<PAGE>   1
                   U.S. SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C.  20549
                                 FORM 10-KSB

(Mark One)

[ x ] Annual report under Section 13 or 15(d) of the Securities Exchange Act of
1934 (Fee required) For the fiscal year ended   December 31, 1997
                                              -------------------

[   ] Transition report under Section 13 or 15(d) of the Securities Exchange
Act of 1934 (No fee required) For the transition period from ______________ to
_______________

Commission file number 333-06581

                        ST. JOSEPH CAPITAL CORPORATION
                        ------------------------------
                (Name of Small Business Issuer in Its Charter)

<TABLE>
<S>                                                             <C>
                   Delaware                                                  35-1977746
---------------------------------------------                   ------------------------------------
(State or Other Jurisdiction of Incorporation or Organization)  (I.R.S. Employer Identification No.)

3820 Edison Lakes Parkway, Mishawaka, Indiana                                   46545
---------------------------------------------                   ------------------------------------
(Address of Principal Executive Offices)                                      (Zip Code)
</TABLE>


                                (219) 273-9700
                           -------------------------
               (Issuer's Telephone Number, Including Area Code)

        Securities registered under Section 12(b) of the Exchange Act:
                                     None.

        Securities registered under Section 12(g) of the Exchange Act:
                                     None.

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 past 12 months
(or for such shorter period that the Issuer was required to file such reports),
and (2) has been subject to such filing requirements for past 90 days.
                              Yes [ x ]  No [   ]

Check if there is no disclosure of delinquent filers in response to Item 405 of
regulation S-B contained in this form, and no disclosure will be contained, to
the best of Issuer'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.  [ x ]

The Issuer's revenues for its most recent fiscal year were $ 2,026,565.

The aggregate market value of the voting stock held by non-affiliates of the
Issuer as of March 5, 1998 was approximately $ 19,216,728.  As of said date,
the Issuer had 1,276,025 shares of Common Stock issued and outstanding.

                     Documents incorporated by reference:
         Part II of Form 10-KSB - 1997 Annual Report to Stockholders.
Part III of Form 10-KSB - Proxy statement for annual meeting of stockholders to
be held May 21, 1998.

Transitional Small Business Disclosure Format (check one):  Yes [   ]  No [ x ]



<PAGE>   2
                                    PART I

ITEM 1.  DESCRIPTION OF BUSINESS

GENERAL

The Company, a Delaware corporation organized in February, 1996, is a bank
holding company which owns all of the capital stock of the St. Joseph Capital
Bank, an Indiana state bank located in Mishawaka, Indiana (the "Bank").  The
Bank commenced business on February 13, 1997.  From the date of the Company's
inception through December 31, 1996, the Company and the Bank conducted no
business other than matters incidental to their organization and opening for
business.  On September 4, 1996, the Company commenced an initial public
offering of 1,265,000 shares of its Common Stock pursuant to a Registration
Statement on Form SB-2 filed with the Securities and Exchange Commission
("SEC") on June 21, 1996, as amended. The Company currently maintains its
offices at 3820 Edison Lakes Parkway, Mishawaka, Indiana, 46545.  The Company's
telephone number is (219) 273-9700.

BUSINESS STRATEGY

The Bank concentrates on the financial services needs of individuals and local
businesses.  A cornerstone of the Bank's business strategy is to emphasize the
Bank's local management and its commitment to the Bank's market area.  The Bank
also expects to establish a high standard of quality in each service it
provides, and the employees of the Bank are expected to emphasize service in
their dealings with clients.  Management believes that the use of
state-of-the-art technology will permit each employee to devote more time and
attention to personal service, respond more quickly to a client's requests and
deliver services in the most timely manner possible.

The Company's goal is to create a "client-driven" organization focused on
providing high value to clients by promptly delivering products and services
matched directly to their needs. The Company expects to gain market share by
developing strong ties to its community.  In this regard, most of the Company's
directors currently hold, and have held in the past, leadership positions in a
number of community organizations, and intend to continue this active
involvement in future years.  Other members of the management team will also be
encouraged to volunteer for such positions.  Additionally, employees are
expected to be active in the civic, charitable and social organizations located
in the Michiana area.

The Bank offers a broad range of deposit services, including checking accounts,
money market accounts, savings accounts and time deposits of various types, as
well as a full range of short to intermediate term personal and commercial
loans.  The Bank makes personal loans directly to individuals for various
purposes, including purchases of automobiles, mobile homes, boats and other
recreational vehicles, home improvements, education and personal investments.
The Bank makes residential mortgage loans and substantially all of such loans
are retained by the Bank and consist of balloon payment and adjustable rate
mortgages.  The Bank also offers other services, including credit cards,
cashiers checks, traveler's checks and automated teller access.

The Bank's initial legal lending limit is approximately $1,500,000.  The Board
of Directors has established an "in-house" limit of $ 1,250,000.  The Board may
from time to time raise or lower the "in-house" limit as it deems appropriate
to comply with safe and sound banking practices and respond to overall economic
conditions.



<PAGE>   3

The Bank's market area is competitive.  There are currently thirteen banks with
multiple offices in the 15 mile radius surrounding the Bank's location.  There
are also five savings associations doing business in the area and numerous
credit unions.  The Bank also faces competition from finance companies,
insurance companies, mortgage companies, securities brokerage firms, money
market funds, loan production offices and other providers of financial
services.  Most of the Bank's competitors have been in business for many years,
have established customer bases, are substantially larger, have substantially
larger lending limits than the Bank and can offer certain services, including
multiple branches and international banking services, that the Bank will be
able to offer only through correspondent banks, if at all.  In addition, most
of these entities have greater capital resources than the Bank, which among
other things, may allow them to price their services at levels more favorable
to clients and to provide larger credit facilities than could the Bank.  The
Company believes that the Bank's legal lending limit of approximately
$1,500,000 is adequate to satisfy the credit needs of most of its clients.

EMPLOYEES

The Bank has 18 full-time employees.  The Company believes that none of its
employees  are covered by a collective bargaining agreement with the Company or
the Bank.  The Company considers its employee relations to be excellent.


SUPERVISION AND REGULATION

GENERAL

Financial institutions and their holding companies are extensively regulated
under federal and state law.  As a result, the growth and earnings performance
of the Company can be affected not only by management decisions and general
economic conditions, but also by the requirements of applicable state and
federal statutes and regulations and the policies of various governmental
regulatory authorities including, but not limited to, the Board of Governors of
the Federal Reserve System (the "FRB"), the Federal Deposit Insurance
Corporation (the "FDIC"), the Indiana Department of Financial Institutions (the
"DFI"), the Internal Revenue Service and state taxing authorities and the
Securities and Exchange Commission (the "SEC"). The effect of such statutes,
regulations and policies can be significant, and cannot be predicted with a
high degree of certainty.

Federal and state laws and regulations generally applicable to financial
institutions, such as the Company and its subsidiary, regulate, among other
things, the scope of business, investments, reserves against deposits, capital
levels relative to operations, the nature and amount of collateral for loans,
the establishment of branches, mergers, consolidations and dividends. The
system of supervision and regulation applicable to the Company and its
subsidiary establishes a comprehensive framework for their respective
operations and is intended primarily for the protection of the FDIC's deposit
insurance funds and the depositors, rather than the shareholders, of financial
institutions.

The following references to material statutes and regulations affecting the
Company and its subsidiary are brief summaries thereof and do not purport to be
complete, and are qualified in their entirety by reference to such statutes and
regulations.  Any change in applicable law or regulations may have a material
effect on the business of the Company and its subsidiary.




<PAGE>   4

RECENT REGULATORY DEVELOPMENTS

PENDING LEGISLATION.  Legislation is pending in the Congress that would allow
bank holding companies to engage in a wider range of nonbanking activities,
including greater authority to engage in securities and insurance activities.
The expanded powers generally would be available to a bank holding company only
if the bank holding company and its bank subsidiaries remain well-capitalized
and well-managed.  Additionally, the pending legislation would eliminate the
federal thrift charter and merge the FDIC's Bank Insurance Fund ("BIF") and
Savings Association Insurance Fund ("SAIF").  At this time, the Company is
unable to predict whether the proposed legislation will be enacted and,
therefore, is unable to predict the impact such legislation may have on the
operations of the Company and the Bank.

THE COMPANY

GENERAL. The Company, as the sole stockholder of the Bank, is a bank holding
company.  As a bank holding company, the Company is registered with, and is
subject to regulation by, the FRB under the BHCA.  In accordance with FRB
policy, the Company is expected to act as a source of financial strength to the
Bank and to commit resources to support the Bank in circumstances where the
Company might not do so absent such policy.  Under the BHCA, the Company is
subject to periodic examination by the FRB and is required to file with the FRB
periodic reports of its operations and such additional information as the FRB
may require. The Company is also subject to regulation by the DFI under Indiana
law.

INVESTMENTS AND ACTIVITIES. Under the BHCA, a bank holding company must obtain
FRB approval before:  (i) acquiring, directly or indirectly, ownership or
control of any voting shares of another bank or bank holding company if, after
such acquisition, it would own or control more than 5% of such shares (unless
it already owns or controls the majority of such shares); (ii) acquiring all or
substantially all of the assets of another bank; or (iii) merging or
consolidating with another bank holding company.  Subject to certain conditions
(including certain deposit concentration limits established by the BHCA), the
FRB may allow a bank holding company to acquire banks located in any state of
the United States without regard to whether the acquisition is prohibited by
the law of the state in which the target bank is located.  In approving
interstate acquisitions, however, the FRB is required to give effect to
applicable state law limitations on the aggregate amount of deposits that may
be held by the acquiring bank holding company and its insured depository
institution affiliates in the state in which the target bank is located
(provided that those limits do not discriminate against out-of-state depository
institutions or their holding companies) or which require that the target bank
have been in existence for a minimum period of time (not to exceed five years)
before being acquired by an out-of-state bank holding company.

The BHCA also prohibits, with certain exceptions, the Company from acquiring
direct or indirect ownership or control of more than 5% of the voting shares of
any company which is not a bank and from engaging in any business other than
that of banking, managing and controlling banks or furnishing services to banks
and their subsidiaries.  The principal exception to this prohibition allows
bank holding companies to engage in, and to own shares of companies engaged in,
certain businesses found by the FRB to be "so closely related to banking ... as
to be a proper incident thereto."  Under current regulations of the FRB, the
Company is permitted to engage in, among other activities, such banking-related
businesses as the operation of a thrift, sales and consumer finance, equipment
leasing, the operation of a computer service bureau, including software
development, and mortgage banking and brokerage.  The BHCA generally does not
place territorial restrictions on the domestic activities of non-bank
subsidiaries of bank holding companies.



<PAGE>   5

Federal law also prohibits acquisition of "control" of a bank, such as the
Bank, or bank holding company, such as the Company, without prior notice to
certain federal bank regulators.  "Control" is defined in certain cases as the
acquisition of 10% of the outstanding shares of a bank or bank holding company.

CAPITAL REQUIREMENTS.   Bank holding companies are required to maintain minimum
levels of capital in accordance with FRB capital adequacy guidelines.  If
capital falls below minimum guideline levels, a bank holding company, among
other things, may be denied approval to acquire or establish additional banks
or non-bank businesses.

The FRB's capital guidelines establish the following minimum regulatory capital
requirements for bank holding companies:  a risk-based requirement expressed as
a percentage of total risk-weighted assets, and a leverage requirement
expressed as a percentage of total assets.  The risk-based requirement consists
of a minimum ratio of total capital to total risk-weighted assets of 8%, at
least one-half of which must be Tier 1 capital.  The leverage requirement
consists of a minimum ratio of Tier 1 capital to total assets of 3% for the
most highly rated companies, with minimum requirements of 4% to 5% for all
others.  For purposes of these capital standards, Tier 1 capital consists
primarily of permanent stockholders' equity less intangible assets (other than
certain mortgage servicing rights and purchased credit card relationships) and
total capital means Tier 1 capital plus certain other debt and equity
instruments which do not qualify as Tier 1 capital and a portion of the
Company's allowance for loan and lease losses.

The risk-based and leverage standards described above are minimum requirements,
and higher capital levels will be required if warranted by the particular
circumstances or risk profiles of individual banking organizations. For
example, the FRB's capital guidelines contemplate that additional capital may
be required to take adequate account of, among other things, interest rate
risk, or the risks posed by concentrations of credit, nontraditional activities
or securities trading activities.  Further, any banking organization
experiencing or anticipating significant growth would be expected to maintain
capital ratios, including tangible capital positions (i.e., Tier 1 capital less
all intangible assets), well above the minimum levels.

Under the FRB's guidelines, the capital standards described above apply on a
consolidated basis to bank holding companies that have more than $150 million
in total consolidated assets, but generally apply on a bank-only basis to bank
holding companies, like the Company, that have less than $150 million in total
consolidated assets.  Nevertheless, as of December 31, 1997, the Company had
regulatory capital in excess of the FRB's minimum requirements, with a total
risk-based capital ratio of 47.5%, a Tier 1 risk-based capital ratio of 46.3%
and a leverage ratio of 23.8%.

DIVIDENDS. The FRB has issued a policy statement with regard to the payment of
cash dividends by bank holding companies.  In the policy statement, the FRB
expressed its view that a bank holding company should not pay cash dividends
which exceed its net income or which can only be funded in ways that weaken the
bank holding company's financial health, such as by borrowing.  Additionally,
the FRB possesses enforcement powers over bank holding companies and their
non-bank subsidiaries to prevent or remedy actions that represent unsafe or
unsound practices or violations of applicable statutes and regulations.  Among
these powers is the ability to proscribe the payment of dividends by banks and
bank holding companies.



<PAGE>   6

In addition to the restrictions on dividends that may be imposed by the FRB,
the Delaware General Corporation Law (the "DGCL") allows the Company to pay
dividends only out of its surplus (as defined and computed in accordance with
the provisions of the DGCL), or if the Company has no such surplus, out of its
net profits for the fiscal year in which the dividend is declared and/or the
preceding fiscal year.

THE BANK

GENERAL.  The Bank is an Indiana-chartered bank, the deposit accounts of which
are insured by the BIF of the FDIC.  As a BIF-insured, Indiana-chartered bank,
the Bank is subject to the examination, supervision, reporting and enforcement
requirements of the DFI, as the chartering authority for Indiana banks, and the
FDIC, as administrator of the BIF.

DEPOSIT INSURANCE.  As an FDIC-insured institution, the Bank is required to pay
deposit insurance premium assessments to the FDIC.  The FDIC has adopted a
risk-based assessment system under which all insured depository institutions
are placed into one of nine categories and assessed insurance premiums based
upon their respective levels of capital and results of supervisory evaluations.
Institutions classified as well-capitalized (as defined by the FDIC) and
considered healthy pay the lowest premium while institutions that are less than
adequately capitalized (as defined by the FDIC) and considered of substantial
supervisory concern pay the highest premium.  Risk classification of all
insured institutions is made by the FDIC for each semi-annual assessment
period.

For the year ended December 31, 1997, BIF assessments ranged from 0% of
deposits to 0.27% of deposits.  For the semi-annual assessment period beginning
January 1, 1998, BIF assessment rates will continue to range from 0% of
deposits to 0.27% of deposits.

The FDIC may terminate the deposit insurance of any insured depository
institution if the FDIC determines, after a hearing, that the institution has
engaged or is engaging in unsafe or unsound practices, is in an unsafe or
unsound condition to continue operations or has violated any applicable law,
regulation, order, or any condition imposed in writing by, or written agreement
with, the FDIC.  The FDIC may also suspend deposit insurance temporarily during
the hearing process for a permanent termination of insurance if the institution
has no tangible capital.  Management of the Company is not aware of any
activity or condition that could result in termination of the deposit insurance
of the Bank.

FICO ASSESSMENTS.  Since 1987, a portion of the deposit insurance assessments
paid by SAIF members has been used to cover interest payments due on the
outstanding obligations of the FICO, the entity created to finance the
recapitalization of the Federal Savings and Loan Insurance Corporation, the
SAIF's predecessor insurance fund.  Pursuant to federal legislation enacted
September 30, 1996, commencing January 1, 1997, both SAIF members and BIF
members became subject to assessments to cover the interest payments on
outstanding FICO obligations.  Such FICO assessments are in addition to amounts
assessed by the FDIC for deposit insurance.  Until January 1, 2000, the FICO
assessments made against BIF members may not exceed 20% of the amount of the
FICO assessments made against SAIF members.  Between January 1, 2000 and the
maturity of the outstanding FICO obligations in 2019, BIF members and SAIF
members will share the cost of the interest on the FICO bonds on a pro rata
basis.  During the year ended December 31, 1997, the FICO assessment rate for
SAIF members was approximately  0.063% of deposits while the FICO assessment
rate for BIF members was approximately 0.013% of deposits.  During the year
ended December 31, 1997, the Bank paid FICO assessments totaling $ 1,293.81.



<PAGE>   7

CAPITAL REQUIREMENTS. The FDIC has established the following minimum capital
standards for state-chartered insured non-member banks, such as the Bank: a
leverage requirement consisting of a minimum ratio of Tier 1 capital to total
assets of 3% for the most highly-rated banks with minimum requirements of 4% to
5% for all others, and a risk-based capital requirement consisting of a minimum
ratio of total capital to total risk-weighted assets of 8%, at least one-half
of which must be Tier 1 capital. For purposes of these capital standards, Tier
1 capital and total capital consist of substantially the same components as
Tier 1 capital and total capital under the FRB's capital guidelines for bank
holding companies (see "--The Company--Capital Requirements").

The capital requirements described above are minimum requirements.  Higher
capital levels will be required if warranted by the particular circumstances or
risk profiles of individual institutions.  For example, the regulations of the
FDIC provide that additional capital may be required to take adequate account
of, among other things, interest rate risk or the risks posed by concentrations
of credit, nontraditional activities or securities trading activities.

During the year ended December 31, 1997, the Bank was not required by the FDIC
to increase its capital to an amount in excess of the minimum regulatory
requirements.  As of December 31, 1997, the Bank exceeded its minimum
regulatory capital requirements with a total risk-based capital ratio of 40.2%,
a Tier 1 risk-based capital ratio of 38.9% and a leverage ratio of 20.0%.

Federal law provides the federal banking regulators with broad power to take
prompt corrective action to resolve the problems of undercapitalized
institutions.  The extent of the regulators' powers depends on whether the
institution in question is "well capitalized," "adequately capitalized,"
"undercapitalized," "significantly undercapitalized" or "critically
undercapitalized."  Depending upon the capital category to which an institution
is assigned, the regulators' corrective powers include: requiring the
submission of a capital restoration plan; placing limits on asset growth and
restrictions on activities; requiring the institution to issue additional
capital stock (including additional voting stock) or to be acquired;
restricting transactions with affiliates; restricting the interest rate the
institution may pay on deposits; ordering a new election of directors of the
institution; requiring that senior executive officers or directors be
dismissed; prohibiting the institution from accepting deposits from
correspondent banks; requiring the institution to divest certain subsidiaries;
prohibiting the payment of principal or interest on subordinated debt; and
ultimately, appointing a receiver for the institution.

DIVIDENDS.  Indiana law prohibits the Bank from paying dividends in an amount
greater than its undivided profits.  The Bank is, however, required to obtain
the approval of the DFI for the payment of any dividend if the aggregate amount
of all dividends paid by the Bank during any calendar year, including the
proposed dividend, would exceed the sum of: (i) the total net profits of the
Bank for that year; and (ii) the retained net profits of the Bank for the
previous two years.  Indiana law defines, "net profits" to mean the sum of all
earnings from current operations plus actual recoveries on loans, investments
and other assets, less the sum of all current operating expenses, actual
losses, accrued dividends on preferred stock, if any, and all federal, state
and local taxes.

The payment of dividends by any financial institution or its holding company is
affected by the requirement to maintain adequate capital pursuant to applicable
capital adequacy guidelines and regulations, and a financial institution
generally is prohibited from paying any dividends if, following payment
thereof, the institution would be undercapitalized.  As described above, the
Bank exceeded its minimum capital requirements under applicable guidelines as
of December 31, 1997.  As of December 31, 1997, approximately $ 0.0 million was
available to be paid as dividends to the Company by the Bank.  Notwithstanding
the availability of funds for dividends, however,




<PAGE>   8

the FDIC may prohibit the payment of any dividends by the Bank if the FDIC
determines such payment would constitute an unsafe or unsound practice.

INSIDER TRANSACTIONS.  The Bank is subject to certain restrictions imposed by
the Federal Reserve Act on extensions of credit by the Company and its
subsidiary, on investments in the stock or other securities of the Company and
its subsidiary and the acceptance of the stock or other securities of the
Company or its subsidiary as collateral for loans.  Certain limitations and
reporting requirements are also placed on extensions of credit by the Bank to
its directors and officers, to directors and officers of the Company and its
subsidiary, to principal stockholders of the Company, and to "related
interests" of such directors, officers and principal stockholders.  In
addition, federal law and regulations may affect the terms upon which any
person becoming a director or officer of the Company or its subsidiary or a
principal stockholder of the Company may obtain credit from banks with which
the Bank  maintains a correspondent relationship.

SAFETY AND SOUNDNESS STANDARDS.  The federal banking agencies have adopted
guidelines which establish operational and managerial standards to promote the
safety and soundness of federally insured depository institutions.  The
guidelines set forth standards for internal controls, information systems,
internal audit systems, loan documentation, credit underwriting, interest rate
exposure, asset growth, compensation, fees and benefits, asset quality and
earnings.  In general, the guidelines prescribe the goals to be achieved in
each area, and each institution is responsible for establishing its own
procedures to achieve those goals.  If an institution fails to comply with any
of the standards set forth in the guidelines, the institution's primary federal
regulator may require the institution to submit a plan for achieving and
maintaining compliance.  The preamble to the guidelines states that the
agencies expect to require a compliance plan from an institution whose failure
to meet one or more of the guidelines is of such severity that it could
threaten the safety and soundness of the institution.  Failure to submit an
acceptable plan, or failure to comply with a plan that has been accepted by the
appropriate federal regulator, would constitute grounds for further enforcement
action.

BRANCHING AUTHORITY. Indiana banks, such as the Bank, have the authority under
Indiana law to establish branches anywhere in the State of Indiana, subject to
receipt of all required regulatory approvals.

Effective June 1, 1997 (or earlier if expressly authorized by applicable state
law), the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994
(the "Riegle-Neal Act") allows banks to establish interstate branch networks
through acquisitions of other banks, subject to certain conditions, including
certain limitations on the aggregate amount of deposits that may be held by the
surviving bank and all of its insured depository institution affiliates.  The
establishment of de novo interstate branches or the acquisition of individual
branches of a bank in another state (rather than the acquisition of an
out-of-state bank in its entirety) is allowed by the Riegle-Neal Act only if
specifically authorized by state law.  The legislation allows individual states
to "opt-out" of certain provisions of the Riegle-Neal Act by enacting
appropriate legislation prior to June 1, 1997.  Indiana has enacted legislation
permitting interstate mergers subject to certain conditions.  Additionally,
Indiana law allows out-of-state banks to acquire individual branch offices in
Indiana and to establish de novo branches in Indiana subject to certain
conditions, including a requirement that the laws of the state in which the
out-of-state bank is headquartered permit Indiana banks authority to acquire or
establish branches in such state.

STATE BANK ACTIVITIES.  Under federal law and FDIC regulations, FDIC insured
state banks are prohibited, subject to certain exceptions, from making or
retaining equity investments of a type, or in an amount, that are not
permissible for a national bank.  Federal law and FDIC regulations




<PAGE>   9

also prohibit FDIC insured state banks and their subsidiaries, subject to
certain exceptions, from engaging as principal in any activity that is not
permitted for a national bank or its subsidiary, respectively, unless the bank
meets, and continues to meet, its minimum regulatory capital requirements and
the FDIC determines the activity would not pose a significant risk to the
deposit insurance fund of which the bank is a member.  Impermissible
investments and activities must be divested or discontinued within certain time
frames set by the FDIC.  These restrictions have not had, and are not currently
expected to have, a material impact on the operations of the Bank.

FEDERAL RESERVE SYSTEM.  FRB regulations, as presently in effect, require
depository institutions to maintain noninterest earning reserves against their
transaction accounts (primarily NOW and regular checking accounts), as follows:
for transaction accounts aggregating $47.8 million or less, the reserve
requirement is 3% of total transaction accounts; and for transaction accounts
aggregating in excess of $47.8 million, the reserve requirement is $1.434
million plus 10% of the aggregate amount of total transaction accounts in
excess of $47.8 million.  The first $4.7 million of otherwise reservable
balances are exempted from the reserve requirements.  These reserve
requirements are subject to annual adjustment by the FRB.  The Bank is in
compliance with the foregoing requirements.





<PAGE>   10

ITEM 1.  BUSINESS-STATISTICAL DISCLOSURE

I.  DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY;
    INTEREST RATES AND INTEREST DIFFERENTIAL

    A.   The following are the average balance sheets for the years ending
         December 31:


<TABLE>
<CAPTION>
                                                    ----------------------1997--------------------
                                                                          ----
                                                    Average                                Average
                                                    Balance               Interest          Rate
                                                    -------               --------         -------
<S>                                                 <C>                  <C>               <C>
                                                                (Dollars in thousands)
ASSETS
Interest-earning assets
    Federal funds sold                             $ 3,132              $    177            5.65%
    Interest-bearing deposits in other
     financial institutions                            617                    41            6.65
    Securities available for sale-taxable (1)       15,414                   920            5.97
    Loans receivable (2)                             9,895                   884            8.93
                                                   -------              --------
      Total interest-earning assets                 29,058                 2,022            6.96%

Noninterest-earning assets
    Cash and due from banks                          1,386
    Allowance for loan losses                         (147)
    Premises and equipment, net                        681
    Accrued interest receivable and
     other assets                                      305
                                                   -------

                                                   $31,283
                                                   =======

LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities
    Savings, NOW and money markets                  $7,873              $    398            5.06%
    Certificates of deposits                         7,583                   437            5.76
    Securities sold under agreements
     to repurchase                                   2,153                   107            4.97
                                                   -------              --------
      Total interest-bearing liabilities            17,609                   942            5.35%
                                                                        --------

Noninterest-bearing liabilities
    Demand deposits                                  1,904
    Accrued interest payable and
     other liabilities                                 142
                                                   -------
                                                    19,655


Shareholders' equity                                11,628
                                                   -------

                                                   $31,283
                                                   =======

Net interest income/spread                                              $  1,080            1.61%
                                                                        ========          ======

Net interest income as a percent
 of average interest earning assets                                                         3.72%
                                                                                          ======
</TABLE>

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

(1) Securities balances represent daily average balances for the fair value of
    securities. The average rate is calculated based on the daily average
    balance for the amortized cost of securities.
(2) Includes fees on loans. The inclusion of loan fees does not have a material
    effect on the average interest rate.

<PAGE>   11

I.  DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY;
    INTEREST RATES AND INTEREST DIFFERENTIAL (Continued)



<TABLE>
<CAPTION>
                                               ----------------------1996-------------------------
                                                                     ----
                                                    Average                                Average
                                                    Balance               Interest          Rate
                                                    -------               --------         -------
<S>                                                 <C>                   <C>              <C>
                                                             (Dollars in thousands)
ASSETS
Interest-earning assets
    Securities available for sale-taxable (1)      $ 4,127                 $   197           4.77%
                                                   -------                 -------
      Total interest-earning assets                  4,127                     197           4.77%

Noninterest-earning assets
    Cash and due from banks                            658
    Accrued interest receivable and
     other assets                                      107
                                                   -------

                                                   $ 4,892
                                                   =======

LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities
    Borrowings                                     $   133                 $     8           6.02%
                                                   -------                 -------
      Total interest-bearing liabilities               133                       8           6.02%
                                                                           -------

Noninterest-bearing liabilities
    Accrued interest payable and
     other liabilities                                   5
                                                   -------
                                                       138

Shareholders' equity                                 4,754
                                                   -------

                                                   $ 4,892
                                                   =======

Net interest income/spread                                                 $   189          (1.25)%
                                                                           =======        =======

Net interest income as a percent
 of average interest earning assets                                                          4.58%
                                                                                          =======
</TABLE>

--------------------------------------------------------------------------------
(1) Securities balances represent daily average balances for the fair value of
    securities. The average rate is calculated based on the daily average
    balance for the amortized of securities.

<PAGE>   12

I.  DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY;
    INTEREST RATES AND INTEREST DIFFERENTIAL (Continued)

    B.  The following tables set forth the effect of volume and rate changes on
        interest income and expense for the periods indicated.  For purposes of
        these tables, changes in interest due to volume and rate were
        determined as follows:

        Volume Variance - change in volume multiplied by the previous year's
        rate. Rate Variance - change in rate multiplied by the previous year's
        volume. Rate/Volume Variance - change in volume multiplied by the
        change in rate.  This variance was allocated to volume variance and
        rate variance in proportion to the relationship of the absolute dollar
        amount of the change in each.




<TABLE>
<CAPTION>
                                            Total
                                          Variance          Variance Attributable To
                                                          ----------------------------
                                          1997/1996        Volume             Rate
                                          ---------        ------             ----
                                                         (In thousands)
<S>                                       <C>             <C>             <C>
INTEREST INCOME
   Federal funds sold                     $     177       $     177       $          -
   Interest-bearing deposits in other
     financial institutions                      41              41                  -
   Securities available for sale-taxable        723             662                 61
   Loans receivable                             884             884                  -
                                          ---------       ---------       ------------
                                              1,825           1,764                 61

INTEREST EXPENSE
   Savings, NOW and money markets               398             398                  -
   Certificates of deposits                     437             437                  -
   Securities sold under agreements
     to repurchase                              107             107                  -
   Borrowings                                    (8)             (8)                 -
                                          ---------       ---------       ------------
                                                934             934                  -
                                          ---------       ---------       ------------

NET INTEREST INCOME                       $     891       $     830       $         61
                                          =========       =========       ============
</TABLE>





<PAGE>   13

II.  INVESTMENT PORTFOLIO

     A.  The carrying value of securities available for sale as of December 31
         are summarized as follows:

<TABLE>
<CAPTION>
                                                    1997     1996
                                                   -------  -------
<S>                                                <C>      <C>
                                                   (In thousands)

U.S. Government and federal agencies               $22,190  $10,128
Obligations of states and
 political subdivisions                                161        -
                                                   -------  -------

                                                   $22,351  $10,128
                                                   =======  =======
</TABLE>



     B.  The maturity distribution and weighted average interest rates of
         securities available for sale at December 31, 1997 are as follows:


<TABLE>
<CAPTION>

                                      ----------------Maturing-----------------
                                                      --------
                                               (Dollars in thousands)
                                                              After One Year
                                            Within              But Within
                                           One Year             Five Years
                                           --------             ----------
                                       Amount    Rate        Amount       Rate
                                       ------    ----        ------       ----
 <S>                                  <C>       <C>       <C>             <C>
 U.S. Government and federal
  agencies                            $  1,843   5.78%      $  20,347     6.15%
 Obligations of states and political
 subdivisions                              161   6.37               -        -
                                      --------              ---------

                                      $  2,004   5.83%      $  20,347     6.15%
                                      ========              =========
</TABLE>



         The weighted average interest rates are based on coupon rates for
         securities purchased at par value and on effective interest rates
         considering amortization or accretion if the securities were purchased
         at a premium or discount.

     C.  Excluding those holdings of the investment portfolio in U.S. Treasury
         securities and other agencies of the U.S. Government, there were no
         securities of any one issuer which exceeded 10% of the shareholders'
         equity of the Company at December 31, 1997.




<PAGE>   14

III. LOAN PORTFOLIO


     A.  Types of Loans - Total loans on the balance sheet are comprised
         of the following classifications at December 31 for the year
         indicated:



<TABLE>
<CAPTION>
                                                                   1997
                                                                   ----
                                                              (In thousands)
         <S>                                                      <C>
         Commercial                                               $14,733
         Residential real estate mortgage, net                      6,376
         Installment loans to individuals                           1,242
                                                                  -------

                                                                  $22,351
                                                                  =======
</TABLE>


         Concentrations of Credit Risk:  The Company grants commercial,
         residential real estate mortgage and installment loans to individuals
         mainly in north central Indiana.  Commercial loans include loans
         collateralized by business assets.  Commercial loans make up
         approximately 66% of the loan portfolio and the loans are expected to
         be repaid from cash flow from operations of businesses.  Residential
         real estate mortgage loans make up approximately 28% of the loan
         portfolio and are collateralized by residential real estate.
         Installment loans to individuals make up approximately 6% of the loan
         portfolio and are primarily collateralized by consumer assets.

     B.  Maturities and Sensitivities of Loans to Changes in Interest Rates -
         The following table shows the amounts of commercial loans outstanding
         as of December 31, 1997 which, based on remaining scheduled repayments
         of principal, are due in the periods indicated. Also, the amounts have
         been classified according to sensitivity to changes in interest rates
         for commercial loans due after one year. (Variable-rate loans are
         those loans with floating or adjustable interest rates.)


<TABLE>
<CAPTION>
                       Maturing                                Commercial
                       --------                                ----------
         <S>                                                 <C>
                                                             (In thousands)

         Within one year                                        $   5,785
         After one year but within five years                       7,991
         After five years                                             957
                                                                ---------

                                                                $  14,733
                                                                =========
</TABLE>


<TABLE>
<CAPTION>
                                       Commercial Loan Interest Sensitivity
                                       ------------------------------------
                                                   (In thousands)
                                       Fixed         Variable
                                        Rate           Rate          Total
                                        ----           ----          -----
         <S>                          <C>           <C>             <C>
         Due after one year but
          within five years           $  5,339       $   2,652      $  7,991
         Due after five years              553             404           957
                                      --------       ---------      --------

                                      $  5,892       $   3,056      $  8,948
                                      ========       =========      ========
</TABLE>




<PAGE>   15

III. LOAN PORTFOLIO (Continued)

     C.   Risk Elements

          1.  Nonaccrual, Past Due, Restructured and Impaired Loans - The
              following schedule summarizes nonaccrual, past due, restructured
              and impaired loans at December 31.


<TABLE>
<CAPTION>
                                                                              1997
                                                                              ----
                                                                         (In thousands)
              <S>                                                          <C>
              (a) Loans accounted for on a nonaccrual basis                  $     -

              (b) Accruing loans which are contractually past due 90
                   days or more as to interest or principal payments               -

              (c) Loans not included in (a) or (b) which are
                   "Troubled Debt Restructurings" as defined by
                   Statement of Financial Accounting Standards No. 15              -

              (d)  Other loans defined as "impaired"                               -
                                                                             -------

                                                                             $     -
                                                                             =======
</TABLE>


              Management believes the allowance for loan losses at December
              31, 1997 is adequate to absorb any losses on nonperforming loans,
              as the allowance balance is maintained by management at a level
              considered adequate to cover losses that are currently anticipated
              based on past loss experience, general economic conditions,
              information about specific borrower situations including their
              financial position and collateral values, and other factors and
              estimates which are subject to change over time.


<TABLE>
<CAPTION>
                                                                            1997
                                                                            ----
                                                                       (In thousands)
              <S>                                                         <C>
              Gross interest income that would have been
              recorded in 1997 on nonaccrual loans outstanding
              at December 31, 1997 if the loans had been current,
              in accordance with their original terms and had
              been outstanding throughout the period or since
              origination if held for part of the period                   $      -

              Interest income actually recorded on nonaccrual
              loans and included in net income for the period                     -
                                                                           --------

              Interest income not recognized during the period             $      -
                                                                           ========
</TABLE>




<PAGE>   16
III.  LOAN PORTFOLIO (Continued)

            Discussion of the Nonaccrual Policy

            The accrual of interest income is discontinued when the collection
            of a loan or interest, in whole or in part, is doubtful.  When
            interest accruals are discontinued, interest income accrued in the
            current period is reversed.  While loans which are past due 90 days
            (180 days for residential real estate mortgage loans) or more as to
            interest or principal payments are considered for nonaccrual
            status, management may elect to continue the accrual of interest
            when the estimated net realizable value of collateral, in
            management's judgment, is sufficient to cover the principal balance
            and accrued interest.

       2.   Potential Problem Loans

            As of December 31, 1997, in addition to the $-0- of loans reported
            under Item III, C.1., there are approximately $-0- in other
            outstanding loans where known information about possible credit
            problems of the borrowers causes management to have serious doubts
            as to the ability of such borrowers to comply with the present loan
            repayment terms and which may result in disclosure of such loans
            pursuant to Item III. C.1 at some future date.  Consideration was
            given to loans classified for regulatory purposes as loss,
            doubtful, substandard, or special mention that have not been
            disclosed in Section 1 above.  To the extent that such loans are
            not included in the $-0- potential problem loans described above,
            management believes that such loans will not materially impact
            future operating results, liquidity, or capital resources.

       3.   Foreign Outstandings

            None

       4.   Loan Concentrations

            None

D.   Other Interest-Bearing Assets

     There are no other interest-bearing assets as of December 31, 1997 which
     would be required to be disclosed under Item III. C.1 or 2 if such assets
     were loans.




<PAGE>   17

IV.  SUMMARY OF LOAN LOSS EXPERIENCE

     A.  The following schedule presents an analysis of the allowance for loan
         losses, average loan data and related ratios for the year ended
         December 31:


<TABLE>
<CAPTION>
                                                                   1997
                                                                   ----
                                                         (Dollars in thousands)
     <S>                                                       <C>
     LOANS
           Loans outstanding at end of period                    $  22,351
                                                                 =========

           Average loans outstanding during period               $   9,895
                                                                 =========

     ALLOWANCE FOR LOAN LOSSES

           Balance at beginning of period                        $       -

           Loans charged-off
              Commercial                                                 -
              Residential real estate mortgage                           -
              Installment loans to individuals                           -
                                                                 ---------
                                                                         -
           Recoveries of loans previously charged-off
              Commercial                                                 -
              Residential real estate mortgage                           -
              Installment loans to individuals                           -
                                                                 ---------
                                                                         -
                                                                 ---------
     Net loans charged-off                                               -

     Provision for loan losses                                         360
                                                                 ---------

     Balance at end of period                                    $     360
                                                                 =========

     Ratio of net charge-offs during the period to
      average loans outstanding during the period                        -%
                                                                 =========
</TABLE>



         The allowance for loan losses balance and the provision for loan
         losses are judgmentally determined by management based upon periodic
         reviews of the loan portfolio.  In addition, management considered the
         level of charge-offs on loans as well as the fluctuations of
         charge-offs and recoveries on loans including the factors which caused
         these changes. Estimating the risk of loss and the amount of loss is
         necessarily subjective.  Accordingly, the allowance is maintained by
         management at a level considered adequate to cover losses that are
         currently anticipated based on past loss experience, general economic
         conditions, information about specific borrower situations including
         their financial position and collateral values and other factors and
         estimates which are subject to change over time.



<PAGE>   18

IV.  SUMMARY OF LOAN LOSS EXPERIENCE (Continued)

     B.  The following schedule is a breakdown of the allowance for loan
         losses allocated by type of loan and related ratios.

<TABLE>
<CAPTION>
                                                   December 31, 1997
                                             Allocation of the Allowance
                                           --------for Loan Losses---------
                                                   ---------------
                                                         Percentage of Loans
                                                           In Each Category
                                             Allowance         to Total
                                               Amount            Loans
                                               ------            -----
                                                (Dollars in thousands)
     <S>                                      <C>             <C>

     Commercial                                 $ 151             65.9%
     Residential real estate mortgage              49              28.5
     Installment loans to individuals              14               5.6
     Unallocated                                  146                 -
                                                -----          --------

                                                $ 360             100.0%
                                                =====          ========
</TABLE>


         While management's periodic analysis of the adequacy of the allowance
         for loan losses may allocate portions of the allowance for specific
         problem loan situations, the entire allowance is available for any
         loan charge-offs that occur.


V.  DEPOSITS

    The average amount of deposits and average rates paid are summarized as
    follows for the years ended December 31:

<TABLE>
<CAPTION>
                                                       1 9 9 7
                                                       -------
                                                 Average      Average
                                                 Amount        Rate
                                                 ------        ----
                                               (Dollars in thousands)
    <S>                                        <C>          <C>

    Savings,  NOW and money markets              $ 7,873        5.06%
    Certificates of deposits                       7,583        5.76
    Demand deposits (noninterest-bearing)          1,904           -
                                                 -------

                                                 $17,360
                                                 =======
</TABLE>


    Maturities of time certificates of deposit and other time deposits of
    $100,000 or more outstanding at December 31, 1997 are summarized as
    follows:


<TABLE>
<CAPTION>
                                                          Amount
                                                          ------
                                                      (In thousands)

    <S>                                                   <C>
    Three months or less                                  $ 6,607
    Over three months and through six months                6,316
    Over six months and through twelve months               1,722
    Over twelve months                                        605
                                                          -------

                                                          $15,250
                                                          =======
</TABLE>



<PAGE>   19

VI. RETURN ON EQUITY AND ASSETS


    The ratio of net income (loss) to average shareholders' equity and average
    total assets and certain other ratios are as follows:


<TABLE>
<CAPTION>
                                                   1997         1996
                                                   ----         ----
   <S>                                          <C>          <C>
                                                 (Dollars in thousands)

   Average total assets                         $    31,283  $     4,892
                                                ===========  ===========

   Average shareholders'
    equity (1)                                  $    11,628  $     4,754
                                                ===========  ===========

   Net income (loss)                            $      (762) $      (290)
                                                ===========  ===========

   Cash dividends declared                      $         -  $         -
                                                ===========  ===========

   Return on average total assets                     (2.44)%      (5.93)%

   Return on average shareholders' equity             (6.55)%      (6.10)%

   Dividend payout percentage                             - %          - %

   Average shareholders'
    equity to average total assets                    37.17%       97.18%
</TABLE>


   (1)   Net of average unrealized appreciation or depreciation on securities
         available for sale.


VII.  SHORT-TERM BORROWINGS

      The Company did not have any category of short-term borrowings for which
      the average balance outstanding during the reported periods was 30
      percent or more of shareholders' equity at the end of the reported
      periods.




<PAGE>   20

ITEM 2.  DESCRIPTION OF PROPERTY

The Company leases premises for the Bank's main office at 3820 Edison Lakes
Parkway, Mishawaka, Indiana, which also serve as the Company's corporate
headquarters.  The premises consist of a 9,600 square foot, two-story brick
building constructed in 1988 with parking for approximately 57 vehicles. Until
such time as the Bank needs the space, the Company may sublet approximately
1,200 square feet of the second floor if a suitable tenant is located, although
none has yet been identified.  The building is located on a major thoroughfare
in Mishawaka, approximately 2 miles south of Interstate 80 and near the city's
population center.

The lease for the building has a primary term of five years with an option for
one five-year extension, and permits the Company, the Bank or an affiliate of
either to purchase the property for $800,000 at any time during the term of the
lease.  Under the lease, the aggregate annual lease payment was $67,500 for
1997 and increases by $14,500 in 1998, $4,500 in 1999 and $9,500 in each
succeeding year during the initial five year term.  It also increases by 5% per
year over and above the rental payment due in year five in each year of the
five year option period, if exercised.

The Bank has four interior teller stations and a night depository facility.
The Company believes the facility will be adequate to meet the needs of the
Company and the Bank for the foreseeable future.


ITEM 3.  LEGAL PROCEEDINGS

The Company is not aware of any legal proceedings against it or the Bank.


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of the Company's security holders during
the fourth quarter of 1997.


                                   PART II


ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

The Company's Common Stock was held by approximately 67 holders of record as of
March 5, 1998, and is quoted on the OTC Bulletin Board under the symbol "SJOE."
To date there has been no regular and liquid market for the common stock, and
there can be no assurance that a regular and liquid trading market will develop
in the foreseeable future.

The following table shows, for the periods indicated, the high and low bid
quotations per share of transactions in the Company's common stock as quoted on
the OTC Bulletin Board.  Certain other private transactions may have occurred
during the periods indicated of which the Company has no knowledge.  The
following prices represent inter-dealer prices without retail markups,
markdowns or commissions.



<PAGE>   21

<TABLE>
<CAPTION>
                                     Per Share           Per Share
                                     Bid Prices          Dividends
         1996                      High        Low       Declared
         ----                      ----        ---       ---------
    <S>                           <C>         <C>          <C>
    March 31, 1996                  N/A         N/A          N/A
    June 30, 1996                   N/A         N/A          N/A
    September 30, 1996            $10.625     $10.000 *       -
    December 31, 1996              10.750      10.625         -

          1997
          ----
    March 31, 1997                $12.125     $10.750         -
    June 30, 1997                  13.375      12.125         -
    September 30, 1997             16.000      13.000         -
    December 31, 1997              17.250      16.000         -
</TABLE>


    * Represents initial public offering price on September 4, 1996.

No cash or other dividends were declared or paid during the fiscal year ended
December 31, 1997 or 1996.   The Company expects that all Company and Bank
earnings, if any, will be retained to finance the growth of the Company and the
Bank and that no cash dividends will be paid for the foreseeable future. If and
when dividends are declared, the Company will probably be largely dependent
upon dividends paid by the Bank for funds to pay dividends on the Common Stock.
It is also possible, however, that the Company will pay dividends in the
future generated from investment income and other activities of the Company.

Under Indiana law, the Bank will be restricted as to the maximum amount of
dividends it may pay on its Common Stock.  The Indiana Act provides that an
Indiana bank may not pay dividends in an amount greater than its undivided
profits or if the payment of dividends would impair such bank's capital.
Moreover, the approval of the DFI is required for the payment of any dividend
if the aggregate amount of all dividends paid by the Bank during such calendar
year, including the proposed dividend, would exceed the sum of (i) the total
net profits (as defined in the Indiana Act) of the Bank for that year; and (ii)
the retained net profits of the Bank for the previous two years.  The DFI and
the FDIC are also authorized under certain circumstances to prohibit the
payment of dividends by the Bank.  In the case of the Company, the Delaware
General Corporation Law would allow the Company to pay dividends only out of
its surplus, or if none, out of the current and/or the past fiscal year's net
profits.  Further restrictions on dividends may also be imposed by the Federal
Reserve Board.


ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF
         OPERATION

The information on pages 8 - 15 of the Company's 1997 Annual Report to
Stockholders under the caption "Management's Discussion and Analysis of
Financial Condition and Results of Operations" is incorporated by reference.


ITEM 7.  FINANCIAL STATEMENTS

The following financial statements and related notes from the 1997 Annual
Report to Stockholders are incorporated by reference:




<PAGE>   22

<TABLE>
<CAPTION>
                                                                Annual Report
                                                                   Page No.
                                                                   --------
<S>                                                                <C>
Report of Independent Auditors                                        16
Consolidated Balance Sheets                                           17
Consolidated Statements of Income                                     18
Consolidated Statements of Changes in Shareholders' Equity            19
Consolidated Statements of Cash Flows                                 20
Notes to Consolidated Financial Statements                          21 - 30
</TABLE>


ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

None.


                                   PART III


ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS,
        COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

A.   Directors.  The information on pages 2 - 3 of  the 1997 proxy statement
     under the caption "Election of Directors" is incorporated by reference.

B.   Executive Officers.  The Company's executive officers who are not also
     directors are as follows:

EDWARD R. POOLEY, Senior Vice President  and Chief Financial Officer of the
Company and Senior Vice President and Cashier of the Bank, served since 1991 as
Cashier and Chief Operations Officer of Metamora State Bank and Treasurer of
Metamora Bancorp, Inc., located in Metamora, Ohio, until joining the Company.




<PAGE>   23

In March 1996, the Company entered into an employment agreement with John
Rosenthal, for a term beginning on such date and ending on March 18, 2000.  In
the absence of notice from either party to the contrary, the employment term
under the agreement extends for an additional one year at the end of each year
of the agreement.  Under the agreement, Mr. Rosenthal received an initial
annual salary of $98,000.  The agreement includes a provision for the annual
review, and possible increase (but not a decrease) of his salary, as well as
performance bonuses, membership in a local country club, an automobile
allowance, participation in the Company's benefit plans, disability benefits
and life insurance.  The employment agreement is terminable at any time by
either the Company's Board of Directors or by Mr. Rosenthal. The agreement
provides severance benefits in the event he is terminated without cause,
including severance compensation equal to his then current salary and benefits
for the remainder of the then current term of the employment agreement.  The
Company also must pay all accrued salary, vested deferred compensation and
other benefits then due to him. The Company may terminate the agreement at any
time for cause without incurring any post-termination obligation to Mr.
Rosenthal.  If Mr. Rosenthal is terminated upon a change in control, he is to
be paid severance compensation equal to three times:  (i) his salary at the
rate then in effect at the time of termination; (ii) the amount of any bonus he
would have received; and (iii) the value of the other benefits which would have
accrued to him if he had remained employed for the full term of his agreement.
Moreover, he will continue to receive health, life and disability insurance
coverage for three years following such termination.  Pursuant to a
non-competition covenant of the agreement, Mr. Rosenthal is prohibited from
competing with the Company or its subsidiaries within a 50-mile radius of the
Company's main office for a period of one year following the termination of his
employment agreement.

ITEM 10.  EXECUTIVE COMPENSATION

The information on pages 4 - 5 of  the 1997 Proxy Statement under the caption
"Executive Compensation" is incorporated by reference.


ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information on page 6 of the 1997 Proxy Statement, under the caption
"Security Ownership of Certain Beneficial Owners" is incorporated by reference.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information on page 4 of the 1997 Proxy Statement under the caption
"Transactions with Management" is incorporated by reference.


ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a)(1) Index to Financial Statements

See Part II, Item 7, Financial Statements

(a)(2) Schedule of Exhibits

The Exhibit Index which immediately follows the signature pages to this Form
10-KSB is incorporated by reference. The exhibits required to be filed with
this Form 10-KSB are included with this Form 10-KSB and are located immediately
following the Exhibit Index to this Form 10-KSB.

(b) Reports on Form 8-K




<PAGE>   24

The Company did not file any Current Reports on Form 8-K during the fourth
quarter of 1997.




















<PAGE>   25

                                  SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, as amended, the
Issuer caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized, on March 25, 1998.


                               ST. JOSEPH CAPITAL CORPORATION

                               By:
                                  ----------------------------------------------
                                  John W. Rosenthal, Chief Executive Officer and
                                  Chairman of the Board


                               By:
                                  ----------------------------------------------
                                  Edward R. Pooley, Principal Financial Officer
                                  and Accounting Officer


In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the Issuer and in the capacities noted below and
on March 25, 1998.


<TABLE>
<CAPTION>

            Signature                                 Title
            ---------                                 -----
<S>                                       <C>


__________________________________        President, Principal Executive
John W. Rosenthal                         Officer and Chairman of the Board

__________________________________        Director
Arthur J. Decio

__________________________________        Director
David A. Eckrich

__________________________________        Director
Jerry Hammes

__________________________________        Director
V. Robert Hepler

__________________________________        Director
Helen L. Krizman
</TABLE>


<PAGE>   26

<TABLE>
<S>                                           <C>

__________________________________            Director
Scott C. Malpass

__________________________________            Director
Jack Matthys

__________________________________            Director
Arthur H. McElwee

__________________________________            Director
Myron Noble

__________________________________            Director
Richard A. Rosenthal

__________________________________            Director
Robert A. Sullivan
</TABLE>



<PAGE>   27

                        ST. JOSEPH CAPITAL CORPORATION
                                EXHIBIT INDEX


<TABLE>
<CAPTION>
================================================================================
                                                                      SEQUENTIAL
EXHIBIT                   DESCRIPTION OF EXHIBITS                    PAGE NUMBER
  NO.
--------------------------------------------------------------------------------
<S>          <C>                                                        <C>
  3.1        Certificate of Incorporation, as amended, of St. Joseph        *
             Capital Corporation
--------------------------------------------------------------------------------
  3.2        Bylaws of St. Joseph Capital Corporation                       *
--------------------------------------------------------------------------------
  4.1        Specimen Common Stock Certificate of St. Joseph Capital        *
             Corporation (See also Articles IV, VI, VII, VIII, XI
             and XII of Exhibit 3.1 and Articles III, IX, X, XI and
             XII of Exhibit 3.2)
--------------------------------------------------------------------------------
 10.1        St. Joseph Capital Corporation 1996 Stock Incentive Plan       *
--------------------------------------------------------------------------------
 10.2        Stock Option Agreement between St. Joseph Capital              *
             Corporation and John W. Rosenthal, dated June 11, 1996
--------------------------------------------------------------------------------
 10.3        Employment Agreement between St. Joseph Capital and            *
             John W. Rosenthal, dated March 18, 1996
--------------------------------------------------------------------------------
 10.4        Amendment to the Employment Agreement between St.             28
             Joseph Capital and John W. Rosenthal, dated March 18,
             1996
--------------------------------------------------------------------------------
 10.5        St. Joseph Capital Bank 401(k) Plan                           **
--------------------------------------------------------------------------------
 13.1        Annual Report to Security holders (furnished for the          40
             information of the Commission and not to be deemed
             "filed" as part of this Form 10-KSB)
--------------------------------------------------------------------------------
 21.1        Subsidiary of St. Joseph Capital Corporation                   *
--------------------------------------------------------------------------------
 27.1        Financial Data Schedule                                       27
--------------------------------------------------------------------------------
 99.1        Proxy Statement and form of proxy for the Annual              29
             Meeting of Stockholders to be held May 21, 1998,
             (except for sections incorporated by reference into
             this Form 10-KSB, the proxy materials shall not be
             deemed to be "filed" with the Commission)
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*    Incorporated by reference from the Registration Statement on Form SB-2
     filed by the Company on June 21, 1996 (SEC File No. 333-06581), as
     amended.

**   Incorporated by reference from the Registration Statement on Form S-8
     filed by the Company on October 29, 1996 (SEC File No. 333-14999).