58
                                
                                
            U. S. SECURITIES AND EXCHANGE COMMISSION
                      Washington, DC  20549
                                
                           FORM 10-KSB
                                
[X]     ANNUAL  REPORT PURSUANT TO SECTION 13  OR  15(d)  OF  THE
SECURITIES
         EXCHANGE ACT OF 1934
         For the Fiscal Year Ended June 30, 1997

                               OR
                                
[  ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES
          EXCHANGE ACT OF 1934
          For the transition period from __________ to __________

                 Commission File Number 0-25518
                                
                     SOBIESKI BANCORP, INC.
         (Name of Small Business Issuer in its Charter)
                                
               Delaware                           35-1942803
   (State or Other Jurisdiction of Incorporation or Organization)
(IRS Employer Identification Number)

         2930   West   Cleveland  Road,   South   Bend,   Indiana
46628
                 (Address   of   Principal   Executive   Offices)
(Zip Code)

Issuer's telephone number, including area code: (219) 271-8300

 Securities Registered Under Section 12(b) of the Exchange Act:
                                
                              None
                                
 Securities Registered Under Section 12(g) of the Exchange Act:
                                
             Common Stock, par value $.01 per share
                        (Title of Class)
                                
      Check whether the Issuer (1) filed all reports required  to
be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934  during  the  preceding twelve months (or for  such  shorter
period  that  the Registrant was required to file such  reports),
and (2) has been subject to such filing requirements for the past
90 days.  YES X.  NO _.

     Check if disclosure of delinquent filers in response to Item
405  of  Regulation  S-B is not contained in this  form,  and  no
disclosure  will  be  contained,  to  the  best  of  Registrant's
knowledge,   in   definitive  proxy  or  information   statements
incorporated by reference in Part III of this Form 10-KSB or  any
amendment to this Form 10-KSB. [  ]

      State  Issuer's revenues for its most recent  fiscal  year.
$5,928,000.

      As of September 16, 1997, there were issued and outstanding
759,632  shares  of  the Issuer's Common  Stock.   The  aggregate
market  value of the voting stock held by non-affiliates  of  the
Issuer, computed by reference to the average of the bid and asked
price of such stock as September 16, 1997, was $12,271,000.  (The
exclusion  from  such amount of the market value  of  the  shares
owned  by  any  person shall not be deemed an  admission  by  the
Issuer that such person is an affiliate of the Issuer.)

               DOCUMENTS INCORPORATED BY REFERENCE
                                
      Part  II  of  Form  10-KSB - Portions of Annual  Report  to
Stockholders for the Fiscal Year ended June 30, 1997.
      Part  III  of Form 10-KSB - Portions of the Proxy Statement
for the 1997 Annual Meeting of Shareholders.
                             PART I

Item 1.   Description of Business

General.

Sobieski Bancorp, Inc.

      Sobieski  Bancorp,  Inc. (the "Company")  was  incorporated
under  the  laws  of the State of Delaware in  December  1994  by
authorization  of  the  Board of Directors  of  Sobieski  Federal
Savings and Loan Association of South Bend ("Sobieski Federal" or
the  "Association") for the purpose of becoming a unitary savings
and  loan  holding company that acquired all of  the  outstanding
stock  of Sobieski Federal issued upon the conversion of Sobieski
Federal  from  the  mutual to the stock form  of  ownership  (the
"Conversion").

      As  a  Delaware corporation, the Company is  authorized  to
engage  in any activity permitted by Delaware General Corporation
Law.   The Company is a unitary savings and loan holding company.
Through the unitary holding company structure, it is possible  to
expand  the  size  and  scope of the financial  services  offered
beyond  those currently offered by the Association.  The  holding
company   structure  also  provides  the  Company  with   greater
flexibility  than  the Association would have  to  diversify  its
business   activities,   through   existing   or   newly   formed
subsidiaries, or through acquisitions or mergers of  both  mutual
and  stock  thrift  institutions  as  well  as  other  companies.
Although  there  are no current arrangements,  understandings  or
agreements regarding any such acquisition, the Company  is  in  a
position   to   take  advantage  of  any  favorable   acquisition
opportunities that may arise.  Future activities of the  Company,
other than the continuing operations of Sobieski Federal, will be
funded  through  the  portion of the net proceeds  of  the  stock
conversion  retained  by  the Company,  dividends  from  Sobieski
Federal,  principal and interest collections on  loans  purchased
from  Sobieski Federal and through borrowings from third parties.
See  "Regulation - Holding Company Regulation" and "-Federal  and
State  Taxation."  Activities of the Company may also  be  funded
through  sales  of additional securities or income  generated  by
other  activities  of the Company.  At this time,  there  are  no
plans regarding such activities.

      At  June  30, 1997, the Company had assets of approximately
$81.7  million,  deposits  of  approximately  $59.4  million  and
stockholders' equity of approximately $12.4 million.

      The executive office of the Company is located at 2930 West
Cleveland Road, South Bend, Indiana  46628, telephone (219)  271-
8300.

Sobieski Federal Savings and Loan Association of South Bend

     Sobieski Federal is a federally chartered mutual savings and
loan  association headquartered in South Bend, Indiana.  Sobieski
Federal  was originally chartered under the laws of the State  of
Indiana  in  1893  and converted to a federally chartered  mutual
savings  and loan association in 1936.  Its deposits are  insured
up  to  the  maximum  allowable amount  by  the  Federal  Deposit
Insurance  Corporation (the "FDIC") under the Savings Association
Insurance  Fund  (the "SAIF").  Through its main office  and  two
branch  offices, Sobieski Federal serves communities  located  in
St. Joseph County, Indiana.

      Sobieski Federal has been, and intends to continue to be, a
community-oriented   financial  institution   offering   selected
financial  products  and  services  to  meet  the  needs  of  the
communities  it serves.  The Association attracts  deposits  from
the  general public and uses such deposits, together  with  other
funds, to originate primarily one-to-four family, fixed-rate  and
variable-rate  residential mortgage loans for  retention  in  its
portfolio.   In  addition, the Association originates  a  limited
number  of  construction loans, consumer loan, and  real  estate-
backed small business commercial loans.  During both fiscal  1997
and  1996,  the Association purchased participation interests  in
commercial  loans funded primarily by advances from  the  Federal
Home Loan Bank ("FHLB") of Indianapolis.

Forward-Looking Statements

      When used in this Form 10-KSB and in future filings by  the
Company  with the Securities and Exchange Commission (the "SEC"),
in  the  Company's press releases or other public or  shareholder
communications, and in oral statements made with the approval  of
an  authorized  executive officer, the  words  or  phrases  "will
likely   result,"  "are  expected  to,"  "will   continue,"   "is
anticipated,"  "estimate," "project" or similar  expressions  are
intended  to  identify  "forward-looking statements"  within  the
meaning of the Private Securities Litigation Reform Act of  1995.
Such  statements are subject to certain risks and  uncertainties,
including, among other things, changes in economic conditions  in
the  Company's  market  area, changes in policies  by  regulatory
agencies, fluctuations in interest rates, demand for loans in the
Company's  market area and competition, that could  cause  actual
results  to differ materially from historical earnings and  those
presently  anticipated  or  projected.   The  Company  wishes  to
caution  readers not to place undue reliance on any such forward-
looking  statements, which speak only as of the date  made.   The
Company  wishes to advise readers that the factors  listed  above
could  affect the Company's financial performance and could cause
the  Company's  actual  results  for  future  periods  to  differ
materially from any opinions or statements expressed with respect
to future periods in any current statements.

     The Company does not undertake-and specifically declines any
obligation-to publicly release the result of any revisions  which
may  be  made to any forward-looking statements to reflect events
or  circumstances after the date of such statements or to reflect
the occurrence of anticipated or unanticipated events.

Lending Activities

       General.   The  Association  has  historically  originated
primarily  fixed-rate  one- to four- family  mortgage  loans  for
retention   in   its  portfolio.   Since  September   1994,   the
Association has begun to originate adjustable-rate mortgage loans
for retention in its portfolio.  However, in response to customer
demand,  the  Association continues to originate fixed  rate-rate
mortgage loans.  Such loans are primarily for terms of up  to  20
years.

       While   the  Association  primarily  focuses  its  lending
activities on the origination of loans secured by first mortgages
on owner-occupied one-to-four family residences, to a much lesser
extent,  it  also  originates construction  and  consumer  loans.
During   fiscal   1997   and  1996  the   Association   purchased
participation  interests in commercial loans funded  with  short-
term  advances from the FHLB.  The Association has  in  the  past
purchased  participations  of the Small  Business  Administration
(the  "SBA")  and originated a limited number of commercial  real
estate  loans.  Substantially all of the Association's loans  are
originated   in  its  market  area.   At  June  30,   1997,   the
Association's net loan portfolio totaled $61.1 million.

      The loan committee, comprised of three members of the Board
on  a  three-month rotating basis, has authority to approve loans
up  to $250,000; any loans over $250,000 must be approved by  the
entire Board of Directors.

      Under regulations of the Office of Thrift Supervision  (the
"OTS"),   the   Association's  loans-to-one-borrower   limit   is
generally limited to the greater of 15% of unimpaired capital and
surplus  or  $500,000.  See "Regulation - Federal  Regulation  of
Savings  Associations."   At June 30, 1997,  the  maximum  amount
which  the  Association could loan to any one  borrower  and  the
borrower's  related entities was $1,554,000.  At June  30,  1997,
the  Association had no loans with aggregate outstanding balances
in  excess  of  this  amount.  At that  date,  the  Association's
largest  lending relationship to a single borrower  or  group  of
related borrowers totaled $1,399,000.

      All  of the Association's lending is subject to its written
underwriting   standards   and   loan   origination   procedures.
Decisions on loan applications are made on the basis of  detailed
applications  and property valuations.  Properties securing  real
estate loans made by Sobieski Federal are generally appraised  by
Board-approved  independent appraisers.   In  the  loan  approval
process,  Sobieski  Federal assesses the  borrower's  ability  to
repay  the  loan,  the adequacy of the proposed  collateral,  the
employment stability of the borrower and the credit worthiness of
the borrower.

      The  Association requires evidence of marketable title  and
lien  position or appropriate title insurance (except on  certain
home  equity  loans) on all loans secured by real property.   The
Association  also  requires fire and extended  coverage  casualty
insurance  in  amounts  at  least equal  to  the  lesser  of  the
principal amount of the loan or the value of improvements on  the
property, depending on the type of loan.  As required by  federal
regulations,  the  Association also requires flood  insurance  to
protect the property securing its interest if property is located
in a designated flood area.





      Loan  Portfolio  Composition.   The  following  information  presents  the
composition of the Company's loan portfolio in dollar amounts and in percentages
(before  deductions  for  loans  in process, deferred  fees  and  discounts  and
allowances for loan losses) as of  the dates indicated.
<TABLE>

At June 30,
                                 1997                   1996          1995
                               Amount  Percent  Amount   Percent  Amount
Percent
                                                  (Dollars in Thousands)
Real Estate Loans:
<S>                            <C>      <C>     <C>      <C>     <C>      <C>
One- to-four family .......    $55,714  89.5%   $48,748  89.8%   $47,276  93.1%
Commercial ................      2,455   4.0      2,783   5.1      3,123   6.1
Construction ..............        869   1.4        797   1.5        225    .4
Total real estate loans         59,038  94.9     52,328  96.4     50,624  99.6

Other Loans:
Deposit loans .............        147    .2        176    .3        168    .3
Commercial business loans .      3,059   4.9      1,783   3.3         11    .1

Total other loans .........      3,206   5.1      1,959   3.6        179    .4
Total loans ...............     62,244 100.0%    54,287 100.0%    50,803 100.0%
          Less:
Loans in process ..........        882              802              224
Deferred fees and discounts         27              171              270
Allowance for loan losses          200              200              200
Total loans receivable, net    $61,135          $53,114          $50,109
</TABLE>



The  following  table shows the composition of the Company's loan  portfolio  by
fixed- and adjustable-rate loans at the dates indicated.
<TABLE>
                                                 At June 30,
                                 1997                1996           1995
                              Amount Percent   Amount  Percent Amount   Percent
                                             (Dollars in Thousands)
Fixed-Rate Loans:
Real estate:
<S>                          <C>      <C>     <C>      <C>    <C>      <C>
One- to-four family .....    $51,031  82.0%   $46,952  86.5%  $45,729  90.0%
Commercial ..............        ---   ---        ---   ---       314    .6
Construction ............        869   1.4        636   1.2       ---   ---
Total real estate loans       51,900  83.4     47,588  87.7    46,043  90.6
Consumer ................        147    .2        176    .3       168    .3
Commercial business .....      1,899   3.1        ---   ---       ---   ---
Total fixed-rate loans ..     53,946  86.7     47,764  88.0    46,211  90.9

Adjustable-Rate Loans:
Real estate:
One-to-four family ......      4,683   7.5      1,796   3.3     1,547   3.1
Commercial ..............      2,455   3.9      2,783   5.1     2,809   5.5
Construction ............        ---   ---        161    .3       225    .4
Total Real estate loans        7,138  11.4      4,740   8.7     4,581   9.0
Commercial business .....      1,160   1.9      1,783   3.3        11    .1
Total adjustable-rate loans    8,298  13.3      6,523  12.0     4,592   9.1
Total loans .............     62,244  100.0%   54,287 100.0%   50,803 100.0%

Less:
Loans in process ........        882              802             224
Deferred fees and discounts       27              171             270
Allowance for loan losses        200              200            200
Total loans receivable, net $ 61,135          $53,114        $50,109
</TABLE>
     The following schedule illustrates the amortization schedule by contractual
maturity of the Company's loan portfolio at June 30, 1997.  Loans which have
adjustable or renegotiable interest rates are shown as maturing in the period
during which the contract is due.  The schedule does reflect scheduled principal
amortization but does not reflect the effects of possible prepayments or
enforcement of due-on-sale clauses.
<TABLE>
                                        Real Estate
                         One- to-Four
Commercial
                            Family   Commercial Construction(2)  Consumer
Business Total                                                   (Dollars in
Thousands)
Due during the twelve
months ending June 30,
<S>                       <C>        <C>          <C>         <C>       <C>      
1998 (1) ...............  $ 9,120    $     145    $   869     $    47    $1,213
$ 11,394
1999 ...................    2,441          155        ---          50        53
2,699
2000 ...................    2,641          168        ---          50        50
2,909
2001 and 2002 ..........    5,951          383        ---         ---     1,743
8,077
2003 to 2007 ...........   20,525        1,229        ---         ---       ---
21,754
2008 to 2022 ...........   15,036          375        ---         ---       ---
15,411

Total ..................   $55,714    $  2,455    $   869      $  147    $3,059
$ 62,244

Weighted average interest
rate ......                 7.83%        8.33%     8.12%        7.16%     8.62%
7.89%
</TABLE>

(1)    Includes  demand  loans, loans having no stated  maturity  and  overdraft
loans.
(2)  Represents construction/permanent loans.
      The  total amount of loans due after June 30, 1998 that have predetermined
interest rates is $49.6 million.
One-    to-Four    Family    Residential    Mortgage    Lending.     Residential
loan    originations    are    generated   by   the   Association's    marketing
efforts,    its   present   customers,   walk-in   customers   and     referrals
from    real    estate    brokers.    Historically,    the    Association    has
focused    its    lending   efforts    primarily   on   the    origination    of
fixed-rate    loans    secured   by   first   mortgages    on    owner-occupied,
single-family   residences   in   its   market   area.    In   September   1994,
the    Association    began    to    originate    adjustable    rate    mortgage
("ARM")    loans.     At    June   30,   1997,   the    Company's    one-to-four
family    residential   mortgage   loan   portfolio   totaled   $55.7   million,
or 89.5% of the Company's gross loan portfolio.

        The   Association   currently   offers   fixed-rate   and   ARM   loans.
For    the    year   ended   June   30,   1997,   the   Association   originated
$15.1   million   of   one-to-four  family  real   estate   loans.     At   June
30,    1997,    the    Association   had   $4.7   million   of   adjustable-rate
mortgage     loans,     and    $51.0    million    of    fixed-rate     mortgage
residential loans.

        The    Association   currently   originates   fixed-rate   loans    with
terms   to   maturity   up   to   30   years.    Interest   rates   charged   on
these   fixed-rate   loans  are  priced  on  a  regular   basis   according   to
market   conditions.    The   Association   has   recently   begun   to    offer
adjustable-rate   mortgage   loans   at   rates   and   on   terms    determined
in     accordance     with    market    and    competitive     factors.      The
Association   currently   originates   one-year   ARM   loans,   with   up    to
30-year   amortization   schedule,  with   a   stated   interest   rate   margin
over   the   one-year   Constant   Maturity   Treasury   Index.    These   loans
provide   for  a  2.0%  maximum  annual  cap  and  a  cap  over  the   life   of
the   loan   of   6.0%.    As  a  consequence  of  using  caps,   the   interest
rates   on   these   loans   may   not  be  as  rate   sensitive   as   is   the
Association's   cost   of   funds.   Currently,   all   ARM   loans   originated
provide   for   an   interest  rate  floor  below  which   the   interest   rate
charged may not fall.

        Borrowers   with   adjustable-rate   mortgage   loans   are    qualified
at    the   fully   indexed   rate.    Adjustable-rate   loans   decrease    the
risk   to   the   Association  associated  with  changes   in   interest   rates
but    involve    other   risks,   primarily   because   as    interest    rates
rise,    the    payment   by   the   borrower   may   rise   to    the    extent
permitted    by    the   terms   of   the   loan,   thereby    increasing    the
potential   for  default.   At  the  same  time,  the  market   value   of   the
underlying   property   may   be   adversely   affected   by   higher   interest
rates.

        Currently,   Sobieski   Federal   will   loan   up   to   85%   of   the
appraised   value   of   the   security  property   without   private   mortgage
insurance   ("PMI")   on   owner  occupied  one-  to-four   family   loans   and
up   to   95%   with  PMI  on  the  sale  price  of  such  security  properties.
Residential   loans   do   not   include   prepayment   penalties,    are    not
assumable   and   do   not   produce   negative   amortization.    Real   estate
loans    originated   by   the   Association   contain   a   "due    on    sale"
clause    allowing   the   Association   to   declare   the   unpaid   principal
balance due and payable upon the sale of the security property.

        The    loans    currently   originated   by    the    Association    are
typically    underwritten   and   documented   pursuant   to   the    guidelines
of    the    Federal   Home   Loan   Mortgage   Corporation   ("FHLMC").     The
Association retains all loans originated in its portfolio.

       The   Association   also   originates  a   limited   amount   of   second
mortgage   and   home  equity  lines  of  credit.   At  June   30,   1997,   the
Association's   second   mortgage   loans  and   home   equity   loans   totaled
$860,000    and    $1.1   million,   respectively.    Second   mortgage    loans
have   fixed  or   variable  rates  of  interest  and  have  terms  up   to   15
years.     Home    equity   loans   have   adjustable   interest    rates    and
terms   of   up   to   12   years.    These   loans   are   underwritten   using
similar guidelines as for single family mortgage lending.

       Residential   Construction   Lending.    To   a   limited   extent,   the
Association   also   originates  loans  for  the  construction   of   one-   to-
four    family    residences.    At   June   30,   1997,    the    Association's
construction    loan   portfolio   totaled   $869,000,   or    1.4%    of    its
gross   loan   portfolio.   As  of  that  date,  all   of   these   loans   were
secured by property located within the Association's market area.

        All    of   the   construction   loans   to   individuals   for    their
residences   are   structured   to   be  converted   to   permanent   loans   at
the   end   of   the  construction  phase,  which  typically  runs   from   four
to    six   months.    These   construction   loans   have   rates   and   terms
comparable    to    one-    to-four    family    loans    offered     by     the
Association,    except    that    during    the    construction    phase,    the
borrower   pays   interest   only.    The   maximum   loan-to-value   ratio   of
owner    occupied    single-family   construction   loans   is    85%    without
PMI    and    95%    with    PMI.     Residential   construction    loans    are
generally    underwritten    pursuant    to    the    same    guidelines     for
originating permanent residential loans.

        Construction    loans    are    obtained    primarily    from    walk-in
customers    and    builder    and   realtor   referrals.     The    application
process   includes   submission  to  the  Association   of   plans   and   costs
of   the   project   to   be  constructed.   These   items   are   used   as   a
basis   to   determine   the   appraised  value   of   the   subject   property.
Loans   are   based   on  the  lesser  of  current  appraised   value   or   the
cost of construction (land plus building).

         The    Association's    construction    loan    agreements    generally
provide    that    loan    proceeds    are   disbursed    in    increments    as
construction     progresses.     The    Association     periodically     reviews
the   progress   of   the   underlying   dwelling   before   disbursements   are
made.     Nevertheless,    construction   lending   is   generally    considered
to   involve   a   higher  level  of  credit  risk  than  one-  to   four-family
residential   lending   since   the  risk  of   loss   on   construction   loans
is   dependent   largely  upon  the  accuracy  of  the   initial   estimate   of
the    individual   property's   value   upon   completion   of   the    project
and the estimated cost (including interest) of the project.

        Commercial    Real    Estate   Lending.     Commercial    real    estate
loans   at   June   30,  1997  totaled  $2.5  million.   These   loans   consist
of   participation   certificates  guaranteed  by   the   SBA.    As   of   June
30,   1997,   all   of   these   participation  certificates   were   performing
in    accordance   with   their   terms   and    Sobieski   Federal   has    not
experienced any losses on these loans.

       Consumer   and   Commercial  Business  Lending.    To   a   much   lesser
extent,    Sobieski    Federal    has   engaged    in    both    consumer    and
commercial business lending.

        Consumer    loans    at   June   30,   1997   totaled    $147,000,    or
approximately    .2%    of    its   gross   loan   portfolio.     These    loans
consisted    of    share    loans   secured   by   deposit    accounts.     Even
though   some   of   these   loans   are  currently   delinquent   ($22,000   or
15.0%   of   total   consumer   loans  at  June   30,   1997),   they   do   not
entail    great   risk   because   they   are   fully   secured    by    savings
deposit   accounts   with   balances  exceeding  the   amount   of   the   loan.
Management     believes    the    delinquencies    primarily     result     from
timing   factors   wherein   borrowers   are   waiting   for   certificates   to
mature    to   repay   the   loans.    Historically,   losses   from    consumer
loans have been non-existent.

        Commercial   business   loans   at   June   30,   1997   totaled    $3.1
million   or   4.9%   of   the   Company's   gross   loan   portfolio.     These
loans    are    purchased   participations   originated   by   other   financial
institutions.    The   loans   are   secured   by   collateral   consisting   of
autos,    trucks    and    an   airplane.    All    of    these    loans    were
performing    in   accordance  with  their  terms  at  June   30,   1997.    See
"Business-Asset Quality".

Originations and Purchases of Loan and Mortgage-Backed Securities

        Loan    originations    are   developed   from    continuing    business
with     depositors    and    borrowers,    soliciting    realtors,    builders,
walk-in customers and small business entities.

        While    the    Association   originates   both   adjustable-rate    and
fixed-rate   loans,   its   ability   to   originate   loans   to   a    certain
extent   is   dependent   upon   the  relative   customer   demand   for   loans
in    its    market,    which    is    affected    by    the    interest    rate
environment,   among   other   factors.    For   the   year   ended   June   30,
1997,     the     Association    originated    $16.2    million    in     loans.
Originations    consisted    of   $15.1   million    in    one-to-four    family
real   estate   loans,   $22,000  of  consumer  loans  and   $1.1   million   in
nonresidential real estate loans.

       Loan   originations   during  the  year  ended   June   30,   1997   were
significantly    higher    than    the    prior    year.     The     Association
believes   the   increase   is  attributable  to  the   lower   interest   level
of     refinancing    as    customers    sought    to    take    advantage    of
historically    low    interest   rates    on    fixed    rate    loans.     The
Association    retains   its   loan   originations   in   its   portfolio    and
has   followed   a   policy   of   not  selling   loan   originations   in   the
secondary market.

        During   fiscal   1997,   the   Association   purchased   $3.0   million
of   participation   interests   in  commercial   loans   funded   by   advances
from    the   FHLB.    These   purchases   were   made   to   increase   income,
increase   liquidity   spread,   and  assist   in   short-term   interest   rate
risk management.

         In    order    to    supplement    its    lending    activities,    the
Association    invests    funds    in    mortgage-backed    securities.      See
Notes   B   and   C   of   the  Notes  to  Consolidated  Financial   Statements.
Virtually   all   of   the   mortgage-backed   securities   purchased   by   the
Association     have     adjustable     interest     rate     features.      See
"Business - Investment Activities."



       The   following   table   shows  the  loan   origination   and   purchase
activities of the Association for the periods indicated.
<TABLE>
                                            Year Ended June 30,
                                    1997      1996       1995
                                                (In Thousands)
Originations:
<S>                                <C>       <C>       <C>
One- to-four family real estate    $15,081   $11,376   $ 3,045
Consumer loans ................         22        56        75
Non-residential real estate ...      1,114       ---       ---
Total originations ............     16,217    11,432     3,120

Purchases:
Purchases of mortgage-backed
securities ..........                  ---     3,018     1,270
Purchases of SBA certificates ..       ---       ---     2,451
Purchases of commercial business
loans                                3,030       ---       ---
Total purchases ................     3,030     3,018     3,721

Repayments:
Loans ..........................   (11,226)   (8,427)   (6,605)
Mortgage-backed securities .....    (2,126)   (2,136)   (1,840)
Other, net .....................      (134)      (95)      (71)
Total repayments                   (13,486)  (10,658)  ( 8,516)
Net increase (decrease) ........  $   5,761  $ 3,792   $(1,675)
</TABLE>
Asset Quality

       General.    When   a   borrower  fails  to  make   a   required   payment
on   a   loan,   the   Association  attempts  to  cause   the   delinquency   to
be    cured   by   contacting   the   borrower.    In   the   case   of    loans
secured   by   real  estate,  a  reminder  notice  is  sent  to   the   borrower
on   all   loans   over   15  days  delinquent.   When   a   loan   becomes   15
days   delinquent,   late  charges  are  assessed   and   a   notice   of   late
charges   is   sent   to   the   borrower.   An  additional   late   notice   is
sent   to   the   borrower  if  the  delinquency  is   not   cured   within   30
days   of   the   required  payment  date.   If  the  loan   becomes   60   days
delinquent    and   the   borrower   has   not   attempted   to   contact    the
Association    to   arrange   an   acceptable   plan   to   bring    the    loan
current,   the   borrower   is  contacted  by  telephone.    If   the   borrower
contacts   the   Association   with   a   reasonable   explanation    for    the
delinquency,    the    Association   generally    will    attempt    to    reach
workable    accommodations   with   the   borrower    to    bring    the    loan
current.    All   proposed   workout   arrangements   are   evaluated    on    a
case    by    case    basis,    based   on   the   best    judgment    of    the
Association's    management,    considering,    among    other    things,    the
borrower's     past     credit     history,    current     financial     status,
cooperativeness,    future    prospects    and    the     reason     for     the
delinquency.    If   the  loan  is  in  excess  of  90  days   delinquent,   the
loan    will   be   referred   to   the   Association's   legal   counsel    for
collection.     In   all   cases,   if  the  Association   believes   that   its
collateral    is    at    risk    and    added    delay    would    place    the
collectibility   of   the   balance   of   the   loan   in   further   question,
management   may   refer  loans  for  collection  even  sooner   than   the   90
days described below.

        When    a    loan   becomes   delinquent   90   days   or   more,    the
Association   will   place   the   loan  on  non-accrual   status.    The   loan
will   remain   on   a  non-accrual  status  as  long  as   the   loan   is   90
days delinquent.

        The    following    table    sets   forth   the    Association's    loan
delinquencies   by  type,  by  amount  and  by  percentage   of   type   as   of
June 30, 1997
<TABLE>
                         Loans Delinquent For:
          60-89 Days  90 Days and Over  Total Delinquent Loans
             Percent              Percent            Percent
             of Loan              of Loan            of Loan
NumberAmountCategory NumberAmountCategory NumberAmountCategory
                              (Dollars in Thousands)
Real Estate:
<S>                 <C><C>  <C>  <C> <C>   <C>  <C> <C>    <C>
One- to-four family  4 $ 61 0.1%  4  $ 188 0.2%  8  $179   0.3%
Consumer (1) ......  -    - 0.0%  1      8 5.4%  1     8   5.4%
Total .............  4 $ 61 0.1%  5  $126  0.2% 11  $187   0.3%

(1) All delinquent consumer loans are secured by savings deposits
in the Association.
</TABLE>

        Non-Performing    Assets.    The   table   below    sets    forth    the
amounts     and     categories    of    non-performing     assets     in     the
Association's    loan    portfolio.    Loans   are   placed    on    non-accrual
status    when   the   collection   of   principal   and/or   interest   becomes
doubtful.      Foreclosed     assets     include     assets     acquired      in
settlement   of   loans.    The  Association  had   no   accruing   loans   more
than 90 days delinquent at the dates shown.


<TABLE>
                                   At June 30,
                         1997    1996    1995   1994    1993
                              (Dollars in Thousands)

Non-accruing loans:
<S>                        <C>     <C>    <C>    <C>     <C>
One-to-four family .....$  118  $  90  $  35  $  220  $  424
Consumer ...............     8    ---      6      98      29
Total ..................   126     90     41     318     453

Foreclosed assets:
One- to-four family ....    11    ---     19     104      16
Total ..................    11    ---     19     104      16

Total non-performing
assets .................$  137 $  90   $  60  $  422  $  469
Total as a percentage of
total assets ...........  .17%   .12%  .08%    0.57%   0.64%
</TABLE>
       For   the   year   ended   June   30,   1997,   gross   interest   income
which   would   have   been   recorded   had   the   non-accruing   loans   been
current    in    accordance   with   their   original    terms    amounted    to
$8,000.
        At   June   30,   1997,   the   Association   had   $126,000   of   non-
accruing    loans    consisting   of   four   one-to-four   family    delinquent
loans and one consumer loan.

       Other   Loans   of   Concern.   At  June  30,   1997,   there   were   no
loans   not   included   in   the   table  or  discussed   above   where   known
information    about    the    possible    credit    problems    of    borrowers
caused    management   to   have   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.

        Classified    Assets.     Federal   regulations    provide    for    the
classification   of   loans  and  other  assets,  such  as   debt   and   equity
securities   considered   by   the   OTS   to   be   of   lesser   quality,   as
"substandard,"    "doubtful"    or   "loss."     An    asset    is    considered
"substandard"   if   it   is  inadequately  protected   by   the   current   net
worth   and   paying   capacity   of   the  obligor   or   of   the   collateral
pledged,      if      any.      "Substandard"     assets      include      those
characterized    by    the    "distinct   possibility"    that    the    insured
institution   will   sustain   "some  loss"  if   the   deficiencies   are   not
corrected.     Assets   classified   as   "doubtful"    have    all    of    the
weaknesses    inherent    in   those   classified   "substandard"    with    the
added    characteristic   that   the   weaknesses   present   make   "collection
or   liquidation   in   full"  on  the  basis  of  currently   existing   facts,
conditions     and    values,    "highly    questionable    and     improbable."
Assets    classified   as   "loss"   are   those   considered    "uncollectible"
and   of   such   little  value  that  their  continuance  as   assets   without
the establishment of a specific loss reserve is not warranted.

        When    an   insured   institution   classifies   problem   assets    as
either     substandard    or    doubtful,    it    may     establish     general
allowances    for    loan   losses   in   an   amount    deemed    prudent    by
management.     General    allowances   represent    loss    allowances    which
have   been   established   to   recognized   the   inherent   risk   associated
with    lending   activities,    but   which,   unlike   specific    allowances,
have   not   been   allocated   to   particular   problem   assets.    When   an
insured    institution    classifies   problem   assets    as    "loss,"    it's
required    either    to   establish   a   specific   allowance    for    losses
equal   to   100%   of   that  portion  of  the  asset  so  classified   or   to
charge-off   such   amount.    An  institution's   determination   as   to   the
classification   of   its   assets   and   the   amount   of    its    valuation
allowances    is   subject   to   review   by   the   regulatory    authorities,
who   may   order   the   establishment  of   addition   general   or   specific
loss allowances.

       In   connection   with   the  filing  of  its   periodic   reports   with
the    OTS    and   in   accordance   with   its   classification   of    assets
policy,   the   Association   regularly   reviews   problem   loans   and   real
estate    acquired    through   foreclosure   to    determine    whether    such
assets     require     classification    in    accordance    with     applicable
regulations.    On   the   basis  of  management's   review   of   its   assets,
at    June   30,   1997,   the   Association   had   classified   a   total   of
$126,000   of   its  assets  as  substandard,  $0  as  doubtful,   and   $0   as
loss.     At    June    30,    1997,   total   classified    assets    comprised
$126,000   or   1.4%   of   the  Association's  capital,   or   0.17%   of   the
Association's total assets.

       Allowance   for   Loan  Losses.   The  allowance  for  loan   losses   is
established    through    a    provision    for    loan    losses    based    on
management's    evaluation    of    the    risk    inherent    in    its    loan
portfolio   and   changes   in   the   nature   and   volume   of    its    loan
activity,    including    those    loans   which    are    being    specifically
monitored    by    management.     Such    evaluation,    which    includes    a
review    of    loans    for   which   full   collectibility    may    not    be
reasonably    assured,    considers    among    other    matters,    the    loan
classifications   discussed   above,   the   estimated   fair   value   of   the
underlying    collateral,   economic   conditions,    historical    loan    loss
experience,    the   amount   of   loans   outstanding   and    other    factors
that   warrant   recognition   in  providing   for   an   adequate   loan   loss
allowance.     A    significant   factor   considered   in    the    unallocated
allowance   was   the  historically  low  level  of  loans   other   than   one-
to-four   family   real   estate   loans.    Management   recognizes   that   as
loan   growth   continues   additional   provisions   to   the   allowance   may
be required.

        Real    estate    properties    acquired   through    foreclosure    are
recorded   at   the   lower  of  cost  or  fair  value  minus   estimated   cost
to   sell.    If  fair  value  at  the  date  of  foreclosure  is   lower   than
the   balance   of   the  related  loan,  the  difference   will   be   charged-
off   to   the   allowance   for  loan  losses  at   the   time   of   transfer.
Valuations    are   periodically   updated   by   management    and    if    the
value   declines,   a   specific  provisions  for  losses   on   such   property
is established by a charge to operations.

         Although    management    believes    that    it    uses    the    best
information     available    to    determine    the    allowance,     unforeseen
market    conditions   could   result   in   adjustments   and   net    earnings
could      be     significantly     affected     if     circumstances     differ
substantially    from    the   assumptions   used   in    making    the    final
determination.     Future    additions   to    the    Association's    allowance
for   loan   losses  will  be  the  result  of  periodic  loan,   property   and
collateral   reviews   and   thus   cannot  be   predicted   in   advance.    In
addition,   federal   regulatory  agencies,  as  an   integral   part   of   the
examination      process,     periodically     review     the      Association's
allowance    for    loan    losses.    Such    agencies    may    require    the
Association   to   recognize   additions   to   the   allowance   level    based
upon   their   judgment   of  the  information  available   to   them   at   the
time   of   their   examination.   At  June  30,  1997,  the   Association   had
a   total   allowance   for   losses   on   loans   of   $200,000   representing
159%   of   total   non-performing  loans  and   .21%   of   the   Association's
loans,   net.    See   Note   D   of   the  Notes  to   Consolidated   Financial
Statements.

        The    following    table    sets   forth    an    analysis    of    the
Association's allowance for loan losses.
<TABLE>
                                        Year Ended June 30,
                                    1997     1996         1995
                                (Dollars in Thousands)
<S>                                 <C>       <C>         <C>
Balance at beginning of period ..   $200      $200        $200

Charge-offs: (1)
One- to-four family                  ---       ---         10
Recoveries:(1)
One- to-four family                  ---       ---        ---
Provision charged to
operations                           ---       ---         10

Balance at end of period .          $200      $200       $200

Ratio of net charge-offs to average
loans outstanding during the period   ---%     ---%       .02%

Ratio of net charge-offs to average
non-performing assets during the
period .............                 ---%      ---%      4.88%
</TABLE>
(1) Excludes net gain on sale of real estate owned in the amount
of $8,611 for the year ended June 30, 1995.  These gains were
included in other operating expenses or other noninterest income.
       The   distribution   of   the   Company's   allowance   for   losses   on
loans at the dates indicated is summarized as follows:























<TABLE>

                                                  At June 30,
                               1997                    1996                1995
                                Percent                 Percent
Percent
               Loan Loss Total of Total Loan Loss Total of Total Loan Loss Total
of Total
                AllowanceLoans  Loans   Allowance Loans Loans    Allowance Loans
Loans
(Dollars in thousands)
One- to four-
<S>             <C>   <C>      <C>      <C>   <C>      <C>     <C>   <C>
<C>
 family ......$   12  $55,693  90.80%  $  8  $48,575   91.11%  $  4  $47,276
93.97%
Unallocated ..   188    5,642   9.20    192    4,739    8.89    196    3,022
6.03
Total (1)..... $ 200 $ 61,335 100.0%   $200  $53,314  100.0%   $200  $50,309
100.0%
</TABLE>

(1) Total loans represent the amount before deducting the loan loss allowance.

















Investment Activities

        General.    Sobieski   Federal   must   maintain   minimum   levels   of
investments   that   qualify   as   liquid   assets   under   OTS   regulations.
Liquidity     may     increase     or    decrease     depending     upon     the
availability    of   funds   and   comparative   yields   on   investments    in
relation    to   the   return   on   loans.    Historically,   the   Association
has    generally    maintained   liquid   assets    at    levels    above    the
minimum   requirements   imposed  by  the  OTS   regulations   and   at   levels
believed   adequate   to   meet   the   requirements   of   normal   operations,
including    repayments    of    maturing    debt    and    potential    deposit
outflows.     Cash    flow    projections    are    regularly    reviewed    and
updated   to   assure   that  adequate  liquidity  is   maintained.    At   June
30,   1997,   the   Association's  liquidity   ratio   (liquid   assets   as   a
percentage    of    net    withdrawable    savings    deposits    and    current
borrowings) was 6.07%.

        Federally   chartered   savings   institutions   have   the    authority
to    invest   in   various   types   of   liquid   assets,   including   United
States     Treasury     obligations,    securities    of     various     federal
agencies,    certain   certificates   of   deposit   of   insured   banks    and
savings     institutions,     certain    bankers'    acceptances,     repurchase
agreements    and    federal   funds.    Subject   to   various    restrictions,
federally    chartered   savings   institutions   may    also    invest    their
assets    in    commercial    paper,    investment    grade    corporate    debt
securities    and    mutual    funds    whose    assets    conform    to     the
investments    that    a    federally   chartered   savings    institution    is
otherwise authorized to make directly.

        Generally,    the    investment   policy   of   the   Association,    as
established   by   the   Board  of  Directors,  is   to   invest   funds   among
various   categories   of   investments   and   maturities   based   upon    the
Association's       liquidity       needs,      asset/liability       management
policies,      investment     quality,     marketability     and     performance
objectives.     The    Investment   Committee   consists    of    two    outside
directors,   Robert   J.   Urbanski  and  Joseph   F.   Nagy,   plus   President
and   Chief   Executive   Officer   Thomas  F.   Gruber   and   Vice   President
of   Finance   Arthur   Skale.    Subject  to  the   policies   established   by
the    Board    of    Directors,    President   Gruber   and   Vice    President
Skale    are    authorized    to    purchase   and    sell    securities.    All
securities   transactions   are   disclosed   to   the   Board   of    Directors
at their next regular meeting.

          Mortgage-Backed     Securities.      The     Association     purchases
mortgage-backed      securities     to     supplement      residential      loan
production   and   as   part  of  its  asset/liability   strategy.    The   type
of     securities     purchased    is    based    upon     the     Association's
asset/liability    management   strategy   and   balance    sheet    objectives.
For      instance,      substantially     all     of     the     mortgage-backed
investments    purchased   by   the   Association   over   the   last    several
years   have   had   adjustable  rates  of  interest.    At   June   30,   1997,
the      amortized     cost     of     the     Association's     mortgage-backed
securities    was    $13.7   million   and   the   market   value    of    these
mortgage-backed securities was $13.4 million at that date.

       At   June   30,   1997,  $11.9  million  or  87%  of  the   Association's
mortgage-backed     securities    have    been    classified     as     held-to-
maturity     and,     accordingly,    are    included    in    its     financial
statements   at   amortized   cost.    Mortgage-backed   securities   with    an
amortized   cost   of   $1.8   million  have  been  classified   as   available-
for-sale   and   are   included   in   the   financial   statements   at    fair
value.     The    Association's    investment    securities    portfolio     was
$2.3   million   at   June   30,  1997.  Of  that  amount,   $1.3   million   or
56%   was   classified   as  available-for-sale  and   $1.0   million   or   44%
was   classified   as   held-to-maturity.   See  Note  C   of   the   Notes   to
Consolidated     Financial     Statements     for     additional     information
regarding   the   amortized   cost  and  approximate   market   value   of   the
Association's mortgage-backed securities as of June 30, 1997.

       As   of   June   30,   1997,   all   of   the   Association's   mortgage-
backed    securities    were    backed   by    government    sponsored    agency
programs.        Accordingly,      management      believes       that       the
Association's    mortgage-backed    securities    are    generally     resistant
to credit problems.

          The     Association's     mortgage-backed     securities     portfolio
consists    of    securities    issued   under    government-sponsored    agency
programs,    including    those    of    the    Federal    National     Mortgage
Association    ("FNMA"),   FHLMC   and   the   Government   National    Mortgage
Association   ("GNMA").    The   FNMA,   FHLMC   and   GNMA   certificates   are
modified     pass-through    mortgage-backed    securities    that     represent
undivided   interests   in   underlying  pools   of   fixed-rate,   or   certain
types    of   adjustable-rate,   predominantly   single-family   and,    to    a
lesser   extent,   multi-family   residential   mortgages   issued   by    those
government-sponsored    entities.    As   a   result,    the    interest    rate
risk    characteristics   of   the   underlying   pool   of   mortgages,   i.e.,
fixed   rate   or   adjustable   rate,  as  well   as   prepayment   risk,   are
passed   on   to   the   certificate   holder.    FNMA   and   FHLMC   generally
provide   the   certificate   holder  a  guarantee   of   timely   payments   of
interest    and   ultimate   collection   of   principal,   whether    or    not
collected.    GNMA's   guarantee   to  the  holder   is   timely   payments   of
principal   and   interest,   backed  by  the   full   faith   and   credit   of
the U.S. Government.

        Mortgage-backed    securities   generally   yield    less    than    the
loans    that   underlie   such   securities,   because   of   the    cost    of
payment   guarantees   or   credit  enhancements   that   reduce   credit   risk
to     holders.     Since    federal    agency    mortgage-backed     securities
generally    carry   a   yield   approximately   50   to   100   basis    points
below   that   of   the  corresponding  type  of  residential   loan   (due   to
the   implied   federal   agency  guarantee  fee  and   the   retention   of   a
servicing   spread   by   the   loan  servicer),   in   the   event   that   the
proportion    of    the   Association's   assets   consisting    of    mortgage-
backed    investments    increase    in   the    future,    the    Association's
assets     yields     would    be    adversely    affected.      Mortgage-backed
securities    are   also   more   liquid   than   individual   mortgage    loans
and   may   be   used   to   collateralize  obligations  of   the   Association.
In    general,    mortgage-backed   securities   issued   or    guaranteed    by
FNMA   and   FHLMC   are   weighted  at  no  more  than   20%   for   risk-based
capital     purposes,     and    mortgage-backed    securities     issued     or
guaranteed    by   GNMA   are   weighted   at   0%   for   risk-based    capital
purposes,   compared   to   an  assigned  risk   weighing   of   50%   to   100%
for whole residential mortgage loans.

       While   mortgage-backed   securities  carry   a   reduced   credit   risk
as   compared   to   whole  loans,  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  to  the  prepayment   speed,   and   value,
of    such    securities.    Mortgage-backed   securities   involve    a    risk
that    actual    prepayments   will   differ   from    estimated    prepayments
over   the   life   of   the   security  which  may   require   adjustments   to
the    amortization   of   any   premium   or   accretion   of   any    discount
relating   to   such   instruments,  thereby   reducing   the   net   yield   on
such   securities.    There   is   also  reinvestment   risk   associated   with
the    cash   flows   from   such   securities.    In   addition,   the   market
value   of   such   securities  may  be  adversely  affected  by   changes    in
interest   rates.    The   adjustable  rate  and/or  short   maturity   of   the
Association's portfolio is designed to minimize that risk.

        Investment   Securities   and   Other   Interest-Earning   Assets.    At
June    30,   1997,   Sobieski   Federal's   interest-bearing   deposits    with
financial   institutions   totaled   $94,000,   or   .1%   of   total    assets,
and     its    investment    securities,    consisting    of    U.S.    Treasury
obligations   totaled   $2.3   million,   or   2.8%   of   total   assets.    In
addition,    as    of   such   date,   the   Association    had    a    $636,000
investment     in     FHLB    stock,    satisfying    its    requirement     for
membership   in   the   FHLB   of  Indianapolis.   It   is   the   Association's
general    policy   to   purchase   securities   which   are   U.S.   Government
securities   or   federal   agency  obligations  or  other   issues   that   are
rated   investment   grade.    At  June  30,   1997,   the   average   term   to
maturity   or   repricing   of   the  securities   portfolio   (excluding   FHLB
stock) was less than two years.

        The    Association's   investment   securities   portfolio    at    June
30,    1997    contained   neither   tax-exempt   securities   nor    securities
of   any   issuer   with  an  aggregate  book  value  in  excess   of   10%   of
the    Association's   equity   capital,   excluding   those   issued   by   the
United State Government or  its agencies.









       The  following  table  sets  forth  the  contractual  maturities  of  the
Association's mortgage-backed securities at June 30, 1997.
<TABLE>
               6 Months  6 Months  1 to 3  3 to 5  5 to 10 10 to 20  Over 20
June 30, 1997
           or Less  to 1 Year  Years  Years   Years   Years  Years  Balance
Outstanding
                                   (In Thousands)

Federal Home Loan Mortgage Corporation:
  <S>                          <C>    <C>   <C>    <C>   <C>    <C>     <C>
<C>
  Fixed-rate .................$  2    $  2  $   7  $  9  $  33  $  11  $  ---  $
64
  Adjustable-rate ............  39      40    133   164    425  1,429     ---
2,230

Federal National Mortgage Association:
 Fixed-rate ..................   3       3     13     7     21      9     ---
56
 Adjustable-rate ............. 112     111    459   485  1,592  4,707     ---
7,466

Government National Mortgage Association:
  Fixed-rate .................   9       9     42    49    162    608     507
1,386
  Adjustable-rate ............  24      24     97   108    324    972     623
2,172

  Net premiums and discounts . ---     ---    ---   ---    ---    ---     ---
336

                              $189   $ 189  $ 751  $822 $2,557 $7,736  $1,130
$13,710
</TABLE>

      The  following  table  sets  forth the composition  of  the  Association's
investment and mortgage-backed securities at the dates indicated.
<TABLE>


                                                            At      June     30,
 .
                                      1997               1996           1995
                                    Book  % of    Book        % of  Book      %
of
                                     Value  Total     Value     Total      Value
Total                                                                   (Dollars
in Thousands)

Investment securities:
<S>                              <C>      <C>   <C>       <C>     <C>       <C>
U. S. government securities (1) $  2,297  78.3  $  3,785  71.0%  $  1,704
53.1%
U. S. government securities
mutual fund ...................      ---   ---       909  17.1        870   27.1
Subtotal ......................    2,297  78.3     4,694  88.1      2,574   80.2



FHLB stock ....................      636  21.7       636  11.9        636   19.8
Total investment securities
and FHLB stock ................ $  2,933 100.0%  $ 5,330 100.0%  $  3,210
100.0%

Other interest-earning assets:
Interest-bearing deposits with
financial institutions ........ $    292 100.0%  $   533  80.8%  $  2,371
43.3%
Federal funds sold ............      ---   ---       127  19.2      3,111   56.7
Total ......................... $    292 100.0%  $   660 100.0%  $  5,482
100.0%

Mortgage-backed securities:
GNMA .........................  $  3,558  26.0%  $ 4,064  25.2%  $  2,494
16.2%
FNMA ..........................    7,522  54.8     8,852  54.8      9,165   59.7
FHLMC .........................    2,294  16.7     2,846  17.6      3,311   21.6
Subtotal ......................   13,374  97.5    15,762  97.6     14,970   97.5

Unamortized premium, net . . ..      336   2.5       390   2.4        394    2.5
Total mortgage-backed securities$ 13,710 100.0% $ 16,152 100.0%   $15,364
100.0%
</TABLE>

(1)The average remaining life of U.S. government securities June 30, 1997 was
less than two years.



       The   composition   and   maturities   of   the   investment   securities
portfolio,   excluding   FHLB   stock,   are   indicated   in   the    following
table.

<TABLE>
                            June 30, 1997
                Less than      1 to 5    5 to 10
                  1 Year        Years     Years       Total
                  Book    Value     Book   Value     Book   Value   Book   Value
(Dollars in Thousands)
<S>             <C>         <C>          <C>
U.S. Government
securities .... $   800      $  497       $1,000     $2,297

Total ......... $   800      $  497       $1,000     $2,297

Weighted average
yield ........    4.81%       5.97%        8.00%      6.45%
</TABLE>

Sources of Funds

        General.     The   Association's   primary   sources   of   funds    are
deposits,    payment   of   principal   and   interest   on   loans,    interest
earned     on     mortgage-backed     securities,     investment     securities,
interest    earned   on   interest-bearing   deposits   with   other   financial
institutions, and other funds provided from operations.

        Deposits.     Sobieski   Federal   offers   a   variety    of    deposit
accounts   having   a   wide   range  of  interest   rates   and   terms.    The
Association's    deposits   consist   of   passbook,   NOW,   checking,    money
market     deposit     and     certificate    accounts.      The     certificate
accounts currently range in terms from 91 days to four years.

        The    Association   relies   primarily   on   advertising    (including
television,    radio,    and    newspaper),   competitive    pricing    policies
and    customer    service    to   attract   and    retain    these    deposits.
Sobieski    Federal   solicits   deposits   from   its   market    area    only,
does   not   use   brokers   to  obtain  deposits  and   currently,   does   not
engage    in    any   type   of   premium,   gift   or   promotional    programs
beyond    the   advertising   vehicles   mentioned   above.    The    flow    of
deposits     is     influenced     significantly     by     general     economic
conditions,   changes   in   money   market  and   prevailing   interest   rates
and competition.

        The    Association   has   become   more   susceptible   to   short-term
fluctuations    in    deposit   flows   as   customers    have    become    more
interest   rate   conscious.    The  Association   endeavors   to   manage   the
pricing    of    its    deposits   in   keeping   with    its    asset/liability
management    and    profitability   objectives.    The    ability    of     the
Association     to    attract    and    maintain    savings     accounts     and
certificates   of   deposit,   and   the   rates   paid   on   these   deposits,
has   been   and   will  continue  to  be  significantly  affected   by   market
conditions.




       The   following   table   sets   forth   the   savings   flows   at   the
Association during the periods indicated.
<TABLE>
                                        1997             1996               1995
 .
<S>                            <C>          <C>          <C>
Opening balance .............  $61,227      $63,142      $67,092
Net withdrawals .............   (2,332)      (2,499)      (4,603)
Interest credited (1) .......      492          584          653

Ending balance ..............  $59,387      $61,227      $63,142

Net decrease ................ $ (1,840)    $ (1,915)    $ (3,950)

Percent decrease ............   (3.01)%      (3.03)%     (5.89)%
</TABLE>


(1)   Includes   interest   credited  to  passbook,   NOW   and   money   market
deposit accounts, but not certificates of deposit.











The  following  table  set forth the dollar amount of savings  deposits  in  the
various  types  of  deposit  programs offered by the Association  at  the  dates
indicated.
<TABLE>
                                                       At June 30,
                                              1997              1996
1995
                                               Percent          Percent
Percent
                                        Amount of Total Amount of Total Amount
of Total
                                                         (Dollars in Thousands)
Transaction and Savings Deposits:
Passbook accounts:
June 30, 1997, June 30, 1996 and June 30, 1995-
<S>                                      <C>      <C>   <C>     <C>     <C>
<C>
2.50% .................................  $15,170  25.5% $15,909 26.0%   $16,342
25.9%

NOW accounts:
June 30, 1997, June 30, 1996 and June 30, 1995-
2.75% .................................   3,876   6.5    2,454  4.0       2,357
3.7

Money market accounts:
June 30, 1997, June 30, 1996 and June 30, 1995-
2.75% to 3.00% .....................     2,172    3.7    2,272  3.7       2,360
3.7
Total Non-Certificates .............    21,218   35.7   20,635  33.7     21,059
33.3

Certificates:

3.51 - 4.00% .......................       262     .4      318   .5       5,425
8.6
4.01 - 6.00% .......................    27,551   46.4   26,560 43.4      23,930
37.9
6.01 - 8.00% .......................    10,355   17.4   13,714 22.4      12,728
20.2

Total Certificates .................    38,168   64.3   40,592 66.3      42,083
66.7
Total Deposits .....................   $59,386  100.0% $61,227 100.0%   $63,142
100.0%
</TABLE>
The   following   table   shows   rate  and   maturity   information   for   the
Association's certificates of deposit as of June 30, 1997.
<TABLE>

                     3.51-  4.01-   6.01-           Percent
                     4.00%  6.00%   8.00%   Total   of Total
                                   (Dollars in Thousands)
Certificate accounts maturing
in quarter ending:
<S>                 <C>   <C>      <C>     <C>      <C>
September 30, 1997 .$ 262 $ 5,864  $  256  $  6,382 16.72%
December 31, 1997 ..  ---   4,933     468     5,401 14.15
March 31, 1998 .....  ---   3,977     134     4,111 10.77
June 30, 1998 ......  ---   2,835     143     2,978  7.80
September 30, 1998 .  ---   3,333   1,050     4,383 11.48
December 31, 1998 ..  ---   1,204   1,836     3,040  7.96
March 31, 1999 .....  ---     119   2,855     2,974  7.79
June 30, 1999 ......  ---      55   3,008     3,063  8.03
September 30, 1999 .  ---     654     606     1,260  3.30
December 31, 1999 ..  ---     614     ---       614  1.61
March 31, 2000 .....  ---   1,018     ---     1,018  2.67
June 30, 2000 ......  ---   1,049     ---     1,049  2.75
Thereafter .........  ---   1,896     ---     1,896  4.97

Total ..............$ 262 $27,551 $10,356   $38,169 100.0%

Percent of total ... .69%  72.18%   27.13%   100.0%
</TABLE>

     The following table indicates the amount of the
Association's certificates of deposit by time remaining until
maturity as of June 30, 1997.

                                                                        Maturity
(In Thousands)
               3 months Over 3 to Over 6 to Over 12
               or less  6 months 12 months months   Total

Certificates of
deposit less
 than $100,000
              $  6,266  $4,901 $6,647  $18,119  $35,933
Certificates of
deposit of
$100,000 or more
                  116     501    442    1,177    2,236
Total certificates
 of deposit .............
              $ 6,382  $5,402 $7,089  $19,296  $38,169

        Borrowings.    Although   deposits   are   the   Association's   primary
source   of   funds,   the   Association   may   utilize   FHLB   advances    or
other   borrowings   to   support  lending  activities   and   to   assist   the
Association's   asset/liability   management   strategy   when   they   are    a
less   costly   source   of   funds  and  may  be   invested   at   a   positive
interest    rate   spread   or   when   the   Association   desires   additional
capacity   to   fund   loan   demand.   At  June  30,  1997,   the   Association
had  borrowings of $9.5 million.

Service Corporation Activities

       As   a   federally   chartered   savings  bank,   Sobieski   Federal   is
permitted   by  OTS  regulations  to  invest  up  to  2%  of  its   assets,   or
approximately   $1.5   million  in  the  stock  of,   or   loans   to,   service
corporation     subsidiaries.     Sobieski     Federal     may     invest     an
additional   1%   of   its   assets   in   service   corporations   where   such
additional   funds   are   used   for  inner-city   or   community   development
purposes   and   up   to   50%  of  its  total  capital  in   conforming   loans
to   service   corporations   in  which  it  owns   more   than   10%   of   the
capital     stock.      In     addition    to     investments     in     service
corporations,    federal    associations   are   permitted    to    invest    an
unlimited    amount    in    operating   subsidiaries    engaged    solely    in
activities   in   which   a  federal  association  may   engage   in   directly.
At    June    30,    1997,    Sobieski   Federal   had   no    active    service
corporation activities.

Competition

         Sobieski     Federal    faces    strong    competition,     both     in
originating     real    estate    loans    and    in    attracting     deposits.
Competition   in   originating   real  estate   loans   comes   primarily   from
commercial     banks,    savings    institutions,    mortgage    bankers     and
credit     unions     located    in    the    Association's     market     area.
Commercial    banks,   savings   institutions   and   credit   unions    provide
vigorous     competition     in    consumer    lending.      The     Association
competes   for   real  estate  and  other  loans  principally   on   the   basis
of   the   quality   of  services  it  provides  to  borrowers,   the   interest
rates   and   loan   fees   it   charges,   and   the   types   of   loans    it
originates.  See "Business - Lending Activities."

        The   Association   attracts   all   of   its   deposits   through   its
retail   banking   offices,   primarily   from   the   communities   in    which
those    retail   banking   offices   are   located.    Therefore,   competition
for   those   deposits   is   principally   from   commercial   banks,   savings
banks,    brokerage    firms    and   credit    unions    located    in    these
communities.     The    Association   competes    for    these    deposits    by
offering   a   variety   of   account   alternatives   at   competitive    rates
and   by   providing   convenient   business   hours,   branch   locations   and
interbranch deposit and withdrawal privileges.

Employees

       At   June   30,  1997,  the  Association  had  a  total   of   20   full-
time   and   4   part-time   employees.    The   Association's   employees   are
not    represented    by   any   collective   bargaining   group.     Management
considers its employee relations to be good.

Executive Officers Who Are Not Directors

        The   business   experience   of   each   executive   officer   of   the
Association   and  the  Holding  Company  who  is  not  also   a   director   is
set forth below.

        Marsha   Nafrady,   age   43,   Ms.   Nafrady   is   secretary/treasurer
of    the    Association.     In    that   capacity    she    oversees    teller
operations    of   the   Cleveland   main   branch   facility.    Ms.    Nafrady
joined the Association in 1973.

        Arthur    Skale,    age    56.    Mr.   Skale   is    currently    Chief
Financial   Officer.    In   that  capacity,   he   is   responsible   for   the
investment,     cash     management    and    budget     planning     of     the
Association.  Mr. Skale joined the Association in 1997.

                           REGULATION
                                
General

       Sobieski   Federal   is   a   federally  chartered   savings   and   loan
association,    the    deposits   of   which   are   federally    insured    and
backed    by    the    full   faith   and   credit   of   the   United    States
Government.     Accordingly,   Sobieski   Federal   is    subject    to    broad
federal   regulation   and   oversight  extending   to   all   its   operations.
The   Association   is   a   member  of  the  FHLB  of   Indianapolis   and   is
subject   to   certain   limited  regulation   by   the   Board   of   Governors
of   the   Federal   Reserve   System  ("Federal  Reserve   Board").    As   the
savings   and   loan   holding   company  of  the   Association,   the   Holding
Company   also   is   subject  to  federal  regulation   and   oversight.    The
purpose    of    the   regulation   of   the   Holding   Company    and    other
holding    companies   is   to   protect   subsidiary   savings    associations.
The   Association   is   a   member   of  the  Savings   Association   Insurance
Fund   ("SAIF")   and   the  deposits  of  the  Association   are   insured   by
the    FDIC.    As   a   result,   the   FDIC   has   certain   regulatory   and
examination authority over the Association.

        Certain    of    these   regulatory   requirements   and    restrictions
are discussed below or elsewhere in this document.

Federal Regulation of Savings Associations

        The    OTS   has   extensive   authority   over   the   operations    of
savings   associations.    As   part   of  this   authority,   the   Association
is   required   to   file  periodic  reports  with  the  OTS  and   is   subject
to    periodic   examinations   by   the   OTS   and   the   FDIC.    The   last
regular   OTS   and   FDIC   examinations  of  the  Association   were   as   of
July     1995     and    February    1997,    respectively.     Under     agency
scheduling   guidelines,   it   is   likely  that   another   examination   will
be    initiated   in   the   near   future.    When   there   examinations   are
conducted   by   the  OTS   and  the  FDIC,  the  examiners  may   require   the
Association   to   provide   for   higher  general   or   specific   loan   loss
reserves.

        All    savings    associations   are    subject    to    a    semiannual
assessment,   based   upon   the   savings   association   total    assets    to
fund   the   operations   of   the  OTS.   The  Association's   OTS   assessment
for the fiscal year ended June 30, 1997 was $26,000.

       The   OTS   also   has   extensive   enforcement   authority   over   all
savings    institutions   and   their   holding   companies,    including    the
Association    and   the   Holding   Company.    This   enforcement    authority
includes,   among   other   things,   the  ability   to   assess   civil   money
penalties,   to   issue   cease-   and-desist   or   removal   orders   and   to
initiate     injunctive    actions.     In    general,     these     enforcement
actions   may   be   initiated   for   violations   of   laws   and   regulation
and   unsafe   or   unsound   practices.   Other  actions   or   inactions   may
provide   the   basis   for   enforcement  action,   including   misleading   or
untimely    reports    filed    with   the   OTS.     Except    under    certain
circumstances,   public   disclosure   of   final   enforcement    actions    by
the OTS is required.

       In   addition,   the   investment,  lending   and   branching   authority
of   the   Association   is   prescribed  by  federal  laws   and   regulations,
and    it    is    prohibited   from   engaging   in    any    activities    not
permitted   by   such   laws  and  regulations.   For   instance,   no   savings
institution    may    invest   in    non-investment   grade    corporate    debt
securities.    In   addition,   the   permissible   level   of   investment   by
federal    associations    in    loans   secured   by    non-residential    real
property    may    not   exceed   400%   of   total   capital,    except    with
approval    of    the    OTS.    Federal   savings   associations    are    also
generally   authorized   to   branch  nationwide.    The   Association   is   in
compliance with the noted restrictions.

        The    Association's    general   permissible    lending    limit    for
loans-to-one-borrower   is   equal  to  the   greater   of   $500,000   or   15%
of   unimpaired   capital   and  surplus  (except  for   loans   fully   secured
by    certain    readily   marketable   collateral,   in   which    case    this
limit   is   increased  to  25%  of  unimpaired  capital   and   surplus).    At
June    30,    1997,    the    Association's   lending    limit    under    this
restriction    was    $1,554,000.    The   Association    is    in    compliance
with the loans-to-one-borrower limitation.

       The   OTS,   as   well  as  the  other  federal  banking  agencies,   has
adopted   guidelines   establishing   safety   and   soundness   standards    on
such     matters    as    loan    underwriting    and    documentation,    asset
quality,    earnings   standards,   internal   controls   and   audit   systems,
interest    rate   risk   exposure   and   compensation   and   other   employee
benefits.     Any    institution   which   fails   to    comply    with    these
standards   must   submit   a  compliance  plan.   A   failure   to   submit   a
plan    or    to    comply   with   an   approved   plan   will   subject    the
institution to further enforcement action.

Insurance of Accounts and Regulation by the FDIC

        Sobieski    Federal   is   a   member   of   the    SAIF,    which    is
administered   by   the   FDIC.   Deposits  are   insured   up   to   applicable
limits   by   the  FDIC  and  such  insurance  is  backed  by  the  full   faith
and   credit   of   the  United  States  Government.   As  insurer,   the   FDIC
imposes    deposit   insurance   premiums   and   is   authorized   to   conduct
examinations     of     and    to    require    reporting    by     FDIC-insured
institutions.     It   also   may   prohibit   any   FDIC-insured    institution
from   engaging   in   any   activity   the  FDIC   determines   by   regulation
or   order   to  pose  a  serious  risk  to  the  FDIC.   The  FDIC   also   has
the    authority    to    initiate   enforcement   actions    against    savings
associations,   after   giving   the   OTS   an   opportunity   to   take   such
action,   and   may   terminate   the  deposit  insurance   if   it   determines
that   the   institution   has   engaged   or   is   engaging   in   unsafe   or
unsound practices, or is in an unsafe or unsound condition.

       The   FDIC's   deposit  insurance  premiums  are   assessed   through   a
risk-based    system   under   which   all   insured   depository   institutions
are    placed   into   one   of   nine   categories   and   assessed   insurance
premiums,   ranging   from   0%   to  .27%  of  deposits,   based   upon   their
level    of   capital   and   supervisory   evaluation.    Under   the   system,
institutions   classified   as   well  capitalized   (i.e.,   a   core   capital
ratio   of  at  least  5%,  a  ratio  of  Tier  1  or  core  capital  to   risk-
weighted   assets   ("Tier  1  risk-based  capital")  of   at   least   6%   and
a    risk-based    capital   ratio   of   at   least   10%)    and    considered
healthy   would   pay   the   lowest  premium  while   institutions   that   are
less    than   adequately   capitalized   (i.e.,   core   and   Tier   1   risk-
based   capital   ratios   of   less   than   4%   or   a   risk-based   capital
ratio   of   less   than   8%)   and  considered  of   substantial   supervisory
concern    would   pay   the   highest   premium.    Risk   classification    of
all   insured   institutions  will  be  made  by  the  FDIC   for   each   semi-
annual assessment period.

       The   FDIC   is   authorized  to  increase   assessment   rates,   on   a
semiannual   basis,   if   it  determines  that  the  reserve   ratio   of   the
SAIF   will   be   less  than  the  designated  reserve  ratio   of   1.25%   of
SAIF    insured    deposits.    In   setting   these   increased    assessments,
the   FDIC   must   seek  to  restore  the  reserve  ratio  to  the   designated
reserve   level,   or   such  higher  reserve  ratio  as  established   by   the
FDIC.     In   addition,   under   FDICIA,   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
by the FDIC.

       As   is   the   case   with  the  SAIF,  the  FDIC   is   authorized   to
adjust   the   insurance  premium  rates  for  banks   that   are   insured   by
the   Bank   Insurance   Fund   (the  "BIF")   of   the   FDIC   in   order   to
maintain   the   reserve   ratio  of  the  BIF   at   1.25%   of   BIF   insured
deposits.     The   FDIC   has   revised   the   premium   schedule    of    BIF
insured    institutions   to   provide   a   range   of   .04%   to   .31%    of
deposits    in    anticipation   of   the   BIF    achieving    its    statutory
reserve   ratio.    As   a  result,  such  institutions   generally   will   pay
lower    insurance    premiums    than   SAIF   insured    institutions.     The
revisions became effective in the third quarter of 1996.

       The    FDIC   is   authorized  to  increase  assessment   rates,   on   a
semiannual   basis,   if   it  determines  that  the  reserve   ratio   of   the
SAIF   will   be   less  than  the  designated  reserve  ratio   of   1.25%   of
SAIF    insured    deposits.    In   setting   these   increased    assessments,
the    FDIC    must    seek   to   restore   the   reserve   ratio    to    that
designated    reserve    level,    or   such    higher    reserve    ratio    as
established    by    the   FDIC.    The   FDIC   may   also    impose    special
assessments   on   SAIF   members   to   repay   amounts   borrowed   from   the
United   States   Treasury   or   for   any  other   reason   deemed   necessary
by the FDIC.

       For   the   first   six   months  of  1995,   the   assessment   schedule
for   members   of   the   Bank  Insurance  Fund  ("BIF")   and   SAIF   members
ranged   from   .23%   to  .31%  of  deposits.   As  is  the   case   with   the
SAIF,    the   FDIC   is   authorized   to   adjust   the   insurance    premium
rates   for  banks  that  are  insured  by  the  BIF  of  the  FDIC   in   order
to   maintain   the  reserve  ratio  of  the  BIF  at  1.25%  of   BIF   insured
deposits.    As   a   result   of  the  BIF  reaching  its   statutory   reserve
ratio    the    FDIC   revised   the   premium   schedule   for   BIF    insured
institutions   to   provide  a  range  of  .04%  to  .31%  of   deposits.    The
revisions   became   effective   in   the   third   quarter   of    1995.     In
addition,   the   BIF   rates   were   further   revised,   effective    January
1996,   to   provide  a  range  of  0%  to  .27%.   The  SAIF  rates,   however,
were   not   adjusted.   At  the  time  the  FDIC  revised   the   BIF   premium
schedule,   it   noted   that,   absent   legislative   action   (as   discussed
below),   the   SAIF   would   not   attain   its   designated   reserve   ratio
until   the   year   2002.    As   a   result,  SAIF   insured   members   would
continue    to    be    generally   subject   to   higher   deposit    insurance
premiums    than   BIF   insured   institutions   until,   all   things    being
equal, the SAIF attained its required reserve ratio.

        In   order   to   eliminate   this   disparity   and   any   competitive
disadvantage    between    BIF    and    SAIF    member    institutions     with
respect      to      deposit     insurance     premiums,     legislation      to
recapitalize    the    SAIF    was   enacted    in    September    1996.     The
legislation   provides   for   a   one-time  assessment   to   be   imposed   on
all   deposits  assessed  at  the  SAIF  rates,  as  of  March  31,   1995,   in
order   to   recapitalize   the  SAIF.   It  also  provides   for   the   merger
of   the   BIF   and   the   SAIF   on   January   1,   1999   if   no   savings
associations   then   exist.    The   special   assessment   rate    has    been
established   at   .657%   of   deposits  by  the   FDIC   and   the   resulting
assessment   of   $414,000   was   paid  in   November   1996.    This   special
assessment      significantly     increased     noninterest     expense      and
adversely    affected   the   Association's   results    of    operations    for
the    year   ended   June   30,   1997.    As   a   result   of   the   special
assessment,    the    Association's    deposit    insurance    premiums     were
reduced    to   $37,000   based   upon   its   current   insured   institutions.
These     premiums    are    subject    to    change    in    future    periods.
Effective   January   1,   1997,  SAIF  members   have   the   same   risk-based
schedule   as   BIF   members.   The  Association  has   effectively   paid   no
assessment    for   deposit   insurance   coverage   commencing    January    1,
1997.

        All    SAIF-insured    institutions   are    required    to    pay    an
assessment   for   the   repayment  of  interest  on   obligations   issued   by
a    federally    chartered   corporation   to   provide   financing    ("FICO")
for   resolving   the  thrift  crisis  in  the  1980s,  in   an   amount   equal
to   6.48   basis   points   for  each  $100  in  domestic   deposits.    As   a
result    of    the    recent   legislation   discussed    above,    BIF-insured
institutions    are   also   required   to   pay   an   assessment    for    the
repayment   of   interest   on  the  FICO  bonds,  in   an   amount   equal   to
1.52    basis    points   for   each   $100   in   domestic    deposits.     The
assessment   on   SAIF-insured  institutions   is   expected   to   be   reduced
to   2.43   basis   points  for  each  $100  in  domestic  deposits   no   later
than    January    1,   2000,   by   which   point   BIF-insured    institutions
will    participate    fully    in   the   FICO   bond    interest    repayment.
These   assessments,   which  may  be  revised   based   upon   the   level   of
BIF   and   SAIF   deposits,   will  continue  until   the   bonds   mature   in
2017.

     Regulatory Capital Requirements

         Federally    insured    savings    associations,    such     as     the
Association,    are    required    to    maintain    a    minimum    level    of
regulatory    capital.    The   OTS   has   established    capital    standards,
including    a   tangible   capital   requirement,   a   leverage   ratio    (or
core    capital)    requirement   and   a   risk-based    capital    requirement
applicable     to     such     savings     associations.      These      capital
requirements    must   be   generally   as   stringent   as    the    comparable
capital    requirements    for   national    banks.     The    OTS    is    also
authorized    to    impose   capital   requirements    for    national    banks.
The   OTS    is   also   authorized   to   impose   capital   requirements    in
excess   of   these  standards  on  individual  associations   on   a   case-by-
case basis.

       The   capital   regulations  require  tangible  capital   of   at   least
1.5%    of    adjusted    total    assets   (as    defined    by    regulation).
Tangible    capital    generally    includes   common    stockholders'    equity
and     retained     income,     and     certain     noncumulative     perpetual
preferred     stock    and    related    income    and    excludes    unrealized
appreciation    or    depreciation   on   securities   available    for    sale.
In   addition,   all   intangible   assets,  other   than   a   limited   amount
of    purchased    mortgage   servicing   rights,   must   be   deducted    from
tangible   capital.    At  June  30,  1997,  the  Association   did   not   have
any intangible assets.

         The     OTS     regulations     establish    special     capitalization
requirements     for    savings    associations    that    own     subsidiaries.
Under   these   regulations   certain   subsidiaries   are   consolidated    for
capital   purposes   and   others  are  excluded  from   assets   and   capital.
In    determining    compliance    with   the    capital    requirements,    all
subsidiaries     engaged     solely    in     activities     permissible     for
national   banks   or   engaged   in  certain   other   activities   solely   as
agent    for   its   customers   are   "includable"   subsidiaries   that    are
consolidated     for     capital    purposes    in     proportion     to     the
association's    level    of    ownership,    including    the     assets     of
includable   subsidiaries   in   which   the   association   has   a    minority
interest    that    is    not    consolidated   for    GAAP    purposes.     For
excludable   subsidiaries   the   debt   and   equity   investments   in    such
subsidiaries   are   deducted   from  assets   and   capital.    At   June   30,
1997, the Association did not have any active subsidiaries.

       At   June   30,   1997   the   Association  had   tangible   capital   of
$9.0    million,    or    11.4%   of   adjusted   total   assets,    which    is
approximately   $7.8   million   above   the   minimum   requirement   of   1.5%
of adjusted total assets in effect on that date.

       The   capital   standards  also  require  core  capital   equal   to   at
least    3%   of   adjusted   total   assets   (as   defined   by   regulation).
Core   capital   generally   consists   of   tangible   capital   plus   certain
intangible     assets,    including    supervisory    goodwill     (which     is
phased-out    over   a   five-year   period)   and   a   limited    amount    of
purchased   credit   card   relationships.   As   a   result   of   the   prompt
corrective    action   provisions   of   FDICIA   discussed   below,    however,
a   savings   association   must  maintain  a   core   capital   ratio   of   at
least    4%    to    be   considered   adequately   capitalized    unless    its
supervisory   condition  is  such  to  allow  it  to  maintain   a   3%   ratio.
At   June   30,   1997,   the   Association  had  no  intangibles   which   were
subject to these tests.

       At   June   30,  1997,  the  Association  had  core  capital   equal   to
$9.0   million,   or   11.4%   of  adjusted  total   assets,   which   is   $6.6
million   above   the  minimum  leverage  ratio  requirement   of   3%   as   in
effect on that date.

        The   OTS   risk-based   requirement   requires   savings   associations
to   have   total   capital   of   at   least  8%   of   risk-weighted   assets.
Total   capital   consists   of   core   capital,   as   defined   above,    and
supplementary    capital.    Supplementary   capital   consists    of    certain
permanent   and   maturing  capital  instruments  that   do   not   qualify   as
core   capital   and   general  valuation  loan  and   lease   loss   allowances
up   to   a   maximum   of   1.25%  or  risk-weighted   assets.    Supplementary
capital   may   be   used   to   satisfy  the   risk-based   requirement    only
to   the   extent   of  core  capital.   The  OTS  is  authorized   to   require
a   savings   association   to  maintain  an  additional   amount   of   capital
for   concentration   of   credit   risk  and  the   risk   of   non-traditional
activities.    At   June   30,   1997,   the   Association   had   no    capital
instruments   that   qualify   as  supplementary   capital   and   $200,000   of
general   loss   reserves,   which  was  less  than   1.25%   of   risk-weighted
assets.

       Certain   exclusions   from   capital  and   assets   are   required   to
be    made    for   the   purpose   of   calculating   total   capital.     Such
exclusions     consist    of    equity    investments     (as     defined     by
regulation)    and    that   portion   of   land   loans   and    nonresidential
construction   loans   in   excess  of  an  80%   loan-to-value   ratio   (these
items   are   excluded   on   a   sliding   scale   through   June   30,   1994,
after    which    they    must   be   excluded   in    their    entirety)    and
reciprocal     holdings    of    qualifying    capital     instruments.      The
Association   had   no   such   exclusions   from   capital   and   assets    at
June 30, 1997.

        In    determining    the   amount   of   risk-weighted    assets,    all
assets,    including    certain    off-balance    sheet    items,    will     be
multiplied   by   a   risk  weight,  ranging  from  0%   to   100%,   based   on
the   risk  inherent  in  the  type  of  asset.   For  example,  the   OTS   has
assigned    a    risk    weight    of    50%    for    prudently    underwritten
permanent   one-to   four-family   first   lien   mortgage   loans   not    more
than   90   days   delinquent  and  having  a  loan  to  value  ratio   of   not
more   than   80%   at  origination  unless  insured  to  such   ratio   by   an
insurer approved by the FNMA or FHLMC.

       OTS   regulations   also   require   that   every   savings   association
with   more   than   normal  interest  rate  risk  exposure   to   deduct   from
its    total   capital,   for   purposes   of   determining   compliance    with
such    requirement,   an   amount   equal   to   50%   of   its   interest-rate
risk    exposure   multiplied   by   the   present   value   of   its    assets.
This   exposure   is   a   measure  of  the  potential  decline   in   the   net
portfolio   value   of  a  savings  association,  greater   than   2%   of   the
present   value   of   its   assets,  based  upon  a  hypothetical   200   basis
point    increase   or   decrease   in   interest   rates   (whichever   results
in   a   greater   decline).   Net  portfolio  value  is   the   present   value
of    expected   cash   flows   from   assets,   liabilities   and   off-balance
sheet   contracts.    The   rule   will   not   become   effective   until   the
OTS    evaluates    the    process   by   which   savings    associations    may
appeal    an    interest   rate   risk   deduction   determination.     It    is
uncertain    as    to   when   this   evaluation   may   be   completed.     Any
savings   association   with  less  than  $300   million   in   assets   and   a
total    capital    ratio   in   excess   of   12%   is   exempt    from    this
requirement unless the OTS determine otherwise.

       On   June   30,   1997,  the  Association  had  risk-based   capital   of
$9.2   million   (including   $9.0  million  in  core   capital   and   $200,000
in    general    loss   reserves)   and   risk-weighted   assets    of    $33.32
million   or   total   capital   of  27.68%  of  risk-weighted   assets.    This
amount   was   $6.56   million   above  the  8%   requirement   in   effect   on
that date.

        The   OTS   and   the   FDIC   are   authorized   and,   under   certain
circumstances     required,     to     take     certain     actions      against
associations    that   fail   to   meet   their   capital   requirements.    The
OTS    is    generally    required   to   take   action    to    restrict    the
activities      of     an     "undercapitalized     association"      (generally
defined   to   be   one  with  less  than  either  a  4%  core  capital   ratio,
a    4%    Tier   1   risked-based   capital   ratio   or   an   8%   risk-based
capital    ratio).      Any   such   association   must   submit    a    capital
restoration   plan   and  until  such  plan  is  approved   by   the   OTS   may
not   increase   its   assets,   acquire  another   institution,   establish   a
branch   or   engage   in   any   new  activities,   and   generally   may   not
make   capital   distributions.    The  OTS  is   authorized   to   impose   the
additional    restrictions,   discussed   below,   that   are   applicable    to
significantly undercapitalized associations.

       As   a   condition   to   the   approval  of  the   capital   restoration
plan,     any    company    controlling    an    undercapitalized    association
must   agree   that   it   will  enter  into  a  limited   capital   maintenance
guarantee   with   respect   to   the   institution's   achievement    of    its
capital requirements.

        Any    savings   association   that   fails   to   comply    with    its
capital   plan   or   is   "significantly  undercapitalized"   (i.e.,   Tier   1
risk-based   or   core  capital  ratios  of  less  than  3%  or   a   risk-based
capital   ratio   of   less  than  6%)  must  be  made   subject   to   one   or
more    of    additional   specified   actions   and   operating    restrictions
mandated    by    FDICIA.     These    actions    and    restrictions    include
requiring      the     issuance     of     additional     voting     securities;
limitations   on   asset   growth;  mandated   asset   reduction;   changes   in
senior    management;    divestiture,   merger    or    acquisition    of    the
association;    restrictions    on    executive    compensation;     and     any
other    action    the    OTS   deems   appropriate.    An   association    that
becomes    "critically    undercapitalized"   (i.e.,    a    tangible    capital
ratio   of   2%   or   less)  is  subject  to  further  mandatory   restrictions
on     its     activities    in    addition    to    those     applicable     to
significantly     undercapitalized    associations.     In     addition,     the
OTS   must   appoint   a   receiver  (or  conservator   with   the   concurrence
of    the    FDIC)   for   a   savings   association,   with   certain   limited
exceptions,     within     90     days    after    it     becomes     critically
undercapitalized.

        Any    undercapitalized   association   is   also   subject   to   other
possible    enforcement   actions   by   the   OTS   or    the    FDIC.     Such
actions    could    include    a   capital   directive,    a    cease-and-desist
order,    civil    money   penalties,   the   establishment   of    restrictions
on   all   aspects   of   the  association's  operations  or   the   appointment
of   a   receiver   or   conservator   or   a   forced   merger   into   another
institution.

        The    OTS    is   also   generally   authorized   to   reclassify    an
association    into    a    lower    capital    category    and    impose    the
restrictions    applicable   to   such   category   if   the   institution    is
engaged   in   unsafe   or   unsound  practices  or   is   in   an   unsafe   or
unsound condition.

       The   imposition   by   the   OTS  or  the   FDIC   of   any   of   these
measures    on    Sobieski    Federal   may   have   a    substantial    adverse
effect   on   the   Association's   operations   and   profitability   and   the
value   of   the   Common   Stock   purchased  in   the   Conversion.    Holding
Company     shareholders     do    not    have    preemptive     rights,     and
therefore,   if   the  Holding  Company  is  directed  by   the   OTS   or   the
FDIC   to   issue   additional   shares   of   Common   Stock,   such   issuance
may   result   in   the  dilution  in  the  percentage  of  ownership   of   the
Holding   Company   of   those   persons   who   purchased   shares    in    the
Conversion.

Limitations on Dividends and Other Capital Distributions

        OTS    regulation   impose   various   restrictions   or    requirements
on   associations   with  respect  to  their  ability  to   pay   dividends   or
make   other   distributions   of   capital.   OTS   regulations   prohibit   an
association    from    declaring   or   paying    any    dividends    or    from
repurchasing   any   of   its   stock  if,   as   a   result,   the   regulatory
capital    of   the   association   would   be   reduced   below   the    amount
required   to   be   maintained   for   the  liquidation   account   established
in connection with its mutual to stock conversion.

        The    OTS    utilizes    a    three-tiered     approach    to    permit
associations,    based    on    their    capital    level    and     supervisory
condition,    to   make   capital   distributions   which   include   dividends,
stock    redemptions    or    repurchases,   cash-out    mergers    and    other
transactions    charged    to   the   capital   account    (see    "--Regulatory
Capital Requirements").

       Generally,   Tier   1   associations,   which   are   associations   that
before    and    after    the   proposed   distribution   meet    their    fully
phased-in    capital    requirements,    may    make    capital    distributions
during   any   calendar   year   equal  to  the   greater   of   100%   of   net
income   for   the   year-to-date  plus  50%  of  the  amount   by   which   the
lesser   of   the   association's   tangible,   core   or   risk-based   capital
exceeds   its   fully   phased-in   capital   requirement   for   such   capital
component,   as   measured  at  the  beginning  of   the   calendar   year,   or
the   amount   authorized   for  a  Tier  2  association.    However,   a   Tier
1    association    deemed   to   be   in   need    of    more    than    normal
supervision   by  the  OTS  may  be  downgraded  to  a  Tier   2   or   Tier   3
association   as   a   result   of  such  a  determination.    The   Association
meets   the   requirements  for  a  Tier  1  association  and   has   not   been
notified   of   a   need   for   more   than   normal   supervision.    Tier   2
associations,   which   are   associations   that   before   and    after    the
proposed     distribution     meet     their     current     minimum     capital
requirements,   may  make  capital  distributions  of   up   to   75%   of   net
income over the most recent four quarter period.

       Tier   3   associations  (which  are  associations  that  do   not   meet
current    minimum   capital   requirements)   that   propose   to   make    any
capital   distribution   and  Tier  2  associations   that   propose   to   make
a   capital   distribution   in  excess  of  the   noted   safe   harbor   level
must    obtain    OTS    approval   prior   to   making   such    distributions.
Tier    2    associations    proposing   to   make   a   capital    distribution
within    the    safe    harbor    provisions   and    Tier    1    associations
proposing    to    make   any   capital   distribution    need    only    submit
written   notice   to  the  OTS  30  days  prior  to  such   distribution.    As
a   subsidiary   of  the  Holding  Company,  the  Association   will   also   be
required   to   give   the  OTS  30  days'  notice  prior   to   declaring   any
dividend   on   its   stock.    The   OTS  may  object   to   the   distribution
during   that   30-day   period  based  on  safety   and   soundness   concerns.
See "-Regulatory Capital Requirements."

        The    OTS   has   proposed   regulations   that   would   revise    the
current      capital      distribution     restrictions.       The      proposal
eliminates    the    current    tiered    structure    and    the    safe-harbor
percentage    limitations.    Under   the   proposal   a   savings   association
may   make   a   capital  distribution  without  notice  to  the   OTS   (unless
it   is   a   subsidiary  of  a  holding  company)  provided  that  it   has   a
CAMEL   1   or   2  rating,  is  not  in  troubled  condition  (as  defined   by
regulation)    and   would   remain   adequately   capitalized    (as    defined
in    the   OTS   prompt   corrective   action   regulations)   following    the
proposed    distribution.     Savings    associations    that    would    remain
adequately   capitalized   following   the   proposed   distribution   but    do
not   meet   the  other  noted  requirements  must  notify  the  OTS   30   days
prior   to   declaring   a   capital   distribution.    The   OTS   stated    it
will    generally    regard   as   permissible   that    amount    of    capital
distributions   that   do   not   exceed  50%  of   the   institution's   excess
regulatory   capital   plus   net   income   to   date   during   the   calendar
year.    A   savings   association   may  not  make   a   capital   distribution
without    prior   approval   of   the   OTS   and   the   FDIC   if    it    is
undercapitalized   before,   or   as  a  result   of,   such   a   distribution.
As   under   the   current   rule,   the   OTS   may   object   to   a   capital
distribution    if    it    would    constitute    an    unsafe    or    unsound
practice.    No   assurance   may  be  given  as   to   whether   or   in   what
form the regulations may be adopted.

Liquidity

        All    savings    associations,   including   Sobieski   Federal,    are
required   to   maintain   an   average   daily   balance   of   liquid   assets
equal   to   a   certain   percentage  of  the  sum   of   its   average   daily
balance    of    net    withdrawable    deposit    accounts    and    borrowings
payable   in   one   year   or   less.    For   a   discussion   of   what   the
Association     includes     in     liquid     assets,     see     "Management's
Discussion    and   Analysis   of    Financial   Condition   and   Results    of
Operations   -   Liquidity   and   Capital  Resources."    This   liquid   asset
ratio   requirement  may  vary  from  time  to  time  (between   4%   and   10%)
depending    upon    economic   conditions   and   savings    flows    of    all
savings    associations.    At   the   present   time,   the   minimum    liquid
asset ratio is 5%.

        In   addition,   short-term   liquid   assets   (e.g.,   cash,   certain
time    deposits,   certain   bankers   acceptances   and   short-term    United
States    Treasury   obligations)   currently   must   constitute    at    least
1%   of   the   association's  average  daily  balance   of   net   withdrawable
deposit    accounts    and    current    borrowings.     Penalties    may     be
imposed   upon   associations   for   violations   of   either   liquid    asset
ratio    requirement.    At   June   30,   1997,   the   Association   was    in
compliance   with   both   requirements,   with   an   overall   liquid    asset
ratio of 6.07% and a short-term liquid assets ratio of 2.47%

Accounting

         An     OTS    policy    statement    applicable    to    all    savings
associations     clarifies    and    re-emphasizes    that    the     investment
activities   of   a   savings   association   must   be   in   compliance   with
approved    and    documented   investment   policies   and   strategies,    and
must   be   accounted   for  in  accordance  with  GAAP.    Under   the   policy
statement,    management    must    support    its    classification    of    an
accounting    for    loans   and   securities   (i.e.,    whether    held    for
investment,   sale   or   trading)   with   appropriate   documentation.     The
Association is in compliance with this policy statement.

        The    OTS    has    adopted   an   amendment    to    its    accounting
regulations,   which   may   be   made  more  stringent   then   GAAP   by   the
OTS,   to   require   that   transactions  be  reported   in   a   manner   that
best    reflects    their   underlying   economic   substance    and    inherent
risk    and    that    financial   reports   must    incorporate    any    other
accounting regulations or orders prescribed by the OTS.

Qualified Thrift Lender Test

        All    savings    associations,   including   Sobieski   Federal,    are
required   to   meet   a  qualified  thrift  lender  ("QTL")   test   to   avoid
certain   restrictions   on   their   operations.    This   test   requires    a
savings   association   to   have  at  least  65%  of   its   portfolio   assets
(as   defined   by   regulation)   in  qualified   thrift   investments   on   a
monthly   average   for   nine   out  of  every   12   months   on   a   rolling
basis.     As   an   alternative,   the   savings   association   may   maintain
60%    of    its    assets    in    those   assets    specified    in    Section
7701(a)(19)    of   the   Internal   Revenue   Code.    Under    either    test,
such    assets    primarily    consist   of    residential    housing    related
loans     and     investments.     Such    assets    primarily    consist     of
residential   housing   related   loans   and   investments.    At   June    30,
1997,   the   Association   met  the  test  and   has   always   met   QTL   the
test since its effectiveness.

       Any   savings  association  that  fails  to  meet  the  QTL   test   must
convert   to   a   national   bank  charter,  unless   it   requalifies   as   a
QTL   and   thereafter   remains   a  QTL.    If   an   association   does   not
requalify   and   converts  to  a  national  bank  charter,   it   must   remain
SAIF-insured   until   the   FDIC  permits  it   to   transfer   to   the   Bank
Insurance   Fund.    If   an   association  that  fails   the   test   has   not
yet   requalified  and  has  not  converted  to  a  national   bank,   its   new
investments   and   activities   are   limited   to   those   permissible    for
both   a   savings  association  and  a  national  bank,  and  it   is   limited
to    national    bank    branching   rights   in   its    home    state.     In
addition,    the    association   is   immediately   ineligible    to    receive
any   new   FHLB   borrowings   and  is  subject   to   national   bank   limits
for     payment    of    dividends.     If    such    association    has     not
requalified   or   converted   to   a   national   bank   within   three   years
after   the   failure,   it   must  divest  of   all   investments   and   cease
all   activities   not   permissible  for  a  national   bank.    In   addition,
it   must   repay   promptly  any  outstanding  FHLB   borrowings,   which   may
result    in   prepayment   penalties.    If   any   association   that    fails
the   QTL   test   is  controlled  by  a  holding  company,  than   within   one
year   after   the   failure,   the  holding  company   must   register   as   a
bank   holding   company   and   become   subject   to   all   restrictions   on
bank holding companies.  See "- Holding Company Regulation."

Community Reinvestment Act

        Under    the   Community   Reinvestment   Act   ("CRA"),   every    FDIC
insured    institution    has   a   continuing   and   affirmative    obligation
consistent   with   safe  and  sound  banking  practices  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   that   it  believes   are   best   suited   to   its
particular   community,   consistent   with   the   CRA.    The   CRA   requires
the   OTS,   in   connection   with   the  examination   of   the   Association,
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,   such   as   a   merger    or    the
establishment     of     a     branch,     by     Sobieski     Federal.       An
unsatisfactory   rating  may  be  used  as  the  basis   for   the   denial   of
an application by the OTS.

        The    federal    banking   agencies,   including    the    OTS,    have
recently    revised    the   CRA   regulations   and   the    methodology    for
determining   an   institution's  compliance  with  the   CRA.    Due   to   the
heightened   attention   being   given   to   the   CRA   in   the   past    few
years,   the   Association   may  be  required  to   devote   additional   funds
for     investment    and    lending    in    its    local    community.     The
Association   was   examined   for   CRA  compliance   in   October   1994   and
received a rating of satisfactory.

Transactions with Affiliates

       Generally,   transactions   between  a   savings   association   or   its
subsidiaries   and   its   affiliates  are  required   to   be   on   terms   as
favorable    to   the   association   as   transactions   with   non-affiliates.
In   addition,   certain   of   these   transactions   are   restricted   to   a
percentage    of    the    association's    capital.     Affiliates    of    the
Association   include   the   Company   and   any   company   which   is   under
common    control    with   the   Association.    In   addition,    a    savings
association   may   not   lend   to   any  affiliate   engaged   in   activities
not    permissible    for   a   bank   holding   company    or    acquire    the
securities    of    most    affiliates.     The    Association's    subsidiaries
are   not   deemed   affiliates,  however;  the  OTS  has  the   discretion   to
treat    subsidiaries   of   savings   associations   as   affiliates    on    a
case by case basis.

        Certain   transactions   with   directors,   officers   or   controlling
persons    are    also    subject   to   conflict   of   interest    regulations
enforced   by   the   OTS.    These  conflict  of   interest   regulations   and
other   statutes   also   impose  restrictions  on   loans   to   such   persons
and   their   related   interests.   Among  other  things,   such   loans   must
be    made    on    terms   substantially   the   same   as   for    loans    to
unaffiliated individuals.

Holding Company Regulation

       The   Company   is   a   unitary  savings  and   loan   holding   company
subject   to   regulatory  oversight  by  the  OTS.   As   such,   the   Company
is   required   to   register   and  file  reports   with   the   OTS   and   is
subject   to   regulation   and  examination   by   the   OTS.    In   addition,
the   OTS   has   enforcement   authority   over   the   Holding   Company   and
its   non-savings   association  subsidiary   which   also   permits   the   OTS
to   restrict   or   prohibit  activities  that   are   determined   to   be   a
serious risk to the subsidiary savings association.

       As   a   unitary   savings  and  loan  holding   company,   the   Company
generally    is    not    subject   to   activity    restrictions.     If    the
Company    acquires    control   of   another   savings   association    as    a
separate   subsidiary,   it   would  become  a   multiple   savings   and   loan
holding   company,  and  the  activities  of  the  Company  and   any   of   its
subsidiaries    (other   than   the   Association    or    any    other    SAIF-
insured     savings    association)    would    become    subject    to     such
restrictions   unless   such  other  associations  each   qualify   as   a   QTL
and were acquired in a supervisory acquisition.

       If   the   Association   fails   the   QTL   test,   the   Company   must
obtain   the   approval   of   the   OTS  prior   to   continuing   after   such
failure,   directly   or   through   its  other   subsidiaries,   any   business
activity   other   than   those   approved  for  multiple   savings   and   loan
holding   companies   or   their   subsidiaries.    In   addition,   with    one
year    of   such   failure   the   Company   must   register   as,   and   will
become    subject   to,   the   restrictions   applicable   to   bank    holding
companies.    The   activities   authorized   for   a   bank   holding   company
are   more   limited  than  are  the  activities  authorized   for   a   unitary
or    multiple   savings   and   loan   holding   company.    See   "--Qualified
Thrift Lender Test."

        The    Company    must   obtain   approval   from   the    OTS    before
acquiring    control    of   any   other   SAIF-insured    association.     Such
acquisitions    are    generally   prohibited    if    they    result    in    a
multiple    savings    and    loan   holding   company    controlling    savings
associations    in   more   than   one   state.    However,   such    interstate
acquisitions    are   permitted   based   on   specific   state    authorization
or in a supervisory acquisition of a failing savings association.

Federal Securities Law

       The   stock   of   the  Company  is  registered  with   the   SEC   under
the   Securities   Exchanges   Act   of  1934,   as   amended   (the   "Exchange
Act").    The    Company    is    subject    to    the    information,     proxy
solicitation,    insider   trading   restrictions   and    other    requirements
of the SEC under the Exchange Act.

       Company   stock   held   by   persons  who  are   affiliates   (generally
officers,    directors   and   principal   stockholders)    of    the    Company
may    not    be    resold   without   registration   or    unless    sold    in
accordance    with    certain    resale   restrictions.     If    the    Company
meets    specified    current    public    information    requirements,     each
affiliate   of   the   Company  is  able  to  sell   in   the   public   market,
without   registration,   a   limited   number   of   shares   in   any   three-
month period.

Federal Reserve System

         The     Federal     Reserve    Board    requires     all     depository
institutions     to     maintain    non-interest     bearing     reserves     at
specified    levels    against    their    transaction    accounts    (primarily
checking,   NOW   and   Super   NOW   checking   accounts).    At    June    30,
1997,    the    Association    was   in   compliance    with    these    reserve
requirements.     The    balances    maintained    to    meet    the     reserve
requirements   imposed   by  the  Federal  Reserve  Board   may   be   used   to
satisfy   liquidity   requirements   that   may   be   imposed   by   the   OTS.
See "-- Liquidity."

        Savings    associations   are   authorized   to    borrow    from    the
Federal   Reserve   Bank   "discount  window,"   but   Federal   Reserve   Board
regulations     require    associations    to    exhaust    other     reasonable
alternative    sources   of   funds,   including   FHLB    borrowings,    before
borrowing from the Federal Reserve Bank.

Federal Home Loan Bank System

       The   Association   is   a   member  of   the   FHLB   of   Indianapolis,
which    is   one   of   12   regional   FHLBs   that   administer   the    home
financing    credit    function   of   savings    associations.     Each    FHLB
serves   as   a   reserve   or  central  bank  for  its   members   within   its
assigned    region.    It   is   funded   primarily   from   proceeds    derived
from   the   sale   of  consolidated  obligations  of  the  FHLB   system.    It
makes    loans    to    members   (i.e.,   advances)    in    accordance    with
policies   and   procedures   established  by  the   board   of   directors   of
the    FHLB.    These   policies   and   procedures   are   subject    to    the
regulation    and   oversight   of   the   Federal   Housing   Finance    Board.
All   advances   from   the  FHLB  are  required  to   be   fully   secured   by
sufficient    collateral   as   determined   by   the   FHLB.    In    addition,
all    long-term    advances    are    required    to    provide    funds    for
residential home financing.

       As   a   member,   the   Association  is   required   to   purchase   and
maintain   stock   in   the   FHLB  of  Indianapolis.    At   June   30,   1997,
the    Association    had    $636,000   of   FHLB   stock,    which    was    in
compliance   with   this   requirement.    During   fiscal   1997   and    prior
years   the   Association   received   substantial   dividends   on   its   FHLB
stock.    The   dividends   averaged   7.84%   for   fiscal   year   1997.   For
both   the   years   ended   June  30,  1997  and  1996,   dividends   paid   by
the FHLB of Indianapolis to the Association totaled $50,000.

       Under   federal   law   the   FHLBs  are  required   to   provide   funds
for    the    resolution    of   troubled   savings    associations    and    to
contribute   to   low-   and   moderately  priced   housing   programs   through
direct    loans    or   interest   subsidies   on   advantages   targeted    for
community     investment     and     low-    and     moderate-income     housing
projects.     These   contributions   have   affected   adversely   the    level
of   FHLB   dividends  paid  and  could  continue  to  do  so  in  the   future.
A   reduction   in   value   of  the  Association's  FHLB   stock   may   result
in a corresponding reduction in the Association's capital.

Federal and State Taxation

        Prior    to    the   enactment   of   recent   legislation    (discussed
below),    savings   associations   such   as   the   Association    that    met
certain   definitional   test   relating   to   the   composition   of    assets
and   other   conditions   prescribed  by   the   Interanl   Revenue   Code   of
1986,   as   amended   (the   "Code"),   had   been   permitted   to   establish
reserves   for   bad   debts  and  to  make  annual  additions   thereto   which
could,   within   specified   formula  limits,   be   taken   as   a   deduction
in   computing   taxable   income  for  federla  income   tax   purposes.    The
amount    of    the    bad   debt   reserve   deduction   for    "non-qualifying
loans"   was   computed   under   the  experience   method.    The   amount   of
the    bad    debt    reserve   deduction   for   "qualifying   real    property
loans"   (generally   loans  secured  by  improved   real   estate)   could   be
computed   under   either   the  experience  method   or   the   percentage   of
taxable income method (based on an annual election).

       The   Small   Business   Job  Protection  Act  of   1996,   signed   into
law   on   August   20,   1996,   repealed   the   special   thrift   bad   debt
deductions    provisions.    This   legislation   eliminates    the    use    of
the   percentage   of   taxable  income  method  as  a  means   of   calculating
deductions   for   bad   debts,   allows   thrifts   greater   flexibility    in
diversifying   their   loan   and   investment   portfolios   and    establishes
requirements    for   the   recapture   of   previously   untaxed    bad    debt
reserve    accumulations.    Bad   debt   reserve   accumulations    prior    to
fiscal    1988    are    exempt   from   recapture   unless   the    Association
liquidates,   pays   a   dividend  in  excess  of  earnings   and   profits   or
redeems    stock.    Post   fiscal   1987   bad   debt   reserve   accumulations
will   be   taxed  in  equal  amounts  over  six  years  beginning   in   fiscal
1997.    The   Association  may  defer  the  recapture  tax   in   fiscal   1997
or   1998   if   it   originates   the  same  principal   amount   of   mortgage
loans   that   it  had  originated  in  the  six  years  before   fiscal   1997.
The   Association   does   not   expect   the   post   fiscal   1987   recapture
tax    to    have   a   material   effect   on   the   consolidated    financial
statements.

        In    addition    to    the    regular   income    tax,    corporations,
including    savings   associations   such   as   the   Association,   generally
are   subject   to   a   minimum   tax.    An   alternative   minimum   tax   is
imposed    at   a   minimum   tax   rate   of   20%   on   alternative   minimum
taxable    income,    which   is   the   sum   of   a   corporation's    regular
taxable    income    (with    certain   adjustments)    and    tax    preference
items,   less   any   available   exemption.   The   alternative   minimum   tax
is    imposed   to   the   extent   it   exceeds   the   corporation's   regular
income   tax   and   net  operating  losses  can  offset  no   more   than   90%
of     alternative    minimum    taxable    income.     For    taxable     years
beginning    after    1986    and   before   1996,    corporations,    including
savings   associations   such  as  the  Association,   are   also   subject   to
an   environmental   tax   equal  to  0.12%  of  the   excess   of   alternative
minimum    taxable   income   for   the   taxable   year   (determined   without
regard    to    net    operating   losses   and   the    deduction    for    the
environmental tax) over $2 million.

         To     the     extent    earnings    appropriated    to    a    savings
association's    bad    debt    reserves   for   "qualifying    real    property
loans"   and   deducted   for   federal   income   tax   purposes   exceed   the
allowable    amount   of   such   reserves   computed   under   the   experience
method    and    to    the    extent    of   the   association's    supplemental
reserves   for   losses   on   loans   ("Excess"),   such   Excess   may    not,
without   adverse   tax   consequences,  be  utilized   for   the   payment   of
cash     dividends     or    other    distributions    to     a     shareholders
(including      distributions      on      redemption,      dissolution       or
liquidation)   or   for  any  other  purpose  (except   to   absorb   bad   debt
losses).

       The   Association  files  federal  income  tax  returns   on   a   fiscal
year   basis   using   the   accrual  method   of   accounting.    The   Company
files     consolidated     federal    income    tax     returns     with     the
Association   and   its   subsidiaries.    Savings   associations,    such    as
the   Association,   that  file  federal  income  tax   returns   as   part   of
a     consolidated     group    are    required    by    applicable     Treasury
regulations    to    reduce    their   taxable   income    for    purposes    of
computing     the     percentage    bad    debt     deduction     for     losses
attributable   to   activities   of   the   non-savings   association    members
of   the   consolidated   group   that   are   functionally   related   to   the
activities of the savings association member.

       The   Association  has  not  been  audited  by  the  IRS   with   respect
to    federal    income   tax   returns   through   June   30,    1997.     With
respect    to   years   examined   by   the   IRS,   either   all   deficiencies
have   been   satisfied   or   sufficient   reserves   have   been   established
to   satisfy   asserted   deficiencies.    In   the   opinion   of   management,
any    examination    of    still   open   returns   (including    returns    of
subsidiaries   and   predecessors   of,   or   entities   merged    into,    the
Association)   would   not  result  in  a  deficiency   which   could   have   a
material    adverse    effect    on    the   financial    condition    of    the
Association and its consolidated subsidiaries.

        Indiana    Taxation.     The   Company   and    the    Association    is
subject    to   an   8.5%   franchise   tax,   imposed   by   the    State    of
Indiana,    on    the    net    income   of   financial    (including    thrift)
institutions,    exempting    them    from    the    current    gross    income,
supplemental    net   income   and   intangible   taxes.    Net    income    for
franchise    tax    purposes    will   constitute   federal    taxable    income
before    net    operating    loss   deductions    and    special    deductions,
adjusted    for    certain    items,    including    Indiana    income    taxes,
property   taxes,   charitable   contributions,   tax   exempt   interest    and
bad   debt.    Other   applicable  Indiana  taxes   include   sales,   use   and
property taxes.

        Delaware    Taxation.     As   a   Delaware   holding    company,    the
Company   is   exempted   from   Delaware   corporate   income   tax   but    is
required   to   file  an  annual  report  with  and  pay  an   annual   fee   to
the   State   of   Delaware.   The  Company  is  also  subject  to   an   annual
franchise tax imposed by the State of Delaware.




Item 2.    Description of Property

        The    Association    conducts   its   business   through    its    main
office    and   two   branch   offices   located   in   South   Bend,   Indiana.
The   following   table   sets   forth   information   relating   to   each   of
the   Association's   offices   as   of  June   30,   1997.    The   total   net
book   value   of   the   Association's  premises   and   equipment   (including
land,     buildings     and     leasehold    improvements     and     furniture,
fixtures    and    equipment)    at   June   30,    1997    was    approximately
$2,028,300.    See   Note   E   of   the  Notes   to   Consolidated    Financial
Statements.

                                      Total
                              Year   Approximate
                          Leased   Square  Net Book Value at
          Location        or Acquired  Footage June 30, 1997

Main Office:
2930 West Cleveland Road      1995    10,080     $1,457
South Bend, Indiana  46628

Branch Offices:
4606 Western Avenue           1978     1,600     $   0
Belleville Shopping Center

740 S. Walnut Street          1952     1,900     $  25


        Sobieski    Federal    believes    that    its    current    facilities,
including   its   new  main  office  facilities  are  adequate   to   meet   the
present and foreseeable needs of the Association and the Company.

        The    Association   maintains   an   on-line   date   base    with    a
service    bureau   servicing   financial   institutions.     The    net    book
value   of   the   data   processing   and  computer   equipment   utilized   by
the Association at June 30, 1997 was $99,000.

Item 3.  Legal Proceedings

       The   Company   and  Sobieski  Federal  are  involved,   from   time   to
time,   as   plaintiff   or   defendant  in  various   legal   actions   arising
in    the   normal   course   of   their   businesses.    While   the   ultimate
outcome   of   these   proceedings   cannot   be   predicted   with   certainty,
it   is   the   opinion   of   management,  after  consultation   with   counsel
representing   Sobieski   Federal   and  the   Company   in   the   proceedings,
that    the    resolution   of   these   proceedings   should   not    have    a
material    effect   on   the   Company's   results   of   operations    on    a
consolidated basis.


Item 4.  Submission of Matters to a Vote of Security Holders

        No   matter   was   submitted   to   a   vote   of   security   holders,
through    the    solicitation   of   proxies   or   otherwise,    during    the
quarter ended June 30, 1997.
                                
                             PART II
                                
Item 5.  Market for the Issuer's Common Stock and Related
Security Holder Matters

     Page 47 of the attached 1997 Annual Report to Stockholders
is herein incorporated by reference.

Item 6.  Management's Discussion and Analysis of Financial
Condition and Results of
      Operations

        Pages   10   to   21   of   the   attached   1997   Annual   Report   to
Stockholders are herein incorporated by reference.

Item 7.  Financial Statements

       The   following   pages   of  the  attached   1997   Annual   Report   to
Stockholders are herein incorported by reference.

Report of Independent Accountants                 Page 22

Consolidated Statements of Financial Condition
as of                                             Page 23
June 30, 1997 and 1996

Consolidated Statements of Income for the
years ended                                       Page 24
June 30, 1997, 1996 and 1995

Consolidated Statements of Stockholders'
Equity for the                                    Page 25
years ended June 30, 1997, 1996 and 1995

Consolidated Statements of Cash Flows for
the years                                         Page 26
ended June 30, 1997, 1996 and 1995

Notes to Consolidated Financial Statements   Pages 27-46

Item    8.     Changes    in    and   Disagreements    with    Accountants    on
Accounting and Financial
       Disclosure

     Not applicable.
                            PART III
                                
Item 9.  Directors, Executive Officers, Promoters, and Control
Persons; Compliance with
       Section 16(a) of the Exchange Act

Directors

         Information     concerning    directors    of    the     Company     is
incorporated    herein    by   reference   from   the    Company's    definitive
Proxy   Statement   for   the   1997   Annual   Meeting   of   Shareholders,   a
copy   of   which   has   been   filed  with   the   Securities   and   Exchange
Commission.

Executive Officers

       Information   concerning   the  executive   officers   of   the   Company
is    incorporated   herein   by   reference   from   "Executive   Officers   of
the Company" contained in Part I of this form 10-KSB.

Section 16(a) Beneficial Ownership Reporting Compliance

        Section   16(a)   of   the   Exchange   Act   requires   the   Company's
officers   and   directors,   and  persons   owning   more   than   10%   of   a
registered    class    of   the   Company's   equity   securities,    to    file
periodic   reports   of   ownership   and  changes   in   ownership   with   the
Securities    and   Exchange   Commisssion   and   to   provide   the    Company
with    copies    of    such   reports.    Based   solely    upon    information
provided   to   the   Company  by  the  directors  and   officers   subject   to
Section    16(a),    all   Section   16(a)   filing   requirements    applicable
to   such   persons   were  complied  with  during  fiscal  1997,   except   for
the   inadvertent   failure  to  timely  file  a  Form   3   Initial   Statement
of   Beneficial   Ownership   by   Arthur   Skale,   the   Vice   President   of
Finance   and   Chief   Financial   Officer   of   the   Company.    Mr.   Skale
subsequently    filed    the   required   form   with   the    Securities    and
Exchange Commission.

Item 10.  Executive Compensation

           Information      concerning      executive      compensation       is
incorporated    herein    by   reference   from   the    Company's    definitive
Proxy   Statement   for   the   1997   Annual   Meeting   of   Shareholders,   a
copy   of   which   has   been   filed  with   the   Securities   and   Exchange
Commission.

Item    11.     Security   Ownership   of   Certain   Beneficial   Owners    and
Management

         Information     concerning    security     ownership     of     certain
beneficial    owners    and    management    is    incorporated    herein     by
reference   from   the   Company's   definitive   Proxy   Statement   for    the
1997   Annual   Meeting   of   Shareholders,  a   copy   of   which   has   been
filed with the Securities and Exchange Commission.




Item 12.  Certain Relationship and Related Transactions

           Information      concerning      certain      relationships       and
transactions    is    incorporated    herein    by    reference     from     the
Company's   definitive   Proxy   Statement   for   the   1997   Annual   Meeting
of    Shareholders,   a   copy   of   which   has   been    filed    with    the
Securities and Exchange Commission.


Item 13.  Exhibits and Reports on Form 8-K

     (a) Exhibits:


                                         Reference to
                                        Prior Filing or
Regulation S-B                          Exhibit Number
Exhibit Number           Document      Attached Hereto

2    Plan of Acquisition, Reorganization,
     Arrangement,                            None
     Liquidation or Succession

4.1  Articles of Incorporation and
     amendments thereto                       **

4.2  Bylaws                                   **

9    Voting Trust Agreement                  None

10   Executive Compensation Plans and Arrangements:

Employee Stock Ownership Plan                  **
Stock Option and Incentive Plan                **
Recognition and Retention Plan                 **

11   Statement re computation of per share
     earnings                                 None

13   Annual Report to Security Holders         13

16         Letter       re       change      in      certifying       accountant
None

18         Letter       re       change      in      accounting       principles
None
21   Subsidiaries of Registrant                 21

22   Published report regarding matter
     submitted to vote                       None

23   Consent of Coopers & Lybrand LLP        None

24   Power of Attorney                 Not Required

27   Financial Data Schedule                   27

99   Additional Exhibits                     None


**     Filed   on   December   30,   1994,  as   exhibits   to   the   Company's
Form    S-1   registration   statement   (File   number   3-88078).    All    of
such     previously     filed    documents    are    hereby     reference     in
accordance with Item 601 of Regulation S-B.

     (b) Reports on Form 8-K:

       No   current   reports   on  Form  8-K  were   filed   by   the   Company
during the three months ended June 30, 1997.









                           SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

                                   SOBIESKI BANCORP, INC.

Date:  September 23, 1997     By:  /s/ Thomas F. Gruber
                                   Thomas F. Gruber
                                   President and Chief
Executive Officer
                                   (Duly Authorized
Representative)

     Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following
persons on behalf of the Registrant and in the capacities and on
the dates indicated.


/s/ Robert  J. Urbanski       /s/ Joseph A. Gorny
Robert J. Urbanski,
Chairman of  the Board        Joseph A. Gorny, Director

Date: September 23, 1997      Date:   September 23, 1997

/s/ George J. Aranowski
George J. Aranowski, Director Leonard J. Dobosiewicz,
Director
Date: September 23, 1997      Date:    September 23, 1997

/s/ Joseph F. Nagy            /s/ Arthur Skale
Joseph F. Nagy, Director      Arthur Skale, Chief Financial
Officer
                              (Principal Financial and
Accounting Officer)
Date: September 23, 1997      Date:  September 23, 1997

/s/ Thomas F. Gruber
Thomas F. Gruber
President and Chief Executive
Officer and Director
(Principal Executive Officer)

Date: September 23, 1997
                                
                        INDEX TO EXHIBITS


       Exhibit
       Number

       13      Annual Report to Stockholders

       21      Subsidiaries of the Registrant
       27      Financial Data Schedule





















                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                           Exhibit 13



1997 ANNUAL REPORT





                     SOBIESKI BANCORP, INC.




TABLE OF CONTENTS







Management Letter  . . . . . . . . . . . . . . .       3
Corporate Profile  . . . . . . . . . . . . . . .       6
Selected Financial Information  . . . . . . . . .      8
Management's Discussion and Analysis of Financial
Condition and Results of Operations  . . . . . .      10
Report of Independent Accountants . . . . . . . .     22
Consolidated Financial Statements . . . . . . . .     23
Stockholder Information . . . . . . . . . . . . .     47
Corporate Information . . . . . . . . .  . . . .      48















             Management's Discussion and Analysis of
          Financial Condition and Results of Operations

Forward-Looking Statements

         When   used   in   this   Annual  Report   or   in   filings   by   the
Company    with    the    Securities   and   Exchange   Commission,    in    the
Company's     press     releases    or    other    public     or     shareholder
communications,   or   in   oral  statements   made   with   the   approval   of
an    authorized    executive   officer,   the   words    or    phrases    "will
likely     result,"     "are    expected    to,"    "will     continue,"     "is
anticipated,"      "estimate,"     "project,"     "believe"      or      similar
expressions    are    intended   to   identify   "forward-looking    statements"
within    the   meaning   of   the   Private   Securities   Litigation    Reform
Act   of   1995.    Such   statements  are  subject   to   certain   risks   and
uncertainties   including,   among   other   things,   changes    in    economic
conditions,     changes     in     policies     by     regulatory      agencies,
fluctuations   in   interest  rates,  demand  for   loans   in   the   Company's
market   area,   credit   risks   of   lending   activities   and   competition.
The   Company   wishes   to  caution  readers  not  to  place   undue   reliance
on   any   such   forward-looking   statements,   which   speak   only   as   of
the   date   made.    The   Company   wishes  to   advise   readers   that   the
factors     noted     above    could    affect    the    Company's     financial
performance    and    could   cause   the   Company's   actual    results    for
future    periods    to   differ   materially   from   those   anticipated    or
projected.

         The   Company   does   not   undertake,  and   specifically   disclaims
any   obligation,   to   publicly   release  the   result   of   any   revisions
which   may   be   made   to   any   forward-looking   statements   to   reflect
the     occurrence    of    anticipated    or    unanticipated     events     or
circumstances after the date of such statements.

General

          The    principal   business   of   Sobieski   Federal   consists    of
attracting   deposits   from   the   general   public   and   investing    those
funds     in    the    origination    of    one-to-four    family    residential
mortgage    loans,   consumer   loans,   construction   loans   and   commercial
loans.     The    Company   also   invests   in   mortgage-backed    securities,
which    are   insured   or   guaranteed   by   federal   agencies,   investment
securities,    consisting    primarily    of    obligations    of    the    U.S.
Government      or      agency      obligations,      financial      institution
certificates   of   deposit   fully   insured   by   the   FDIC,    and    other
liquid    assets.   The   Company's   profitability   depends    primarily    on
its   net   interest   income,   which  is  the  difference   between   interest
income    earned    on    its    loans,    investments    and    mortgage-backed
securities   and   the   interest  expense  incurred   on   its   deposits   and
FHLB    borrowings.     Net    interest   income   is    affected    by    rates
received    on    and    the    amounts   of    interest-earning    assets    as
contrasted   to   the   rates   paid   on   and   the   amounts   of   interest-
bearing liabilities.

          Sobieski   Federal's   profitability   is   also   affected   by   its
provision    for    loan   losses,   non-interest   income   and    non-interest
expense.    Non-interest   income   principally    consists    of    fees    and
service   charges   on   deposit   accounts  and   loan   late   payment   fees.
Non-interest    expense    is   principally   operating    expense,    including
compensation     and    related    benefits,    federal    deposit     insurance
premiums,     advertising,    service    bureau     data     processing,     and
occupancy   costs.   Earnings   of   Sobieski   Federal   are   also    affected
significantly    by    general    economic    and    competitive     conditions,
particularly changes in general interest rate levels.

Business Strategy

          Sobieski   Federal   has   concentrated   its   lending   efforts   on
the   origination   of   one-to-  four  family   mortgage   loans   along   with
home    equity    loans    and    mortgage-backed    commercial    loans     for
portfolio    retention.     In   addition,   the   Association   continues    to
purchase      participation    interests    in     commercial     loans.     The
participation    interests    are    purchased    according    to    established
underwriting    standards.      The   loans   underlying    the    participation
interests   are   performing  in  accordance  with   their   terms.    At   June
30,   1997,   the   ratio   of  Sobieski  Federal's  nonperforming   assets   to
total   assets   was   .15%   and  the  ratio  of   its   allowance   for   loan
losses    to    nonperforming    loans   was    158.52%.    Historically,    the
loans    originated   by   Sobieski   Federal   were   principally   fixed-rate,
one-to-four     family     mortgage    loans,    while     the     Association's
investments    in    mortgage-backed   securities    have    been    principally
in   adjustable   rate   products.  At  June  30,  1997,   $53.8   million,   or
77.5%,   of   the   Association's   combined  mortgage   loans   and   mortgage-
backed   securities   portfolio  had  fixed  rates   of   interest   and   $15.6
million,     or     22.5%,     had    adjustable     interest     rates.     The
Association's    business   strategy   emphasizes    retail    deposits    along
with FHLB advances as its principal source of funds.

          The    Association's   primary   objective    is    to    remain    an
independent,     community     oriented    financial     institution     serving
customers   in   its   primary  market  area.  The  Board   of   Directors   has
sought   to   accomplish   this   objective   through   the   adoption   of    a
strategy    designed    to   maintain   profitability,    a    strong    capital
position   and   high   asset   quality.  This  strategy   has   been   effected
primarily    by    (i)    emphasizing    the    origination    of    one-to-four
family    residential    mortgage   lending,    home    equity    lending    and
mortgage-       backed      commercial      lending,       (ii)       purchasing
participation    interests   in   commercial   loans   funded    by     advances
from     FHLB,     (iii)    maintaining    a    substantial     portfolio     of
adjustable-rate      mortgage-backed      securities      and      short      to
intermediate      term     investment     securities,      (iv)      controlling
operating expenses and (v) increasing fee income.

Asset/Liability Management

          Sobieski    Federal,   like   other   financial    institutions,    is
vulnerable    to    increases    in    interest    rates    because    interest-
bearing    liabilities    reprice    more    quickly    than    interest-earning
assets.     Historically,   Sobieski   Federal   has    invested    in    fixed-
rate,    long-term    mortgage    loans   secured    by    one-to-four    family
residences   and   its   primary  source  of  funds  has  been   deposits   with
much     shorter     terms    to    maturity.    This    mismatched     position
generally    produces    lower   net   interest   income   through    compressed
spreads   during   periods   of   rising  rates  and   improved   net   interest
income   resulting   from   larger   spreads   during   periods   of   declining
rates.    Accordingly,    increases   in   general   market    interest    rates
adversely    impact    the    Association's   interest    rate    spread    and,
therefore,   have   a   negative   impact   on   the   Company's   results    of
operations and financial condition.

          To    reduce    interest    rate    risk    through    asset/liability
management,    Sobieski   Federal   has   taken   steps    to    mitigate    the
sensitivity   of   its   interest-earning   assets   by   investing   in   short
to    intermediate    term    investments    and    adjustable-rate    mortgage-
backed    securities,   which,   although   long-term    in    nature,    adjust
periodically   in   response   to  changes  in  general   levels   of   interest
rates.     Additionally,    to    decrease    interest     rate     sensitivity,
Sobieski    Federal    originates    variable-rate    home    equity    products
and     adjustable     mortgage-backed    commercial    loans     along     with
purchased    participation    interests   in    adjustable    rate    commercial
loans.      The    funding   for   these   originations   and   purchases    has
come   from   short-term   advances  from  the  FHLB.    At   June   30,   1997,
Sobieski     Federal    had    $47.0    million    in    long-term    fixed-rate
mortgages    and    $4.5    million    in   adjustable-rate    mortgages.    The
Association's      ability     to     generate     Adjustable-Rate      Mortgage
("ARM")    loans    is    dependent   upon    the    current    interest    rate
environment and customer preferences.

         Net   Portfolio   Analysis.   The  OTS   provides   a   Net   Portfolio
Value    ("NPV")    approach   to   the   quantification   of   interest    rate
risk.   This   approach   calculates   the  difference   between   the   present
value   of   expected  cash  flows  from  assets  and  the  present   value   of
expected   cash   flows  from  liabilities,  as  well   as   cash   flows   from
off-balance sheet contracts.

        In    August   1993,   the   OTS   issued   new   regulations   to    be
effective   beginning   on   January  1,  1994,  which   were   going   to   add
an    interest-rate   risk   component   to   a   bank's   risk-based    capital
requirement.    The   OTS   then   delayed   implementation    of    this    new
regulation   pending   action   on   the   issue   from   the   other    banking
agencies.     In    early    1996,   the   other   regulators    (the    Federal
Reserve   Board,   Federal  Deposit  Insurance  Corp.,   and   Office   of   the
Comptroller    of   the   Currency)   announced   that   their    approach    to
evaluating   a   financial   institution's  interest   rate   risk   would   not
include    a    standard    model    to    calculate    a    required    capital
component.     While   the   OTS   will   likely   review   its   approach    to
evaluating   a   bank's   exposure   to  interest   rate   fluctuations   as   a
result   of   the   other   regulators'   conclusions,   the   OTS   under   any
scenario   will   require   that  a  Bank  have  adequate   board   and   senior
management    oversight    and   a   comprehensive   process    for     managing
interest rate risk.

       Presented   below,  as  of  June  30,  1997,  is  an  analysis   of   the
Association's   interest   rate   risk   as   measured   by   changes   in   NPV
for    instantaneous   and   sustained   parallel   shifts    in    the    yield
curve,   in   100   basis   point   increments,   up   and   down   400    basis
points   in   accordance   with  OTS  regulations.   As   illustrated   in   the
table,    NPV    is   more   sensitive   to   rising   rates   than    declining
rates.   This   occurs   principally  because,  as  rates   rise,   the   market
value   of   fixed-rate   loans  decline  due  to  the   rate   increase.   When
rates   decline,   the   Association  does   not   experience   as   significant
a   rise   in   market   value   for  these  loans  because   borrowers   prepay
at   relatively   high   rates.  The  following  table  is   based   on   assets
and liabilities of the Association only.






<TABLE>
             Change in
            Interest Rate           Net Portfolio Value
            (Basis Points)     $ Change      % Change
                                    (Dollars in Thousands)
                <S>             <C>               <C>
                +400           $(5,780)           (59)%
                +300             (4,297)           (44)
                +200             (2,766)           (28)
                +100             (1,317)           (13)
                 0                   -                -
                -100                912              9
                -200              1,211             12
                -300              1,394             14
                -400              1,859             19
</TABLE>

          Management    reviews   the   NPV   measurements   on   a    quarterly
basis.    In    addition    to   monitoring   selected    measures    on    NPV,
management   also   monitors   effects  on   net   interest   income   resulting
from   increases   or   decreases   in  rates.   This   measure   is   used   in
conjunction   with   NPV   measures   to  identify   excessive   interest   rate
risk.

         The   Association's   change  in  its  NPV,  based   on   a   rise   in
interest   rates   of   2.0%,  was  a  28%  decrease   representing   a   dollar
decrease   in   equity   value   of  approximately   $2.77   million   at   June
30,   1997.    In   contrast,  based  on  a  decline  in   interest   rates   of
2.0%,   the   Association's  NPV  was  estimated  to   increase   9%   at   June
30,    1997.     The    most    significant   factor   contributing    to    its
liability    sensitive    position   was   the    Association's    balance    of
fixed    rate   mortgage   loans.    At   June   30,   1997,   91.3%   of    the
Association's    loan   portfolio   was   comprised   of    long-term,    fixed-
rate mortgage loans.

          As    with    any   method   of   measuring   interest   rate    risk,
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.   Also,  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,   have   features   which   restrict    changes    in
interest   rates   on   a   short-term  basis  and  over   the   life   of   the
asset.    Further,   in   the   event   of   a   change   in   interest   rates,
expected   rates   of   prepayments  on  loans  and   early   withdrawals   from
certificates     could     likely    deviate    significantly     from     those
assumed in calculating the table.

Impact of Inflation and Changing Prices

          The    consolidated   financial   statements   and    notes    thereto
presented   herein   have   been   prepared   in   accordance   with   generally
accepted    accounting   principles,   which   require   the   measurement    of
financial    position   and   operating   results   in   terms   of   historical
dollars   without   considering   the  change   in   the   relative   purchasing
power    of    money   over   time   due   to   inflation.    The   impact    of
inflation    is   reflected   in   the   increased   cost   of   the   Company's
operations,   Nearly   all   the   assets  and  liabilities   of   the   Company
are   financial,   unlike  most  industrial  companies.   As   a   result,   the
Company's   performance   is   directly  impacted   by   changes   in   interest
rates,      which      are     indirectly     influenced     by     inflationary
expectations.    The    Company's    ability    to    match     the     interest
sensitivity    of   its   financial   assets   to   the   interest   sensitivity
of    its    financial    liabilities   in   its   asset/liability    management
may   tend   to   minimize   the  effect  of  change  in   interest   rates   on
the    Company's    performance.   Changes   in   interest    rates    do    not
necessarily   move   to   the  same  extent  as  changes   in   the   price   of
goods    and    services.   In   the   current   interest   rate    environment,
liquidity   and   the   maturity  structure  of   the   Company's   assets   and
liabilities     are    critical    to    the    maintenance    of     acceptable
performance levels.



<TABLE>
Net   Interest  Income  Analysis.   The  primary  determinant  of  Sobieski
Federal's earnings is net interest income, which is the difference  between
interest  income and interest expense.  Net interest income is affected  by
(1)  rates received on interest-earning assets, (2) rates paid on interest-
bearing  liabilities,  and  (3) the relative  amounts  of  interest-earning
assets  versus interest-bearing liabilities.  The following table  presents
for  the periods indicated the total dollar amount of interest income  from
average  interest-earning assets and the resultant yields, as well  as  the
interest expense on average interest-bearing liabilities, expressed both in
dollars  and  rates.  No tax equivalent adjustment were made.  All  average
balances  are  monthly  average  balances.  Non-accruing  loans  have  been
included in the table as loans carrying a zero yield.
                                                 Year Ended June 30,
                                  1997                   1996
1995
                         Average Interest      Average Interest
Average Interest
                         Outstanding Earned/   Outstanding  Earned/
Outstanding Earned/
               Balance Paid Yield/Rate  Balance Paid Yield/Rate  Balance
Paid Yield/Rate
                                                       (Dollars in
Thousands)
Interest-Earning Assets:
<S>                      <C>     <C>    <C>   <C>      <C>     <C>   <C>
<C>    <C>
Loans receivable (1). . .$55,105 $4,433 8.04% $48,777  $4,012  8.23%
$49,987 $4,079 8.16%
Mortgage-backed securities15,080    944 6.26   15,704     962  6.13
15,238    836 5.49
Investment securities . .  4,813    281 5.84    7,447     441  5.92
5,592    335 5.99
FHLB stock  . . . . . . .    636     44 6.92      636      50  7.86
634     45 7.10
Total interest-earning
assets(1) . . . . . . . . 75,634  5,702 7.54   72,564   5,465  7.53
71,451  5,295 7.41
Non interest-earning
assets . . . . . . . . .   3,692                4,897
2,692
Total assets. . . . . .  $79,326              $77,461
$74,143

Interest-Bearing Liabilities:
Savings deposits  . . .  $15,272 $  374 2.45  $16,028     456  2.85
$17,116    507 2.96
NOW and MMDA accounts  .   5,286    118 2.23    4,699     129  2.74
4,838    146 3.02


Certificate accounts. .   39,352  2,290 5.82   41,250   2,432  5.90
42,756  2,145 5.02
FHLB borrowing . . . .     5,850    349 5.97      600      13  2.17
-      -    -
Total interest-bearing
liabilities . . . . . .   65,760  3,131 4.76   62,577   3,030  4.84
64,710  2,798 4.32
Non interest-bearing
liabilities  . . . . .       126                  576
948
Total liabilities . . .   65,886               63,153
65,658
Stockholders' equity  .   13,440               14,308
8,485
Total liabilities and
stockholders' equity . . $79,326              $77,461
$74,143

Net interest income . .           $2,571               $2,435
$2,497
Net interest rate spread                 2.78%                2.69%
3.09%
Net earning assets. . .  $ 9,874              $ 9,987                $
6,741
Net yield on average
interest-earning assets                  3.40%                3.36%
3.49%
Average interest-earning
assets to average
interest-bearing
liabilities . . . . . .   115.02%             115.96%
110.42%
</TABLE>

      (1) Calculated net of deferred loan fees, discounts and premiums, and
loans in process.








<TABLE>
The  following  table  presents the dollar amount of  changes  in  interest
income and interest expense for major components of interest-earning assets
and  interest-bearing  liabilities. It distinguishes  between  the  changes
related  to  outstanding balances and those due to the changes in  interest
rates.  For  each  category of interest-earning assets and interest-bearing
liabilities, information is provided on changes attributable to (i) changes
in volume (i.e., changes in volume multiplied by old rate) and (ii) changes
in  rate (i.e., changes in rate multiplied by old volume). For purposes  of
this  table, changes attributable to both rate and volume, which cannot  be
segregated, have been allocated proportionately to the change due to volume
and the change due to rate.

                                            Year Ended June 30.
                                1996 vs. 1997             1995 vs. 1996
                           Increase                   Increase
                           (Decrease)         Total  (Decrease)
Total
                            Due to          Increase  Due to
Increase
                           Volume   Rate  (Decrease) Volume   Rate
(Decrease)
                                             (Dollars in Thousands)
Interest-earning assets:
<S>                             <C>   <C>      <C>     <C>    <C>    <C>
Loans receivable, net . . . $   511 $ (90) $   421  $  (99) $  32  $ ( 67)
Mortgage-backed securities      (39)   21      (18)     26    100     126
Investment securities  . .     (154)   (6)    (160)    110     (4)    106
FHLB stock . . . . . . . .      ---    (6)      (6)    ---      5       5

Total interest-earning
assets  . . . .             $   318   (81)     237  $   37 $  133     170

Interest-beating liabilities:
Savings deposits. . . . .       (21)  (61)     (82)    (31)   (20)    (51)
NOW and MMDA accounts. . .       15   (26)     (11)     (4)   (13)    (17)
Certificate accounts. . . .    (111)  (31)    (142)    (78)   365     287
FHLB  borrowing. . . . . .      280    56      336      13    ---      13

Total interest-bearing
liabilities . . . .          $  163 $ (62)     101  $ (100) $ 332     232

Net interest income . . .                    $  136                 $ (62)
</TABLE>



Financial Condition

          General.   Total  assets  increased  $2.87  million   or   3.64%,
from  $78.86  million  at  June  30,1996 to  $81.73  million  at  June  30,
1997.  The  increase  in  assets  was  primarily  the  result  of  a  $8.02
million   increase   in   net  loans  offset   by   reductions   of   $4.84
million   in   investment   securities   and   mortgage-backed   securities
and   $.31   million  of  other  assets.  Funding  for  the  asset   growth
primarily   came   from   $6.50  million  of  FHLB   advances   offset   by
$1.84   million   in  decreased  deposits  and  common  stock   repurchases
of  $2.01 million.

        Cash   and   Cash   Equivalents.   Cash   and   cash   equivalents,
consisting   of   cash,  interest-bearing  deposits   and   federal   funds
sold   decreased  $134,000  from  $1.39  million  at  June  30,   1996   to
$1.25 million at June 30, 1997.

       Investment   Securities.   Investment  securities,   consisting   of
United   States  Government  securities  and  an  investment  in  a  United
States   Government  securities  mutual  fund,  decreased   $2.39   million
or   51%  from  $4.69  million  at  June  30,  1996  to  $2.30  million  at
June   30,   1997.   The   decrease  resulted  from   the   sale   of   the
Company's   $.89  million  interest  in  a  mutual  fund,  and   maturities
of   $1.5   million   of  government  securities.   At   June   30,   1997,
$1.30   million   or   56%  of  the  Association's  investment   securities
were available for sale.

         Mortgage-backed     Securities.     Mortgage-backed     securities
decreased  $2.44  million  or  15%,  from  $16.15  million  at   June   30,
1996   to   $13.71   million   at  June  30,  1997.    The   decrease   was
primarily   the  result  of  principal  repayments.   At  June  30,   1997,
$1.78   million   or   13%   of   the   mortgage-backed   securities   were
classified as available for sale.

        Loans   Receivable,   Net.   Loans   receivable   increased   $8.02
million,  or  15%,  from  $53.11  million  at  June  30,  1996  to   $61.13
million  at  June  30,  1997.  This  increase  was  primarily  the   result
of   increased   demand   and   expanded  market   area   for   residential
mortgages   in   conjunction  with  aggressive   efforts   in   origination
of    home   equity  and  mortgage-backed  commercial   loans  along   with
continued participations in commercial loans.

       Deposits.   Deposits  decreased  $1.84  million,   or   3.0%,   from
$61.23   million  at  June  30,  1996  to  $59.39  million  at   June   30,
1997.   The   Association  is  actively  pursuing   a   deposit   retention
program.   The   program,  implemented  during  the   fourth   quarter   of
fiscal   1997,   offers  higher  rate  special  short-term  and   long-term
deposit    certificates.      Under    the    program,    fourth    quarter
deposits  increased  by  $390,000,  a  reversal  of  the  outflow   pattern
experienced   during  fiscal  1996  and  the  first   three   quarters   of
fiscal    1997.     Monitoring    of   local    market    rates,    special
certificate   offerings  and  wholesale  alternatives  will   continue   to
be utilized as management  focuses on viable funding sources.

       Stockholders'   Equity.   Stockholders'   equity   decreased   $1.69
from   $14.05  million  at  June  30,  1996  to  $12.36  million  at   June
30,    1997.   This   decrease   was   primarily   the   result   of    the
Company's   stock  repurchase  program,  partially  offset  by   1997   net
income.


Results of Operations

       General.    Net   income   decreased  $88,000,   or   26.27%,   from
$335,000   for   1996  to  $247,000  for  1997.   The   decrease   in   net
income   resulted   primarily  from  the  expense   associated   with   the
one-time    special   SAIF   recapitalization   assessment   of   $414,000.
Adjusted   for  the  SAIF  recapitalization  assessment,  net  of   related
federal  and  state  income  tax  benefits,  net  income  for  1997   would
have   been   $497,000,  an  increase  of  48.36%  over  net   income   for
1996.

        Net    interest    income.    Net    interest   income    increased
$136,000   from   $2.44  million  in  1996  to  $2.57  million   in   1997.
The   increase   was   due   to  $3.07  million   of   additional   average
interest-earning   assets   at   an   improved   net   four   basis   point
yield.    Net   yield   on   average  interest-earning   assets   in   1997
increased 1.19% to 3.40% from 3.36% in 1996.

       Interest   Income.    Interest  income  increased   $237,000,   from
$5.46   million  for  1996  to  $5.70  million  for  1997.   The   increase
was   the   result  of  $6.33  million  of  higher  average   balances   in
loans   receivable   during   the  year  offset   by   $3.26   million   of
reduced     investment     and    mortgage-backed    securities     average
balances.    The  change  due  to  net  volume  increases  added   $318,000
to   interest   income   and   was  offset  by  lower   rate   precipitated
decreases    of   $81,000.    The   yield   on   average   interest-earning
assets  increased  1  basis  point,  from  7.53%  for  1996  to  7.54%  for
1997

       Interest   Expense.   Interest  expense  increased   $101,000   from
$3.03  million  in  1996  to  $3.13  million  in  1997,  primarily   as   a
result   of   $336,000   of  additional  expense   related   to   increased
FHLB    advances.     The   average   rate   paid   for    interest-bearing
liabilities  decreased  8  basis  points  from  4.84%  in  1996  to   4.76%
in   1997,   a  decrease  of  1.65%.   The  average  balance  of  interest-
bearing   liabilities   for   fiscal   1997   was   $65.76   million,    an
increase of $3.18 million from $62.58 million for fiscal 1996.

       Provision  for  Loan  Losses.   There  was  no  provision  for  loan
losses  for  the  year  ended  June  30,  1997  and  the  year  ended  June
30,   1996.   The   Company  maintains  an  allowance   for   loan   losses
based    upon    management's   periodic   evaluation   of   non-performing
loans,   inherent   risks  in  the  loan  portfolio,  economic   conditions
and   past  experience.   Management  does  expect  that  as  loan   growth
continues,   provisions   for   loan   losses   may   be   required.    The
provisions,   however,  are  not  expected  to  have  a   material   impact
on earnings.

        Noninterest   Income.    Noninterest   income   increased   $54,000
from   $172,000  in  1996  to  $226,000  in  1997,  primarily  from   gains
on sales of securities.

         Noninterest     Expense.     Noninterest     expense     increased
$310,000,   from  $2.06  million  in  1996  to  $2.37  million   in   1997.
The   primary   increase   was  the  result  of   the   $414,000   one-time
special   assessment   to  recapitalize  the  SAIF   fund.    The   expense
recognition    for    the   SAIF   recapitalization    occurred    as    of
September   30,  1996.  As  a  result  of  the  special  assessment,   FDIC
deposit   insurance   rates  have  decreased  from   $.23   per   $100   of
domestic   deposits  to  $.064  per  $100  of  domestic  deposits.    Under
the   revised   assessment  rate,  the  Association  expects   to   realize
approximately   $99,000   of   reduced   expenses   at   current    deposit
levels   under   existing  regulatory  ratings.  Total   compensation   and
related   benefits   as   well   as   occupancy   and   equipment   expense
remained    relatively  unchanged  from  1996  levels   at   $964,000   and
$279,000,     respectively.     Advertising    and    promotion     expense
decreased    by    $10,000,   the   continued   result    of    the    1996
reorganization     of    our    advertising    campaign.      Additionally,
service   bureau   expense  decreased  by  $9,000   and   other   operating
expense decreased by $25,000 over fiscal 1996 expenditures.

       Income   Taxes.    Income   tax  expense  decreased   $31,000   from
$213,000  in  1996  to  $182,000  in  1997,  principally  as  a  result  of
a  decrease  in  pretax  income.   The effective  tax  rate  for  1997  was
42.34% versus 38.83% in 1996.

Liquidity and Capital Resources

        The   Association's   primary   sources   of   funds   consist   of
deposits,   repayment   and   prepayment  of  loans   and   mortgage-backed
securities,    maturities   of   investment   securities   and    temporary
cash    investments,    and   funds   provided   by    operations.    While
scheduled    loan    and   mortgage-backed   securities   repayments    and
maturities   of   investments   are   predictable   sources    of    funds,
deposit   flows   and  loan  and  mortgage-backed  securities   prepayments
are   significantly   influenced  by  the   general   level   of   interest
rates,    economic   conditions,   and   competition.   Sobieski    Federal
uses   it   liquidity   resources  to  fund  existing   and   future   loan
commitments,    purchase   mortgage-backed   securities,   fund    maturing
certificates   of  deposit  and  other  savings  deposit  withdrawals,   to
invest   in   other   interest-earning  assets,  to   maintain   liquidity,
and   to  meet  operating  expenses.  Management  believes  that  loan  and
mortgage-backed securities repayments
and   other   sources  of  funds  will  be  adequate   to   meet   Sobieski
Federal's current liquidity needs.

        As   a   federal   savings   association,   the   Association    is
required   to   maintain   liquid  assets  of  5%   of   its   withdrawable
deposits   plus   short-term   borrowings.    At   June   30,   1997,   the
Association   was   in   compliance  with  Office  of  Thrift   Supervision
("OTS") liquidity requirements, having a ratio of 6.07%.

       The   Association  is  required  by  OTS  to  meet  minimum  capital
requirements,   which   include  tangible   capital,   core   capital   and
risk-based     capital    requirements.     The    Association's     actual
capital   as   reported  to  the  OTS  at  June  30,  1997   exceeded   all
three   requirements.    The  following  chart  sets   forth   the   actual
and    required   minimum   levels   of   regulatory   capital   for    the
Association   under   applicable   OTS   regulations   as   to   June   30,
1997(dollars in thousands):

           Actual Percent Required Percent  Excess
Core      $ 9,026   11.4  $  2,380  3.0    $  6,646
Tangible    9,026   11.4     1,190  1.5       7,836
Risk-based  9,226   27.7     2,666  8.0       6,560

       The   OTS  has  proposed  to  increase  the  minimum  required  core
capital  ratio  from  the  current  3%  level  to  a  range  of  4%  to  5%
for   all  but  the  most  highly  rated  financial  institutions.    While
the   OTS   has   not  taken  final  action  on  such  proposal,   it   has
adopted   a  prompt  corrective  action  regulation  that  classifies   any
savings   institution  that  maintains  a  core  capital  ratio   of   less
than  4%  (3%  in  the  event  the institution  was  assigned  a  composite
1    rating    in    its   most   recent   report   of   examination)    as
"undercapitalized."   As  of  June  30,  1997,  the   Association   had   a
core   capital  ratio  of  11.4%  and  met  the  requirement  for  a  "well
capitalized" institution.

Accounting And Regulatory Developments

Statement   of   Financial   Accounting   Standards   ("SFAS")   No.   121,
"Accounting   for   the   Impairment  of  Long-Lived   Assets   and   Long-
Lived   Assets  to  be  Disposed  Of,"  was  issued  in  March   1995   and
requires    that    long-lived   assets   be   reviewed   for    impairment
whenever   events  or  changes  in  circumstances  indicate  the   carrying
amount  of  an  asset  may  not  be  recoverable.   The  adoption  of  this
statement   during   fiscal   1997  had  no   effect   on   the   Company's
consolidated financial statements.

SFAS   No.   122,   "Accounting  for  Mortgage   Servicing   Rights,"   was
issued   in   May  1995  and  requires  the  capitalization   of   mortgage
servicing   rights   acquired   through   either   purchase   of   mortgage
loan   servicing   or   origination   and   sale   or   securitization   of
mortgage   loans   with  retention  of  servicing.  SFAS   No.   122   also
requires   an  analysis  of  capitalized  mortgage  servicing  rights   for
potential   impairment   based  on  the   fair   value   of   the   rights.
Currently,   the   Company  does  not  purchase  or   originate   to   sell
mortgage loans.

SFAS   No.   123,   "Accounting   for   Stock-Based   Compensation,"    was
issued   in  October  1995  and  established  a  fair  value  based  method
of   accounting   for  stock-based  compensation  plans.   This   statement
also    establishes   fair   value   as   the   measurement    basis    for
transactions   in  which  an  entity  acquires  goods  or   services   from
non-employees   in  exchange  for  equity  instruments.    There   was   no
effect   on  the  Company's  1997  consolidated  financial  statements   as
this statement was adopted in 1997 on a disclosure basis only.

SFAS  No.  128,  "Earnings  Per  Share,"  establishes  new  standards   for
computing   and  presenting  earnings  per  share  ("EPS")  for   publicly-
held   companies.    The   statement  replaces  the  current   presentation
of   primary   EPS   with   a  presentation  of   basic   EPS.    It   also
requires  dual  presentation  of  basic  and  fully  diluted  EPS  on   the
face   of   the   income   statement  for   all   entities   with   complex
capital   structures  and  requires  a  reconciliation  of  the   numerator
and  denominator  of  the  basic  EPS  computation  to  the  numerator  and
denominator   of  the  fully  diluted  EPS  computation.    SFAS   128   is
effective   for   financial   statements   issued   for   periods    ending
after    December    15,   1997,   including   interim    periods.     This
statement   requires   restatement   of   all   prior-period    EPS    data
presented.    Adoption  of  this  statement  by  the  Company   in   fiscal
1998  is  not  presently  expected  to  have  any  significant  impact   on
the Company's historical presentation of EPS data.

SFAS    No.    129,    "Disclosure    of    Information    about    Capital
Structure,"    establishes    standards    for    disclosing    information
about   an   entity's   capital  structure.   Such   information   includes
pertinent    rights    and    privileges   of    securities    outstanding.
Examples   of  information  that  shall  be  disclosed  are  dividend   and
liquidation   preferences,   participation   rights,   call   prices    and
dates,   conversion   or   exercise  prices  or   rates   and   significant
terms   of   contracts  to  issue  additional  shares.   Other  disclosures
include     information     regarding    liquidation     preferences     of
preferred   stock   and  redemption  requirements  of   redeemable   stock.
SFAS   129  is  effective  for  financial  statements  issued  for  periods
ending   after  December  15,  1997  and  is  not  presently  expected   to
have   any   significant  impact  on  the  Company's  historical  financial
statements.

Impact of Deposit Insurance Funds Act of 1996

On   September   30,   1996,  President  Clinton  signed   into   law   the
Deposit   Insurance   Funds   Act  of  1996,  which   included   provisions
recapitalizing  the  SAIF.   It  provides  for  the  eventual   merger   of
the   thrift  fund  with  the  Bank  Insurance  Fund  ("BIF")  on   January
1,   1999,   provided  no  savings  associations  are  then  in  existence,
and   reallocates   payment   of  the  annual  Financing   Corp.   ("FICO")
bond  obligation.   As  part  of  the  legislation,  the  FDIC  imposed   a
special   one-time  assessment  of  65.7  basis  points   to   be   applied
against  all  SAIF-insured  deposits  as  of  March  31,  1995,  in   order
to   restore   the  SAIF  to  the  statutorily  prescribed   1.25   percent
reserve    ratio.    The   special   assessment,   which   was   paid    in
November   1996,   resulted   in   a  $414,000   pretax   charge   to   the
Association   during   its   first   quarter   of   fiscal    1997.     The
assessment   reduced  the  Company's  1997  net  income  by   approximately
$250,000, or $0.32 per share.

Effective  January  1,  1997,  SAIF  members  will  have  the  same   risk-
based   assessment   schedule  as  BIF  members.    The   Association   has
effectively   paid   no   assessment   for   deposit   insurance   coverage
commencing    January   1,   1997.    However,    all    SAIF    and    BIF
institutions,   including   the  Company,  are  responsible   for   sharing
the   cost  of  interest  payments  on  the  FICO  bonds.   The  cost  will
be  an  annualized  charge  of  1.3  basis  points  for  BIF  deposits  and
6.4 basis points for SAIF deposits.

REPORT OF INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.


To the Stockholders and Board of Directors of
  Sobieski Bancorp, Inc.:

We    have   audited   the   accompanying   consolidated   statements    of
financial   condition  of  Sobieski  Bancorp,  Inc.   and   subsidiary   as
of    June    30,   1997   and   1996,   and   the   related   consolidated
statements   of   income,  stockholders'  equity   and   cash   flows   for
each  of  the  three  years  in  the period  ended  June  30,  1997.  These
financial    statements   are   the   responsibility   of   the   Company's
management.  Our  responsibility  is  to  express  an  opinion   on   these
financial statements based on our audits.

We   conducted   our   audits   in  accordance  with   generally   accepted
auditing   standards.   Those  standards   require   that   we   plan   and
perform   the   audit   to  obtain  reasonable  assurance   about   whether
the   financial   statements   are  free  of  material   misstatement.   An
audit   includes   examining,   on  a  test  basis,   evidence   supporting
the   amounts  and  disclosures  in  the  financial  statements.  An  audit
also    includes   assessing   the   accounting   principles    used    and
significant   estimates  made  by  management,  as   well   as   evaluating
the   overall  financial  statement  presentation.  We  believe  that   our
audits provide a reasonable basis for our opinion.

In    our   opinion,   the   financial   statements   referred   to   above
present    fairly,    in   all   material   respects,   the    consolidated
financial  position  of  Sobieski  Bancorp,  Inc.  and  subsidiary  as   of
June   30,   1997  and  1996,  and  the  consolidated  results   of   their
operations  and  their  cash  flows  for  each  of  the  three   years   in
the   period   ended   June   30,  1997,  in  conformity   with   generally
accepted accounting principles.






  South Bend, Indiana
  August 22, 1997


Sobieski Bancorp, Inc. and Subsidiary

Consolidated Statements Of Financial Condition
as of June 30, 1997 and 1996

          ASSETS             1997                1996
Cash, including interest-
bearing deposits in other
financial institutions of
$94,477 and $334,793,
respectively              $ 1,251,373      $   1,258,520
Federal funds sold               -               127,000
Certificates of deposit       198,000            198,000
Investment securities,
available-for-sale
(amortized cost of
$1,299,335 and $3,167,813,
respectively)               1,297,148          3,193,784
Investment securities,
held-to-maturity (market
value of approximately
$1,012,900 and $1,497,000,
respectively)               1,000,000          1,500,000
Mortgage-backed securities,
available-for-sale (amortized
cost of $1,790,203 and
$2,383,429, respectively)   1,780,210          2,344,925
Mortgage-backed securities,
held-to-maturity (market
value of approximately
$11,617,500 and $13,424,600,
respectively)              11,929,352         13,806,725
Loans receivable, net      61,134,644         53,114,094
Real estate owned              11,037                 -
Federal Home Loan Bank
stock, at cost                636,000            636,000
Property and equipment,
net                         2,028,310          2,110,699
Other assets                  466,672            557,044
Deferred income taxes               -             15,960

Total assets              $81,732,746       $ 78,862,751

           LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits               $59,386,630       $ 61,226,683
Federal Home Loan Bank
advances                 9,500,000          3,000,000
Advances from borrowers
for taxes and insurance   260,439             264,531
Accrued income taxes       80,628             129,305
Accrued interest and
other expenses            132,077             188,042
Deferred income taxes      12,177                   -

Total liabilities      69,371,951          64,808,561

Commitments (Notes L )

Stockholders' equity:
Preferred stock, $.01
par value: 500,000 shares
authorized; none issued      -                   -
Common stock, $.01 par
value: 3,500,000 shares
authorized; 966,000
 shares issued             9,660                9,660
Additional paid-in
 capital               9,147,176            9,099,156
Retained earnings,
substantially
restricted             6,670,543            6,538,602
Net unrealized depreciation
of securities
available-for-sale       (7,356)               (7,571)
15,820,023            15,639,847
Less: Treasury stock,
at cost, 206,368 and
71,940 shares,
respectively          2,879,878               909,457
Unallocated Employee
Stock Ownership Plan
 shares;57,935 and
67,620 shares,
respectively            579,350               676,200
Total stockholders'
 equity              12,360,795            14,054,190

Total liabilities
and stockholders'
equity             $ 81,732,746          $ 78,862,751
See accompanying notes to consolidated financial statements.
Sobieski Bancorp, Inc. and Subsidiary

Consolidated Statements Of Income
for the years ended June 30, 1997, 1996 and 1995

                   1997           1996              1995
Interest income:
Loans          $ 4,433,288   $ 4,012,220      $ 4,079,101
Mortgage-backed
securities         944,274       962,464          835,981
Interest-bearing
deposits            43,665       267,071          179,173
Investments and
other              281,103       222,913          200,800

Total interest
income           5,702,330     5,464,668        5,295,055

Interest expense:
Interest on
deposits         2,782,319     3,016,692        2,798,112
Interest on
borrowings         348,563        12,896                -

Total interest
expense          3,130,882     3,029,588        2,798,112

Net interest
income           2,571,448     2,435,080        2,496,943

Provision for
loan losses             -           -               9,743

Net interest
income after
provision for
loan losses      2,571,448    2,435,080         2,487,200

Non-interest
income:
Fees and
service charges    156,443      162,303           139,361
Gain on sale
of securities       63,535          -                 -
Other income         5,567        9,247            30,469

Total non-interest
income             225,545      171,550           169,830

Non-interest expenses:
Compensation
and benefits       964,207      962,655           775,672
Occupancy and
equipment          278,747      278,576           173,084
Federal deposit
insurance premiums 495,872      143,583            152,580
Advertising and
promotion           30,666       41,349            120,967
Service bureau
expense             98,555      107,575             92,929
Other operating
expenses           500,257      524,813            419,263

Total non-interest
 expenses        2,368,304    2,058,551          1,734,495

Income before
income taxes       428,689      548,079            922,535

Income taxes       181,500      212,800            372,400

Net income    $    247,189  $   335,279      $     550,135

Earnings per
common share(1)$      .32   $       .39     $          .09

(1) For 1995, earnings per common share is for the period
subsequent to the initial offering of common
    stock which was completed on March 30, 1995.


See accompanying notes to consolidated financial statements.
Sobieski Bancorp, Inc. and Subsidiary

Consolidated Statements Of Stockholders' Equity
for the years ended June 30, 1997, 1996 and 1995

<TABLE>                                                     Net
Unrealized
                                                     Appreciation
Unallocated
                                                    (Depreciation)
Employee     Total
                              Additional           of Securities
Stock        Stock-
                         Common Paid-in Retained    Available- Treasury
Ownership      holders'
                         Stock Capital  Earnings    For-Sale   Stock
Plan Shares   Equity
<S>                      <C>    <C>       <C>         <C>     <C>       <C>
<C>
Balance, July 1, 1994    $   -  $    -    $5,653,188  $   -   $     -   $
-   $ 5,653,188
Net income                   -       -       550,135      -         -
-       550,135
Proceeds from issuance
of common stock,
net of expenses           9,660 9,079,243        -        -         -
(772,800)  8,316,103
Common stock committed
to be released for allocation
to Employee Stock Ownership
Plan participants           -       1,800        -       -          -
32,200      34,000
Net unrealized appreciation
of securities available-
for-sale                    -        -           -      19,154      -
-        19,154

Balance, June 30, 1995    9,660 9,081,043 6,203,323     19,154      -
(740,600) 14,572,580
Net income                  -        -      335,279       -         -
-       335,279
Purchase of treasury
stock, 71,940 shares        -        -          -         -    (909,457)
-        (909,457)
Common stock committed
to be released for allocation
to Employee Stock Ownership
Plan participants          -       18,113       -         -        -
64,400      82,513
Net unrealized depreciation
of securities available-
for-sale                   -         -          -      (26,725)    -
-      (26,725)

Balance, June 30, 1996   9,660 9,099,156  6,538,602   (  7,571)
(909,457)(676,200)  14,054,190
Net income                  -        -      247,189        -         -
-         247,189
Cash dividends ($.14
per share)                 -         -     (115,248)      -          -
-        (115,248)
Purchase of treasury
stock, 137,600 shares      -         -         -          -    (2,011,403)
-      (2,011,403)
Common stock committed
to be released for allocation
to Employee Stock Ownership
Plan participants         -       41,495       -          -          -
96,850      138,345
Treasury stock issued to
vested Recognition and
Retention Plan
 participants            -        6,525        -          -       40,982
-         47,507
Net unrealized
appreciation of securities
available-for-sale       -          -          -         215        -
-            215

Balance,
June 30, 1997    $    9,660 $ 9,147,176 $6,670,543  $(7,356) $(2,879,878)
$(579,350) $12,360,795
</TABLE>
See accompanying notes to consolidated financial statements.
Sobieski Bancorp, Inc. and Subsidiary
<TABLE>
Consolidated Statements of Cash Flows
for the years ended June 30, 1997, 1996 and 1995
                              1997                 1996
1995
Cash flows provided by
(used in) operating activities:
<S>                      <C>                   <C>
<C>
Net income               $   247,189           $   335,279
$   550,135
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation and
amortization                 111,156               106,811
44,769
Provision for loan losses        -                     -
9,743
Provision for losses on
real estate owned                -                     -
13,632
(Gain) loss on disposition
 of equipment                  1,165                   775
(7,300)
(Gain) loss on sale of real
 estate owned, net               -                   3,865
(8,611)
(Gain) on sale of securities (63,535)                  -
-
 Deferred income taxes        28,000                39,500
24,000
Contribution to Employee
Stock Ownership Plan         138,345                82,513
34,000
Contribution to Recognition
and Retention Plan            47,507                   -
-
Amortization of premiums
and accretion of discounts,
net                          61,944                 81,062
83,053
Amortization of deferred
loan fees                  (144,532)               (99,110)
(77,679)
Loan fees collected, net
 of costs                       -                      750
7,174
(Increase) decrease in
other assets                 90,372                (17,118)
(50,484)
Increase (decrease) in
 accrued income taxes       (48,677)               114,240
(233,600)
Increase (decrease) in
accrued interest and
other expenses              (55,965)                 6,478
51,440
Net cash provided by
operating activities        412,969                655,045
440,272

Cash flows provided by
(used in) investing activities:
Purchase of certificates
 of deposit                     -                (198,000)
(694,000)
Proceeds from maturity
of certificates of deposit      -                 793,000
-
Proceeds from maturity
of investment securities  1,500,000                   -
-
  Proceeds from sales of
investment securities       938,028                   -
-
Proceeds from sales of
mortgage-backed securities  289,121                   -
-
  Purchase of investment
 securities                 (12,415)           (2,150,574)
(49,650)
 Purchase of mortgage-
backed securities              -               (3,018,040)
(1,270,445)
Principal reductions of
mortgage-backed
securities                2,125,933             2,136,444
1,840,372
Net (increase) decrease
in loans made to customers
and principal collections
on loans                 (7,887,055)           (2,906,404)
1,069,633
Proceeds from sale of
real estate owned             -                    15,197
112,623
Proceeds from disposition
 of equipment                 -                       -
7,300
Purchase of property and
equipment                   (29,932)              (73,383)
(1,948,254)
Purchase of Federal Home
Loan Bank stock               -                      -
(2,800)
Net cash (used in)
investing activities     (3,076,320)           (5,401,760)
(935,221)

Cash flows provided by
(used in) financing activities:
 Net decrease in deposits (1,840,053)           (1,914,965)
(3,950,208)
Increase(decrease) in
advances from borrowers
for taxes and insurance       (4,092)              (71,954)
63,541
Federal Home Loan Bank
advances                   6,900,000             3,000,000
-
Federal Home Loan Bank
payments                    (400,000)                  -
-
Purchase of treasury stock(2,011,403)             (909,457)
-
Proceeds from issuance of
common stock, net               -                      -
8,316,103
Cash dividends            (115,248)                    -
-      .
Net cash provided by
financing activities     2,529,204                 103,624
4,429,436
Increase (decrease)
in cash and cash
equivalents               (134,147)             (4,643,091)
3,934,487
Cash and cash
equivalents, beginning
of year                  1,385,520               6,028,611
2,094,124
Cash and cash
equivalents, end of
year                   $ 1,251,373             $ 1,385,520
$ 6,028,611
               See accompanying notes to consolidated financial
statements.

</TABLE>
Sobieski Bancorp, Inc. and Subsidiary
Notes To Consolidated Financial Statements

A.   CONVERSION AND ISSUANCE OF COMMON STOCK.

On   October   4,  1994,  the  Board  of  Directors  of  Sobieski   Federal
Savings   and   Loan   Association  of  South  Bend   (the   "Association")
adopted   a  plan  of  conversion  to  convert  the  Association   from   a
federally   chartered   mutual  savings   and   loan   association   to   a
federally    chartered   stock   savings   and   loan   association    (the
"Conversion").   The   Association   obtained   the   required   regulatory
approval   for   the  Conversion  in  February  1995  and  on   March   22,
1995   the  plan  of  conversion  was  approved  by  a  majority   of   the
votes eligible to be cast by the members of the Association.

Sobieski   Bancorp,   Inc.   (the   "Company")   was   organized    as    a
Delaware    corporation   in   December   1994   for   the    purpose    of
acquiring  all  of  the  issued  and  outstanding  capital  stock  of   the
Association to be issued in the Conversion.

In   connection  with  the  Conversion,  on  March  30,  1995  the  Company
sold   966,000   shares  of  its  common  stock,   par   value   $.01   per
share,   including   77,280   shares   acquired   by   the   newly   formed
Employee   Stock   Ownership  Plan  ("ESOP"),  for  $10  per   share.   Net
proceeds  from  the  sale,  after  deducting  direct  issuance  costs   and
expenses   of   $571,000,  aggregated  $9,089,000   of   which   $4,542,500
was  used  to  purchase  all  of  the  capital  stock  of  the  Association
and   $772,800  was  used  to  fund  the  purchase  of  77,280  shares   of
the Company's common stock by the ESOP.

The   Company's  Articles  of  Incorporation  authorize  the  issuance   of
4,000,000   shares  of  capital  stock,  consisting  of  3,500,000   shares
of  common  stock,  par  value  $.01  per  share,  and  500,000  shares  of
preferred  stock,  par  value  $.01  per  share.  As  of  June   30,   1996
and   1995,   966,000   shares   of  the  Company's   common   stock   were
issued and all of the Company's preferred stock is unissued.

At   the   time   of   the  Conversion,  the  Association   established   a
liquidation   account   in   an   amount   equal   to   the   Association's
retained   earnings   as   of   September   30,   1994.   The   liquidation
account  will  be  maintained  for  the  benefit  of  depositors,   as   of
the   eligibility   record   date  and  supplemental   eligibility   record
date,    who    continue   to   maintain   their    deposits    with    the
Association   after   the  Conversion.  In  the   event   of   a   complete
liquidation   (and   only   in  such  event),   each   eligible   depositor
will   be   entitled  to  receive  a  liquidation  distribution  from   the
liquidation   account,   in   the  proportionate   amount   of   the   then
current   adjusted   balance   for   deposits   then   held,   before   any
liquidation    distribution   may   be   made   with   respect    to    the
stockholders.

Current   regulations   allow  the  Company  to  pay   dividends   on   its
common   stock   if   its   regulatory  capital  would   not   thereby   be
reduced   below   the   amount  then  required   for   the   aforementioned
liquidation     account.    Also,    capital    distribution    regulations
limit    the   Company's  ability  to  make  capital  distributions   which
include    dividends,    stock   redemptions,   repurchases    and    other
transactions  charged  to  the  capital  account  based  on   its   capital
level    and    supervisory    condition.    Federal    regulations    also
preclude  any  repurchase   of   the  stock  of  the  Company  for    three
years  after  conversion  except  for
Sobieski Bancorp, Inc. and Subsidiary
Notes To Consolidated Financial Statements, Continued

A.   CONVERSION AND ISSUANCE OF COMMON STOCK, Concluded.

purchases   of   qualifying   shares  of   a   director   and   repurchases
pursuant  to  an  offer  made  on  a pro-rata  basis  to  all  stockholders
and   with   prior  approval  of  the  Office  of  Thrift  Supervision   or
pursuant   to   an  open-market  stock  repurchase  program  with   certain
regulatory criteria.

B.   ACCOUNTING POLICIES.

Organization

The   Association  is  a  federally  chartered  stock  savings   and   loan
association  and  as  a  member  of  the  Federal  Home  Loan  Bank  System
("FHLB")   is   required  to  maintain  an  investment   in   the   capital
stock of the FHLB.

Deposit   accounts   are   insured  by  the   Federal   Deposit   Insurance
Corporation    ("FDIC")    within   certain    limitations.    An    annual
premium  is  required  by  the  FDIC for  the  insurance  of  such  deposit
accounts.

On     September    30,    1996,    Congress    passed    into    law     a
recapitalization   plan  for  the  Savings  Association   Insurance   Fund,
the   insurance   fund   covering   deposits   of   savings   institutions.
The    recapitalization   plan   provided   for    a    special    one-time
assessment  of  .66%  on  certain  deposits  of  savings  institutions   as
of   March   31,  1995.   The  Association's  special  assessment  amounted
to   approximately   $414,000   and  is   included   in   federal   deposit
insurance   premiums   in  the  consolidated  statement   of   income   for
the   year   ended  June  30,  1997.   Future  deposit  insurance  premiums
decreased    to   approximately   .06%   from   the   .23%   of    deposits
previously paid by the Association.

Principles of Consolidation

The    accompanying   consolidated   financial   statements   include   the
accounts    of    the    Company   and   the   Association,    collectively
referred   to   herein   as   "Sobieski".  All   significant   intercompany
accounts    and   transactions   have   been   eliminated.   The    initial
capitalization    of   the   Company   and   its   acquisition    of    the
Association  took  place  on  March  30,  1995  as  more  fully   described
in   Note  A.  The  acquisition  of  the  Association  has  been  accounted
for  at  historical  cost  in  a  manner similar  to  that  utilized  in  a
pooling of interest.

Securities

Securities   are  classified  as  either  held-to-maturity   and   reported
at   amortized   cost,   trading  and  reported   at   fair   value   (with
unrealized    holding    gains    and   losses    included    in    current
earnings),   or  available-for-sale  and  reported  at  fair  value   (with
unrealized    holding    gains   and   losses   excluded    from    current
earnings and reported as a separate

Sobieski Bancorp, Inc. and Subsidiary
Notes To Consolidated Financial Statements, Continued

B.   ACCOUNTING POLICIES, Continued.

component   of   stockholders'   equity).    The   Association    had    no
trading securities at June 30, 1997 and 1996.

Gains   and   losses   on  all  securities  transactions   are   recognized
when sold as determined by the identified certificate method.

Loans Receivable

Loans   receivable   are   stated  at  the   unpaid   principal   balances,
less   deferred   loan   fees   and   an   allowance   for   loan   losses.
Sobieski  follows  the  policy  of  charging  estimated  losses  on   loans
to   the   provision  for  loan  losses  in  the  period  in   which   such
losses become evident.

The   allowance  for  loan  losses  is  an  estimate  used  by   management
in    the   preparation   of    Sobieski's   financial   statements.    The
allowance  is  maintained  at  a  level  considered  by  management  to  be
adequate   to   provide   for  probable  loan  losses   inherent   in   the
portfolio.     Management's   evaluation   is   based   on   a   continuing
review   of   the  loan  portfolio  and  includes  consideration   of   its
actual    loan    loss    experience,   the   present    and    prospective
financial   condition   of   the   borrowers,   balance   of    the    loan
portfolio,   and   general   economic  conditions.    An   economic   slow-
down  in  the  geographic  area  could  adversely  effect  the  ability  of
borrowers   to  make  scheduled  monthly  payments  and  the  duration   of
such   an   economic   slow-down   would  increase   the   possibility   of
credit losses.

Revenue Recognition

Interest   on  loans  is  included  in  interest  income  on  the   accrual
method   over  the  terms  of  the  loans  based  upon  principal  balances
outstanding.   Sobieski  discontinues  the  accrual  of   interest   income
on    loans   when   payment   of   interest   is   more   than   90   days
delinquent.
Loan   origination   and  commitment  fees  and  direct  loan   origination
costs   are  deferred,  and  the  net  deferred  amount  is  amortized   to
interest  income  over  the  contractual  life  of  the  related  loans  as
an adjustment to the yield.

Property And Equipment

Property   and   equipment   are   carried   at   cost   less   accumulated
depreciation   and   amortization.  Depreciation   and   amortization   are
determined   using  the  straight-line  method  based  on   the   estimated
useful  lives  of  the  applicable  assets  which  range  from  3   to   39
years.





Sobieski Bancorp, Inc. and Subsidiary
Notes To Consolidated Financial Statements, Continued

B.  ACCOUNTING POLICIES, Continued.


Real Estate Owned

Real   estate  acquired  in  settlement  of  loans  is  recorded   at   the
lower   of  cost  (the  unpaid  principal  balance  of  the  loan  at   the
date   of  acquisition  plus  foreclosure  and  other  related  costs)   or
fair   market  value  at  the  date  of  acquisition  and  is  subsequently
carried  at  the  lower  of  cost  or  net  realizable  value.   Costs   of
improvements   made   to   facilitate  sale  are  capitalized;   costs   of
holding   the   property  are  charged  to  expense.    It  is   Sobieski's
policy    to   provide   valuation   allowances   for   estimated    losses
whenever,   based   upon  management's  evaluation,   a   significant   and
permanent decline in value occurs.

Income Taxes

The   Company   and   the   Association  file  consolidated   federal   and
state income tax returns.

The   Small   Business   Job   Protection   Act   of   1996   (the   "Act")
repealed   the  special  tax  bad  debt  deduction  available  to   savings
institutions.   The  Association  was  required  to  change  its  tax   bad
debt   reserve   method   to   the   specific   charge-off   method   under
Internal   Revenue  Code  Section  585  effective  for  its  taxable   year
ended   June   30,   1997.    This  change  in  method   will   result   in
taxable   income  of  approximately  $295,000,  representing   the   excess
of   the  Association's  tax  bad  debt  reserve  at  June  30,  1996  over
the  reserve  that  arose  in  tax  years beginning  before  July  1,  1988
(base   year   amount).   This  additional  taxable  income  is  reportable
for   income   tax  purposes  ratably  over  a  six-year   period.    There
was  no  effect  of  this  change  on the  Company's  net  income  for  the
year   ended   June   30,   1997   as  a   deferred   tax   liability   had
previously  been  established  for  the  tax  effect  of  the  excess   tax
bad debt reserve over the base year amount.

The   Association's   retained  earnings  as  of  June   30,1997   includes
the   income  tax  benefit  of  approximately  $875,000  of  tax  bad  debt
deductions,   representing   the   base   year   amount,   for   which   no
deferred income taxes have been provided.

Earnings Per Common Share

Earnings    per    common   share   for   periods   subsequent    to    the
completion   of  the  Company's  initial  stock  offering  on   March   30,
1995  is  calculated  by  dividing  net  income  for  the  period  by   the
weighted    average    number   of   common   shares   outstanding.     The
Company  accounts  for  the  shares  of  common  stock  acquired   by   the
ESOP  and  the  restricted  shares  awarded  under  the   Recognition   and
Retention    Plan   ("RRP")    in    accordance    with    Statement     of
Position    93-6,    "Employers'    Accounting    for    Employee     Stock
Ownership   Plans,"  which  prescribes  that  shares  held  by   the   ESOP
and   the   restricted  shares  awarded   under    the    RRP    are    not
considered     in     the      weighted       average       number       of
shares      outstanding     until     such     shares     are     committed
for
Sobieski Bancorp, Inc. and Subsidiary
Notes To Consolidated Financial Statements, Continued.

B.  ACCOUNTING POLICIES, Concluded.

allocation   to  an  ESOP  participant's  individual  account  or   vested,
in   the  case  of  the  RRP.  Accordingly,  the  weighted  average  number
of  common  shares  outstanding  for the  year  ended  June  30,  1997  was
770,098   (864,621   shares  for  the  year  ended  June   30,   1996   and
888,755   shares   for  the  period  March  30,  1995  through   June   30,
1995).    No   adjustment   has  been  made   to   the   weighted   average
number   of   common  shares  outstanding  to  reflect  outstanding   stock
options since the effect is not material.

Use of  Estimates in the Preparation of Financial Statements

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   income   and  expenses   during   the   reporting
period.  Actual results could differ from those estimates.

Statements Of Cash Flows

For    purposes   of   the   consolidated   statements   of   cash   flows,
Sobieski   considers  cash  and  federal  funds  sold  to   be   cash   and
cash equivalents.

Supplemental   disclosures   of   cash   flow   information   and   noncash
investing   and  financing  activities  for  the  years  ended   June   30,
1997, 1996 and 1995 are as follows:

                                                        1997
1996            1995

Supplemental disclosures of cash flow
  information:
Cash paid during the years for:
Interest             $ 3,154,873     $3,033,648   $2,784,152
Income taxes             202,177         59,060      582,000

Noncash investing and financing
 activities:
Loans transferred to real estate
owned                     11,037            -         32,696
Common stock issued to
 ESOP                        -              -        772,800









Sobieski Bancorp, Inc. and Subsidiary
Notes To Consolidated Financial Statements, Continued

C.   INVESTMENT SECURITIES AND MORTGAGE-BACKED SECURITIES.

The    amortized   cost   and   estimated   aggregate   fair    value    of
investment   securities  and  mortgage-backed  securities   at   June   30,
1997 are as follows:
                             Available-For-Sale
                          Gross        Gross
                        Unrealized  Unrealized    Estimated
             Amortized    Holding   Holding       Aggregate
                Cost       Gains    Losses        Fair Value

Debt securities:
U.S. Treasury
 obligations $ 1,299,335 $   111  $  (2,298)     $1,297,148
Mortgage-backed
securities     1,790,203  10,609    (20,602)       1,780,210

Total        $ 3,089,538 $10,720  $ (22,900)     $ 3,077,358


                              Held-To-Maturity
                          Gross        Gross
                       Unrealized   Unrealized    Estimated
           Amortized     Holding      Holding     Aggregate
                 Cost      Gains     Losses      Fair Value

Debt securities:
U. S. Treasury
obligations  $ 1,000,000 $ 12,900  $     -      $ 1,012,900
Mortgage-backed
 securities   11,929,352   27,288    (339,140)   11,617,500

Total        $12,929,352 $ 40,188 $  (339,140) $ 12,630,400

The amortized cost and estimated aggregate fair value of debt
securities and mortgage-backed securities at June 30, 1997, by
contractual maturity (except for mortgage-backed securities), are
shown in the following table. Expected maturities will differ
from contractual maturities because borrowers may have the right
to call or prepay obligations with or without call or prepayment
penalties.

           Available-For-Sale     Held-To-Maturity
                    Estimated                 Estimated
          Amortized Aggregate  Amortized     Aggregate
             Cost   Fair Value    Cost       Fair Value

Due in one
year or
 less   $  801,253 $  799,938  $      -      $       -
Due after
one year through
five years   498,082     497,210        -             -
Due after
five years      -            -     1,000,000    1,012,900
Mortgage-backed
 securities 1,790,203   1,780,210 11,929,352   11,617,500

  Total   $ 3,089,538 $ 3,077,358 $12,929,352 $12,630,400






Sobieski Bancorp, Inc. and Subsidiary
Notes To Consolidated Financial Statements, Continued

C.  INVESTMENT SECURITIES AND MORTGAGE-BACKED SECURITIES,
     Concluded.

The amortized cost and estimated aggregate fair value of
investment securities and mortgage-backed securities at June 30,
1996 are as follows:

                               Available-For-Sale
                           Gross         Gross
                       Unrealized     Unrealized   Estimated
              Amortized  Holding       Holding     Aggregate
                Cost      Gains        Losses     Fair Value

Debt securities:
U.S. Treasury
 obligations $2,308,353 $     -     $   (23,283) $ 2,285,070
Mortgage-
backed
securities    2,383,429    1,618        (40,122)   2,344,925

Other securities:
Federated Intermediate
Government
Trust Fund
#47             859,460   49,254             -       908,714

Total        $5,551,242 $  50,872  $ (63,405)  $ 5,538,709


                                Held-To-Maturity
                               Gross    Gross
                           Unrealized Unrealized  Estimated
              Amortized     Holding    Holding    Aggregate
                 Cost       Gains      Losses     Fair Value

Debt securities:
U. S. Treasury
 obligations$ 1,500,000  $    3,323  $  (6,323) $  1,497,000
Mortgage-backed
 securities 13,806,725          -     (382,125)   13,424,600

Total      $15,306,725   $    3,323  $(388,448) $ 14,921,600

Purchases of available-for-sale securities for the years ended
June 30, 1997, 1996 and 1995 totaled $12,415, $2,621,645 and
$49,650, respectively.  Purchases of held-to-maturity securities
for the years ended June 30, 1997, 1996 and 1995 totaled $0,
$2,546,969 and $1,270,445, respectively. Proceeds from the sales
of available-for-sale securities for the year ended June 30, 1997
totaled $1,227,149, with gross gains of $63,535 realized on those
sales.  There were no sales of investment securities or mortgage-
backed securities during the years ended June 30, 1996 and 1995.

Sobieski Bancorp, Inc. and Subsidiary
Notes To Consolidated Financial Statements, Continued

D.  LOANS RECEIVABLE.

Loans receivable consisted of the following:
                                    June 30,
1997                     1996

One-to-four family
 mortgage loans       $  55,714,150      $ 48,748,883
Construction and
commercial mortgage
loans                     3,928,023         2,580,066
Share loans                 146,561           176,379
Small Business
Administration pass-through
certificates                2,454,856            2,781,500
                           62,243,590           54,286,828
  Less: Undisbursed
portion of loans in
process                       882,268              801,524
Allowance for loan
losses                        200,000              200,000
Deferred loan fees             26,678              171,210

Loans receivable, net  $   61,134,644      $    53,114,094

Certain directors, executive officers and their families have
loans with Sobieski. Such loans, exclusive of those not exceeding
$60,000 in the aggregate to any such persons, aggregated
approximately                                    $145,000 at June
30, 1997 (none at June 30, 1996).

The following is a summary of activity in the allowance for loan
losses:

                        Years Ended June 30,
                   1997         1996           1995

Balance,
beginning
of year        $  200,000   $  200,000    $   200,000
Provision
charged to
expense              -             -            9,743
Charge-offs         -              -           (9,743)

Balance, end
of year       $  200,000   $   200,000    $   200,000

Nonaccrual loans totaled approximately $126,000, $90,000 and
$41,000 at June 30, 1997, 1996 and 1995, respectively.

E.   PROPERTY AND EQUIPMENT.

Property and equipment and related accumulated depreciation and
amortization consisted of the following:



June 30,
1997             1996

Land               $  169,518       $  162,893
Office buildings    1,696,031        1,686,978
Leasehold
improvements           66,927           68,396
Furniture and
equipment             580,622          800,672
                    2,513,098        2,718,939
Less, Accumulated
depreciation
and amortization      484,788          608,240

Property and
equipment, net    $ 2,028,310      $ 2,110,699

Sobieski Bancorp, Inc. and Subsidiary
Notes To Consolidated Financial Statements, Continued


F.  OTHER ASSETS.

Other assets consisted of the following:
                                     June 30,
                              1997          1996

Accrued interest receivable:
Loans                     $  300,583     $ 290,589
Mortgage-backed securities    92,092       110,308
Investment securities         23,004        42,057
Interest-bearing deposits        963           945
Prepaid expenses and other    50,030       113,145

 Total                    $  466,672    $  557,044


G.  DEPOSITS.

Deposits consisted of the following:
                                      June 30,
                               1997           1996
                                 Percent            Percent
                   Amount  of Total    Amount      of Total

NOW accounts, 2.75% $ 3,875,715  6.5% $  2,453,936     4.0%

Money market
accounts, 2.75-3.00%  2,171,804   3.7    2,271,719     3.7

Passbook accounts,
 2.50%               15,170,287  25.5    15,908,610    26.0

Certificates of deposit
 and IRA accounts:

3.51-5.00%            9,039,019  15.2     8,941,931    14.6
5.01-6.00%           18,774,255  31.6    17,936,185    29.3
6.01-8.00%           10,355,550  17.5    13,714,302    22.4
                     38,168,824  64.3    40,592,418    66.3

Total              $ 59,386,630 100.0%  $61,226,683   100.0%

The weighted average interest rates on certificates of deposit
and IRA accounts were 5.62%  and 5.74% at June 30, 1997 and 1996,
respectively.

The aggregate amount of certificates of deposit and IRA accounts
with a minimum denomination of $100,000 was approximately
$2,235,600 and $1,856,000 at June 30, 1997 and 1996,
respectively. Deposits in denominations greater than $100,000 are
in excess of federally insured limits.


Sobieski Bancorp, Inc. and Subsidiary
Notes To Consolidated Financial Statements, Continued

G.   DEPOSITS, Concluded.

At June 30, 1997, scheduled maturities of certificates of deposit
and IRA accounts for the years ending on June 30 are as follows:
           1998       1999      2000      2001        2002

3.51-5.00%$  9,039,019 $   -   $     -  $      -   $       -
5.01-6.00%  8,832,677 4,711,613 3,334,284 1,801,268   94,413
6.01-8.00%  1,000,489 8,748,320   606,741        -        -

      $18,872,185 $13,459,933 $ 3,941,025 $1,801,268 $94,413

At June 30, 1996, scheduled maturities of certificates of deposit
and IRA accounts for the years ending on June 30 are as follows:
           1997      1998     1999    2000   2001    2002

3.51-5.00%$7,263,637 $1,670,354 $  -   $    -  $   -  $7,940
5.01-6.00% 9,733,202  4,638,156  646,265 2,918,562 -      -
6.01-8.00% 5,488,889  1,204,287 6,410,646  610,480 -      -

     $22,485,728 $7,512,797 $7,056,911 $3,529,042 $-  $7,940

Interest expense on deposits is summarized as follows:

                           Years Ended June 30,
                    1997          1996            1995

NOW and money
 market accounts$   117,653      $  128,385     $   146,196
Passbook accounts   373,848         456,114         507,356
Certificates of
deposit and
 IRA accounts     2,290,818       2,432,193       2,144,560

  Total         $ 2,782,319     $ 3,016,692     $ 2,798,112

H.  FEDERAL HOME LOAN BANK ADVANCES.

At June 30, 1997 and 1996, Sobieski had advances from the Federal
Home Loan Bank of Indianapolis totaling $9,500,000 and
$3,000,000, respectively, with variable and fixed interest rates
ranging from 5.75% to 6.97%, respectively, as of June 30, 1997.
Advances outstanding at June 30, 1997 mature from July 1997
through June 1998.

The advances are collateralized by all mortgage loans and
mortgage-backed securities issued or guaranteed by the Federal
Home Loan Mortgage Corporation, the Federal National Mortgage
Association or the Government National Mortgage Association.








Sobieski Bancorp, Inc. and Subsidiary
Notes To Consolidated Financial Statements, Continued

I.  INCOME TAXES.

Income taxes consist of the following:
                          Years Ended June 30,
1997           1996              1995

Federal:
Current          $  106,500     $  132,300        $260,400
Deferred             28,000         39,500          24,000

                    134,500        171,800         284,400
State                47,000         41,000          88,000

Total             $ 181,500     $  212,800       $ 372,400

The provision for income taxes differs from the expected amounts
(computed by applying the federal statutory corporate income tax
rate of 34% to income before income taxes) as follows :

                        Years Ended June 30,
1997            1996         1995

Computed statutory
tax provision     $ 145,800    $ 186,400     $  313,700
State income
taxes, net of
federal income
tax benefit          31,000      27,100          58,100
Non-deductible
portion of ESOP
contributions        14,100       7,200             700
(Gain) loss on
sale of real estate
owned, net             -          1,300          (2,900)
Business meals and
  entertainment       5,300       5,600           9,600
Other, net          (14,700)    (14,800)         (6,800)
                   $181,500    $212,800        $372,400
Effective tax rate    42.3%        38.8%          40.4%


The components of the net deferred tax asset(liability) at June
30, 1997 and 1996 were as follows :

                                       June 30,
                                  1997             1996

Deferred tax asset (liability):
  Deferred loan fees            $    4,600      $  51,000
  Allowance for loan losses         68,000         68,000
  Special tax bad debt deductions  (83,700)      (100,000)
  Depreciation and amortization    (11,500)         4,000
  Net unrealized depreciation of
    securities available-for-sale    4,823          4,960
  Other, net                         5,600        (12,000)

Net deferred tax asset(liability) $ (12,177)      $ 15,960

Sobieski Bancorp, Inc. and Subsidiary
Notes To Consolidated Financial Statements, Continued

J.   EMPLOYEE BENEFIT PLANS.

The Association has a defined contribution retirement plan under
Section 401(k) of the Internal Revenue Code. Substantially all
employees of the Association are eligible to participate in the
plan. Under the plan, the Association matches a percentage of
participating employee contributions and may also provide an
additional annual discretionary contribution. Retirement plan
expense for the years ended June 30, 1997, 1996 and 1995 was
$10,312, $13,383 and $9,262, respectively.

Effective March 30, 1995, the Association established the ESOP
for the benefit of the Association's employees who meet certain
eligibility requirements including having completed 1,000 hours
of credited service within a twelve-month period with the
Association. The  ESOP trust acquired 77,280 shares of the
Company's common stock in the Company's initial public offering
with proceeds from a loan from the Company. The Association makes
cash contributions to the ESOP on a semi-annual basis sufficient
to enable the ESOP trust to make its required debt service
payments to the Company.

The promissory note payable to the Company by the ESOP trust
bears interest at 7.78% with interest and principal payments due
in twenty-four (24) consecutive semi-annual installments on the
last day of June and December commencing June 30, 1995 and
continuing until December 31, 2006. The promissory note is
collateralized by the unallocated shares of the Company's common
stock held by the ESOP.

As the ESOP promissory note is repaid, shares of the Company's
common stock are released from collateral and allocated to
qualified ESOP participants based on the proportion of debt
service paid during the period. The Company accounts for the ESOP
in accordance with Statement of Position 93-6. Accordingly, the
unallocated shares pledged as collateral are reported as a
reduction of stockholders' equity in the consolidated statements
of financial condition. As shares are committed for release from
collateral, the Association records contribution expense equal to
the average market value of the released shares, and the released
shares become outstanding for earnings per common share
computations. Contribution expense related to the ESOP was
$138,345, $82,513 and $34,000 for the years ended June 30, 1997,
1996 and 1995, respectively.

Following is a summary of shares held by the ESOP trust as of
June 30, 1997:

     Allocated shares           19,345
     Unreleased shares          57,935

     Total ESOP shares           77,280

     Fair value of unreleased shares at
       June 30, 1997         $  854,541

On October 25, 1995, the stockholders of the Company ratified the
Company's adoption of the Recognition and Retention Plan ("RRP")
and the 1995 Stock Option and Incentive Plan (the "Stock Option
Plan").

Under the RRP, an aggregate of 38,640 shares of the Company's
common stock have been reserved for the awarding of restricted
shares to the Company's directors, officers and employees.
Awards of common stock granted under the RRP vest in five equal
annual installments beginning  on  the  first  anniversary  of
stockholder approval of the RRP and are subject to forfeiture in
the event the recipient terminates employment with the Company
for any reason other than death or disability.  RRP shares become
free of all restrictions and are distributed to recipients on the
date on which they vest.  As of June 30, 1997 and 1996, an
aggregate of 21,452 and 19,162 shares, respectively, of the
Company's common stock, with a market  value  of  $249,714  and
$208,600,  respectively,  at  the  respective  dates  of  grant,
have   been

Sobieski Bancorp, Inc. and Subsidiary
Notes To Consolidated Financial Statements, Continued

J.   EMPLOYEE BENEFIT PLANS, Concluded.

awarded under the RRP.  Contribution expense recognized for the
years ended June 30, 1997 and 1996 related to the award  of RRP
shares was $48,295 and $31,095, respectively.

Pursuant to the Stock Option Plan, an aggregate of 96,600 shares
of the Company's common stock have been reserved for the granting
of stock options and other long-term incentive awards to the
Company's directors, officers and employees.  Incentive and non-
qualified stock options may be granted under the Stock Option
Plan at exercise prices of not less than the fair market value of
the Company's common stock at the date of grant, become
exercisable at the rate of 20% per year commencing on the first
anniversary of the date of grant and have terms not exceeding ten
years.

The following is a summary of the activity with respect to
Sobieski's stock option plan for the years ended June 30, 1996
and 1997.

                                             Weighted-
                                              Average
                                                                   Exercise
Number of        Price
                                 Shares        Per Share

Outstanding, July 1, 1995          -           $  -
  Granted                         42,480          12.75

Outstanding, June 30, 1996      42,480          12.75
Granted                         19,320          12.50
Canceled                        (9,000)         12.75

Outstanding, June 30, 1997      52,800          12.65

At   June   30,  1997,  options  exercisable  under  the  Company's   Stock
Option   Plan   totaled   3,348   shares   and   had   a   weighted-average
exercise   price   per   share   of  $12.75.    There   were   no   options
exercisable   at   June  30,  1996.   For  options  outstanding   at   June
30,   1997,   the   exercise  price  per  share  ranged  from   $12.50   to
$12.75   and  the  weighted-average  remaining  contractual  life  of   the
options   was   8.6  years.   As  of  June  30,  1997,  43,800  shares   of
common   stock   were  reserved  for  future  option   grants   under   the
Company's  Stock  Option  Plan  compared  to  54,120  shares  of  June  30,
1996.

Sobieski   adopted  the  disclosure  only  provisions   of   Statement   of
Financial   Accounting   Standards  No.   123,   "Accounting   For   Stock-
Based   Compensation"   ("SFAS  No.  123"),   effective   July   1,   1996.
For  the  years  ended  June  30,  1997 and  1996,  pro  forma  net  income
and   earnings  per  share,  reported  as  if  compensation   expense   had
been   recognized  under  the  fair  value  provisions  of  SFAS  No.  123,
would   have   been  approximately  $225,000,  or  $.29  per   share,   and
$319,000,    or   $.37   per   share,   respectively.    The    significant
assumptions  used  in  the  calculation  of  the  Black-Scholes  value   of
Sobieski's stock options were as follows:

Risk free interest rate  6.25%     Volatility rate     20%
Expected life            7 years   Expected dividends    2%


Sobieski Bancorp, Inc. and Subsidiary
Notes To Consolidated Financial Statements, Continued

K.    REGULATORY CAPITAL.

The    Association    is    subject   to   various    regulatory    capital
requirements    administered    by   the    federal    banking    agencies.
Failure   to  meet  minimum  capital  requirements  can  initiate   certain
mandatory,    and   possibly   additional   discretionary,    actions    by
regulators   that,   if   undertaken,  could   have   a   direct   material
effect   on   the   Association's  financial  statements.   Under   capital
adequacy    guidelines   and   the   regulatory   framework   for    prompt
corrective   action,   the   Association   must   meet   specific   capital
guidelines     that     involve    quantitative     measures     of     the
Association's    assets,   liabilities,   and   certain   off-balance-sheet
items   as   calculated   under  regulatory  accounting   practices.    The
Association's   capital  amounts  and  classification  are   also   subject
to   qualitative  judgments  by  the  regulators  about  components,   risk
weightings, and other factors.

Quantitative   measures  established  by  regulation  to   ensure   capital
adequacy   require  the  Association  to  maintain  minimum   amounts   and
ratios    of   total   and   Tier   I   capital,   as   defined   in    the
regulations,  to  risk-weighted  assets,  as  defined,  and   of   Tier   I
capital  to  average  assets,  as  defined.   As  of  June  30,  1997,  the
most   recent   notification  from  the  Office   of   Thrift   Supervision
categorized    the    Association   as   well   capitalized    under    the
regulatory    framework   for   prompt   corrective    action.     To    be
categorized   as   well   capitalized,  the   Association   must   maintain
minimum   total  risk-based,  Tier  I  risk-based,  and  Tier  I   leverage
ratios.     There    are    no   conditions   or    events    since    that
notification     that    management    believes    have     changed     the
Association's category.

The     following     represents    a    reconciliation     between     the
Association's    stockholder's    equity    under    generally     accepted
accounting principles to regulatory capital at June 30, 1997:

Stockholder's equity                          $ 9,018,312
Add: Net unrealized depreciation of
securities available-for-sale                       7,356
Tangible and Tier I capital                     9,025,668

Add: Allowance for loan losses                    200,000

Total risk-based capital                      $ 9,225,668

The   following  are  details  of  the  Association's  regulatory   capital
position   and   the  related  capital  requirements   as   of   June   30,
1997.    Sobieski's  consolidated  amounts  and  ratios   do   not   differ
materially  from the Association's capital amounts and ratios.

                                             To Be Well
                                        Capitalized Under
                           For Capital     Prompt Corrective
                 Actual  AdequacyPurposes Action Provisions
                Amount  Ratio  Amount  Ratio Amount  Ratio
                               (Dollars in Thousands)

Total Capital  $9,226   27.68 $ 2,666 > 8.0% $3,332  > 10%
(to Risk-Weighted Assets)
Tier I Capital  9,026   27.08   1,333 > 4.0%  1,999  > 6.0%
(to Risk-Weighted Assets)
Tier I Capital  9,026   11.37   3,173 > 4.0%  3,966  > 5.0%
(to Adjusted Assets)
Tangible Capital9,026   11.37   2,380 > 3.0%  N/A      N/A
(to Tangible Assets)



Sobieski Bancorp, Inc. and Subsidiary
Notes To Consolidated Financial Statements, Continued

L.   FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK.

Sobieski   is   a   party   to  loan  commitments  with   off-balance-sheet
risk  in  the  normal  course  of business  to  meet  the  financing  needs
of    its   customers.   The   loan   commitments   involve,   to   varying
degrees,  elements  of   credit  and  interest  rate  risk  in  excess   of
the    amount    recognized     in   the   consolidated    statements    of
financial condition.

Sobieski's   exposure  to  credit  loss  in  the  event  of  nonperformance
by   the   parties   to  the  loan  commitments  is  represented   by   the
contractual   dollar   amounts   of  those  commitments   ($1,769,000   and
$712,000   at  June  30,  1997  and  1996,  respectively).  Sobieski   uses
the   same  credit  policies  in  making  loan  commitments  as   it   does
for on-balance-sheet instruments.

Loan  commitments  are  agreements  to  lend  to  a  customer  as  long  as
there   is   no   violation   of   any   condition   established   in   the
contract.   Loan   commitments  generally  have  fixed   expiration   dates
or   other  termination  clauses  and  may  require  payment  of   a   fee.
Since   many   of   the   commitments  are  expected  to   expire   without
being   drawn  upon,  the  total  commitment  amounts  do  not  necessarily
represent    future    cash   requirements.   Sobieski    evaluates    each
customer's   creditworthiness   on  a  case-by-case   basis.   The   amount
of   collateral   obtained,   if   deemed  necessary   by   Sobieski   upon
extension   of   credit,  is  based  on  management's   credit   evaluation
of   the   borrower.  Collateral  held  consists  primarily  of  the   real
estate being financed.

M.   CONCENTRATION OF CREDIT RISK.

Substantially   all   of  Sobieski's  loan  activity  is   with   customers
located   in   St.  Joseph  County  in  Northern  Indiana  with   a   major
concentration in single-family residential lending.

Generally,  loans  are  collateralized  by  real  estate.  The  loans   are
expected  to  be  repaid  from  cash flow or  proceeds  from  the  sale  of
selected   assets  of  the  borrowers.  Sobieski's  policy  for   requiring
collateral   is   dependent   upon  management's   credit   evaluation   of
the borrower.

The   mortgage-backed  securities  held  by  Sobieski   consist   primarily
of   FNMA,   GNMA   and   FHLMC   pass-through   certificates   which   are
issued   by  those  respective  agency  programs,  as  sponsored   by   the
United States Government.

Interest-bearing   deposits   in  other  financial   institutions   consist
principally   of   deposits   with  the   Federal   Home   Loan   Bank   of
Indianapolis.

Sobieski Bancorp, Inc. and Subsidiary
Notes To Consolidated Financial Statements, Continued

N.   FAIR VALUE OF FINANCIAL INSTRUMENTS.

Fair   value   disclosures   of   financial   instruments   are   made   to
comply   with  the  requirements  of  Statement  of  Financial   Accounting
Standards   No.   107,   "Disclosures  About  Fair   Value   of   Financial
Instruments."

The   estimated   fair  values  of  Sobieski's  financial  instruments   as
of June 30, 1997 and 1996 are as follows:

                     Carrying                 Estimated
                      Amount            Fair Value
                 1997         1996        1997         1996
Assets:
Cash and cash
equivalents $ 1,251,373 $ 1,385,520 $ 1,251,373 $1,385,520
Certificates
of deposit      198,000     198,000     198,000    198,000
Investment
securities    2,297,148   4,693,784   2,310,048  4,690,784
Mortgage-
backed
securities   13,709,562  16,151,650  13,397,710 15,769,525
Loans
receivable,
net          61,134,644  53,114,094  61,521,000 53,095,000
Federal Home
Loan Bank
 stock          636,000     636,000     636,000    636,000

Liabilities:
Deposits     59,386,630  61,226,683  59,508,000 61,442,000
Federal Home Loan
Bank advances 9,500,000   3,000,000   9,511,000  3,000,000

                   Contract
                      or                Estimated
                  Notional             Unrealized
                    Amount                   Gain
               1997        1996       1997         1996

Off-balance-sheet
 financial instruments:
Loan commitments
 - fixed rate $1,331,000 $ 610,000 $ 13,000      $     -
Loan commitments
 - adjustable
rate            438,000    102,000      -              -


The   following  methods  and  assumptions  were  used  to   estimate   the
fair value of Sobieski's financial instruments.

Cash   and   cash   equivalents,  certificates  of  deposit   and   Federal
Home Loan Bank stock:

The   carrying   amounts   of  cash  and  cash  equivalents,   certificates
of   deposit   and   Federal   Home  Loan   Bank   stock   are   reasonable
estimates of their respective fair values.

Investment securities and mortgage-backed securities:

Estimated    fair   values   of   investment   securities   and   mortgage-
backed   securities   are   based   on   quoted   market   prices,    where
available.    If   quoted   market   prices   are   not   available,   fair
values   are   estimated   using   quoted   market   prices   for   similar
instruments.

Sobieski Bancorp, Inc. and Subsidiary
Notes To Consolidated Financial Statements, Continued

N.   FAIR VALUE OF FINANCIAL INSTRUMENTS, Concluded.

Loans receivable:

Fair   values   are   estimated  for  portfolios  with  similar   financial
characteristics.     Loans    are   segregated    by    type,    such    as
residential    mortgages,   nonresidential   mortgages,   commercial    and
consumer   loans.    Each   loan  category  is   further   segmented   into
fixed   and   variable  interest  categories,  with  residential   mortgage
loans   (Sobieski's  largest  category)  further  segregated   by   similar
note  rates  and  maturities.   Future  cash  flows  of  these  loans   are
discounted   using  the  current  rates  at  which  similar   loans   would
be   made   to   borrowers  with  similar  credit  rating  for   the   same
remaining maturities.

Deposits:

The   estimated   fair  values  of  passbook  and  money  market   accounts
and   negotiable  orders  of  withdrawal  are  determined  by   discounting
estimated   future   cash  flows  using  the  market  rates   for   similar
deposits.     Certificates    of   deposit    and    IRA    accounts    are
segregated   by   original  and  remaining  term   and   estimated   future
cash   flows   are   discounted   using   rates   currently   offered   for
certificate and IRA accounts of similar remaining maturity.

Federal Home Loan Bank advances:

The   estimated  fair  values  of  advances  from  the  Federal  Home  Loan
Bank   of   Indianapolis   are  determined  by   discounting   the   future
cash    flows    of    outstanding   advances   using    rates    currently
available   on   advances   from   the   Federal   Home   Loan   Bank    of
Indianapolis with similar characteristics.

Loan commitments - fixed rate:

The   estimated   fair   value  of  commitments  to  originate   fixed-rate
loans   is   determined   based   on   the   difference   between   current
levels    of   interest   rates   and   the   committed   rates.    Because
Sobieski's    loan    commitments   expire    within    45-60    days    of
commitment,  the  effect  of  market  rate  changes  on  the   fair   value
of these commitments is not significant.

Loan commitments - adjustable rate:

There   is   no   estimated  unrealized  gain  or  loss   attributable   to
adjustable   rate  loan  commitments  due  to  their  adjustable   interest
rate feature.

The   fair   value  estimates  presented  herein  are  based  on  pertinent
information  available  to  management  as  of  June  30,  1997  and  1996.
Estimated   fair   value   amounts  have  been   determined   by   Sobieski
using    available    market   information    and    a    selection    from
appropriate     valuation     methodologies.      However,     considerable
judgment   is   necessarily   required  to   interpret   market   data   to
develop   the   estimates  of  fair  value.   Accordingly,  the   estimates
presented   are   not  necessarily  indicative  of  the   amount   Sobieski
could  realize  in  a  current  market  exchange.   The  use  of  different
market    assumptions   and   estimation   methodologies   may    have    a
material effect on the estimated fair value amounts.

O.   PARENT COMPANY FINANCIAL INFORMATION.

The  Company  was  organized  to  serve as  the  holding  company  for  the
Association   and  began  operations  on  March  30,  1995  in  conjunction
with    the    Association's    mutual-to-stock    conversion    and    the
Company's   initial   public   offering   of   its   common   stock.    The
Company's   statements  of  financial  condition  as  of  June   30,   1997
and  1996,  and  its  related  statements of  income  and  cash  flows  for
the  years  ended  June  30,  1997  and 1996  and  the  period  from  March
30, 1995 through June 30, 1995 are as follows:

Sobieski Bancorp, Inc. and Subsidiary
Notes To Consolidated Financial Statements, Continued

O. PARENT COMPANY FINANCIAL INFORMATION, Continued.

                STATEMENTS OF FINANCIAL CONDITION
                  As of June 30, 1997 and 1996

     ASSETS                  1997              1996

Cash and cash
equivalents          $       24,566      $       24,573
Loans receivable          3,089,198           3,292,723
Note receivable
from subsidiary             611,800             676,200
Investment in
subsidiary                9,018,312          10,100,080
Other assets                144,179              32,726

Total assets         $   12,888,055      $   14,126,302

     LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES:
Note payable to
subsidiary          $       500,000     $            -
Accrued income taxes         14,173               65,829
Other liabilities            13,087                6,283

Total liabilities           527,260               72,112

     STOCKHOLDERS' EQUITY:
Preferred stock, $.01
par value: 500,000 shares
authorized; none issued        -                     -
Common stock, $.01 par
 value: 3,500,000 shares
authorized; 966,000
shares issued               9,660                 9,660
Additional paid-in
capital                 9,147,176             9,099,156
Retained earnings,
substantially
restricted              6,670,543             6,538,602
Net unrealized
depreciation of
securities
available-for-sale           (7,356)               (7,571)
                         15,820,023            15,639,847

Less: Treasury stock,
at cost, 206,368 and
71,940 shares,
respectively              2,879,878               909,457
Unallocated Employee
Stock Ownership
Plan shares; 57,935
and 67,620
shares, respectively        579,350               676,200

Total stockholders'
equity                   12,360,795            14,054,190

Total liabilities and
stockholders' equity    $12,888,055          $ 14,126,302

Sobieski Bancorp, Inc. and Subsidiary
Notes To Consolidated Financial Statements, Continued

O. PARENT COMPANY FINANCIAL INFORMATION, Continued.

STATEMENTS OF INCOME
for the years ended
June 30,1997 and 1996 and
for the period from March 30, 1995
through June 30, 1995


                   1997          1996              1995

Income:
Interest income
 on loans      $   231,082    $   260,652      $   67,422
Dividends
received from
subsidiary       1,449,000        217,350             -
Interest on note
receivable from
subsidiary          51,356         56,366          15,031
Other interest
 income               -               266          11,689

Total income     1,731,438        534,634          94,142

Expenses:
Compensation and
 benefits           57,900         63,900           5,475
Occupancy and
 equipment           6,000          6,000           1,500
Professional fees   37,349         76,098          10,988
Interest on note
 payable to
subsidiary         24,006              -              -
Other operating
expenses           48,159          65,800          16,019

Total
expenses          173,414         211,798          33,982

Income before
income taxes and
equity in
undistributed
earnings of
 subsidiary     1,558,024        322,836          60,160

Income taxes       43,000         42,000          23,830

Income before
equity in undistributed
earnings of
subsidiary      1,515,024        280,836          36,330

Equity in undistributed
 earnings (losses)
of subsidiary  (1,267,835)        54,443         513,805

Net income   $    247,189     $  335,279       $ 550,135








Sobieski Bancorp, Inc. and Subsidiary
Notes To Consolidated Financial Statements, Concluded

O.  PARENT COMPANY FINANCIAL INFORMATION, Concluded.

STATEMENTS OF CASH FLOWS
for the years ended
June 30, 1997 and  1996 and
for the period from March 30, 1995
through June 30, 1995
                         1997           1996          1995

Cash flows from
 operating activities:
Net income          $  247,189   $   335,279    $  550,135
Adjustments to
reconcile net
income to net
cash provided by
operating activities:
Equity in undistributed
losses (earnings) of
subsidiary           1,267,835      (  54,443)     (513,805)
Decrease (increase)
 in other assets      (111,453)         2,597       (35,323)
Increase (decrease)
in accrued income
 taxes                 (51,656)        41,999        23,830
Increase (decrease)
in other liabilities     6,804         (4,334)       10,615

Net cash provided by
operating activities 1,358,719         321,098       35,452

Cash flows from
investing activities:
 Investment in
common stock of
subsidiary                -               -      (4,542,500)
Payments received on
note receivable from
subsidiary             64,400          96,600            -
Net (increase) decrease
 in loans purchased
 from subsidiary and
principal collections
on loans               203,525       282,983    (3,575,706)

Net cash provided
by (used in)investing
activities             267,925       379,583    (8,118,206)

Cash flows from
financing activities:
 Proceeds from note
payable to
subsidiary             500,000          -              -
Proceeds from issuance
of common stock,
 net                      -            -         8,316,103
Purchase of treasury
stock               (2,011,403)     (909,457)          -
Cash dividends        (115,248)         -              -

Net cash provided by
(used in) financing
activities         (1,626,651)      (909,457)    8,316,103

Net increase
(decrease) in cash
and cash equivalents       (7)      (208,776)      233,349

Cash and cash equivalents:
Beginning of period    24,573        233,349           -

End of period     $    24,566   $     24,573    $  233,349


These financial statements should be read in conjunction with the
Company's consolidated financial statements and notes thereto.

                     SOBIESKI BANCORP, INC.
                     STOCKHOLDER INFORMATION

ANNUAL MEETING

        The   Annual  Meeting  of  Stockholders  will  be  held   at   2:00
p.m.,  South  Bend,  Indiana,  time on  October  27,  1997  at  the  office
of   Sobieski   Bancorp,  Inc.,  2930  W.  Cleveland  Road,   South   Bend,
Indiana 46628.

STOCK LISTING

         Sobieski   Bancorp,   Inc.  common  stock   is   traded   on   the
NASDAQ System under the symbol "SOBI".

MARKET AND DIVIDEND INFORMATION

     The  Company's  ability  to  pay  dividends  to  its  stockholders  is
substantially    dependent   upon   the   dividends   it   receives    from
Sobieski   Federal.   Under  current  regulations,   the   Association   is
not   permitted   to  pay  dividends  if  its  regulatory   capital   would
thereby   be   reduced  below  (1)  the  amount  then  required   for   the
liquidation     account    established    in    connection     with     the
Association's   conversion  from  mutual  to  stock  form,   or   (2)   the
regulatory   capital  requirements  imposed  by  the   Office   of   Thrift
Supervision.   Capital   distributions  are   also   subject   to   certain
limitations  based  on  Sobieski  Federal's  net  income.  See  Note  A  of
Notes    to    Consolidated   Financial   Statements.   The   Association's
total   capital   at   June  30,  1997  exceeded   the   amounts   of   its
liquidation account and regulatory capital requirements.

        The  following  table  sets  forth,  for  the  periods  shown,  the
per  share  price  range  of  the  common  stock  and  dividends  paid  for
each   quarter  since  the  common  stock  began  trading  on   March   30,
1995.   The   prices   reflect   interdealer  quotations   without   retail
markup,   markdown  or  commissions,  and  do  not  necessarily   represent
actual transactions.
                    1997           1996              1995
    HIGH LOW Dividends HIGH LOW Dividends HIGH LOW Dividends
 First
 Quarter
  $12.75 $11.75 $   -  $12.19 $11.00 $ -  $ -  $ -   $   -
Second
Quarter
   17.00  12.75    -    13.25  12.00   -    -    -       -
Third
Quarter(1)
   15.50  14.00   0.07  13.00  12.00   -  10.25 10.00    -
Fourth
Quarter
   15.25 14.50    0.07   13.00  12.00   -  11.13 10.00    -

(1) For 1995, reflects the period from March 30, 1995 through
March 31, 1995.

      The  stock  price  information  set forth  in  the  table  above  was
provided   by   the  National  Association  of  Securities  Dealers,   Inc.
Automated   Quotation   System.  The  average  of   the   bid   and   asked
prices   of   Sobieski  Bancorp,  Inc.'s  common  stock   on   August   29,
1997 was $16.4375.

       At   August  29,  1997,  there  were  759,632  shares  of   Sobieski
Bancorp,   Inc.  common  stock  issued  and  outstanding  and  there   were
approximately 399 holders of record.


STOCKHOLDER               AND              GENERAL               INQUIRIES:
TRANSFER AGENT:
Thomas F. Gruber
Registrar and Transfer Co.
President and Chief Executive Officer
10 Commerce Drive
Sobieski Bancorp, Inc.
Cranford, NJ 07016
2930 W. Cleveland Road
South Bend, Indiana 46628
(219) 271-8300

ANNUAL AND OTHER REPORTS
         A   copy  of  Sobieski  Bancorp,  Inc.'s  Annual  Report  on  Form
10-KSB   for   the   year  ended  June  30,  1997,  as   filed   with   the
Securities    and   Exchange   Commission,   may   be   obtained    without
charge   by   contacting   Thomas   F.   Gruber,   President   and    Chief
Executive    Officer,   Sobieski   Bancorp,   Inc.,   2930   W.   Cleveland
Road, South Bend, Indiana (219) 271-8300.

                      SOBIESKI BANCORP, INC.
                      CORPORATE INFORMATION

COMPANY AND BANK ADDRESS

       2930 W. Cleveland Road
       South Bend, Indiana 46628
       Telephone: (219) 271-8300
       Fax: (219) 271-3269

BOARD OF DIRECTORS

Thomas F. Gruber                    Robert J. Urbanski
President and Chief Executive
 Officer                           President and Co-owner,
of Sobieski Bancorp, Inc. and      Trans-Tech Electric,Co.
Sobieski Federal Savings and Loan  and Chairman of the
Association                        Board Sobieski Bancorp,
Inc. and Sobieski Federal
Savings and Loan
                                   Association

Joseph F. Nagy                     Leonard J. Dobosiewicz
 Auditor, St. Joseph               Maintenance Professional
 County

Joseph A. Gorny                    George J. Aranowski
 Owner, Liquor Store               Public Accountant


EXECUTIVE OFFICERS

 Thomas F. Gruber                  Marsha Nafrady
  President and Chief Executive    Secretary and Treasurer
  Officer

Arthur Skale                       Sharon Mrozek
Chief Financial Officer            Vice President of
Operations













INDEPENDENT AUDITORS            GENERAL COUNSEL
SPECIAL COUNSEL
<TABLE>
<S>                        <C>                    <C>
Coopers & Lybrand L.L.P.   Kenneth Fedder, Esq.   Silver,Freedman & Taff, L.L.P.
4101 Edison Lakes Parkway  205 West Jefferson Blvd.1100 New York Avenue, NW
Suite 200                  South Bend, Indiana 46601  Seventh Floor
Mishawaka, Indiana 46545                          Washington, DC 20005
</TABLE>












































                           Exhibit 21
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                 SUBSIDIARIES OF THE REGISTRANT
                                
                                             State of
Percentage
     Parent                             Subsidiary
Incorporation              of Ownership

Sobieski Bancorp, Inc.        Sobieski Federal Savings and Loan
United States            100%
                    Association