rights or any
other rights in respect of any fractional share.

B-8
<PAGE> 227
3.05 Dissenting Shares.

3.06 Withholding Rights. Acquiror shall be entitled to deduct and
withhold from any amounts otherwise payable pursuant to this Agreement to any
holder of shares of Company Common Stock such amounts as Acquiror is required
under the Code or any provision of state, local or foreign tax law to deduct
and withhold with respect to the making of such payment. Any amounts so
withheld shall be treated for all purposes of this Agreement as having been
paid to the holder of Company Common Stock in respect of which such deduction
and withholding was made by Acquiror.

3.07 Options.

(i) The number of shares of Acquiror Common Stock to be
subject to the converted option shall be equal to the number of shares
of Company Common Stock subject to the original option multiplied by a
fraction determined by application of Section 3.01(b)(2) provided that
any fractional shares of Acquiror Common Stock resulting from such
multiplication shall be rounded down to the nearest whole share; and

(ii) The exercise price per share of Acquiror Common Stock
under the converted option shall be equal to the exercise price per
share of Company Common Stock under the original option divided by a
fraction determined by application of Section 3.01(b)(2), provided
that such exercise price shall be rounded up to the nearest cent.

B-9
<PAGE> 228
(iii) The Acquiror agrees that a director of Reliance who
becomes a member of the Advisory Board, as defined in Section 4.08 of
the Agreement, shall be deemed an "Outside Director" under the terms
of the Acquiror's option plan for purposes of being eligible to have
any options to purchase shares of Company Common Stock which are
converted, under (i) and (ii) above, into options for the purchase of
Acquiror's Common Stock administered under the terms of Acquiror's
plan.

(c) If Acquiror merges the Option Plan with its own option plan,
each converted option shall be subject to the terms, benefits, rights and
features of the Acquiror's option plan and the related agreement evidencing the
grant of such option thereunder from and after the Closing Date.

(d) All options which are issued and outstanding as of the date
hereof under the terms of the Option Plan will become fully vested and
exercisable as of the Closing Date.

(e) The Surviving Corporation may, at its option, merge the Option
Plan with its own plan or continue the Option Plan after the Effective Time
provided that such merger or continuance shall not reduce the vesting credit
earned by holders of converted options under the Option Plan prior to the
Closing Date.

3.08 Bank Merger. The Company and the Acquiror intend to take all
action necessary and appropriate to cause, including causing the entering into
of a merger agreement (the "Bank Merger Agreement"), pursuant to which the
Acquiror-Bank and the Merging Bank shall merge immediately following the Merger
or as soon as practicable thereafter with the Acquiror-Bank being the surviving
bank ("Surviving Bank") thereof pursuant to the provisions of applicable law.
At the effective time of the Bank Merger, the charter and by-laws of the
Surviving Bank shall be the articles of association and by-laws of the
Acquiror-Bank in effect immediately prior to the effective time of the Bank
Merger. At the effective time of the Bank Merger, the directors and officers
of the Surviving Bank shall be the directors and officers of the Acquiror-Bank
immediately prior to the effective time of the Bank Merger, except that,
provided the Surviving Bank can obtain all necessary regulatory approvals, one
outside director of the Merging Bank, as selected by the Board of Directors of
the Merging Bank, shall become a director of the Surviving Bank as soon as
practicable after the effective date of the Bank Merger.

ARTICLE IV

4.01 Notices. All documents, notices, requests, demands and other
communications that are required or permitted to be delivered or given under
this Plan of Merger shall be in writing and shall be deemed to have been duly
delivered or given upon the delivery or mailing thereof, as the case may be, if
delivered personally or sent by registered or certified mail, return receipt
requested, postage prepaid:

(a) if to the Company, to:
Allan T. Bach
President and Chief Executive Officer
Reliance Bancshares, Inc.
3140 South 27th Street
Milwaukee, Wisconsin 53515

B-10
<PAGE> 229
with a copy to:
Christopher J. Zinski
Schiff Hardin & Waite
7300 Sears Tower
Chicago, Illinois 60606

(b) and if to Acquiror to:
Thomas R. Perz
President and Chief Executive Officer
St. Francis Capital Corporation
13400 Bishops Lane, Suite 350
Brookfield, Wisconsin 53005-6203

with a copy to:
W. Charles Jackson
Michael Best & Friedrich
100 East Wisconsin Avenue
Milwaukee, Wisconsin 53202

or to such other person or address as a party hereto shall specify hereunder.

4.02 Consummation of the Merger. Consummation of the Merger is
conditioned upon the fulfillment or waiver of the conditions precedent set
forth in Articles Seven, Eight and Nine of the Agreement.

4.03 Counterparts. This Plan of Merger may be executed in one or
more counterparts, each of which shall be deemed to be an original but all of
which together shall constitute one agreement.

4.04 Governing Law. This Plan of Merger shall be governed in all
respects, including, but not limited to, validity, interpretation, effect and
performance, by the laws of the State of Wisconsin.

4.05 Amendment. Subject to applicable law, this Plan of Merger may
be amended, modified or supplemented only by written agreement of Acquiror and
the Company, by their respective officers thereunto duly authorized, at any
time prior to the Effective Time.

4.06 Waiver. Any of the terms or conditions of this Plan of Merger
may be waived at any time by whichever of the Constituent Corporations is, or
the shareholders of which are, entitled to the benefit thereof by action taken
by the Board of Directors of such Constituent Corporation.

4.07 Termination. This Plan of Merger shall terminate
simultaneously upon the termination of the Agreement in accordance with Article
Ten thereof. There shall be no liability on the part of any of the parties
hereto (or any of their respective directors or officers) except as otherwise
provided in the Agreement.

B-11
<PAGE> 230
IN WITNESS WHEREOF, each of the Constituent Corporations have caused
this Plan of Merger to be executed on their behalf by their officers hereunto
duly authorized all as of the date first above written.

ATTEST: ST. FRANCIS CAPITAL CORPORATION

By: By:
----------------------------- -------------------------------
Thomas R. Perz
----------------------------- President and Chief Executive Officer

ATTEST: RELIANCE BANCSHARES,INC.

By: By:
----------------------------- -------------------------------
Allan T. Bach
----------------------------- President and Chief Executive Officer

B-12
<PAGE> 231
EXHIBIT C
Opinion of Robert W. Baird & Co., Inc.

Board of Directors
Reliance Bancshares, Inc.
3140 S. 27th Street
Milwaukee, WI 53125

Ladies and Gentlemen:

Reliance Bancshares, Inc. ("Reliance") proposes to enter into an
Agreement and Plan of Reorganization (the "Agreement") with St. Francis Capital
Corporation ("St. Francis"). Pursuant to the Agreement, at the Effective Time
(as defined in the Agreement), Reliance shall be merged with and into St.
Francis and, immediately thereafter, Reliance Savings Bank, a wholly owned
subsidiary of Reliance, will be merged with and into St. Francis Bank, F.S.B.,
a wholly owned subsidiary of St. Francis (collectively, the "Merger") and each
share of the common stock, $1.00 par value per share ("Company Common Stock")
of Reliance (other than Dissenting Shares (as defined in the Agreement) and
shares held by Reliance, St. Francis or any of their respective subsidiaries)
will be converted into the right to receive the Merger Consideration (as
hereinafter defined).

The "Merger Consideration" means an amount in cash equal to the Per
Share Cash Distribution (as hereinafter defined) or a fractional share of St.
Francis common stock, par value $0.01 per share ("Acquiror Common Stock") equal
to the Per Share Stock Distribution (as hereinafter defined), as the holder of
Company Common Stock may elect or deem to have elected pursuant to the
Agreement (and subject to the limitations on such elections set forth in the
Agreement). The "Per Share Cash Distribution" means (i) $10.00, if the
Acquiror Average Stock Price (as defined in Section 1.05(d) of the Agreement)
is $40.00 or less, (ii) an amount equal to 0.250 of the Acquiror Average Stock
Price, if the Acquiror Average Stock Price is between $40.01 and $42.00, (iii)
$10.50, if the Acquiror Average Stock Price is between $42.01 and $45.74, and
(iv) an amount equal to 0.2295 of the Acquiror Average Stock Price, if the
Acquiror Average Stock Price is $45.75 or more. The "Per Share Stock
Distribution" means a fractional share of Acquiror Common Stock equal to (i)
$10.00, divided by the Acquiror Average Stock Price, if the Acquiror Average
Stock Price is $40.00 or less, (ii) 0.250, if the Acquiror Average Stock Price
is between $40.01 and $42.00, (iii) $10.50, divided by the Acquiror Average
Stock Price, if the Acquiror Average Stock Price is between $42.01 and $45.74
and (iv) 0.2295 of the Acquiror Average Stock Price, if the Acquiror Average
Stock Price is $45.75 or more.

You have requested our opinion as to the fairness, from a financial
point of view, of the Merger Consideration to the holders of Company Common
Stock (other than St. Francis and its affiliated companies).

Robert W. Baird & Co. Incorporated ("Baird"), as part of its
investment banking business, is engaged in the evaluation of businesses and
their securities in connection with

C-1
<PAGE> 232

Reliance Bancshares, Inc.
Page 2

mergers and acquisitions, negotiated underwritings, competitive biddings,
secondary distributions of listed and unlisted securities, private placements,
and valuations for estate, corporate and other purposes.

In conducting our investigation and analysis and in arriving at our
opinion herein, we have reviewed such information and taken into account such
financial and economic factors as we have deemed relevant under the
circumstances. In that connection, we have, among other things: (i) reviewed
certain internal information, primarily financial in nature, including
projections, concerning the business and operations of Reliance and St. Francis
furnished to us for purposes of our analysis, as well as publicly available
information including but not limited to Reliance's and St. Francis' recent
filings with the Securities and Exchange Commission and equity analyst research
reports prepared by various investment banking firms including Baird; (ii)
reviewed the draft Agreement in the form presented to Reliance's Board of
Directors; (iii) compared the historical market prices and trading activity of
the Company Common Stock and Acquiror Common Stock with those of certain other
publicly traded companies we deemed relevant; (iv) compared the financial
position and operating results of Reliance and St. Francis with those of other
publicly traded companies we deemed relevant; (v) compared the proposed
financial terms of the Merger with the financial terms of certain other
business combinations involving thrift institutions we deemed relevant; and
(vi) reviewed certain potential pro forma effects of the Merger on St. Francis.
We have held discussions with members of Reliance's and St. Francis' respective
senior managements concerning Reliance's and St. Francis' historical and
current financial condition and operating results, as well as the future
prospects of Reliance and St. Francis, respectively. We have not been
requested to, and did not, solicit third party indications of interest in
acquiring all or any part of Reliance. We have also considered such other
information, financial studies, analysis and investigations and financial,
economic and market criteria which we deemed relevant for the preparation of
this opinion.

In arriving at our opinion, we have assumed and relied upon the
accuracy and completeness of all of the financial and other information that
was publicly available or provided to us by or on behalf of Reliance and St.
Francis, and have not been engaged to independently verify any such
information. We have assumed, with your consent, (i) that all material assets
and liabilities (contingent or otherwise, known or unknown) of Reliance and St.
Francis are as set forth in their respective financial statements; (ii) the
Merger will be accounted for under the purchase method of accounting; (iii) the
Merger will be consummated in accordance with the terms of the Agreement
without any amendment thereto and without waiver of any condition; (iv) the
prospective cost savings and revenue enhancements contemplated by managements
of both companies following the Merger will be realized; and (v) all
shareholder and required regulatory approvals will be obtained in a timely
manner. We have also assumed that the financial forecasts examined by us were
reasonably prepared on bases reflecting the best available estimates and good
faith judgments of Reliance's and St. Francis' respective senior managements
as to future performance of Reliance and St. Francis, respectively. In
conducting our review, we have not undertaken nor obtained an independent
evaluation or appraisal of any of the assets or liabilities (contingent or
otherwise) of Reliance and St. Francis nor have we made a physical inspection
of the properties or facilities of Reliance or St. Francis. Our opinion
necessarily is based upon economic, monetary and market conditions as they
exist and can be

C-2
<PAGE> 233

Reliance Bancshares, Inc.
Page 3

evaluated on the date hereof, and does not predict or take into account any
changes which may occur, or information which may become available, after the
date hereof. Furthermore, we express no opinion as to the price or trading
range at which Reliance's or St. Francis' securities (including without
limitations the Company Common Stock and Acquiror Common Stock) will trade
following the date hereof.

Our opinion has been prepared at the request and for the information
of the Board of Directors of Reliance, and shall not be used for any other
purpose or disclosed to any other party without the prior written consent of
Baird; provided, however, that this letter may be reproduced in full in the
Proxy Statement-Prospectus to be provided to Reliance's shareholders in
connection with the Merger. This opinion does not address the relative merits
of the Merger and any other potential transactions or business strategies
considered by Reliance's Board of Directors, and does not constitute a
recommendation to any shareholder of Reliance as to how any such shareholder
should vote with respect to the Merger. Baird will receive a fee for rendering
this opinion. In the past, we have provided investment banking and financial
advisory services to Reliance and St. Francis, including in connection with
both Reliance's and St. Francis' conversions from mutual to stock companies,
for which we received our customary compensation.

In the ordinary course of our business, we may from time to time trade
the securities of Reliance and St. Francis for our own account or the accounts
of our customers and, accordingly, may at any time hold long or short positions
in such securities.

Based upon and subject to the foregoing, we are of the opinion that,
as of the date hereof, the Merger Consideration is fair, from a financial point
of view, to the holders of Company Common Stock (other than St. Francis and its
affiliated companies).

Very truly yours,

ROBERT W. BAIRD & CO. INCORPORATED

C-3
<PAGE> 234

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Registrant is incorporated under the Wisconsin Business Corporation
Law ("WBCL"). Under Section 180.0851(1) of the WBCL, the Registrant is required
to indemnify a director or officer, to the extent such person is successful on
the merits or otherwise in the defense of a proceeding, for all reasonable
expenses incurred in the proceeding if such person was a party because he or she
was a director or officer of the Registrant. In all other cases, the Registrant
is required by Section 180.0851(2) to indemnify a director or officer against
liability incurred in a proceeding to which such a person was a party because he
or she was a director or officer of the Registrant, unless it is determined that
he or she breached or failed to perform a duty owed to the Registrant and the
breach or failure to perform constitutes: (i) a willful failure to deal fairly
with the Registrant or its shareholders in connection with a matter in which the
director or officer has a material conflict of interest; (ii) a violation of
criminal law, unless the director or officer had reasonable cause to believe his
or her conduct was lawful or no reasonable cause to believe his or her conduct
was unlawful; (iii) a transaction from which the director or officer derived an
improper personal profit; or (iv) willful misconduct. Section 180.0858(1) of the
WBCL provides that, subject to certain limitations, the mandatory
indemnification provisions do not preclude any additional right to
indemnification or allowance of expenses that a director or officer may have
under the Registrant's articles of incorporation, bylaws, a written agreement or
a resolution of the Board of Directors or shareholders.

Section 180.0859 of the WBCL provides that it is the public policy of
the State of Wisconsin to require or permit indemnification, allowance of
expenses and insurance to the extent required to be permitted under Sections
180.0850 to 180.0858 of the WBCL, for any liability incurred in connection with
a proceeding involving a federal or state statute, rule or regulation regulating
the offer, sale or purchase of securities.

Section 180.0828 of the WBCL provides that, with certain exceptions, a
director is not liable to a corporation, its shareholders, or any person
asserting rights on behalf of the corporation or its shareholders, for damages,
settlements, fees, fines, penalties or other monetary liabilities arising from a
breach of, or failure to perform, any duty resulting solely from his or her
status as a director, unless the person asserting liability proves that the
breach or failure to perform constitutes any of the four exceptions to mandatory
indemnification under Section 180.0851(2) referred to above.

Section 180.0833 of the WBCL provides that with certain exceptions,
directors of the Registrant against whom claims are asserted with respect to the
declaration of improper dividends or distributions to shareholders or certain
other improper acts which they approved are entitled to contribution from other
directors who approved such actions and from shareholders who knowingly accepted
an improper dividend or distribution, as provided therein. In addition, Articles
VIII and IX of the Registrant's Articles of Incorporation provide as follows:

"ARTICLE VII. INDEMNIFICATION.

A. Each person who was or is made a party or is threatened to be
made a party to or is otherwise involved in any action, suit
or proceeding, whether civil, criminal, administrative or
investigative (hereinafter a "proceeding"), by reason of
service as a director or officer of the Corporation or is or
was serving or has agreed to serve at the request of the
Corporation as a director or officer of another corporation,
including, without limitation, any subsidiary, partnership,
joint venture, trust or other enterprise, including service
with respect to an employee benefit plan (hereinafter an
"indemnitee"), whether the basis of such proceeding is alleged
action in their capacity as a director or officer or in any
other capacity while serving as such, shall be indemnified and
held harmless by the Corporation to the fullest extent
authorized by the WBCL, as the same exists or may hereafter be
amended (but, in the case of any amendment, only to the extent
the amendment permits the Corporation to provide broader
indemnification rights than such law permitted prior to
amendment), against all expense, liability and loss (including
attorneys' fees, judgments, fines, Employee Retirement Income
Security Act of 1974 excise taxes or penalties and amounts
paid in settlement) reasonably incurred or suffered by the
indemnitee in connection therewith; provided, however, that,
except as provided in Section C of this Article VIII with
respect to proceedings to enforce rights to indemnification,
the Corporation shall indemnify such indemnitee in connection
with a proceeding (or part thereof) initiated by the
indemnitee only if the proceeding (or part thereof) was
authorized by the Board pursuant to the WBCL on written
request by the indemnitee to the Corporation.

131
<PAGE> 235

B. The right to indemnification conferred in Section A of this
Article VIII shall include the right to be paid by the
Corporation the expenses incurred in defending any such
proceeding in advance of its final disposition ("advancement
of expenses"); provided, that if the WBCL requires, an
advancement of expenses incurred by an indemnitee in his or
her capacity as a director or officer (and not in any other
capacity in which service was or is rendered by such
indemnitee, including, without limitation, service to an
employee benefit plan) shall be made only upon delivery to the
Corporation of an undertaking ("undertaking"), by or on behalf
of the indemnitee, to repay all amounts so advanced if it is
ultimately determined by final judicial decision from which
there is no further right to appeal ("final adjudication")
that the indemnitee is not entitled to indemnification for
expenses under this Section B or otherwise, together with a
written affirmation by the indemnitee of his or her good faith
belief that he or she has not breached or failed his or her
duties to the Corporation. The rights to indemnification and
to the advancement of expenses conferred in Sections A and B
of this Article VIII shall be contract rights and such rights
shall continue as to an indemnitee who has ceased to be a
director or officer and shall inure to the benefit of the
indemnitee's heirs, executors and administrators.

C. The rights to indemnifications and to advancement of expenses
conferred in this Article VIII shall not be exclusive of any
other right which any person may have or hereafter acquire
under any statute, these Articles of Incorporation, By-laws,
agreement, vote of shareholders or directors, or otherwise.

D. The Corporation may maintain insurance, at its expense, to
protect itself and any director, officer, employee or agent of
the Corporation or another corporation, partnership, joint
venture, trust or other enterprise against any expense,
liability or loss, regardless of whether the Corporation would
have the power to indemnify such person against such expense,
liability or loss under the WBCL.

E. The Corporation may, as authorized from time to time by a
majority vote of disinterested directors, grant
indemnification and advancement of expenses to any employee or
agent of the Corporation or any person who is or was serving
or has agreed to serve at the request of the Corporation as an
employee or agent of another corporation, including, without
limitation, any subsidiary of the Corporation, partnership,
joint venture, trust or other enterprise, including service
with respect to an employee benefit plan, to the fullest
extent of this Article VIII permits indemnification and
advancement of expenses for directors and officers of the
Corporation.

ARTICLE IX. LIMITATION OF LIABILITY.

A director of this Corporation shall not be personally liable
to the Corporation or its shareholders, or any person asserting rights
on behalf of the Corporation or its shareholders, for monetary damages
for breach or failure to perform any duty resulting from his or her
status unless the person asserting liability proves that the breach or
failure to perform constitutes: (i) a willful failure to deal fairly
with the Corporation or its shareholders in a matter in which the
director has a material conflict of interest, (ii) a violation of
criminal law, unless the director had reasonable cause to believe his
or her conduct was lawful, (iii) a transaction from which the director
received an improper personal benefit, or (iv) willful misconduct. If
the WBCL is hereafter amended to authorize corporate action further
alienating or limiting the personal liability of directors, the
liability of directors of the Corporation shall be eliminated or
limited to the fullest extent permitted by such law as amended."

The directors and officers of St. Francis Bank, F.S.B. ("St. Francis
Bank") are included in the Registrant's directors' and officers' liability
insurance policy. The Registrant's insurance policy provides that, subject to
the applicable liability limits and retention amounts, the insurer will
reimburse directors and officers of St. Francis Bank and the Registrant for a
"loss" (as defined in the policy) sustained by a director or officer resulting
from any claim made against them for a "wrongful act" (as defined in the
policy). The policy also provides that, subject to the applicable liability
limits and retention amounts, the insurer will reimburse the Registrant for a
loss for which the Registrant has lawfully indemnified (or is required or
permitted by law to indemnify) a director or officer resulting from any such
claim. Subject to certain exclusions set forth in the policy, "wrongful act" is
defined to mean any actual or alleged error, misstatement, misleading statement,
act or omission, or neglect or breach of duty by the directors or officers in
the discharge of their duties solely in their capacities as such directors or
officers.

132
<PAGE> 236

ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) EXHIBITS

EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT

2.1 Agreement and Plan of Reorganization, dated June 30, 1998, by and
between St. Francis Capital Corporation and Reliance Bancshares, Inc.

2.2 Agreement and Plan of Merger, dated September 22, 1998, between St.
Francis Capital Corporation and Reliance Bancshares, Inc.

3.1 St. Francis' Articles of Incorporation (incorporated by reference to
St. Francis' Form S-1 Registration Statement (33-58680) declared
effective by the SEC on April 22, 1993).

3.2 Articles of Amendment to St. Francis' Articles of Incorporation
(incorporated by reference to Exhibit A of the Rights Agreement filed
as Exhibit 3.5 to St. Francis' Current Report on Form 8-K filed
September 26, 1997).

3.3 St. Francis' Bylaws (incorporated by reference to St. Francis' Annual
Report on Form 10-K for the fiscal year ended September 30, 1995).

4.1 Rights Agreement between St. Francis and Firstar Trust Company, as
Rights Agent, dated September 25, 1997 (incorporated by reference to
Exhibit 4.1 to St. Francis' Current Report on Form 8-K filed September
26, 1997).

5.1 Opinion of Michael Best & Friedrich LLP regarding Legality of
Securities being Issued.

8.1 Opinion of Michael Best & Friedrich LLP regarding federal income tax
consequences.

10.1 Employment Agreement - Allan T. Bach.

10.2 Proposed Employment Agreement - Carol A. Barnharst.

10.3 Form of Voting Agreement by and between St. Francis and the
executive officers and directors of Reliance in their individual
capacity.

10.4 Form of Letter Agreement by and between St. Francis and "affiliates" of
Reliance.

21.1 Subsidiaries of St. Francis.

23.1 Consent of Michael Best & Friedrich LLP as to the Legality of the
Securities Being Issued (contained in its opinion filed as Exhibit
5.1).

23.2 Consent of KPMG Peat Marwick LLP.

23.3 Consent of Schenck & Associates, S.C.

23.4 Consent of Michael Best & Friedrich LLP as to its tax opinion
(contained in its opinion filed as Exhibit 8.1).

23.5 Consent of Robert W. Baird & Co., Incorporated, Financial Advisor to
Reliance Bancshares, Inc. (included in Exhibit C to the Proxy
Statement/Prospectus).

24.1 Power of Attorney (contained in the Signature Page of this Registration
Statement).

133
<PAGE> 237

99.1 Form of proxy to be mailed to shareholders of Reliance.

(b) FINANCIAL STATEMENT SCHEDULES

Not applicable.

1. Opinion of Robert W. Baird & Co., Incorporated (included
herein as Exhibit C to the Proxy Statement/Prospectus).

ITEM 22. UNDERTAKINGS.

(a) The undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration
Statement:

(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933, as amended (the "Act");

(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a
fundamental change in the information set forth in the
Registration Statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would
not exceed that which was registered) and any deviation
from the low or high end of the estimated maximum
offering range may be reflected in the form of the
prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation
of Registration Fee" table in the effective Registration
Statement; and

(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the Registration Statement.

(2) That, for the purpose of determining any liability under the
Act, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities
offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering
thereof.

(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.

(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Act, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act")
(and, where applicable, each filing of an employee benefit plan's
annual report pursuant to section 15(d) of the Exchange Act) which is
incorporated by reference in the Registration Statement shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

134
<PAGE> 238

(c) The undersigned Registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is
sent or given, the latest annual report to security holders that is
incorporated by reference in the prospectus and furnished pursuant to
and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the
Exchange Act; and, where interim financial information required to be
presented by Article 3 of Regulation S-X is not set forth in the
prospectus, to deliver, or cause to be delivered to each person to whom
the prospectus is sent or given, the latest quarterly report that is
specifically incorporated by reference in the prospectus to provide
such interim financial information.

(d) (1) The undersigned registrant hereby undertakes as follows: that
prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is a part of this
registration statement, by any person or party who is deemed
to be an underwriter within the meaning of Rule 145(c), the
issuer undertakes that such reoffering prospectus will contain
the information called for by the applicable registration form
with respect to reofferings by persons who may be deemed
underwriters, in addition to the information called for by the
other items of the applicable form.

(2) The undersigned Registrant undertakes that every prospectus
(i) that is filed pursuant to paragraph (1) immediately
preceding, or (ii) that purports to meet the requirements of
Section 10(a)(3) of the Act and is used in connection with an
offering of securities subject to Rule 415, will be filed as a
part of an amendment to the Registration Statement and will
not be used until such amendment is effective, and that, for
purposes of determining any liability under the Act, each such
post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.

(e) Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the
Registrant pursuant to any existing provision or arrangement or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or paid
by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.

(f) The undersigned Registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus
pursuant to Item 4, 10(b), 11, or 13 of this Form, within one business
day of receipt of such request, and to send the incorporated document
by first class mail or other equally prompt means. This includes
information contained in documents filed subsequent to the effective
date of the Registration Statement through the date of responding to
the request.

(g) The undersigned Registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and
the company being acquired involved therein, that was not the subject
of, and included in the Registration Statement when it became
effective.

135
<PAGE> 239

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended,
St. Francis Capital Corporation has duly caused this Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Brookfield, State of Wisconsin on September 28, 1998.

ST. FRANCIS CAPITAL CORP.

By: /s/ Thomas R. Perz
-------------------------
Thomas R. Perz, President and
Chief Executive Officer

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Thomas R. Perz and Jon D. Sorenson or any
of them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission and any state of the United States, granting
unto said attorneys-in-fact and agents full power and authority to do and
perform each and every act and thing requisite and necessary to be done in and
about the premises, as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents may lawfully do or cause
to be done by virtue hereof.

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED,
THIS REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATE INDICATED.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Thomas R. Perz President, Chief Executive
- ---------------------------- Officer and Director (Principal
Thomas R. Perz Executive and Operating Officer)

/s/ Jon D. Sorenson Chief Financial Officer and
- ---------------------------- Treasurer (Principal Financial
Jon D. Sorenson and Accounting Officer)

/s/ John C. Schlosser Chairman of the Board and
- ---------------------------- Director
John C. Schlosser

/s/ David J. Drury Director
- ----------------------------
David J. Drury

/s/ Rudolph T. Hoppe Director
- ----------------------------
Rudolph T. Hoppe September 28, 1998

/s/ Edward W. Mentzer Director
- ----------------------------
Edward W. Mentzer

/s/ Jeffrey A. Reigle Director
- ----------------------------
Jeffrey A. Reigle

/s/ Julia H. Taylor Director
- ----------------------------
Julia H. Taylor

/s/ Edmund O. Templeton Director
- ----------------------------
Edmund O. Templeton
</TABLE>

<PAGE> 1
EXHIBIT A

AGREEMENT AND PLAN OF REORGANIZATION

BETWEEN

ST. FRANCIS CAPITAL CORPORATION

AND

RELIANCE BANCSHARES, INC.

Dated as of June 30, 1998
<PAGE> 2
TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE ONE

ARTICLE TWO

ARTICLE THREE

i
<PAGE> 3
<TABLE>
<S> <C>
3.12 Brokerage Commissions and Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-22
3.13 Certain Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-22
3.14 Governing Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-23
3.15 Orders, Injunctions, Decrees; Compliance With Applicable Laws . . . . . . . . . . . . . . . . . A-23
3.16 Shareholders of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-23
3.17 Regulatory Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-23
3.18 Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-24
3.19 Loan Portfolio; Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-24
3.20 Mortgage-Backed and Related Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-24
3.21 Allowance for Loan Losses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-24
3.22 Conduct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-25
3.23 Fiduciary Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-25
3.24 Compliance With Environmental Laws and Health and Safety Laws . . . . . . . . . . . . . . . . . A-25
3.25 Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-26
3.26 Insider Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-27
3.27 No Sensitive Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-27
3.28 Community Reinvestment Act Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-27
3.29 Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-27
3.30 Qualified Thrift Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-27
3.31 The ESOP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-27
3.32 Absence of Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-27
3.33 Liquidation Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-27
3.34 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-28
3.35 Derivative Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-28
3.36 Company Pension Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-28
3.37 Director Deferred Retirement Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-28

ARTICLE FOUR

ARTICLE FIVE

ii
<PAGE> 4
<TABLE>
<S> <C>
5.12 Termination and Other Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-36
5.13 Voting Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-37
5.14 Advise of Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-37

ARTICLE SIX

ARTICLE SEVEN

ARTICLE EIGHT

ARTICLE NINE

iii
<PAGE> 5
<TABLE>
<S> <C>
ARTICLE TEN

ARTICLE ELEVEN

ARTICLE TWELVE

</TABLE>

APPENDIX I: Disclosure Schedules

iv
<PAGE> 6
AGREEMENT AND PLAN OF REORGANIZATION

W I T N E S S E T H:

NOW, THEREFORE, in consideration of the premises and the mutual and
dependent promises hereinafter contained, the parties do represent, warrant,
covenant and agree as follows:

ARTICLE ONE

THE REORGANIZATION

A-1
<PAGE> 7
1.04 Effect of Merger. Upon the Merger becoming effective:

(1) the right to receive an amount in cash (the "Per Share
Cash Distribution") equal to:

(a) $10.00, if the Acquiror Average Stock Price as
calculated herein is between $32.41 and $40.00;

(b) an amount equal to .250 of the Acquiror Average
Stock Price, if the Acquiror Average Stock Price as
calculated herein is between $40.01 and $42.00;

(d) an amount equal to .2295 of the Acquiror Average
Stock Price, if the Acquiror Average Stock Price as
calculated herein is $45.75 or more;

A-2
<PAGE> 8
(e) If the Acquiror Average Stock Price is $32.40 or
less, then the Acquiror has the option of completing the
Merger using a Per Share Cash Distribution of $10.00 or
terminating the Agreement pursuant to Section 10.01(e) of the
Agreement; or

(2) the right to receive the following (the "Per Share
Stock Distribution):

(b) if the Acquiror Average Stock Price is between
$40.01 and $42.00, .250 shares of Acquiror Common Stock;

(d) if the Acquiror Average Stock Price is $45.75 or
more, .2295 shares of Acquiror Common Stock;

A-3
<PAGE> 9
All shares of Acquiror Common Stock that are owned by the Company or any
of its wholly-owned subsidiaries (other than Trust Account Shares and DPC
Shares) shall become treasury stock of Acquiror.

1.06 Election Procedures.

A-4
<PAGE> 10
(e) Any election as between the Per Share Cash Distribution or
the Per Share Stock Distribution shall have been properly made only if
the Exchange Agent shall have received a properly completed Election Form
by the Election Deadline. An Election Form will be properly completed
only if accompanied by certificates representing all shares of the
Company Common Stock covered thereby. An Election Form may be revoked or
changed by the person submitting such Election Form to the Exchange Agent
by written notice to the Exchange Agent, provided such notice is received
by the Exchange Agent at or prior to the Election Deadline. All Election
Forms shall be deemed revoked if the Exchange Agent is notified in
writing by Acquiror or the Company that this Agreement has been
terminated. The certificate or certificates representing the Company
Common Stock relating to any revoked Election Form shall be promptly
returned without charge to the person submitting such Election Form to
the Exchange Agent. The Exchange Agent shall have reasonable discretion
to determine when any election, modification or revocation is received
and whether any such election, modification or revocation has been
properly made.

(i) if the number of shares of Acquiror Common
Stock that would be issued upon conversion in
the Merger of the Stock Election Shares is
less than the Stock Amount, then

(A) all shares of Company Common
Stock electing Stock Election Shares
will be converted into the right to
receive the Per Share Stock
Distribution,

A-5
<PAGE> 11
(B) subject to Section 1.06(d), the
Exchange Agent will select first from
among the No Election Shares, by random
selection, and then (if necessary) from
among the Cash Election Shares, pro rata
in accordance with the number of shares
of Company Common Stock beneficially
owned by each Company shareholder and
designated as Cash Election Shares
("Stock Designee Shares"), in each case
subject to the requirement for issuance
pursuant to Section 1.06(b) of at least
50 shares of Acquiror Common Stock to
each recipient thereof, such that the
number of Stock Designee Shares will,
when added to the number of Stock
Election Shares, equal the minimum Stock
Amount percentage, and the appropriate
number of Stock Designee Shares will be
converted into the right to receive the
Per Share Stock Distribution (provided,
however, that no particular holder of
Cash Election Shares will be required to
designate all or a portion of his, her
or its Cash Election Shares as Stock
Designee Shares if such designation
would threaten satisfaction of any of
the conditions to the consummation of
the Merger set forth in Article Seven),
and

(C) Cash Election Shares and the No
Election Shares not designated Stock
Designee Shares will be converted into
the right to receive the Per Share Cash
Distribution; or

1.07 Exchange Procedures.

A-6
<PAGE> 12
and/or the amount of cash into which the Certificate surrendered shall
have been converted pursuant to this Agreement and, if such holder's
Company Common Stock has been converted into Acquiror Common Stock,
any other distribution theretofore declared and not yet paid with
respect to the Acquiror Common Stock issuable in the Merger, in each
case without interest. The Exchange Agent shall not be entitled to
vote or exercise any rights of ownership with respect to the shares of
Acquiror Common Stock held by it from time to time hereunder, except
that it shall receive and hold all dividends or other distributions
paid or distributed with respect to such shares for the account of the
persons entitled thereto. No dividends or other distributions payable
after the Effective Time with respect to Acquiror Common Stock shall
be paid to the holder of any unsurrendered Certificate until the
holder thereof shall duly surrender such Certificate in accordance
with this Article One. After the surrender of a Certificate in
accordance with this Article One, the record holder thereof shall be
entitled to receive any dividends or other distributions, with any
interest thereon, which became payable with respect to the shares of
Acquiror Common Stock represented by such Certificate after the
Effective Time but on or before the time of such surrender. No holder
of an unsurrendered Certificate shall be entitled, until the surrender
of such Certificate, to vote the shares of Acquiror Common Stock into
which his or her Company Common Stock shall have been converted.

A-7
<PAGE> 13
(e) Any portion of the Exchange Fund that remains
unclaimed by the shareholders of the Company for six months after the
Effective Time, including dividends received pursuant to section
1.07(b) and any interest paid on the Exchange Fund, shall be remitted
back to Acquiror. Any shareholders of the Company who have not
theretofore complied with this Article One shall thereafter look only
to Acquiror for payment for their shares of Company Common Stock.
Notwithstanding the foregoing, neither the Acquiror, the Company, the
Exchange Agent, or any other person shall be liable to any former
holder of shares of Company Common Stock for any amount properly
delivered to a public official pursuant to applicable abandoned
property, escheat or similar laws.

1.09 Dissenting Shares.

A-8
<PAGE> 14
1.11 Options.

(d) All options which are issued and outstanding as of the date
hereof under the terms of the Option Plan will become fully vested and
exercisable as of the Closing Date.

A-9
<PAGE> 15
bylaws of the Surviving Bank shall be the articles of association and by-laws
of the Acquiror-Bank in effect immediately prior to the effective time of the
Bank Merger. At the effective time of the Bank Merger, the directors and
officers of the Surviving Bank shall be the directors and officers of the
Acquiror-Bank immediately prior to the effective time of the Bank Merger,
except that, provided the Surviving Bank can obtain all necessary regulatory
approvals, one outside director of the Merging Bank, as selected by the Board
of Directors of the Merging Bank, shall become a director of the Surviving Bank
as soon as practicable after the effective date of the Bank Merger.

ARTICLE TWO

REPRESENTATIONS AND WARRANTIES OF ACQUIROR

Acquiror represents and warrants to the Company as follows:

2.01 Organization; Qualification; Good Standing; Corporate Power.

(b) Acquiror-Bank is a federally chartered stock savings
association duly organized and in existence under the laws of the
United States.

A-10
<PAGE> 16
2.04 Financial Statements.

A-11
<PAGE> 17
governing documents of Acquiror-Bank, or (b) assuming that the consents and
approvals referred to in Section 2.07 hereof are duly obtained, (i) violate any
statute, code, ordinance, rule, regulation, judgment, order, writ, decree or
injunction applicable to Acquiror or Acquiror-Bank, or (ii) violate, conflict
with, result in a breach of any material provision of or the loss of any
material benefit, constitute a default (or an event which, with notice or lapse
of time, or both, would constitute a default) under, result in the termination
of or a right of termination or cancellation under, accelerate the performance
required by, or result in the creation of any material lien, pledge, security
interest, charge or other encumbrance upon any of the respective properties or
assets of Acquiror or Acquiror-Bank or any of their subsidiaries under any of
the material terms, conditions or provisions of any material note, bond,
mortgage, indenture, deed of trust, license, lease, agreement or other
instrument or obligation to which Acquiror or Acquiror-Bank is a party, except
for such violations, conflicts, breaches or defaults which, either individually
or in the aggregate, would not have or be reasonably likely to have a material
adverse effect on Acquiror.

2.09 Employee Benefit Plans.

A-12
<PAGE> 18
applied for a favorable determination letter from the IRS, and the
Acquiror is not aware of any circumstances likely to result in
revocation of any such favorable determination letter. The Acquiror's
Employee Stock Ownership Plan satisfies the requirements for an
employee stock ownership plan under Section 4975(e)(7) of the Code.
There is no material pending or threatened litigation relating to the
Acquiror Plans. Neither the Acquiror nor any of its ERISA Affiliates
has engaged in a transaction with respect to any Acquiror Plan that,
could subject the Acquiror or any of its ERISA Affiliates or any other
party to a tax or penalty imposed by Section 4975 of the Code or
Section 502(i) or 502(l) of ERISA in an amount which would be
material.

(f) No matter is pending relating to any of the Acquiror
Plans before any court or government agency.

(g) Neither the Acquiror nor any of its ERISA Affiliates
presently contributes to or is currently a party to any Multi-Employer
Plan.

(i) Neither the Acquiror nor any ERISA Affiliate
presently contributes to any Acquiror Plan that is or was subject to
Title IV of ERISA.

A-13
<PAGE> 19
(j) Except as set forth in Schedule 2.09, the
consummation of the transactions contemplated by this Agreement will
not, either alone, or in combination with another event (i) entitle
any current or former employee or officer of the Acquiror or an ERISA
Affiliate to severance pay, unemployment compensation or any other
payment, except as expressly provided in this Agreement or (ii)
accelerate the time of payment or vesting, or increase the amount, of
compensation due any such employee or officer.

(k) No Acquiror Plan provides for payment of an amount
which taken by itself would exceed amounts deductible for federal
income tax purposes by virtue of Section 280(G) of the Code.

2.10 Compliance with Environmental Laws. Except as set forth on
Schedule 2.10, to Acquiror's knowledge, as of the date of this Agreement:

A-14
<PAGE> 20
made or will make any untrue statement of a material fact or omitted or will
omit to state a material fact necessary in order to make the statements made,
in the light of the circumstances under which they were made, not misleading.
Except for normal examinations conducted by the IRS, the OTS, the FDIC in the
regular course of the business of the Acquiror or its subsidiaries, no federal,
state or local governmental agency, commission or other entity has initiated
any proceeding or, to the best of the knowledge and belief of the Acquiror,
investigation into the business or operations of the Acquiror or its
subsidiaries within the past five years. Except as set forth on Schedule 2.14,
there is no unresolved violation, criticism or exception by the SEC, the FRB,
the FDIC, the OTS or other agency, commission or entity with respect to any
report or statement referred to herein. Since the date of any such filings,
there has been no material change in the condition of the Acquiror or any of
its Subsidiaries, financial or otherwise, such that, had such change occurred
prior to any such filing, such change would have been required to be disclosed
or described therein. Except as otherwise disclosed on Schedule 2.14, there is
no unresolved violation, criticism or exception by any regulatory agency with
respect to any report or statement relating to any examinations of the Acquiror
or any of its subsidiaries.

ARTICLE THREE

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to Acquiror as follows:

3.01 Organization; Qualification; Good Standing; Corporate Power.

A-15
<PAGE> 21
(b) The Merging Bank is a state-chartered stock savings
bank duly organized, validly existing and in good standing under the
laws of the State of Wisconsin. Set forth on Schedule 3.01 is a list
of all direct and indirect subsidiaries of the Company, including the
Merging Bank (collectively, the "Subsidiaries"), and the states of
incorporation or organization for each of its Subsidiaries and states
in which each of its Subsidiaries is qualified to do business. Each
of its Subsidiaries has the corporate power and authority to carry on
its business as it is now conducted and to own, lease and operate
their properties, and are duly qualified to do business and are in
good standing in each jurisdiction where its ownership or leasing of
property or the conduct of its business requires it to be qualified
and in which the failure to be duly qualified would have a material
adverse effect upon its financial condition, results of operation or
business. The deposit accounts of the Merging Bank are insured by the
Federal Deposit Insurance Corporation ("FDIC") through the Savings
Association Insurance Fund (the "SAIF") to the fullest extent
permitted by law, and all premiums and assessments required in
connection therewith have been paid by the Merging Bank. The Merging
Bank is the only direct subsidiary of the Company, and is the only
subsidiary of the Company that is a "Significant Subsidiary" as such
term is defined in Regulation S-X promulgated by the SEC.

3.03 Capitalization.

A-16
<PAGE> 22
Option, the expiration date of each such Option, and the price at
which each such Option may be exercised are set forth in Schedule
3.03. In addition, the Company has awarded 81,980 shares as stock
awards to certain officers and employees of the Company pursuant to
the Reliance Savings Bank Recognition and Retention Plan (the "RRP"),
and an additional 20,514 shares have been awarded, subject to
completion of the Merger to certain Officers of the Company pursuant
to the RRP, and has purchased 102,494 shares of Company Common Stock
(the "Restricted Stock") to fund such obligations. The names of the
recipients of Restricted Stock under the RRP, the date of grant, the
number of shares received and the vesting schedule for each award are
set forth on Schedule 3.03. Except with respect to the Options and
pursuant to the RRP and the terms of this Agreement, neither the
Company nor its Subsidiaries have granted any outstanding warrants,
options, rights, calls, agreements, understandings or other
commitments of any nature relating to the authorization, issuance,
sale or repurchase of any equity securities of the Company or its
Subsidiaries. Except as otherwise provided in the Articles of
Incorporation of the Company and except as set forth on Schedule 3.03,
only the 2,403,701 issued and outstanding shares of Company Common
Stock will be entitled to vote to approve this Agreement and the Plan
of Merger.

3.04 Financial Statements.

A-17
<PAGE> 23
(c) All of the aforesaid Company Financial Statements
have been, and, with respect to the Subsequent Company Financial
Statements, will be, prepared in accordance with GAAP, utilizing
accounting practices consistent with prior years except as otherwise
disclosed, and comply or will comply with applicable accounting
requirements and with the rules and regulations of the SEC with
respect thereto. All of the aforesaid Company Financial Statements
present fairly, and all of the Subsequent Company Financial Statements
will present fairly, the financial position of the Company and its
Subsidiaries taken as a whole and the results of its and their
operations and changes in its and their financial position as of and
for the periods ending on their respective dates. The books and
records of the Company and the Merging Bank have been and are being
maintained in all material respects in accordance with GAAP and all
other applicable legal accounting requirements and reflect only actual
transactions. Subject to such changes which may result from an audit
of any Subsequent Company Financial Statements (which changes in the
aggregate will not be material), the allowance for loan losses in such
Company Financial Statements is, and, with respect to the Subsequent
Company Financial Statements will be, adequate under the standards
applied by the WDFI and FDIC and based on past loan loss experiences
and potential losses in current portfolios to cover all known or
anticipated loan losses. Except with respect to this Agreement and
the transactions contemplated herein, there are, and with respect to
the Subsequent Financial Statements will be, no agreements, contracts
or other instruments to which the Company or its Subsidiaries are a
party or by which it or they or (to the knowledge of the Company) any
of the officers, directors, employees or shareholders of the Company
or its Subsidiaries have rights which would have a material adverse
effect on the consolidated financial position of the Company or the
financial position of the Merging Bank which are not disclosed herein
or reflected in the Company Financial Statements and the Subsequent
Company Financial Statements.

A-18
<PAGE> 24
3.07 Consents and Approvals. Except for (a) the filing of
applications, notices or other documents necessary to obtain, and the receipt
of, the Requisite Regulatory Approvals (as defined in Section 7.01), (b) the
filing with the SEC of a proxy statement in definitive form relating to any
meeting of the Company's shareholders to be held in connection with this
Agreement and the transactions contemplated hereby, (c) the approval of this
Agreement by the requisite vote of the shareholders of the Company, (d) the
filing of the Articles of Merger with the WDFI pursuant to applicable
provisions of the WBCL, and (e) such consents, filings, authorizations or
approvals as may be set forth on Schedule 3.07, no consents or approvals of or
filings or registrations with any court, administrative agency or commission or
other governmental authority or instrumentality or with any third party are
necessary in connection with (i) the execution and delivery by the Company of
this Agreement, (ii) the consummation by Company of the Merger, and (iii) the
consummation by the Merging Bank of the Bank Merger and the other transactions
contemplated hereby.

3.09 Taxes, Returns and Reports.

A-19
<PAGE> 25
assessments upon the Company or any of its Subsidiaries, nor does the
Company or any of its Subsidiaries have outstanding any currently
effective waivers extending the statutory period of limitation
applicable to any Federal, state, county, local or foreign income tax
return for any period. In addition, (i) proper and accurate amounts
have been withheld by the Company and its Subsidiaries from their
employees, customers, depositors, shareholders and others from whom
they are required to withhold Tax in compliance with all applicable
Federal, state, county, local and foreign laws, except where the
failure to do so would not have a material adverse effect on the
Company or its Subsidiaries, the Acquiror or the Surviving
Corporation, and (ii) there are no Tax liens upon any property or
assets of the Company or its Subsidiaries except liens for current
Taxes not yet due. Except as, in the aggregate, would not have a
material adverse effect on the Company or its Subsidiaries, the
Acquiror or the Surviving Corporation, or as disclosed on Schedule
3.09, to the best of the Company's knowledge, (i) no property of the
Company or any of its Subsidiaries is property that the Company or any
of its Subsidiaries is required to treat as "tax-exempt use property"
within the meaning of Section 168(h) of the Code, (ii) neither the
Company nor any of its Subsidiaries has been required to include in
income any adjustment pursuant to Section 481 of the Code by reason of
a voluntary change in accounting method initiated by the Company or
any of its Subsidiaries, and the IRS has not initiated or proposed any
such adjustment or change in accounting method; and (iii) neither the
Company nor any of its Subsidiaries has entered into a transaction
which is being accounted for as an installment obligation under
Section 453 of the Code.

3.10 Corporate Properties.

A-20
<PAGE> 26
(b) Except as set forth on Schedule 3.10 and except for
property in foreclosure proceedings, the Company and its Subsidiaries
have good and marketable title to all their real and personal
property, free, clear and discharged of, and from, any and all liens,
mortgages, charges, encumbrances and/or security interests of any
kind.

3.11 Employee Benefit Plans.

A-21
<PAGE> 27
(e) Neither the Company nor any of its ERISA Affiliates
has any obligations for retiree health and life benefits under any
Plan, except as set forth on Schedule 3.11. Except as set forth on
Schedule 3.11, there are no restrictions on the rights of the Company
or its ERISA Affiliates to amend or terminate any such Plan without
incurring any liability thereunder.

(g) No matter is pending relating to any of the Company
Plans before any court or government agency.

(h) Neither the Company nor any of its ERISA Affiliates
presently contributes to or is currently a party to any Multi-Employer
Plan.

(i) Neither the Company nor any ERISA Affiliate presently
contributes to any Company Plan that is or was subject to Title IV of
ERISA.

(j) No amounts payable under any of the Company Plans
which taken by itself will fail to be deductible for federal income
tax purposes by virtue of Section 280(G) of the Code.

3.12 Brokerage Commissions and Fees.

A-22
<PAGE> 28
excess of $25,000 per annum, or which materially restricts the conduct of any
line of business by the Company or its Subsidiaries. True, complete and
correct copies of all of the written agreements, contracts, or other
instruments, and written descriptions of the material details of any oral
agreements or instruments identified on Schedule 3.13, are attached to Schedule
3.13. Except as otherwise specifically disclosed on Schedule 3.13, all such
agreements, contracts or other instruments are valid and binding and are in
full force and effect and neither the Company nor any of its Subsidiaries is in
default under, or is in violation of, any such agreement, contract or other
instrument to which they are a party or by which they may be bound.

3.15 Orders, Injunctions, Decrees; Compliance With Applicable
Laws.

A-23
<PAGE> 29
regular course of the business of the Company or its Subsidiaries, no federal,
state or local governmental agency, commission or other entity has initiated
any proceeding or, to the best of the knowledge and belief of the Company,
investigation into the business or operations of the Company or its
Subsidiaries within the past five years. Except as set forth on Schedule 3.17,
there is no unresolved violation, criticism or exception by the SEC, the
Federal Reserve, the FDIC, the WDFI or other agency, commission or entity with
respect to any report or statement referred to herein. Since the date of any
such filings, there has been no material change in the condition of the
Company, the Merging Bank, or any of its Subsidiaries, financial or otherwise,
such that, had such change occurred prior to any such filing, such change would
have been required to be disclosed or described therein. Except as otherwise
disclosed on Schedule 3.17, there is no unresolved violation, criticism or
exception by any regulatory agency with respect to any report or statement
relating to any examinations of the Company or any of its Subsidiaries.

A-24
<PAGE> 30
3.22 Conduct. Except as set forth on Schedule 3.22, since June
30, 1997, neither the Company nor any of its Subsidiaries has (a) conducted its
business or entered into any transaction other than in the ordinary course of
business consistent with prudent banking practices, or incurred or became
subject to any liabilities or obligations except liabilities incurred in the
ordinary course of business consistent with prudent banking practices; (b)
suffered any labor trouble, or any event or condition of any character
materially adversely affecting its business or prospects; (c) discharged or
satisfied any lien or encumbrance or paid any obligation or liability other
than those presented in the Company Financial Statements or incurred after the
date thereof in the ordinary course of business consistent with prudent banking
practices; (d) mortgaged, pledged, or subjected to lien, charge or other
encumbrance any part of its assets, or sold or transferred any such assets,
except in the ordinary course of business consistent with prudent banking
practices; (e) made or permitted an amendment or termination of any contract to
which it is a party except in the ordinary course of business consistent with
prudent banking practices; (f) issued, agreed to issue or sold any of its
capital stock or corporate debt obligations (whether authorized and unissued or
held in the treasury); (g) granted any options, warrants or other rights for
the purchase of its capital stock; (h) declared, agreed to declare, set aside
or paid any dividend or other distribution in respect of its or their capital
stock, or directly or indirectly purchased, redeemed or otherwise acquired or
agreed to purchase or redeem or otherwise acquire any shares of such stock; (i)
entered into any employment contract with any officer or salaried employee,
made any accrual or arrangement for or payment of bonuses or special
compensation of any kind or any severance or termination pay to any of its
present or former officers or employees, increased the rate of compensation
payable or to become payable by them to any of its officers or employees, or
instituted or made any increase in any employee welfare, retirement or similar
plan or arrangement, in each case other than in the ordinary course of business
consistent with prudent banking practices or as contemplated pursuant to such
contract, plan or arrangement, or suffered any strike, work stoppage, slow-down
or other labor disturbance; or (j) entered into any other transaction other
than in the ordinary course of business consistent with prudent banking
practices.

A-25
<PAGE> 31
radioactive substance, radioactive material, radioactive waste or dangerous
substance under any Environmental Laws (as defined herein). The term
"Hazardous Material" shall include, but not be limited to the following:
petroleum or fraction thereof, underground storage tank, aboveground storage
tank, asbestos or asbestos-containing materials, polychlorinated byphenyls
("PCBs") and medical waste.

(a) Except as set forth on Schedule 3.24, to the Company's
knowledge, as of the date of this Agreement:

A-26
<PAGE> 32
such portions thereof that relate solely to the Acquiror) will comply in all
respects with the provisions of all applicable laws, including the Securities
Act and the Exchange Act.

3.30 Qualified Thrift Lender. The Merging Bank is a "Qualified
Thrift Lender" as defined under Section 10(m) of the HOLA, codified at 12 USC
Sec. 1467a(m).

A-27
<PAGE> 33
3.34 Insurance. Schedule 3.34 contains a true, correct and
complete list of all insurance policies and bonds maintained by the Company and
its Subsidiaries, including the name of the insurer, the policy number, the
type of policy and any applicable deductibles, and all such insurance policies
and bonds are in full force and effect and have been in full force and effect
at all times during which the Company or any Subsidiary had any insurable
interest in the subject of such insurance policies and bonds. As of the date
hereof, neither the Company nor any Subsidiary has received any notice of
cancellation or amendment of any such policy or bond or is in default under any
such policy or bond, no coverage thereunder is being disputed and all material
claims thereunder have been filed in a timely fashion and all premiums due
thereon on or prior to the date of Closing have been paid as and when due. The
existing insurance carried by the Company and its Subsidiaries is and will
continue to be, in respect of the nature of the risks insured against and the
amount of coverage provided, substantially similar in kind and amount to that
customarily carried by parties similarly situated who own properties and engage
in businesses substantially similar to that of the Company and its
Subsidiaries. True and complete copies of all such policies and bonds
reflected on Schedule 3.34 are available for inspection by Acquiror.

ARTICLE FOUR

COVENANTS OF ACQUIROR

Acquiror hereby covenants and agrees with the Company as follows:

4.01 Conduct Of Business: Certain Covenants. From and after the
execution and delivery of this Agreement and until the Effective Time, Acquiror
and each of its subsidiaries will:

(a) Conduct its business and operate in the usual
ordinary course in accordance with prudent and sound banking and
business practices; and

A-28
<PAGE> 34
4.02 SEC Registration. Acquiror shall file with the SEC, as soon
as practicable after the execution of this Agreement but in no event later than
90 days from the date of this Agreement, any necessary Registration Statement
(as defined in Section 6.01(a)) covering the Acquiror Common Stock to be issued
pursuant to this Agreement and the Plan of Merger (provided that the Company
has given to Acquiror all information concerning the Company which is required
for inclusion in the Registration Statement), and shall use its best efforts
to cause the same to become effective and thereafter, until the Effective Time
or termination of this Agreement, to keep the same effective and, if necessary,
amend and supplement the same. Acquiror shall, as soon as practicable after
the execution of this Agreement, take all actions necessary to have the shares
of Acquiror Common Stock to be delivered in exchange for Company Common Stock
qualified or registered for offering and sale, or to identify and perfect an
exemption therefrom, under the securities or "Blue Sky" laws of each
jurisdiction within the United States in which shareholders of the Company
reside. In advance of filing the Registration Statement, Acquiror shall
provide the Company and its counsel with a copy of the Registration Statement
and an opportunity to comment thereon. Acquiror shall advise the Company,
promptly after Acquiror receives notice thereof, of the time when the
Registration Statement has become effective or any supplement or amendment has
been filed, of the issuance of any stop order or the suspension of
qualification of Acquiror Common Stock for offering or sale in any
jurisdiction, of the initiation or threat of any proceeding for any such
purpose, or of any request by the SEC for the amendment or supplement of the
Registration Statement or for additional information. None of the information
furnished by the Acquiror for inclusion in the Registration Statement, when it
shall become effective, and at all times subsequent to such effectiveness, or
the Proxy Statement/Prospectus (as defined in Section 6.01(a)), when mailed or
at the time of the Shareholders Meeting (as defined in Section 5.01(a)), or in
the case of any other document filed with the SEC or any state securities
commission, at the respective times at which such documents are filed with the
SEC or such state securities commission, shall contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.

A-29
<PAGE> 35
4.06 Employment Agreements. Acquiror agrees to provide an
employment agreement between Ms. Carol A. Barnharst and Acquiror, which
agreement shall commence as of the Effective Time and run for an initial term
of three (3) years at her current base salary level and shall be in the form
attached hereto as Exhibit C. Acquiror further agrees to honor the provisions
of the present contract between Mr. Allan T. Bach and the Company, including
those that relate to a termination of employment following a change-in-control
of the Company.

A-30
<PAGE> 36
interests of such Indemnified Party and the interests of one or more other
Indemnified Parties and that the interests of such Indemnified Party will not
be adequately represented unless separate counsel is retained, in which case,
Acquiror shall be obligated to pay such separate counsel, (C) Acquiror shall
not be liable for any settlement effected without its prior written consent
(which consent shall not be unreasonably withheld) and (D) Acquiror shall have
no obligation hereunder to any Indemnified Party when and if a court of
competent jurisdiction shall ultimately determine, and such determination shall
have become final and nonappealable, that indemnification of such Indemnified
Party in the manner contemplated hereby is prohibited by applicable law. Any
Indemnified Party wishing to claim Indemnification under this Section 4.10,
upon learning of any such claim, action, suit, proceeding or investigation,
shall notify Acquiror thereof, provided that the failure to so notify shall not
affect the obligations of Acquiror under this Section 4.10 except to the extent
such failure to notify materially prejudices Acquiror. The Acquiror's
obligations under this Section 4.10 shall continue in full force and effect for
the period of the applicable statute of limitations; provided, however, that
all rights to indemnification in respect of any claim (a "Claim") asserted or
made within such period shall continue until the final disposition of such
Claim.

ARTICLE FIVE

COVENANTS OF THE COMPANY

The Company hereby covenants and agrees with Acquiror as follows:

5.01 Registration Statement and Shareholders Meeting.

5.02 Conduct Of Business, Certain Covenants.

(a) From and after the execution and delivery of this
Agreement and until the Effective Time, the Company and each of its
Subsidiaries shall:

A-31
<PAGE> 37
(ii) maintain an allowance for loan losses deemed by
management of the Company to be adequate based on
GAAP;

(iii) remain in good standing with all applicable federal
and state regulatory authorities and preserve each
of its and their existing banking locations;

(iv) use its and their best efforts to retain the
services of its and their present officers and
employees;

(vii) consult with Acquiror prior to acquiring any
interest in real property, except in the ordinary
course of business or entering into any contract or
agreement having a term of more than one year;

(viii) take no action which would cause the termination
or cancellation by the FDIC of insurance in respect
of the Merging Bank's deposits; and

(b) From and after the execution and delivery of this
Agreement and until the Effective Time, the Company and its
Subsidiaries shall not, without the prior consent of Acquiror:

(i) amend its or their Articles of Incorporation,
Charter or Bylaws;

(iii) make payment of any cash dividend, or institute
any other form of dividend or distribution, with
respect to the Company's or its Subsidiaries'
capital stock;

A-32
<PAGE> 38
(vi) make or grant any general or individual wage or
salary increase or fringe benefit increase, or
increase in any manner the compensation or fringe
benefits of any of its directors, officers or
employees, or pay any bonus, pension or retirement
allowance to any such directors, officers or
employees, except in accordance with any plan or
agreement set forth on Schedule 5.02(b)(vi), or
become a party to, adopt, amend or otherwise modify
or make any contribution outside the ordinary
course of business to any Compensation and Benefit
Plan, any bonus, pension, profit sharing,
retirement or other compensation plan or enter into
any contract of employment with any officer which
is not terminable at will without cost or other
liability (other than benefits accrued as of the
date of such termination), or enter into, modify,
or renew any contract, agreement, commitment or
arrangement providing for the payment to any
director, officer or employee of such party of
compensation or benefits contingent, or the terms
of which are materially altered, upon the
occurrence of any of the transactions contemplated
by this Agreement; provided however, that (i) the
annual compensation of officers employed by the
Company and Merging Bank as of July 1, 1998 may be
increased effective as of such date in a manner
consistent with prior practice of the Company and
the Merging Bank, provided that the combined amount
of the annual increases put into effect for all
such officers shall not exceed, in the aggregate,
5% of the total amount paid to such officers for
the year ended June 30, 1998, and (ii) the Company
and the Merging Bank may pay to their employees
year-end bonuses for the 1998 fiscal year, in a
manner and amount consistent with prior practice of
the Company and the Merging Bank;

(x) transfer or grant any rights under any leases,
licenses or agreements, other than in the ordinary
course of business;

A-33
<PAGE> 39
(xii) incur any indebtedness for borrowed money, assume,
guarantee, endorse or otherwise as an accommodation
become responsible for the obligations of any other
individual, corporation or other entity, except for
deposit liabilities and except for indebtedness
incurred for liquidity purposes in the ordinary
course of business and consistent with the
Company's and its Subsidiaries' past practice with
respect to the incurrence of indebtedness, the
repayment term of which does not exceed nine
months; provided, however, that nothing in this
Section shall prohibit the Company from incurring
FHLB advances in the ordinary course of business
for liquidity purposes, in amounts consistent with
approvals of the Board of Directors existing on the
date hereof and disclosed to Acquiror on Schedule
5.02(b)(xii) hereof;

(xvi) make or commit to make any loan over $150,000;

(xvii) purchase or commit to purchase any bulk loan
servicing portfolio;

(xix) take or cause to be taken any action which would
disqualify the Merger as a tax-free reorganization
under Section 368 of the Code; or

(xx) fail to comply in any material respect with any
laws, regulations or governmental actions
applicable to it or to the conduct of its business.

A-34
<PAGE> 40
5.03 Confirming and Conforming Accounting and Reserve Policies;
Integration.

A-35
<PAGE> 41
5.06 Recommendation of Merger to Shareholders. The Board of
Directors of the Company shall recommend in the Proxy Statement/Prospectus,
consistent with its fiduciary duties, approval of this Agreement, the Plan of
Merger and the Merger to all shareholders of the Company entitled to vote
thereon.

5.11 Best Efforts. The Company agrees to use its best efforts to
cause the conditions contained in Articles Seven and Nine to be satisfied and
to effect the Reorganization.

A-36
<PAGE> 42
5.13 Voting Agreements. Within 20 days of the date of this
Agreement, the Company shall obtain and deliver to Acquiror signed voting
agreements ("Voting Agreements"), substantially in the form attached hereto as
Exhibit D, from each of its executive officers and directors in their
individual capacity, to the effect that he or she will vote the shares of
Company Common Stock beneficially owned by him or her in favor of the Merger
and all transactions related thereto, and he or she will not dispose of any
shares of Company Common Stock beneficially owned by him or her prior to the
Effective Time, subject to certain exceptions as provided in the Voting
Agreements.

ARTICLE SIX

ADDITIONAL COVENANTS AND AGREEMENTS

6.01 Regulatory Matters.

A-37
<PAGE> 43
(c) Acquiror and the Company shall, upon request, furnish
each other with all information concerning themselves, their
subsidiaries, directors, officers and shareholders and such other
matters as may be reasonably necessary or advisable in connection with
the Registration Statement or any other statement, filing, notice or
application made by or on behalf of Acquiror, the Company or any of
their respective subsidiaries to any regulatory agency or governmental
entity in connection with the Reorganization and the other
transactions contemplated by this Agreement.

A-38
<PAGE> 44
investigations or hearings (or communications indicating that the same may be
contemplated), or the institution or the threat of material litigation
involving the Company or any of its Subsidiaries, and shall keep Acquiror fully
informed of such events.

6.08 Tax Returns. The Company shall prepare and file, as approved
or as may be directed by Acquiror, any tax returns with respect to the Merger.

6.09 Compensation and Benefit Plans; Existing Agreements.

A-39
<PAGE> 45
(d) Non-Qualified Deferred Retirement Plan for Directors.
Acquiror agrees to assume the obligations of the Company under the Reliance
Savings Bank Non-Qualified Deferred Retirement Plan for Directors, as in effect
on the date hereof, and from and after the Effective Time to continue to
perform and satisfy the terms and obligations thereof. Acquiror agrees that
the transactions contemplated by this Agreement constitute a change of control
of the Company for purposes of such Plan.

(g) Successors of Acquiror. The provisions of this Section 6.09
shall be binding upon and inure to the benefit of any successor to the
Acquiror.

6.10 Environmental Studies.

A-40
<PAGE> 46
evaluation work to be shared equally by the Acquiror and the Company.
Within one week of receipt, the party receiving any environment
evaluation report shall deliver copies of all reports and analytical
data to the other.

ARTICLE SEVEN

CONDITIONS TO OBLIGATIONS OF EACH OF THE PARTIES

A-41
<PAGE> 47
of Company Common Stock will include the period during which such holder held
the Company Common Stock exchanged therefor, provided that such Company Common
Stock was held as a capital asset immediately prior to the consummation of the
Merger. In rendering such opinion, Michael Best & Friedrich may rely upon
representations contained in certificates of officers of Acquiror, the Company
and others.

ARTICLE EIGHT

FURTHER CONDITIONS TO THE OBLIGATIONS OF THE COMPANY

The obligation of the Company to consummate the transactions
contemplated by this Agreement is further subject to the satisfaction of the
following conditions:

8.02 Opinion of Counsel. There shall have been delivered and
addressed to the Company an opinion of Michael Best & Friedrich, in the form
attached hereto as Exhibit E, dated as of the Closing Date.

A-42
<PAGE> 48
8.05 No Environmental Condition. At the Effective Time, there
shall be no Environmental Condition existing with respect to any Real Property,
which has or is likely to have a material adverse effect on the consolidated
assets, properties, business, operations or condition, financial or otherwise,
of Acquiror, and with respect to which Acquiror has not taken reasonable steps
to cure, abate, correct or remedy such Environmental Condition to the
reasonable satisfaction of the Company. For purposes of this Section 8.05, a
"material adverse effect" shall mean the existence of an Environmental
Condition where the amount which is likely to be charged to Acquiror exceeds 1%
of Acquiror's total shareholders' equity.

ARTICLE NINE

FURTHER CONDITIONS TO THE OBLIGATIONS OF ACQUIROR

The obligation of Acquiror to consummate the transactions contemplated
by this Agreement is further subject to the satisfaction of the following
conditions:

A-43
<PAGE> 49
9.03 Net Worth. As of the close of business on the day
immediately preceding the Effective Time, the Company's net worth, as shown by
the sum of its total shareholders' equity plus the allowance for loan losses
but excluding any adjustments made as a result of the application of SFAS No.
115, "Accounting for Certain Investments in Debt and Equity Securities", any
adjustments recorded pursuant to Section 5.03(a), plus an allowance of up to
$210,000 for legal, accounting, and investment advisor/fairness opinion fees
incurred in connection with the transactions contemplated by this Agreement,
shall not be less than the amount set forth in the Company's Consolidated
Statement of Financial Condition at March 31, 1998. The Company shall deliver
to Acquiror a certificate signed by its Chief Financial Officer, dated the
Closing Date, certifying to such effect.

A-44
<PAGE> 50
9.09 Agreements of Affiliates.

9.10 Bank Merger Agreement. The Bank Merger Agreement shall have
been duly authorized and approved by the Merging Bank so as to permit the Bank
Merger to be consummated as contemplated thereby.

A-45
<PAGE> 51
ARTICLE TEN

TERMINATION AND AMENDMENT

(a) by written agreement between Acquiror and the Company
authorized by a majority of the entire Board of Directors of each;

(e) by Acquiror in the event the Acquiror Average Stock
Price is $32.40 or less;

A-46
<PAGE> 52
(h) by Acquiror within three weeks of receipt of the
Environmental Survey pursuant to the provisions of Section 6.10(b)
hereof in the event an Environmental Survey identifies an
Environmental Condition, or by Acquiror if upon the Acquiror's
request, the Company shall not have cured, abated, corrected or
remedied an Environmental Condition to the satisfaction of the
Acquiror prior to the Effective Time; or

(k) by the Acquiror, if a Company Purchase Event as
defined in Section 10.03(b) occurs prior to the termination of this
Agreement.

10.03 Fee.

(a) The Company hereby agrees to pay Acquiror and
Acquiror shall be entitled to receipt of a fee (the "Fee") of $875,000
in the event of:

(i) termination by the Company as provided in
Section 10.01(j);

(ii) termination by the Acquiror as provided in
Section 10.01(k);

(iii) the Merger contemplated herein not being
consummated because the Company materially
breaches its obligations under this
Agreement; or

Such payment shall be made in immediately available funds within five
business days after delivery of notice of entitlement by Acquiror.

A-47
<PAGE> 53
(i) the acquisition by any person, other than Acquiror
or any of its subsidiaries, alone or together with
such person's affiliates and associates or any
group, of beneficial ownership of 25% or more of
the Company Common Stock (for purposes of this
Subsection (b)(i), the terms "group" and
"beneficial ownership" shall be as defined in
Section 13(d) of the Exchange Act and regulations
promulgated thereunder and as interpreted
thereunder);

ARTICLE ELEVEN

MODIFICATIONS, AMENDMENTS AND WAIVER

A-48
<PAGE> 54
ARTICLE TWELVE

MISCELLANEOUS

(a) if to the Company, to:
Allan T. Bach
President and Chief Executive Officer
Reliance Bancshares, Inc.
3140 South 27th Street
Milwaukee, Wisconsin 53215

with a copy to:
Christopher J. Zinski
Schiff Hardin & Waite
7300 Sears Tower
Chicago, Illinois 60606

(b) and if to Acquiror to:
Mr. Thomas R. Perz
President and Chief Executive Officer
St. Francis Capital Corporation
13400 Bishops Lane, Suite 350
Brookfield, Wisconsin 53005-6203

with a copy to:
W. Charles Jackson
Michael Best & Friedrich LLP
100 East Wisconsin Avenue
Milwaukee, Wisconsin 53202

or to such other person or address as a party hereto shall specify hereunder.

A-49
<PAGE> 55
12.05 Alternative Structure. Notwithstanding anything to the
contrary contained in this Agreement, prior to the Effective Time, Acquiror
shall be entitled to revise the structure of the Merger and related
transactions, provided however, that the transactions comprising such revised
structure shall not delay the Closing Date or prevent the Merger from being
deemed a reorganization within the meaning of Section 368 of the Code and that
Acquiror shall bear the costs of effecting any such revision. This Agreement
and any related documents shall be appropriately amended in order to reflect
any such revised structure.

A-50
<PAGE> 56
12.12 Captions. The caption headings of the Articles, Sections and
subsections of this Agreement are for convenience of reference only and are not
intended to be, and should not be construed as, a part of this Agreement or the
Plan of Merger.

12.13 Relief Due to Breach.

A-51
<PAGE> 57
IN WITNESS WHEREOF, each of the parties hereto has duly executed this
Agreement as of the date set forth hereafter.

ST. FRANCIS CAPITAL CORPORATION

Dated: June 30, 1998 By:
------------------------------------------------
Thomas R. Perz, President and Chief
Executive Officer

Attest:
---------------------------------------

RELIANCE BANCSHARES, INC.

Dated: June 30, 1998 By:
------------------------------------------------
Allan T. Bach, President and Chief
Executive Officer

Attest:
---------------------------------------

A-52

<PAGE> 1
EXHIBIT B

AGREEMENT AND PLAN OF MERGER

RECITALS

Therefore, in consideration of the premises and the mutual covenants
and agreements contained herein, Acquiror and the Company hereby covenant and
agree as follows:

ARTICLE I

B-1
<PAGE> 2
1.02 Effective Time. The Merger shall be consummated upon the
filing of appropriate Articles of Merger with the Wisconsin Department of
Financial Institutions ("WDFI") in the form and manner required by the WBCL.
The close of business on the date on which such Articles of Merger shall have
been filed is herein referred to as the "Effective Time," unless some other
date is agreed upon by Acquiror and the Company. Unless otherwise mutually
agreed upon in writing by the parties, and subject to the terms and conditions
hereof, the Effective Time shall occur on the Closing Date (as defined in
Section 12.01 of the Agreement) or the next succeeding business day thereafter.

1.03 Effect of the Merger. Upon the Effective Time:

(a) The separate existence of the Company shall cease and
be merged with and into Acquiror, as the Surviving Corporation, which
shall possess all of the rights, privileges, immunities, powers and
franchises of a public as well as of a private nature, and shall be
subject to all of the restrictions, disabilities and duties, of each
of the Company and Acquiror; and all singular rights, privileges,
immunities, powers and franchises of each of the Company and Acquiror,
and all property, real, personal and mixed, and all debts due to
either the Company or Acquiror in whatever amount, including
subscriptions to shares, and all other things in action or belonging
to each of the Company and Acquiror shall be vested in the Surviving
Corporation; and all property, rights, privileges, immunities, powers
and franchises, and all and every interest, shall be thereafter as
effectually the property of the Surviving Corporation as they were of
the Company and Acquiror and the title to any real estate, or interest
therein, vested by deed or otherwise, in either of the Company and
Acquiror shall not revert or be in any way impaired by reason of the
Merger.

(b) All rights of creditors and all liens upon any
property of the Company or Acquiror shall be preserved unimpaired and
all debts, liabilities and duties of the Company or Acquiror shall
thenceforth attach to the Surviving Corporation and may be enforced
against the Surviving Corporation to the same extent as if said debts,
liabilities and duties had been incurred or contracted by it,
provided, however, that all such liens shall attach only to those
assets to which they were attached prior to the Effective Time.

(c) Any action or proceeding, whether civil, criminal or
administrative, instituted, pending or threatened by or against either
the Company or Acquiror or relating to their assets, liabilities or
shares of common stock shall be prosecuted as if the Merger had not
taken place, and the Surviving Corporation may be substituted as a
party in such action or proceeding in place of the Company.

ARTICLE II

2.01 Name. The name of the Surviving Corporation shall be "St.
Francis Capital Corporation."

B-2
<PAGE> 3
2.03 Bylaws. The Bylaws of Acquiror, as in effect immediately
prior to the Effective Time shall, from and after the Effective Time, be and
continue to be the Bylaws of the Surviving Corporation until the same are
amended as provided therein or provided in the Articles of Incorporation of the
Surviving Corporation.