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                               1998 ANNUAL REPORT
                          Year ended September 30, 1998

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                             Report To Shareholders
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                                  Home Bancorp
                               Fort Wayne, Indiana


<PAGE>
                                CORPORATE PROFILE



          Home  Bancorp,  Fort  Wayne,  Indiana,  an  Indiana  Corporation,  was
established  March 29, 1995 as a savings bank holding  company for its principal
subsidiary,  Home Loan Bank fsb.  Based on total assets at September 30, 1998 of
$372  million,  Home  Bancorp  is  the  largest  savings  bank  holding  company
headquartered in Fort Wayne, the second largest city in Indiana.


          Originally  founded  on March  22,  1893 by a group of  fellow  German
immigrants  representing  local business  people,  Home Loan Bank is a dedicated
community  oriented  financial  institution  offering  traditional  deposit  and
mortgage and consumer  loan  products.  The Bank  maintains a nine  full-service
office  network  in  Fort  Wayne,  Decatur  and  New  Haven  and  possesses  the
distinction  of being Fort  Wayne's  oldest bank and Fort  Wayne's  only locally
owned bank.


          As a guide for our forthcoming  106th  consecutive year, our challenge
is to continue  the Bank's  solid  reputation  and offer  superior  service with
competitive  prices through  increased  efficiency and close  operating  expense
controls.  Home Loan Bank is an equal opportunity  employer and an equal housing
lender.


          The common stock of Home  Bancorp  trades under the symbol HBFW on The
Nasdaq National Market.

<PAGE>
                                TABLE OF CONTENTS



Corporate Profile.........................................Front Cover Inside

President's Annual Shareholder Report......................................1

Selected Consolidated Financial Information................................2

Management's Discussion & Analysis of Financial
     Condition & Results of Operations.....................................4

Report of Independent Auditors............................................15

Consolidated Balance Sheets...............................................16

Consolidated Statements of Income.........................................17

Consolidated Statements of Changes in
     Shareholders' Equity.................................................18

Consolidated Statements of Cash Flows.....................................19

Notes to Consolidated Financial Statements................................20

Corporate & Shareholder Information.......................................41

Home Loan Bank Office Locations...........................................41

Mission Statement.........................................................42

Market Makers.............................................................42

Directors & Officers......................................................43



                       Fort Wayne . . . The Midwest Hub !


<PAGE>
PRESIDENT'S ANNUAL SHAREHOLDER REPORT

During the fiscal  year 1998 (FY 1998),  mortgage  loan  originations  increased
39.3% to a historical  $114.2  million,  up from $81.9  million for the previous
year. The continued low interest rate  environment  produced the record mortgage
origination  volume.  Total net loans at September 30, 1998 were $324.2 million,
compared with $284.0  million a year ago, an increase of $40.2 million or 14.2%,
exceeding prior year (FY 1997) 13.5% loan growth.

Fiscal year ended  September 30, 1998  completed our third full year as a public
company,  as result of the March 29, 1995  conversion,  with continued  positive
results  for  shareholders.  All 14 quarters of Home  Bancorp's  existence  have
reported  successively  higher  outstanding  loan  balances.   Total  net  loans
receivable at September 30, 1998 were $324.2 million  compared with  outstanding
loans  following the conversion of $204.0 million at March 31, 1995, an increase
of 58.9%. The net conversion proceeds of $30.1 million were invested in 13 short
months  with  the  net  loan  increase   through   community   residential  loan
originations.   The  Company's  loan  to  deposit  ratio,  following  the  stock
conversion,  stood at 81.5% on March 31, 1995, has reflected a 42-month increase
to 102.6% at September 30, 1998.

For fiscal year 1998,  the net income  reported at $2,906,000  was impacted by a
Year 2000 (Y2K) pretax expense of $140,000, compared to net income of $2,893,000
for fiscal year 1997.  Basic  earnings per share (EPS) were $1.32 for FY 1998, a
10%  increase,  compared to the $1.20 basic EPS for prior year FY 1997.  Diluted
earnings  per share were $1.28,  an 8.5%  increase  from the prior year of $1.18
diluted EPS. Home Bancorp return on average assets was 0.82%,  and its return on
average equity was 6.80% for FY 1998.

The  September  30, 1998 total  deposits grew by $18.5 million or 6.2% to $316.0
million in FY 1998 from $297.5  million for the previous  year.  Core  deposits,
which include checking,  savings and money market accounts,  were $81.4 million,
an increase of $4.4 million or 5.8% for FY 1998. Time deposits,  certificates of
deposit,  were $234.6 million,  a 6.3% yearly increase  compared to FY 1997. The
September  30, 1998 total assets  increased  by $26.4  million or 7.6% to $372.4
million from $346.0 million at the FY 1997 year end.

As severe  competition  for  residential  mortgage  customers has intensified in
recent quarters,  many lenders are finding  themselves up against rivals willing
to compromise their  underwriting  standards to win business.  We have continued
prudent  asset-quality  underwriting  as  reflected in our  delinquency  history
compared with our peer group ratios for  non-performing  assets to total assets.
As of  September  30,  1998,  non-performing  loans  90 days or more  delinquent
totaled $292,000 or 0.09% of total loans, compared to $223,000 or 0.08% of total
loans at September 30, 1997.  Non-performing assets,  consisting solely of loans
90 days or more delinquent, totaled 0.08% of total assets at September 30, 1998,
compared to $223,000 or 0.06% of assets on September 30, 1997.

Diligent  contribution in controlling the Bank's  operating  expenses  continued
during FY 1998.  The 1998 fiscal year  operating  (general  and  administrative)
expenses to average assets was 1.42% compared to 1.44% for fiscal year 1997. The
efficiency  ratio for the year ended  September  30, 1998 was 49.6%  compared to
49.0% for the  fiscal  year ended  September  30,  1997.  The  efficiency  ratio
represents  operating expenses as a percentage of the sum of net interest income
and  non-interest  income.  For example,  during FY 1998,  every  49.6(cent)  in
expense generated $1.00 in net income before taxes.
<PAGE>
During FY 1998, the Company repurchased a total of 234,731 shares.  These shares
were  repurchased  at an average  price of $27.42.  Since the  inception  of the
Company's  stock  repurchase  plans,  a total  of  1,163,622  shares  have  been
repurchased  as of September  30,  1998.  The Bank  remained a  well-capitalized
institution,  exceeding all current minimum regulatory capital requirements.  In
our current  program,  6,997  shares  remain  eligible  to complete  the 241,186
authorized  December 15, 1997 repurchase  program.  We believe this represents a
very prudent investment and use of our capital.

The initial  quarterly  dividend of $0.05 per share paid June 20, 1996 continued
quarterly until the dividend per share declared June 16, 1998 was increased to a
quarterly $0.08 per share, a 60% increase over the prior dividend rate.

All new teller  terminals and in-house pc's have been installed.  Plus, the data
processing  software  provided by an outside  vendor as being  certified as Year
2000 compliant has been tested and will involve a second testing, along with the
installation of the Federal Reserve Bank Fedline software by March 31, 1999.

To our  shareholders,  we value your  confidence and  appreciate  your financial
referrals.   The  directors,   officers  and  staff  know  of  their   fiduciary
responsibility to enhance shareholder value. Sincere thanks to everyone involved
for their hard work, dedication and commitment to our company.

                                                         Cordially,


                                                         /s/W. Paul Wolf
                                                         ---------------
                                                         W.Paul Wolf
                                                         Chairman, President
December 1, 1998                                         Chief Executive Officer


<PAGE>
                             SELECTED FINANCIAL DATA

         Set forth below are selected  financial  and other data of the Company.
This financial data is derived in part from the financial statements and related
notes of the Company which are presented elsewhere in this Annual Report.
<TABLE>
<CAPTION>
                                                                             At September 30,
                                                       -------------------------------------------------------------
                                                         1998         1997          1996         1995         1994
                                                       --------     --------      --------     --------     --------
                                                                              (In Thousands)
<S>                                                    <C>          <C>           <C>          <C>          <C>     
Summary of Financial Condition:
  Total assets....................................     $372,429     $346,041      $322,702     $313,185     $275,210
  Loans receivable, net...........................      324,188      283,987       250,306      214,405      200,678
  Cash and cash equivalents.......................       23,366       16,445        11,923       21,390       19,695
  Investment securities and FHLB Stock............       19,944       40,530        54,842       71,917       49,995
  Deposits........................................      315,998      297,493       271,185      256,108      251,340
  Shareholders' equity - substantially restricted.       41,038       43,991        46,713       54,060       21,370
<CAPTION>
                                                                           Year Ended September 30,
                                                       -------------------------------------------------------------
                                                         1998         1997         1996          1995         1994
                                                       -------       -------      -------      --------      -------
                                                                              (In Thousands)
Summary of Operating Results:
  Interest income................................      $25,979       $24,422      $22,913      $ 21,120      $17,625
  Interest expense...............................       16,223        14,963       13,787        12,730       10,247
                                                       -------       -------      -------      --------      -------
    Net interest income..........................        9,756         9,459        9,126         8,390        7,378
  Provision for loan losses......................            2             2           13            87           45
                                                       -------       -------      -------      --------      -------
    Net interest income after provision for
     loan losses.................................        9,754         9,457        9,113         8,303        7,333
  Noninterest income:
    Gains on sales of interest-earning assets,
      net........................................          108           ---            3             1           14
    Other........................................          248           246          227           220          250
                                                       -------       -------      -------      --------      -------
      Total noninterest income...................          356           246          230           221          264
  Noninterest expense:
    Compensation and benefits....................        3,088         2,726        2,512         2,088        1,806
    Occupancy and equipment......................          729           591          528           584          559
    SAIF deposit insurance premium.......                  186           251        2,235           582          517
    Conversion costs.............................          ---           ---          ---           ---          486
    Other........................................        1,009         1,187        1,151         1,274          970
                                                       -------       -------      -------      --------      -------
      Total noninterest expense..................        5,012         4,755        6,426         4,528        4,338
                                                       -------       -------      -------      --------      -------
  Income before income taxes and cumulative
   effect of change in accounting principle......        5,098         4,948        2,917         3,996        3,259
  Income tax expense.............................        2,192         2,055        1,281         1,535        1,233
                                                       -------       -------      -------      --------      -------
  Income before cumulative effect of change
   in accounting principle.......................        2,906         2,893        1,636         2,461        2,026
  Cumulative effect of change in accounting
   for income taxes..............................          ---           ---          ---           ---          324
                                                       -------       -------      -------      --------      -------

  Net income.....................................      $ 2,906       $ 2,893      $ 1,636      $  2,461     $  2,350
                                                       =======       =======      =======      ========     ========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                                                              Year Ended September 30,
                                                            ----------------------------------------------------------- 
                                                              1998         1997        1996         1995         1994
                                                            --------     --------    --------     --------     --------
<S>                                                         <C>          <C>         <C>          <C>          <C>     
PERFORMANCE RATIOS (Averages)
  Return on assets(1)...............................             .82%         .87%        .52%         .83%         .88%
  Return on shareholders' equity(2).................            6.80         6.43        3.21         6.50        11.47
  Yield on interest-earning assets..................            7.47         7.53        7.43         7.25         6.78
  Cost of interest-bearing liabilities..............            5.30         5.30        5.30         4.99         4.22
  Net interest spread(3)............................            2.17         2.23        2.13         2.26         2.56
  Net interest rate margin(4).......................            2.80         2.92        2.96         2.88         2.84
  Operating (G&A) expenses to assets(5)(6)..........            1.42         1.44        1.52         1.53         1.63
  Efficiency ratio (6)(7)...........................           49.56        48.99       51.05        52.59        57.36
  Net interest income to operating (G&A)
       expenses(6)..................................          194.67       198.87      190.80       185.61       170.06
  Interest-earning assets to interest-bearing
       liabilities..................................          113.78       114.92      118.63       114.73       106.99
  Average assets (dollars in thousands).............        $354,167     $331,060    $314,645     $296,221     $266,115

CAPITAL RATIOS
  Equity to assets at period end ...................           11.02%       12.71%      14.48%       17.26%        7.76%
  Average equity to average assets..................           12.06        13.59       16.21        12.79         7.70
  Average tangible equity to average assets.........           12.06        13.59       16.21        12.79         7.70
  Dividend payout ratio.............................           23.16        16.50       16.13          ---          ---


ASSET QUALITY RATIOS
  Non-performing assets to total assets.............             .08%         .06%        .07%         .03%         .05%
  Non-performing loans to total loans...............             .09          .08         .09          .05          .04
  Allowance for loan losses to net loans............             .43          .49         .55          .64          .64
  Allowance for loan losses to non-
        performing loans............................             476          623         600        1,411        1,431
  Net charge-offs to net loans......................             ---          ---         ---          ---          ---
  Loans to deposits.................................          102.59        95.46       92.30        83.72        79.84
  Loans to assets...................................           87.13        82.07       77.57        68.46        72.92
  Loan originations (dollars in thousands)..........        $114,171     $ 81,888    $ 83,917     $ 51,514     $ 71,152

PER COMMON SHARE
 Dividends declared per share.......................          $ 0.31       $ 0.20      $ 0.10       $ ---         $ ---
 Earnings, basic....................................            1.32         1.20        0.57         0.44          ---
 Earnings, diluted..................................            1.28         1.18        0.57         0.44          ---
 Book value.........................................           18.20        17.83       16.91        16.37          ---
 Tangible book value................................           18.20        17.83       16.91        16.37          ---
 Shares outstanding at period end...................       2,254,642    2,467,238   2,762,350    3,303,178          ---

Number of full-service offices                                    9            9           8           8             8

</TABLE>
<PAGE>


(1)  Net income divided by average total assets.

(2)  Net income divided by average total shareholders' equity.

(3)  Interest rate spread is determined by subtracting combined weighted average
     interest rate cost from combined  weighted average interest rate earned for
     the period indicated.

(4)  Net interest income divided by average interest-earning assets.

(5)  Other expense divided by average total assets.

(6)  The ratios for 1996 excludes $1.65 million  pre-tax on  non-recurring  SAIF
     special  assessment.  Including the said exclusion,  operating  expenses to
     average  assets  would be 2.04%;  efficiency  ratio  would be  68.68%;  net
     interest income to operating expenses would be 141.81%.

(7)  Operating   expenses  divided  by  the  sum  of  net  interest  income  and
     noninterest income.

                                        3

<PAGE>
                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS


General

         Fiscal  year 1998  marked  the third  full  year of  operation  of Home
Bancorp (the " Company") since the conversion of Home Loan Bank fsb (the "Bank")
on March 29, 1995 from a mutual to stock form of ownership  (the  "Conversion").
Through that  conversion the Company raised $30.1 million,  net of funds used to
purchase  shares for an Employee  Stock  Ownership  Plan (the "ESOP") and net of
Conversion  costs.  During fiscal 1998 the Company  continued to leverage  those
conversion  proceeds  in  sustained  growth in its  balance  sheet.  Through the
origination of first lien residential  mortgages in the Bank's service area, the
Company had  substantive  loan portfolio  growth that was supported by growth in
consumer  deposits,  borrowings  from the Federal Home Loan Bank of Indianapolis
(the  "FHLB"),  and use of investment  proceeds.  During fiscal 1998 the Company
also repurchased  234,731 shares of Home Bancorp stock to fund stock options and
other  corporate  purposes.  The leverage of the Company's  capital  through the
stock repurchases enhanced both the earnings per share and the return on equity.
The Company's net income for fiscal 1998  represents the most profitable year on
record for the Company.


Financial Condition

         September 30, 1998 compared to September 30, 1997. The Company's  total
assets  increased  from $346.0  million as of September 30, 1997 to $372.4 as of
September 30, 1998, an increase of $26.4 million or 7.6%.  Shareholders'  equity
decreased  from $44.0 as of September  30, 1997 to $41.0 million as of September
30,  1998, a decrease of $3.0  million or 6.8%.  The  decrease in  shareholders'
equity was  primarily  the net result of earnings for the year of  approximately
$2.9 million,  payments on benefit plans,  less the repurchase of 234,731 shares
of common stock for $6.4 million, and dividends paid on common stock.

         Total cash and cash  equivalents  increased  from  $16.4  million as of
September  30, 1997 to $23.4  million as of September  30, 1998,  an increase of
approximately  $7.0  million.  Investment  securities,  including  those held to
maturity and available for sale,  were $17.2 million as of September 30, 1998, a
decrease of $20.9  million from the balance of $38.1 million as of September 30,
1997.  The net  decrease  in  liquid  assets  during  the  fiscal  year was used
primarily to fund growth in the loan portfolio and repurchase common stock.

         Net loans  receivable  increased  $40.2  million or 14.2%,  from $284.0
million as of September  30, 1997 to $324.2  million as of  September  30, 1998.
This  increase  was  primarily  the  result  of  continued  growth  in  one-  to
four-family residential loan originations in the Company's primary lending area.
Mortgage loan  originations  increased as a result of demand  attributable  to a
continued  stable interest rate  environment and  historically  low unemployment
rates.
<PAGE>
         Total  deposits  were  $316.0  million as of  September  30,  1998,  an
increase of $18.5  million  from $297.5  million as of September  30, 1997.  The
increase in deposits was  primarily the result of modest growth in core deposits
and more  substantive  growth in  certificates  of deposit.  As of September 30,
1998,  certificates  of deposit  had an increase  of $14.0  million  from $220.6
million as of September  30, 1997 to $234.6  million as of  September  30, 1998.
Management  attributes  this fact to customer  preferences  for higher  yielding
instruments  of  deposit  of  relatively  short  maturities  as  opposed  to the
liquidity afforded lower yielding transactional accounts. At September 30, 1998,
the Company had $151.8 million in certificates of deposit with terms of one year
or less as compared to $140.1  million for the same period ended  September  30,
1997.The  Company's  pricing of certificates of deposit are consistent with that
of its competitors.

         Due to favorable  funding rates and anticipated  liquidity  needs,  the
Bank borrowed from the FHLB.  Outstanding FHLB advances as of September 30, 1998
were $9.0  million.  The  maturity of these  advances  ranged from 30 days to 10
years and were  secured  by a  blanket  lien  arrangement.  The  Company  had no
advances as of September 30, 1997.




                                        4

<PAGE>
Results of Operations

Comparison of the Fiscal Years Ended September 30, 1998 and 1997

         General.  Net  income for the year ended  September  30,  1998 was $2.9
million,  an increase of $13,000  compared to net income  recorded  for the year
ended  September 30, 1997. The modest  increase in net income for the year ended
September  30, 1998  compared to the prior year was  primarily  the result of an
increase in net interest  income and profit  recorded from the sale of available
for sale investments, that was nearly offset by increased operating expenses and
taxes.

         Interest Income.  Interest income increased $1.6 million, or 6.6%, from
$24.4  million for the year ended  September  30, 1997 to $26.0  million for the
year ended  September 30, 1998.  Interest income on loans  receivable  increased
$2.7 million while  interest  income on investments  and other  interest-earning
assets decreased $1.1 million during fiscal 1998 as compared to fiscal 1997. The
increase  in  interest  income  for  fiscal  1998 was  primarily  the  result of
increases in the average balance of outstanding  loans, as yields earned on loan
balances  decreased  during  the  fiscal  year.  Both the  average  balances  of
investments  and  interest-earning  deposits,  and the  yield  earned  on  those
balances  decreased  during the year ended  September  30,  1998.  See  "Average
Balances, Interest Rates and Yields" and "Rate/Volume Analysis."

         Interest  Expense.  Interest expense  increased $1.2 million,  or 8.0%,
from $15.0  million for the year ended  September  30, 1997 to $16.2 million for
the year ended  September  30, 1998.  The  increase in interest  expense was the
result of higher average  balances of deposits,  FHLB  advances,  and rate based
savings  preferences of customers  during fiscal 1998. The weighted average rate
paid on interest-bearing liabilities for fiscal 1998 of 5.30% was the same as in
fiscal 1997. See "Average Balances,  Interest Rates and Yields" and "Rate/Volume
Analysis."

         Net Interest Income.  Net interest income  increased  $297,000 or 3.2%,
from $9.5 million for the year ended  September 30, 1997 to $9.8 million for the
year ended September 30, 1998. This increase was attributable to the increase in
interest  income  which more than offset the  increase  in  interest  expense as
previously  discussed.  The Company's  interest rate spread decreased from 2.23%
during  fiscal 1997 to 2.17% during  fiscal  1998.  The decrease in the interest
rate  spread  during the fiscal  year  reflected  a general  decrease  in market
spreads.

         Provision  for Loan Losses.  The provision for loan losses for the year
ended  September 30, 1998 was $2,400.  This was the same amount  provided for in
fiscal 1997.  The Company's  provision for loan losses was based on, among other
things,  management's  assessment  of the credit risk  inherent in the Company's
loan  portfolio and the current  balance of the  allowance  for loan losses.  At
September 30, 1998, the Company's allowance for loan losses totaled $1.4 million
or .43% of net  loans  receivable  and 476% of total  non-performing  loans.  In
management's  assessment,  continued  growth in the Company's  residential  loan
portfolio has not significantly  raised  anticipated risk exposures nor impaired
the Company's ability to absorb future loan losses.

         In establishing its allowance,  the Company also considers the level of
its classified and non-performing assets and their estimated value, the national
economic  outlook which may tend to inhibit  economic  activity and depress real
estate and other values in the Company's  primary market area,  the  regulators'
<PAGE>
view  of  adequate  reserve  levels  for  the  thrift  industry,  the  Company's
historically  low loan losses,  and the levels of the  allowance for loan losses
established by the Company's peers.  Accordingly,  the allowance for loan losses
is not based  solely on the level of  non-performing  loans.  The Company had no
loan losses in fiscal 1998.

         The Company will  continue to monitor its allowance for loan losses and
make future additions to the allowance  through the provision for loan losses as
economic  conditions  dictate.  Although the Company maintains its allowance for
loan  losses  at a level  which it  considers  to be  adequate  to  provide  for
potential  losses,  there can be no assurance that future losses will not exceed
estimated  amounts or that  additional  provisions  for loan  losses will not be
required in future periods. In addition,  the Company's  determination as to the
amount of its  allowance  for loan  losses is subject to review by the Office of
Thrift Supervision (the "OTS") as part of their examination  process,  which may
result in the  establishment of additional  allowances based upon their judgment
of the information available to them at the time of their examination.

         Noninterest  Income.  Noninterest  income  increased  from  $247,000 in
fiscal 1997 to $356,000 in fiscal  1998.  The  increase  was the result of gains
from the sale of  securities  held as available  for sale that were sold to fund
liquidity needs of

                                        5

<PAGE>
the Company. There were no sales of interest earning assets during fiscal 1997.

         Noninterest  Expense.   Noninterest  expense  increased   approximately
$257,000 or 5.4%,  from $4.7  million in fiscal  1997 to $5.0  million in fiscal
1998.  Approximately  $362,000 of this  increase  was  attributable  to employee
compensation and benefits. Specifically,  increases in the Company's stock price
during the fiscal year impacted expenses  associated with the ESOP and accounted
for most this increase. Occupancy and equipment expense in fiscal 1998 increased
by approximately  $140,000  associated with expenditures and depreciation  costs
associated with Year 2000 issues. Some of these costs represented  non-recurring
items  necessary  in the  Company's  readiness  for Year  2000.  See "Year  2000
Compliance."  Federal  deposit  insurance  premiums  decreased by  approximately
$66,000  in  fiscal  1998 from the prior  year as a result  of the  lowering  of
premiums following the  recapitalization  of the federal deposit insurance fund.
Other  noninterest  expenses  decreased  $178,000 for the fiscal year ended 1998
when  compared  to the  like  period  in 1997,  primarily  from  income  on loan
originations that was applied to costs.

         Income Tax Expense.  Income tax expense  increased from $2.1 million in
fiscal  1997 to $2.2  million  in fiscal  1998,  as a result  of  higher  pretax
earnings for the period.  The effective  tax rate in fiscal 1998 was  moderately
higher than in 1997 due to increased  market  values of ESOP shares  relative to
cost.

Comparison of the Fiscal Years Ended September 30, 1997 and 1996

         General.  Net  income for the year ended  September  30,  1997 was $2.9
million,  an increase of $1.3 million compared to net income of $1.6 million for
the year ended  September 30, 1996. Net income for fiscal 1996 was impacted by a
$1.0  million  after tax special  assessment  by the Federal  Deposit  Insurance
Corporation  ("FDIC") to  capitalize  the  Savings  Association  Insurance  Fund
("SAIF") to its statutory reserve level of at least 1.25%.  Comparing net income
for  fiscal  1997 to fiscal  1996  after  adjusting  for the  effect of the FDIC
special assessment would yield an increase of approximately  $257,000,  or 9.8%,
for the period. The increase in net income for the year ended September 30, 1997
compared to the year ended  September  30, 1996 was  primarily the result of the
decrease in operating  expenses of $1.6 million  primarily  attributable  to the
gross amount of the 1996 FDIC special assessment,  and an approximately $334,000
increase in net interest income,  partially offset by an associated  increase in
income taxes as more fully described below.

         Interest  Income.  Interest income increased $1.5 million or 6.6%, from
$22.9  million for the year ended  September  30, 1996 to $24.4  million for the
year ended  September 30, 1997.  Interest income on loan  receivables  increased
$2.5 million while  interest  income on investments  and other  interest-earning
assets decreased $1.0 million during fiscal 1997 as compared to fiscal 1996. The
increase  in  interest  income  for  fiscal  1997 was  primarily  the  result of
increases  in the  average  balance  of  interest-earning  assets  and a  modest
improvement  in the yield of those  balances.  See "Average  Balances,  Interest
Rates and Yields" and "Rate/Volume Analysis."

         Interest Expense. Interest expense increased $1.2 million or 8.7%, from
$13.8  million for the year ended  September  30, 1996 to $15.0  million for the
year ended  September 30, 1997. The increase in interest  expense was the result
of higher  average  balances of deposits and rate based savings  preferences  of
customers  during  fiscal 1997.  The weighted  average rate paid on deposits for
fiscal  1997 of 5.30% was the same as in fiscal  1996.  See  "Average  Balances,
Interest Rates and Yields" and "Rate/Volume Analysis."
<PAGE>
         Net  Interest  Income.  Net  interest  income  increased  approximately
$334,000 or 3.7%,  from $9.1  million for the year ended  September  30, 1996 to
$9.5  million  for  the  year  ended  September  30,  1997.  This  increase  was
attributable  to the  increase  in  interest  income  which more than offset the
increase in interest  expense as previously  discussed.  The Company's  interest
rate spread increased from 2.13% during fiscal 1996 to 2.23% during fiscal 1997.
The  increase in the  interest  rate spread  during the fiscal year  reflected a
general increase in market spreads.

         Provision  for Loan Losses.  The provision for loan losses for the year
ended  September  30, 1997 was $2,400  compared to $13,200 in the prior year,  a
decrease of $10,800.  The decrease in the  provision  for loan losses for fiscal
1997 was based on, among other  things,  the continued low levels of credit risk
inherent  in the  Company's  loan  portfolio  and  the  current  balance  of the
allowance for loan losses.  At September  30, 1997 the  Company's  allowance for
loan losses totaled $1.4 million or .49% of net loans  receivable and 622.88% of
total non-performing loans. In management's assessment,

                                        6

<PAGE>
continued   growth  in  the  Company's   residential   loan  portfolio  has  not
significantly  raised  anticipated  risk  exposures  nor impaired the  Company's
ability to absorb future loan losses.

         In establishing its allowance,  the Company also considers the level of
its classified and non-performing assets and their estimated value, the national
economic  outlook which may tend to inhibit  economic  activity and depress real
estate and other values in the Company's  primary market area,  the  regulators'
view of  adequate  reserve  levels for the thrift  industry,  and the  Company's
historically  low loan  losses and the levels of the  allowance  for loan losses
established  by the  Company's  peers in assessing the adequacy of the loan loss
allowance.  Accordingly,  the  calculation  of the adequacy of the allowance for
loan  losses is not  based  solely on the  level of  non-performing  loans.  The
Company had no loan losses in fiscal 1997.

         The Company will  continue to monitor its allowance for loan losses and
make future additions to the allowance  through the provision for loan losses as
economic  conditions  dictate.  Although the Company maintains its allowance for
loan  losses  at a level  which it  considers  to be  adequate  to  provide  for
potential  losses,  there can be no assurance that future losses will not exceed
estimated  amounts or that  additional  provisions  for loan  losses will not be
required in future periods. In addition,  the Company's  determination as to the
amount of its  allowance for loan losses is subject to review by the OTS as part
of  their  examination  process,  which  may  result  in  the  establishment  of
additional  allowances based upon their judgment of the information available to
them at the time of their examination.

         Noninterest  Income.  Noninterest  income  increased  from  $231,000 in
fiscal 1996 to $247,000 in fiscal 1997. The increase was primarily the result of
increases in service charges and fees.  There were no sales of interest  earning
assets during fiscal 1997.

         Noninterest  Expense.  Noninterest  expense  decreased  $1.6 million or
25.0%,  from $6.4 million in fiscal 1996 to $4.8 million in fiscal 1997.  Of the
decrease,  $1.6  million was  attributable  in fiscal  1996 to the special  SAIF
assessment by the FDIC. Noninterest expense without the foregoing  non-recurring
item would have  increased  approximately  $23,000 or 0.3%,  from fiscal 1996 to
fiscal 1997.

         Increased  compensation  and benefit  expenses of $214,000  from fiscal
1996 to 1997 were primarily due to costs  associated  with the fair market value
expense on ESOP shares and general cost of living  increases.  Net occupancy and
equipment  expense increased $63,000 in fiscal 1997 primarily due to the opening
of the  Bank's  ninth  office  in late  1996 and the  associated  operating  and
depreciation expenses incurred in the fiscal year. Other expenses increased by a
modest $36,000 in the current fiscal year.

         Income Tax Expense.  Income tax expense  increased from $1.3 million in
fiscal  1996 to $2.1  million  in fiscal  1997,  as a result  of  higher  pretax
earnings for the period. Included in the tax expense for fiscal 1996 was the tax
benefit associated with the special SAIF assessment,  which effectively  lowered
the Company's tax liability by $650,000.



                                        7
<PAGE>
Average Balances, Interest Rates and Yields
<TABLE>
<CAPTION>
                                                      At
                                                September 30,                          For the Year Ended September 30,
                                             ------------------       --------------------------------------------------------------
                                                     1998                           1998                              1997    
                                             ------------------       -----------------------------     ----------------------------
                                                                          (Dollars in Thousands)
<S>                                          <C>           <C>        <C>       <C>           <C>       <C>       <C>          <C>
Interest-Earning Assets:
 Interest-earning deposits.................  $ 21,723      5.09%      $ 14,122  $    680      4.82%     $ 17,097  $    897     5.25%
 Investment securities.....................    17,161      6.67         26,044     1,748      6.71        39,153     2,728     6.97 
 Loans.....................................   324,188      7.43        305,218    23,342      7.65       265,704    20,618     7.76 
 FHLB stock................................     2,782      8.03          2,603       209      8.02         2,252       179     7.95 
                                             --------                 --------  --------                --------  --------          
   Total interest-earning assets...........   365,854      7.26        347,987    25,979      7.47       324,206    24,422     7.53 
                                                                                            
                                                                                                                                    
Noninterest-earning assets.................     6,575                    6,180                             6,854                    
                                             --------                 --------                          --------                    
   Total assets............................   372,429                  354,167                           331,060                    
                                             --------                 --------                          --------                    
                                                                                                                   
Interest-Bearing Liabilities:                                                                                                       
 Savings accounts..........................    15,725      2.22         15,851       405      2.56        15,939       455     2.85 
 NOW and money market accounts.............    65,632      3.58         62,486     2,311      3.70        43,344     1,374     3.17 
 Certificates of deposits..................   234,641      5.87        225,755    13,415      5.94       222,889    13,134     5.89 
 FHLB Advances.............................     9,000      5.34          1,750        92      5.26           ---       ---      --- 
                                             --------                 --------  --------                --------  --------  
  Total interest-bearing liabilities.......   324,998      5.21        305,842    16,223      5.30       282,172    14,963     5.30 
                                                                                                                                
                                                                                                                                    
 Noninterest-bearing liabilities...........     6,393                    5,231                             3,893                    
                                             --------                 --------                          --------                    
   Total liabilities.......................   331,391                  311,073                           286,065                    
 Shareholders' equity......................    41,038                   42,716                            44,995                    
                                             --------                 --------                          --------                    
  Total liabilities and retained earnings..   372,429                  353,789                           331,060                    
                                             --------                 --------                          --------                    
Net interest-earning assets................  $ 40,856                 $ 42,145                          $ 42,034                    
                                             ========                 ========                          ========                    
                                                                   
Net interest income........................                                      $ 9,756                           $ 9,459          
                                                                                 =======                           =======          
Interest rate spread(1)....................                2.05%                              2.17%                            2.23%
Net yield on weighted average interest-                                                                                             
 earning assets(2).........................                                                   2.80%                            2.92%
Average interest-earning assets to                                                                                                  
 average interest-bearing liabilities......                            113.78%                           114.92%                    
</TABLE>         
<PAGE>
<TABLE>
<CAPTION>

                                                     For the Year Ended September 30,
                                                     ----------------------------------
                                                                     1996
                                                     ----------------------------------
<S>                                                  <C>           <C>            <C>              
Interest-Earning Assets:                     
 Interest-earning deposits..................         $ 17,927      $ 1,009        5.63%            
 Investment securities......................           57,479        3,627        6.31        
 Loans......................................          231,047       18,119        7.84        
 FHLB stock.................................            2,008          158        7.87        
                                                                       
   Total interest-earning assets............          308,461       22,913        7.43        
                                                                   -------                    
                                                                                              
Noninterest-earning assets..................            6,184                                 
                                                     --------                                 
   Total assets.............................          314,645                                 
                                                     --------                                                                       
Interest-Bearing Liabilities:                                                                 
 Savings accounts...........................           16,981          482        2.84        
 NOW and money market accounts..............           20,819          382        1.83        
 Certificates of deposits...................          222,219       12,923        5.82        
 FHLB Advances..............................         --------      -------                  
                                                                                             
  Total interest-bearing liabilities........          260,019       13,787        5.30        
                                                                   -------                    
                                                                                              
 Noninterest-bearing liabilities............            3,606                                 
                                                     --------                                 
   Total liabilities........................          263,625                                 
 Shareholders' equity.......................           51,020                                 
                                                     --------                                 
  Total liabilities and retained earnings...          314,645                                 
                                                     --------                                 
Net interest-earning assets.................         $ 48,442                                 
                                                     ========                                 
Net interest income.........................                       $ 9,126                    
                                                                   =======                    
Interest rate spread(1).....................                                      2.13%       
Net yield on weighted average interest-                                                       
 earning assets(2)..........................                                      2.96%       
Average interest-earning assets to                                                            
 average interest-bearing liabilities.......          118.63%                                 
</TABLE>
----------------
(1)  Net interest  rate spread is calculated by  subtracting  combined  weighted
     average  interest rate paid from combined  weighted  average  interest rate
     earned  for  the  period  indicated.  Net  interest  rate  spread  must  be
     considered   in  light  of  the   relationship   between   the  amounts  of
     interest-earning  assets  and  interest-bearing   liabilities.   Since  the
     Company's interest-earning assets exceeded its interest-bearing liabilities
     for each of the three years shown above,  a positive  interest  rate spread
     resulted in net interest income.
(2)  The net yield on average  interest-earning assets is calculated by dividing
     net  interest  income  by  total  interest-earning  assets  for the  period
     indicated.  No net yield figure is presented at September 30, 1998, because
     the  computation of net yield is applicable  only over a period rather than
     at a specific date.
<PAGE>
Rate/Volume Analysis

         The following  table  describes the extent to which changes in interest
rates and  changes in volume of  interest-earning  assets  and  interest-bearing
liabilities  have affected the Company's  interest income and expense during the
periods   indicated.   For  each   category  of   interest-earning   assets  and
interest-bearing liabilities, information is provided on changes attributable to
(1) changes in rate  (changes in rate  multiplied by old volume) and (2) changes
in volume (changes in volume  multiplied by old rate).  Changes  attributable to
both  rate  and  volume  that   cannot  be   segregated   have  been   allocated
proportionally to the change due to volume and the change due to rate.
<TABLE>
<CAPTION>
                                                                       Year Ended September 30,
                                     -----------------------------------------------------------------------------------
                                                     1998 vs. 1997                                 1997 vs. 1996
                                     --------------------------------------       -------------------------------------- 
                                            Increase                                     Increase
                                           (Decrease)                                   (Decrease)            
                                              Due to                Total                 Due to                 Total       
                                     ---------------------         Increase      ----------------------        Increase 
                                      Volume          Rate        (Decrease)      Volume          Rate        (Decrease)
                                                                  (Dollars in Thousands)
<S>                                  <C>            <C>            <C>            <C>            <C>            <C>     
Interest-earning assets:
 Interest-earning deposits ...       $  (147)       $   (70)       $  (217)       $   (45)       $   (67)       $  (112)
 Investment securities .......          (883)           (97)          (980)        (1,247)           348           (899)
 Loans .......................         3,026           (302)         2,724          2,691           (192)         2,499
 FHLB stock ..................            28              2             30             19              2             21
                                     -------        -------        -------        -------        -------        -------

   Total .....................       $ 2,024        $  (467)       $ 1,557        $ 1,418        $    91        $ 1,509
                                     =======        =======        -------        =======        =======        -------

Interest-bearing liabilities:
 Savings accounts ............       $    (2)       $   (48)       $   (50)       $   (30)       $     3        $   (27)
 NOW and money market accounts           680            257            937            593            399            992
 Certificates of deposit .....           170            111            281             39            172            211
                                                                                                                -------
 FHLB Advances ...............            92           --               92             39            172            211
                                     -------        -------        -------        -------        -------        -------

   Total .....................       $   940        $   320        $ 1,260        $   602        $   574        $ 1,176
                                     =======        =======        -------        =======        =======        -------

Change in net interest income                                      $   297                                      $   333
                                                                   =======                                      =======
</TABLE>
<PAGE>
Asset/Liability Management and Market Risk

         As described in "Results of Operation",  the Company derives its income
primarily from the excess of interest collected over interest paid. The rates of
interest  the  Company  earns on assets and pays on  liabilities  generally  are
established  contractually  for a period of time.  Market  interest rates change
over time. Accordingly,  the Company's results of operations, like those of many
financial  institution  holding  companies  are  impacted by changes in interest
rates and the interest rate sensitivity of its assets and liabilities.  The risk
associated with changes in interest rates and the Company's ability to adapt and
respond to these changes is known as interest  rate risk.  Interest rate risk is
the Company's significant market risk.

         In attempt to manage the Company's  exposure to interest rate risk, the
Company continually analyzes and manages assets and liabilities based on payment
streams and interest  rates,  the timing of maturities,  and the  sensitivity to
actual or  potential  changes in market  interest  rates.  The Bank,  like other
financial  institutions,  recognizes that it is subject to interest rate risk to
the   extent   that   its   interest-bearing   liabilities   with   short-   and
intermediate-term maturities reprice more rapidly, or on a different basis, than
its interest-earning assets.  Management of the Bank believes it is important to
recognize the  relationship  between interest rates and the effect on the Bank's
net portfolio value ("NPV"). 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. Management of the Bank's assets and liabilities is done

                                        9

<PAGE>
within the context of the market place,  but also within limits  established  by
the Board of Directors on the amount of change in NPV which is acceptable  given
certain interest rate changes.

         At September  30,  1998, a change in the interest  rate of positive 200
basis points would have resulted in a 1.95%  decrease in the NPV as a percent of
the present value of the Bank's  assets,  while a change in the interest rate of
negative 200 basis points would have resulted in a 0.56%  decrease in the NPV as
a percent of the present value of the Bank's assets.  Under  proposed  Office of
Thrift Supervision regulations,  the Bank's level of interest rate risk exposure
would have been considered normal.

         Presented  in the  following  table,  as of September  30, 1998,  is an
analysis  of the  Bank's  interest  rate risk as  measured  by changes in NPV as
calculated by the Office of Thrift  Supervision for  instantaneous and sustained
parallel shifts in the yield curve in 100 basis point increments up and down 400
basis points and compared to Board policy  limits.  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
declines  due to both the rate  increase  and  slowing  prepayments.  When rates
decline,  the Bank does not  experience a  significant  rise in market value for
these loans because  borrowers  prepay at relatively high rates. OTS assumptions
are used in calculating the amounts in this table.
<TABLE>
<CAPTION>
                                                          At September 30, 1998
    Change in                                             ---------------------
  Interest Rate        Board Limit      Estimated          Amount       Percent
 (Basis Points)      Percent Change        NPV             Change        Change
 --------------      --------------        ---             ------        ------
                                  (Dollars In Thousands)

<S>                      <C>             <C>              <C>             <C>    
     +400 bp              -60%           $15,756          $-21,435        -58%    
     +300 bp              -45             22,251           -14,940        -40     
     +200 bp              -29             28,568           - 8,623        -23     
     +100 bp              -13             33,939           - 3,252        - 9     
        0 bp              ---             37,191               ---        ---     
     -100 bp              - 2             36,870           -   321        - 1     
     -200 bp              - 6             35,766           - 1,425        - 4     
     -300 bp              -10             35,410           - 1,781        - 5     
     -400 bp              -14             35,324           - 1,867         -5     
</TABLE>
                                                                               

         The Bank has  structured  its assets and  liabilities  in an attempt to
maintain interest rate risk at a level deemed acceptable by the Board. The Board
reviews the OTS  measurements  as well as the Bank's own results  from  modeling
performed 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.  A primary  objective  of
asset/liability management is to manage interest rate risk. The Company monitors
its  asset/liability  mix on an ongoing basis and manages  interest rate risk by
applying the following policies:
<PAGE>
         Promoting adjustable rate mortgages. Adjustable rate mortgages ("ARMs")
have been  historically  viewed by  management  as a viable  option for managing
interest rate exposure.  The Company  focuses  lending  efforts toward  offering
competitively  priced  adjustable  rate loan products as an  alternative to more
traditional  fixed rate  mortgage  loans.  The Company  offers a wide variety of
adjustable rate loan products that reprice as frequently as every year or can be
fixed for a term of up to seven years and adjust yearly thereafter.

         Originating 10, 15 and 20 year fixed rate mortgages. By retaining these
mortgages in the loan portfolio,  and selling  mortgages with terms of 30 years,
management  can reduce its interest rate exposure.  Loans with  maturities of 30
years are currently  classified as held for sale by the Company at  origination.
The Company retains the servicing on loans sold in the secondary market.

         Emphasizing long-term deposits. The Company's cost of funds responds to
changes in interest rates due to the relatively short-term nature of its deposit
portfolio.  Consequently, the results of operations are influenced by the levels
of short-term  interest  rates.  The Company offers a range of maturities on its
deposit  products  at  competitive  rates  and  concentrates  a  portion  of its
advertising  and  promotional   campaigns  on  attracting   longer-term  deposit
products. It also

                                       10
<PAGE>
monitors the maturities on an ongoing basis.

         Actively managing liquidity  position.  Management actively manages the
Company's liquidity position in anticipation of changing interest rate exposure.
The  primary  objective  of the  Company's  investment  strategy  is to  provide
liquidity necessary to meet funding needs as well as address daily, cyclical and
long-term changes in the asset/liability mix while contributing to profitability
by  providing  a stable  flow of  dependable  earnings.  Generally,  the Company
invests  funds based on its  liquidity  needs and to achieve the proper  balance
between  the  desire  to  minimize  risk  and  maximize  yield  to  fulfill  its
asset/liability management policies.

         Actively marketing short-term home equity loans. Short-term home equity
lines of credit and home  improvement  loans offer higher yields while  lowering
interest rate exposure through their relatively short-term maturities.

         In  evaluating  the Bank's  exposure  to  interest  rate risk,  certain
shortcomings inherent in the method of analysis presented in the foregoing table
must be considered.  For example,  although  certain assets and  liabilities may
have similar  maturities for periods of re-pricing,  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.  Furthermore,  in  the  event  of a  change  in  interest  rates,
prepayments and early withdrawal level would likely deviate  significantly  from
those assumed in calculating the table.  Finally,  the ability of many borrowers
to service their debts may decrease in the event of an interest  rate  increase.
As a result,  the actual effect of changing  interest rates may differ from that
presented in the foregoing table.

Liquidity And Capital Resources

         The  Bank's  primary  sources  of funds  are  deposits,  principal  and
interest  payments  on loans and  maturities  of  investment  securities.  While
maturities of securities and scheduled  amortizations of loans are a predictable
source of funds,  deposit flows and mortgage  prepayments are greatly influenced
by general interest rates, economic conditions and competition.

         Federal  regulations  require  the Bank to maintain  minimum  levels of
liquid assets.  The required  percentage has varied from time to time based upon
economic  conditions and savings flows.  As of September 30, 1998, was 4% of net
withdrawable savings deposits and borrowings payable on demand or in one year or
less during the  preceding  calendar  month.  Liquid assets for purposes of this
ratio include cash, certain time deposits,  U.S.  Government,  government agency
and other securities and obligations  generally  having remaining  maturities of
less than five years.  The Bank has maintained its liquidity  ratio at levels in
excess of those required.  At September 30, 1998, the Bank's liquidity ratio was
9.7% compared to 16.0% and 22.9% at September 30, 1997 and 1996.

         Management  structures  the liquid asset  portfolio of the Bank to meet
the cash flow needs of operating, investing and financing activities. Cash flows
provided by operating  activities,  consisting primarily of interest received on
loans and investments  less interest paid on deposits,  were $5.3 million,  $3.9
million, and $4.3 million for the years ended September 30, 1998, 1997 and 1996,
respectively. Net cash flows used for investing activities, consisting primarily
of  disbursements  for loan  originations  and investments  purchased  offset by
principal  collections  on loans and  proceeds  from the sales and  maturity  of
investments,  were $19.7 million, $19.6 million, and $19.4 million for the years
ended  September  30, 1998,  1997 and 1996,  respectively.  Net cash provided by
<PAGE>
financing  activities,  consisting  primarily  of net deposit  activity and FHLB
advances that were offset by treasury share purchases,  was $21.3 million, $20.2
million,  $5.6 million for the years ended  September  30, 1998,  1997 and 1996,
respectively.  If the Bank  requires  additional  funds  beyond  its  ability to
acquire  them  locally,  it  has  borrowing   capability  through  the  FHLB  of
Indianapolis.  At September 30, 1998, the Bank had $9.0 million in advances from
the FHLB of Indianapolis.  Prior to fiscal 1998 the Bank had not had advances or
other borrowings outstanding since 1983.

         The Bank  uses its  liquidity  resources  principally  to meet  ongoing
commitments,  to fund maturing  certificates of deposit and deposit  withdrawals
and to  meet  operating  expenses.  The  Bank  anticipates  that  it  will  have
sufficient  funds available to meet current loan  commitments.  At September 30,
1998,  the Bank had  outstanding  commitments to extend credit which amounted to
$22.4 million  (including  $12.3 million in unused lines of credit).  Management
believes  that loan  repayments  and other  sources of funds will be adequate to
meet the Bank's foreseeable liquidity needs.

                                       11
<PAGE>
         At September 30, 1998,  the Bank had tangible and core capital of $33.8
million,  or 9.23% of  adjusted  total  assets,  which was  approximately  $28.3
million  and $22.8  million  above the  minimum  requirements  of 1.5% and 3.0%,
respectively,  of the adjusted total assets in effect on that date. The Bank had
risk-based  capital at  September  30, 1998 of $35.2  million  (including  $33.8
million in core capital),  or 18.97% of risk-weighted  assets of $185.7 million.
This amount was $20.3 million above the 8.0% requirement in effect on that date.

         The Company also has a need for, and sources of,  liquidity.  Liquidity
is required to fund operating expenses,  stock repurchase  programs,  as well as
the payments of any dividends to  shareholders.  The primary source of liquidity
for the Company on an ongoing basis is dividends from the Bank. During 1998, the
Bank paid  dividends in the amount of  $2,714,000  to the  Company.  This amount
represented  the transfer of 100 percent of the Bank's net income.  In addition,
the Company has access to public debt and equity markets.  The Company currently
has no significant  liquidity  commitments as its operating costs are modest and
dividends on common stock are discretionary.

Uses and Sources of Funds

         During the year ended  September 30, 1998,  there was a net increase of
$6.9 million in cash and cash equivalents,  as major sources of funds offset the
uses of cash.  Primary uses of cash during the fiscal year 1998 included funding
an increase  of $40.2  million in the loan  portfolio,  the  repurchase  of $6.4
million in treasury shares, and the purchase of $4.0 million in securities.  The
major  source of funds  included  $25.3  million  from the sale or  maturity  of
securities,  a $18.5 million increase in deposits,  and $9.0 million in advances
from the FHLB of maturities from 30 days to ten years.  The Company paid a total
of $0.31 per share on common stock,  or a total of $673,000 to its  shareholders
during fiscal 1998.

         During the year ended  September 30, 1997,  there was a net increase of
$4.5 million in cash and cash equivalents,  as major sources of funds offset the
uses of cash.  Primary uses of cash during the fiscal year 1997 included funding
an increase  of $33.7  million in the loan  portfolio,  the  repurchase  of $6.1
million in treasury shares, and the purchase of $15.1 million in securities. The
major source of funds  included  $30.0 million from maturity of securities and a
$26.3 million increase in deposits.  The Company paid a total of $0.20 per share
on common stock, or a total of $477,000 to its shareholders during fiscal 1997.

         During the year ended  September 30, 1996,  there was a net decrease of
$9.5  million in cash and cash  equivalents,  as uses  offset  sources of funds.
Primary uses of cash during the fiscal year 1996 included funding an increase of
$35.9 million in the loan portfolio,  the repurchase of $9.3 million in treasury
shares,  and the repurchase of $6.1 million in  securities.  The major source of
funds  included  $23.0 million from the maturity and sales of  securities  and a
$15.0 million increase in deposits.  The Company paid a total of $0.10 per share
on common stock, or a total of $264,000 to its shareholders during fiscal 1996.

Year 2000 Compliance

         General.  The Year 2000 (the "Y2K") issue  confronting the Bank and its
suppliers,  customers,  and  competitors  centers on the  inability  of computer
systems to recognize the year 2000. Many existing  computer programs and systems
originally  were  programmed with only two digits to identify the calendar year.
With the impending new millennium,  these programs and computers could recognize
"00" as the year 1900 rather than the year 2000.
<PAGE>
         Risk. Like most financial institutions, the Bank and its operations may
be  significantly  affected by the Y2K issue due to its dependency on technology
and  date-sensitive  data.  Computer  software and hardware and other equipment,
both  within  and  outside  the  Bank's  direct  control,  including  the Bank's
dependency on data processing  capabilities from NCR Corporation and other third
parties with whom the Bank  electronically  or  operationally  interfaces may be
affected.  If computer  systems are not modified and tested  properly to process
the year  2000,  many  computer  applications  could  fail or  create  erroneous
results.  As a result,  many calculations which rely on date filled information,
such as  interest,  payment or due dates and other  operating  functions,  could
generate  results  which  are  significantly   misstated,  and  the  Bank  could
experience an inability to process transactions, prepare statements or engage in
similar normal business activities.  Thus if not adequately  addressed,  the Y2K
issue could have an adverse  impact on the Bank's  operations  and, in turn, its
financial condition and results of operations.

         Systematic  Review.   Financial  institution   regulators  have  placed
significant  emphasis  upon  Y2K  compliance  issues  and have  issued  guidance
concerning the responsibilities of senior management and directors.  The federal
bank regulatory agencies have stressed the adoption of specific steps to achieve
Y2K compliance. The Federal Financial Institutions

                                       12
<PAGE>
Examination Council (the "FFIEC"),  of which the Office of Thrift Supervision is
a member,  has  designed  an  outline  for  institutions  to use in  effectively
managing the Y2K challenge. Those phases include:

         Awareness Phase.  Define the problem and obtain executive level support
for the  resources  necessary  to perform  compliance  work.  Develop an overall
strategy that covers  in-house  systems,  service  bureaus,  vendors,  auditors,
customers, and suppliers.

         Assessment  Phase.  Assess the size and the  complexity of the problem,
including  identifying  all  systems  that will be  affected  by the year  2000.
Identification of needs and the prioritization of work based upon risk.

         Renovation   Phase.   Undertake   the   reworking,   replacement  ,  or
modification of systems based upon priorities. Monitor servicers' progress.

         Validation  Phase.  Testing  and  verification  of changes to  systems.
Simulate critical date changes. Verification of exchanges of information between
servicers.

         Implementation Phase. Use of renovated systems.  Monitoring of critical
systems and contingency plans.

         State of Readiness.  During December 1997, the Bank formulated its plan
to address the Y2K issue. Since that time, the Bank has established  timeframes,
taken specific steps,  and developed  contingencies in regards to the issue. The
Bank has  explicitly  followed  regulatory  guidance.  The following  paragraphs
summarize  the Bank's  progress to date as  illustrated  by the FFIEC  specified
phases:

         Awareness  Phase.  The Bank  established a formal Y2K plan headed by an
executive officer, and a project team for the management of the issue. A plan of
action was  developed  with the support of the Board of Directors  that included
milestones, budget estimates,  strategies, and methodologies to track and report
the status of the project. This phase is substantially complete.

         Assessment  Phase.  The Bank's  strategies were further  developed with
respect to how the objectives of the Y2K plan would be achieved,  and a business
risk  assessment  was made to quantify the extent of the Bank's Y2K exposure.  A
corporation  inventory  was  developed  to identify  and monitor  readiness  for
information  systems  (hardware,  software,  utilities  and  vendors) as well as
environmental  systems.  Systems were prioritized based upon business impact and
available  alternatives.  A formal plan was  developed  to replace,  repair,  or
upgrade all mission critical systems. This phase is substantially complete.

         Because the Bank's loan portfolio is primarily  residential real estate
based and is  diversified  with  individual  borrowers,  and the Bank's  primary
market area is not significantly dependent on one employer or industry, the Bank
does not expect any significant or prolonged Y2K related  difficulties that will
affect  net  earnings  or cash  flow.  As part of the  current  credit  approval
process,  all  residential  loan  applications  over  $300,000 by  self-employed
individuals are evaluated for Y2K risk as are all commercial loan applications.

         Renovation  Phase.  In recognition of potential Y2K problems,  the Bank
delayed significant  hardware and software purchases until this fiscal year. The
Bank has replaced or renovated virtually all of its hardware systems and updated
or replaced most of its software systems.  Y2K compliant  equipment and software
has been delivered and placed into production and is either in the validation or
<PAGE>
implementation phase of the plan. The Bank has invested  approximately  $500,000
in new computers, communication, and software purchases. Approximately, $140,000
in charges  associated  with Y2K were also  expensed  as  non-recurring  charges
during the fiscal year.

         Validation and Implementation Phases. These phases are designed to test
the ability of the systems to accurately  process date sensitive  data. The Bank
has completed or is in the process of validating all of the its mission critical
applications. These phases are expected to be fully completed by March 31, 1999.

         Continency  Plans.  The Bank has also developed a plan that  recognizes
that  certain  contingencies  may  undermine  preparations  to  date.  The  plan
addresses the viability of certain  processes,  including  data and  information
processing,  that could be threatened by circumstances  beyond the Bank's direct
or even recognizable  control.  The Bank's  contingency plan attempts to provide
thoughtful  analysis of issues and circumstances,  and provide substantive plans
of action in the event of system failures.


                                       13

<PAGE>
         While the Bank does not,  nor can it make  representation  that it will
not be susceptible to Y2K problems,  the Bank has expended  tremendous  energies
and resources to the issue. The Bank has attempted to identify its exposures and
to respond to them.

Impact Of Inflation

         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
changes in  interest  rates on the  Company's  performance.  Changes in interest
rates do not necessarily  move to the same extent as do changes in the prices of
goods and services.

Forward-Looking Statements

         The  Company  and the Bank may from time to time make  written  or oral
"forward-looking  statements",  including  statements contained in the Company's
filings  with  the  Securities  and  Exchange  Commission   (including  Exhibits
thereto),  in its reports to  shareholders  and in other  communications  by the
Company,  which are made in good faith by the Company  and the Bank  pursuant to
the "safe harbor" provisions of the Private Securities  Litigation Reform Act of
1995.

         These forward-looking statements include statements with respect to the
Company's  and the  Bank's  beliefs,  plans,  objectives,  goals,  expectations,
anticipations,  estimates and intentions,  that are subject to significant risks
and  uncertainties,  and are subject to change based on various factors (some of
which are beyond the Company's and Bank's  control).  The words "may",  "could",
"should",  "would", "believe",  "anticipate",  "estimate",  "expect",  "intend",
"plan"  and  similar  expressions  are  intended  to  identify   forward-looking
statements.  The following factors,  among others, could cause the Company's and
the  Bank's  financial   performance  to  differ   materially  from  the  plans,
objectives,   expectations,   estimates   and   intentions   expressed  in  such
forward-looking  statement: the strength of the United States economy in general
and the  strength of the local  economies  in which the Company and Bank conduct
operations;  the effects of, and changes in, trade, monetary and fiscal policies
and laws,  including  interest  rate  policies  of the  Federal  Reserve  Board;
inflation,   interest  rate,  market  and  monetary  fluctuations;   the  timely
development  of and  acceptance of new products and services of the Bank and the
perceived overall value of thee products and services;  the willingness of users
to  substitute  competitors'  products and services for the Bank's  products and
services,  when required;  the impact of changes in financial services' laws and
regulations   (including  laws  concerning   taxes,   banking,   securities  and
insurance);  technological changes;  acquisitions;  changes in consumer spending
and saving habits; and the success of the Company and the Bank at managing risks
involved in the foregoing.

         The foregoing list of important  factors is not exclusive.  The Company
does not undertake to update any forward-looking  statement,  whether written or
oral,  that may be made from time to time by or on behalf of the  Company or the
Bank.

                                       14
<PAGE>


                         REPORT OF INDEPENDENT AUDITORS



Board of Directors and Shareholders
Home Bancorp
Fort Wayne, Indiana


We have audited the accompanying  consolidated balance sheets of Home Bancorp as
of  September  30,  1998 and 1997 and the  related  consolidated  statements  of
income,  changes in  shareholders'  equity  and cash  flows for the years  ended
September  30,  1998,  1997  and  1996.  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 consolidated  financial statements referred to above present
fairly, in all material  respects,  the financial position of Home Bancorp as of
September 30, 1998 and 1997 and the results of its operations and its cash flows
for the  years  ended  September  30,  1998,  1997 and 1996 in  conformity  with
generally accepted accounting principles.





                                                /s/Crowe, Chizek and Company LLP
                                                --------------------------------
                                                   Crowe, Chizek and Company LLP

South Bend, Indiana
October 21, 1998



                                       15
<PAGE>
<TABLE>
<CAPTION>
                                    CONSOLIDATED BALANCE SHEETS
                                    September 30, 1998 and 1997


                                                                     1998               1997
                                                                 -------------      -------------
<S>                                                              <C>                <C>          
ASSETS
Cash on hand and in other banks ............................     $   1,643,168      $   1,282,926
Federal funds sold .........................................        10,000,000          7,000,000
Interest-earning deposits in other banks ...................        11,722,658          8,162,372
                                                                 -------------      -------------
     Total cash and cash equivalents .......................        23,365,826         16,445,298
Securities available for sale ..............................         5,137,187         11,126,562
Securities held to maturity (fair value:
  1998 - $12,195,000 and 1997 - $27,214,000) ...............        12,024,247         26,954,555
Loans receivable, net of allowance for loan losses:
  1998 -  $1,390,389 and 1997 - 1,387,989...................       324,187,601        283,986,922
Federal Home Loan Bank stock ...............................         2,782,500          2,449,100
Accrued interest receivable ................................         1,948,771          2,049,564
Premises and equipment, net ................................         2,804,550          2,710,492
Other assets ...............................................           178,303            318,809
                                                                 -------------      -------------

     Total assets ..........................................     $ 372,428,985      $ 346,041,302
                                                                 =============      =============

LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
     Non-interest-bearing demand deposits ..................     $   5,754,398      $   4,048,663
     Savings, NOW and MMDA deposits ........................        75,602,517         72,876,749
     Certificates of deposit ...............................       234,641,189        220,567,213
                                                                 -------------      -------------
         Total deposits ....................................       315,998,104        297,492,625

     Federal Home Loan Bank advances .......................         9,000,000               --
     Advances from borrowers for taxes and insurance .......         2,597,387          2,092,412
     Accrued expenses and other liabilities ................         3,795,215          2,465,213
                                                                 -------------      -------------
         Total liabilities .................................       331,390,706        302,050,250
                                                                 -------------      -------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S>                                                              <C>                <C>          
Shareholders' equity
     Preferred stock, no par value;  5,000,000 shares
       authorized; none issued .............................              --                 --
     Common stock, no par value;  10,000,000 shares
       authorized;  1998 - 3,380,315 shares issued
       and 2,254,642 shares outstanding; 1997 - 3,381,305
       shares issued and 2,467,238 shares outstanding ......        34,399,134         33,985,413
     Retained earnings, substantially restricted ...........        29,851,665         27,618,839
     Net unrealized appreciation on securities
       available for sale, net of tax of $33,110 in 1998 and
       $26,284 in 1997 .....................................            64,273             51,021
     Unearned Employee Stock Ownership Plan shares .........        (1,536,908)        (1,769,379)
     Unearned Recognition and Retention Plan shares ........          (466,130)          (714,294)
     Treasury stock at cost, 1,125,673 and 914,067 common
       shares at 1998 and 1997, respectively ...............       (21,273,755)       (15,180,548)
                                                                 -------------      -------------
         Total shareholders' equity ........................        41,038,279         43,991,052
                                                                 -------------      -------------

         Total liabilities and shareholders' equity ........     $ 372,428,985      $ 346,041,302
                                                                 =============      =============
</TABLE>

                                                16
<PAGE>
<TABLE>
<CAPTION>
                                 CONSOLIDATED STATEMENTS OF INCOME
                           Years ended September 30, 1998, 1997 and 1996


                                                         1998             1997             1996
                                                     -----------      -----------      -----------
<S>                                                  <C>              <C>              <C>        
Interest income
     Loans receivable, including fees
         Mortgage loans .......................      $22,407,485      $19,820,186      $17,463,746
         Consumer and other loans .............          934,504          798,484          655,700
     Securities ...............................        1,747,735        2,728,399        3,626,283
     Other ....................................          889,770        1,075,643        1,167,304
                                                     -----------      -----------      -----------
                                                      25,979,494       24,422,712       22,913,033

Interest expense
     Deposits .................................       16,130,669       14,963,252       13,787,143
     Federal Home Loan Bank advances ..........           92,112             --               --
                                                     -----------      -----------      -----------
                                                      16,222,781       14,963,252       13,787,143

Net interest income ...........................        9,756,713        9,459,460        9,125,890

Provision for loan losses .....................            2,400            2,400           13,200
                                                     -----------      -----------      -----------

Net interest income after provision
  for loan losses .............................        9,754,313        9,457,060        9,112,690

Noninterest income
     Gains on sales of interest-earning
       assets, net ............................          108,406             --              3,550
     Other ....................................          247,664          246,713          227,024
                                                     -----------      -----------      -----------
                                                         356,070          246,713          230,574

Noninterest expense
     Employee compensation and benefits .......        3,087,945        2,725,691        2,511,718
     Occupancy and equipment ..................          729,436          591,127          528,360
     Federal deposit insurance premium ........          185,957          251,594        2,235,132
     Other ....................................        1,008,989        1,187,017        1,150,883
                                                     -----------      -----------      -----------
                                                       5,012,327        4,755,429        6,426,093

Income before income taxes ....................        5,098,056        4,948,344        2,917,171

Income tax expense ............................        2,192,056        2,055,344        1,281,171
                                                     -----------      -----------      -----------

Net income ....................................      $ 2,906,000      $ 2,893,000      $ 1,636,000
                                                     ===========      ===========      ===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S>                                                  <C>              <C>              <C>        
Earnings per common and
  common equivalent share

     Basic earnings per common share ..........      $      1.32      $      1.20      $      0.57
                                                     ===========      ===========      ===========

     Diluted earnings per common share ........      $      1.28      $      1.18      $      0.57
                                                     ===========      ===========      ===========

</TABLE>
                                       17

<PAGE>
<TABLE>
<CAPTION>  
                                                            HOME BANCORP
                                     CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                                            Years ended September 30, 1998, 1997 and 1996


                                                                                                 Net Unrealized        Unearned
                                                                                                 Appreciation on       Employee     
                                                                                                   Securities            Stock      
                                                                    Common         Retained       Available For        Ownership    
                                                                     Stock         Earnings     Sale, Net of Tax      Plan Shares   
                                                                -------------   --------------   --------------    --------------- 

<S>                                                             <C>             <C>             <C>                <C>
Balances at October 1, 1995                                     $  32,445,205   $   23,831,000  $                  $    (2,215,753)
                                                                                                                                   
Cash dividends declared on common stock - $.10 per share                              (263,947)                                    
23,237 shares committed to be released under the ESOP                 118,525                                              214,576 
78,327 shares issued under the RRP                                  1,194,487                                                      
Amortization of RRP contribution                                                                                                   
Purchase 619,155 shares of treasury stock                                                                                          
Net change in unrealized appreciation on                                                                                           
  securities available for sale, net of tax of $1,608                                                    3,124                     
Net income for the year ended September 30, 1996                                     1,636,000                                     
                                                                -------------   --------------  --------------     --------------- 
Balances at September 30, 1996                                     33,758,217       25,203,053           3,124          (2,001,177)
                                                                                                                                   
Cash dividends declared on common stock - $.20 per share                              (477,214)                                    
22,590 shares committed to be released under the ESOP                 224,687                                              231,798 
Cancellation of 200 RRP shares                                         (3,050)                                                     
Amortization of RRP contribution                                                                                                   
Issuance of 14,824 common shares from treasury stock                                                                               
  due to exercise of stock options                                      5,559                                                      
Purchase 309,736 shares of treasury stock                                                                                          
Net change in unrealized appreciation on securities                                                                                
  available for sale, net of tax of $24,676                                                             47,897                     
Net income for the year ended September 30, 1997                                     2,893,000                                     
                                                                -------------   --------------  --------------     --------------- 
Balances at September 30, 1997                                     33,985,413       27,618,839          51,021          (1,769,379)
                                                                                                                                   
Cash dividends declared on common stock - $.31 per share                              (673,174)                                    
21,504 shares committed to be released under the ESOP                 420,147                                              232,471 
Cancellation of 990 RRP shares                                        (15,098)                                                     
Amortization of RRP contribution                                                                                                   
Issuance of 23,125 common shares from treasury stock                                                                               
  due to exercise of stock options                                      8,672                                                      
Purchase 234,731 shares of treasury stock                                                                                          
Net change in unrealized appreciation on securities                                                                                
  available for sale, net of tax of $6,826                                                              13,252                     
Net income for the year ended September 30, 1998                                     2,906,000                                     
                                                                -------------   --------------  --------------     --------------- 
Balances at September 30, 1998                                  $  34,399,134   $   29,851,665  $       64,273     $    (1,536,908)
                                                                =============   ==============  ==============     =============== 
                                                                                                                  
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                                                     Unearned                                      
                                                                    Recognition                         Total      
                                                                   and Retention    Treasury        Shareholders'  
                                                                    Plan Shares       Stock            Equity      
                                                                 --------------- ---------------- --------------
<S>                                                               <C>            <C>              <C> 
Balances at October 1, 1995                                      $               $                $   54,060,452                  
                                                                                                                  
Cash dividends declared on common stock - $.10 per share                                                (263,947) 
23,237 shares committed to be released under the ESOP                                                    333,101  
78,327 shares issued under the RRP                                   (1,194,487)                               -  
Amortization of RRP contribution                                        238,898                          238,898  
Purchase 619,155 shares of treasury stock                                             (9,294,413)     (9,294,413) 
Net change in unrealized appreciation on                                                                          
  securities available for sale, net of tax of $1,608                                                      3,124  
Net income for the year ended September 30, 1996                                                       1,636,000  
                                                                 --------------  ---------------  --------------  
Balances at September 30, 1996                                         (955,589)      (9,294,413)     46,713,215  
                                                                                                                  
Cash dividends declared on common stock - $.20 per share                                                (477,214) 
22,590 shares committed to be released under the ESOP                                                    456,485  
Cancellation of 200 RRP shares                                            3,050                                -  
Amortization of RRP contribution                                        238,245                          238,245  
Issuance of 14,824 common shares from treasury stock                                                              
  due to exercise of stock options                                                       220,507         226,066  
Purchase 309,736 shares of treasury stock                                             (6,106,642)     (6,106,642) 
Net change in unrealized appreciation on securities                                                               
  available for sale, net of tax of $24,676                                                               47,897  
Net income for the year ended September 30, 1997                                               -       2,893,000  
                                                                 --------------  ---------------  --------------  
Balances at September 30, 1997                                         (714,294)     (15,180,548)     43,991,052  
                                                                                                                  
Cash dividends declared on common stock - $.31 per share                                                (673,174) 
21,504 shares committed to be released under the ESOP                                                    652,618  
Cancellation of 990 RRP shares                                           15,098                                -  
Amortization of RRP contribution                                        233,066                          233,066  
Issuance of 23,125 common shares from treasury stock                                                              
  due to exercise of stock options                                                       343,984         352,656  
Purchase 234,731 shares of treasury stock                                             (6,437,191)     (6,437,191) 
Net change in unrealized appreciation on securities                                                               
  available for sale, net of tax of $6,826                                                                13,252  
Net income for the year ended September 30, 1998                                                       2,906,000  
                                                                 --------------  ---------------  --------------  
Balances at September 30, 1998                                   $     (466,130) $   (21,273,755) $   41,038,279  
                                                                 ==============  ===============  ==============  
                                                                 
</TABLE>
                                       18
<PAGE>
<TABLE>
<CAPTION>
                                                 HOME BANCORP
                                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                                Years ended September 30, 1998, 1997 and 1996

 
                                                                 1998              1997              1996
                                                            ------------      ------------      ------------
<S>                                                         <C>               <C>               <C>         
Cash flows from operating activities
   Net income .........................................     $  2,906,000      $  2,893,000      $  1,636,000
   Adjustments to reconcile net income
     to net cash from operating activities
     Depreciation .....................................          338,956           208,661           181,463
     Provision for loan losses ........................            2,400             2,400            13,200
     Gain on sale of securities .......................         (108,406)             --              (1,438)
     Gain on sale of loans ............................             --                --              (2,112)
     Loans originated for sale ........................             --                --            (123,500)
     Proceeds from loan sales .........................             --                --             125,612
     ESOP expense .....................................          652,618           456,485           333,101
     Amortization of RRP contribution .................          233,066           238,245           238,898
     Loss on disposal of premises and equipment .......            8,609               770              --
     Securities amortization and accretion, net .......         (253,523)          (72,753)          127,892
     Change in
       Accrued interest receivable ....................          100,793           210,935           421,114
       Accrued expenses and other liabilities .........        1,296,892          (451,160)        1,698,342
       Other assets ...................................          166,790           432,777          (317,673)
                                                            ------------      ------------      ------------
         Net cash from operating activities ...........        5,344,195         3,919,360         4,330,899

Cash flows from investing activities
   Proceeds from maturities of securities held to
     maturity .........................................       15,000,000        30,000,000        21,000,000
   Proceeds from sales of securities available for sale       10,286,815              --           2,032,376
   Purchase of securities available for sale ..........       (3,985,125)       (7,084,219)       (5,992,813)
   Purchase of securities held to maturity ............             --          (8,063,750)             --
   Purchase of Federal Home Loan Bank stock ...........         (333,400)         (394,900)          (86,700)
   Net change in loans ................................      (40,203,079)      (33,683,676)      (35,914,093)
   Purchase of premises and equipment .................         (441,623)         (325,006)         (444,394)
                                                            ------------      ------------      ------------
     Net cash from investing activities ...............      (19,676,412)      (19,551,551)      (19,405,624)

</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S>                                                         <C>               <C>               <C>         
Cash flows from financing activities
   Net change in deposits .............................       18,505,479        26,307,158        15,077,412
   Advances from Federal Home Loan Bank ...............        9,000,000              --                --
   Increase in advance payments by
     borrowers for taxes and insurance ................          504,975           205,553            88,514
   Purchase of treasury stock .........................       (6,437,191)       (6,106,642)       (9,294,413)
   Cash dividends paid ................................         (673,174)         (477,214)         (263,947)
   Proceeds from exercise of stock options ............          352,656           226,066              --
                                                            ------------      ------------      ------------
     Net cash from financing activities ...............       21,252,745        20,154,921         5,607,566
                                                            ------------      ------------      ------------

Net change in cash and cash equivalents ...............        6,920,528         4,522,730        (9,467,159)

Cash and cash equivalents at beginning of year ........       16,445,298        11,922,568        21,389,727
                                                            ------------      ------------      ------------

Cash and cash equivalents at end of year ..............     $ 23,365,826      $ 16,445,298      $ 11,922,568
                                                            ============      ============      ============

Supplemental disclosures of cash flow information
   Cash paid for
     Interest .........................................     $ 16,076,559      $ 14,942,651      $ 13,763,931
     Income taxes .....................................        1,712,000         1,681,976         1,586,000

</TABLE>

                                       19
<PAGE>
                                  HOME BANCORP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        September 30, 1998, 1997 and 1996


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation:  The accompanying consolidated financial statements
include Home Bancorp (the Company), and its wholly-owned  subsidiary,  Home Loan
Bankfsb (the Bank). All significant  intercompany  transactions and balances are
eliminated in consolidation.

Nature of Business  and  Concentrations  of Credit Risk:  The primary  source of
income for the Company is the  origination of  residential  real estate loans in
Fort Wayne,  Indiana and the  surrounding  areas.  Loans  secured by real estate
mortgages  comprise  approximately  99% of the loan  portfolio at September  30,
1998.  The Company  accepts  deposits  from  customers  in the normal  course of
business primarily in Fort Wayne, Indiana and the surrounding areas. The Company
operates  in the  banking  industry  which  accounts  for  more  than 90% of its
revenues.

Use  of  Estimates  In  Preparing  Financial  Statements:   Preparing  financial
statements in conformity with generally accepted accounting  principles requires
management to make estimates and assumptions that affect the reported amounts of
assets,  liabilities and disclosure of contingent  assets and liabilities at the
date of the  financial  statements  and the  reported  amounts of  revenues  and
expenses  during the  reporting  period,  as well as the  disclosures  provided.
Actual results could differ from those estimates.  Estimates associated with the
allowance for loan losses and the  classification  and fair values of securities
and other financial instruments are particularly  susceptible to material change
in the near term.

Certain  Vulnerability  Due  to  Certain  Concentrations:  Management  is of the
opinion  that the  Company  is not  vulnerable  to  concentrations  which have a
potentially significant short-term impact.

Cash and Cash  Equivalents:  For purposes of reporting cash flows, cash and cash
equivalents is defined to include the Company's cash on hand and in other banks,
federal  funds  sold,   and   interest-earning   deposits  in  other   financial
institutions  with  maturities of 90 days or less. The Company  reports net cash
flows for customer loan transactions,  deposit transactions and advance payments
by borrowers for taxes and insurance.

Securities:  The Company classifies securities into held to maturity,  available
for sale and trading categories. Held to maturity securities are those which the
Company  has the  positive  intent  and  ability  to hold to  maturity,  and are
reported at amortized cost.  Available for sale securities are those the Company
may decide to sell if needed for liquidity,  asset-liability management or other
reasons.  Available  for  sale  securities  are  reported  at fair  value,  with
unrealized  gains and losses included as a separate  component of  shareholders'
equity,  net of tax. Trading  securities are bought  principally for sale in the
near term,  and are  reported  at fair value  with  unrealized  gains and losses
included in earnings.

Gains and losses on the sale of  securities  are  determined  using the specific
identification  method based on amortized  cost and are  reflected in results of
operations  at the time of sale.  Interest  and  dividend  income,  adjusted  by
amortization  of purchase  premium or discount  over the  estimated  life of the
security using the level yield method, is included in earnings.


                                       20
<PAGE>
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Mortgage Banking Activities:  Mortgage loans originated and intended for sale in
the secondary  market are reported as loans held for sale and are carried at the
lower of cost or estimated market value in the aggregate.  Net unrealized losses
are recognized in a valuation allowance by charges to income.

Loan  servicing  fees are  recognized  when  received and the related  costs are
recognized when incurred.  The Bank sells mortgages into the secondary market at
market prices, which includes consideration for normal servicing fees.

Effective October 1, 1996, the Company adopted Statement of Financial Accounting
Standards  ("SFAS") No. 122,  Accounting  for Mortgage  Servicing  Rights.  This
Statement  changed the accounting for mortgage  servicing  rights  retained by a
loan  originator.  Under this standard,  if the originator  sells or securitizes
mortgage loans and retains the related servicing  rights,  the total cost of the
mortgage loan is allocated  between the loan (without the servicing  rights) and
the servicing rights, based on their relative fair values. Under prior practice,
all such  costs were  assigned  to the loan.  The costs  allocated  to  mortgage
servicing  rights are now  recorded  as a separate  asset and are  amortized  in
proportion  to, and over the life of, the net  servicing  income.  The  carrying
value  of  the  mortgage   servicing  rights  are  periodically   evaluated  for
impairment. The effect of adopting the statement was not material.

Loans Receivable: Loans receivable are stated at unpaid principal balances, less
the allowance for loan losses,  and net of deferred loan origination fees, costs
and discounts.

Interest  income  on loans  is  accrued  over the term of the loan  based on the
amount of unpaid principal,  except where doubt exists as to the  collectibility
of a loan, in which case the accrual of interest is  discontinued.  The carrying
values of impaired  loans are  periodically  adjusted to reflect cash  payments,
revised  estimates of future cash flows,  and  increases in the present value of
expected  cash flows due to the  passage  of time.  Cash  payments  representing
interest  income are  reported  as such.  Other cash  payments  are  reported as
reductions  in carrying  value,  while  increases or decreases due to changes in
estimates  of future  payments  and due to the  passage of time are  reported as
adjustments to the provision for loan losses.

Loan Origination  Fees and Costs:  Loan fees and certain direct loan origination
costs are deferred,  and the net fee or cost is recognized using the level yield
method, as an adjustment to interest income over the life of the loan.

Allowance  for Loan  Losses:  Because  some loans may not be repaid in full,  an
allowance  for loan  losses  is  recorded.  The  allowance  for loan  losses  is
increased  by a provision  for loan losses  charged to expense and  decreased by
charge-offs  (net of recoveries).  Estimating the risk of loss and the amount of
loss on any  loan is  necessarily  subjective.  Accordingly,  the  allowance  is
maintained by management at a level considered adequate to cover losses that are
currently  anticipated.  Management's periodic evaluation of the adequacy of the
allowance is based on past loan loss experience, known and inherent risks in the
portfolio,  adverse  situations that may affect the borrower's ability to repay,
the  estimated  value  of  any  underlying  collateral,   and  current  economic
conditions. While management may periodically allocate portions of the allowance
for specific problem loan  situations,  the whole allowance is available for any
loan charge-offs that occur.


                                       21
<PAGE>
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Loans are  considered  impaired if full  principal or interest  payments are not
anticipated in accordance  with the contractual  loan terms.  Impaired loans are
carried at the present  value of expected  future cash flows  discounted  at the
loan's  effective  interest  rate or at the fair value of the  collateral if the
loan is  collateral  dependent.  A portion of the  allowance  for loan losses is
allocated  to impaired  loans if the value of such loans is less than the unpaid
balance.  If these  allocations  cause the  allowance for loan losses to require
increase, such increase is reported in the provision for loan losses.

Smaller-balance  homogeneous  loans are evaluated for impairment in total.  Such
loans include  residential  first mortgage  loans secured by one-to-four  family
residences, residential construction loans, automobile, manufactured homes, home
equity and second mortgage loans. Commercial loans and mortgage loans secured by
other  properties are evaluated  individually  for impairment.  When analysis of
borrower  operating  results and financial  condition  indicates that underlying
cash flows of the  borrower's  business  are not  adequate to meet debt  service
requirements,  the loan is evaluated  for  impairment.  Often this is associated
with a delay or shortfall in payments of 30 days or more.  Nonaccrual  loans are
often also considered impaired. Impaired loans, or portions thereof, are charged
off when deemed  uncollectible.  The nature of disclosures for impaired loans is
considered  generally  comparable to prior nonaccrual and renegotiated loans and
non-performing and past due asset disclosures.

Foreclosed Real Estate:  Real estate properties acquired through, or in lieu of,
loan  foreclosure  are  initially   recorded  at  fair  value  at  the  date  of
acquisition, establishing a new cost basis. Any reduction to fair value from the
carrying  value of the related loan at the time of  acquisition is accounted for
as a loan  loss  and  charged  against  the  allowance  for loan  losses.  After
acquisition,  a valuation  allowance is recorded  through a charge to income for
the amount of selling costs. Valuations are periodically performed by management
and valuation  allowances are adjusted through a charge to income for changes in
fair value or estimated selling costs.

Income  Taxes:  The Company  records  income tax expense  based on the amount of
taxes due on its tax return plus deferred  taxes  computed based on the expected
future tax  consequences of temporary  differences  between the carrying amounts
and tax bases of assets and  liabilities,  using enacted tax rates.  A valuation
allowance,  if needed,  reduces deferred tax assets to the amount expected to be
realized.

Premises  and  Equipment:  Land  and  land  improvements  are  carried  at cost.
Buildings,  leasehold improvements,  and furniture,  fixtures, and equipment are
carried at cost, less accumulated  depreciation and amortization.  Buildings and
furniture,  fixtures,  and equipment  are  depreciated  using the  straight-line
method over the  estimated  useful  lives of the assets.  The cost of  leasehold
improvements is being amortized using the straight-line method over the terms of
the related leases.  These assets are reviewed for impairment under SFAS No. 121
when events indicate the carrying amount may not be recoverable.

Employee  Benefits:  The Company has a  noncontributory  defined benefit pension
plan and a defined  contribution  401(k) plan, each covering  substantially  all
employees.  The pension plan is funded through a multi-employer  defined benefit
plan, on the individual level premium method. The defined contribution plan is a
multi-employer  contributory  profit  sharing plan.  The amount of the Company's
contribution  is at the  discretion  of its Board of Directors and is limited to
the amount deductible for federal income tax purposes.


                                       22
<PAGE>
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Employee  Stock  Ownership  Plan:  The Company  accounts for its employee  stock
ownership plan (ESOP) in accordance with AICPA Statement of Position (SOP) 93-6.
Under SOP 93-6,  the cost of shares issued to the ESOP, but not yet allocated to
participants,  is presented in the consolidated balance sheets as a reduction of
shareholders' equity. Compensation expense is recorded based on the market price
of the shares as they are committed to be released for allocation to participant
accounts.  The  difference  between  the  market  price  and the cost of  shares
committed to be released is recorded as an adjustment to common stock. Dividends
on allocated ESOP shares reduce  retained  earnings;  dividends on unearned ESOP
shares reduce debt and accrued interest.

Federal Home Loan Bank Stock: The Bank is a member of the Federal Home Loan Bank
system and is required to invest in capital  stock of the Federal Home Loan Bank
("FHLB"). The amount of the required investment is based upon the balance of the
Bank's  outstanding home mortgage loans or advances from the FHLB and is carried
at cost plus the value assigned to stock dividends.

Financial  Instruments with  Off-Balance-Sheet  Risk: The Company, in the normal
course of business,  makes  commitments to make loans which are not reflected in
the financial  statements.  A summary of these  commitments is disclosed in Note
14.

Earnings  Per Share:  Basic and diluted  earnings  per common share are computed
under a new  accounting  standard  effective  beginning  with the quarter  ended
December  31,  1997.  All prior  earnings  per common  share  amounts  have been
restated to be  comparable.  Basic earnings per common share is based on the net
income  divided by the  weighted  average  number of common  shares  outstanding
during the period.  ESOP shares are  considered  outstanding  for  earnings  per
common share calculations as they are committed to be released;  unearned shares
are not considered  outstanding.  Recognition  and retention plan ("RRP") shares
are considered  outstanding  for earnings per common share  calculations as they
become vested.  Diluted  earnings per common share shows the dilutive  effect of
additional  potential  common shares  issuable under stock options and nonvested
shares  issued  under the RRP.  Earnings  and  dividends  per common  shares are
restated for all stock splits and dividends.

Stock Compensation:  Expense for employee  compensation under stock option plans
is based on  Accounting  Principles  Board  ("APB")  Opinion  25,  with  expense
reported  only if options  are granted  below  market  price at grant  date.  If
applicable,  disclosures of net income and earnings per share are provided as if
the fair value method of SFAS No.
123 were used for stock-based compensation.

Impact of New Accounting Standards:  In June 1997, the FASB issued SFAS No. 130,
Reporting  Comprehensive  Income,  which establishes  standards for reporting of
comprehensive  income.  Comprehensive  income  is net  income  plus  changes  in
unrealized appreciation  (depreciation) on securities available for sale, net of
tax. The Company will be required to adopt this statement as of October 1, 1998.


                                       23
<PAGE>
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

A new accounting standard,  SFAS No. 133, Accounting for Derivative  Instruments
and Hedging  Activities,  will require all  derivatives to be recognized at fair
value as either assets or  liabilities  in the  Consolidated  Balance Sheets for
fiscal  years  beginning  after  June 15,  1999.  Changes  in the fair  value of
derivatives not designated as hedging instruments are to be recognized currently
in earnings.  Gains or losses on derivatives  designated as hedging  instruments
are either to be  recognized  currently in earnings or are to be recognized as a
component of other  comprehensive  income,  depending on the intended use of the
derivatives  and the  resulting  designations.  The  Company  does  not  believe
adoption of this new standard  will have a material  impact on its  consolidated
financial position or results of operations.

Reclassifications:  Certain  amounts in the 1997 and 1996  financial  statements
have been reclassified to conform with the 1998 presentation.


NOTE 2 - EARNINGS PER COMMON SHARE AND COMMON EQUIVALENT SHARE

A reconciliation  of the numerators and denominators  used in the computation of
the basic  earnings  per common  share and diluted  earnings per common share is
presented below:
<TABLE>
<CAPTION>
                                                              Year Ended June 30,
                                                    ----------------------------------------
                                                       1998           1997           1996
                                                    ----------     ----------     ----------
<S>                                                 <C>            <C>            <C>       
Basic earnings per common share
   Numerator
     Net income ...............................     $2,906,000     $2,893,000     $1,636,000
                                                    ==========     ==========     ==========

   Denominator
     Weighted average common shares outstanding      2,396,434      2,642,006      3,136,253
     Less:  Average unallocated ESOP shares ...        162,199        184,270        207,205
     Less:  Average non-vested RRP shares .....         38,842         54,765         70,497
                                                    ----------     ----------     ----------

     Weighted average common shares outstanding
       for basic earnings per common share ....      2,195,393      2,402,971      2,858,551
                                                    ==========     ==========     ==========

   Basic earnings per common share ............     $     1.32     $     1.20     $     0.57
                                                    ==========     ==========     ==========

</TABLE>

                                       24
<PAGE>
NOTE 2 - EARNINGS PER COMMON SHARE AND COMMON EQUIVALENT SHARE (Continued)
<TABLE>
<CAPTION>
<S>                                                      <C>            <C>            <C>       
Diluted earnings per common share
   Numerator
     Net income ....................................     $2,906,000     $2,893,000     $1,636,000
                                                         ==========     ==========     ==========
   Denominator
     Weighted average common shares outstanding
       for basic earnings per common share .........      2,195,393      2,402,971      2,858,551

     Add:  Dilutive effects of assumed exercises of
       stock options ...............................         76,588         39,213           --
     Add:  Dilutive effects of average nonvested RRP
       shares ......................................             37           --             --
                                                         ----------     ----------     ----------
     Weighted average common shares and
       dilutive potential common shares outstanding       2,272,018      2,442,184      2,858,551
                                                         ==========     ==========     ==========

   Diluted earnings per common share ...............     $     1.28     $     1.18     $     0.57
                                                         ==========     ==========     ==========
</TABLE>
NOTE 3 - SECURITIES

Year end securities available for sale were as follows:
<TABLE>
<CAPTION>

                                              Gross            Gross
                           Amortized       Unrealized        Unrealized           Fair
1998                          Cost            Gains            Losses             Value
----                      -----------     -----------     ---------------     -----------
<S>                       <C>             <C>             <C>                 <C>        
Debt securities
      U.S. Government     $ 5,039,804     $    97,383     $          --       $ 5,137,187
                          ===========     ===========     ===============     ===========

                                                                                     1997
Debt securities
      U.S. Government     $11,049,257     $    77,305     $          --       $11,126,562
                          ===========     ===========     ===============     ===========
</TABLE>
Year end securities held to maturity were as follows:
<TABLE>
<CAPTION>

                                              Gross            Gross
                           Amortized       Unrealized        Unrealized           Fair
1998                          Cost            Gains            Losses             Value
----                      -----------     -----------     ---------------     -----------
<S>                       <C>             <C>             <C>                 <C>        
Debt securities
      U.S. Government     $12,024,247     $   170,753     $          --       $12,195,000
                          ===========     ===========     ===============     ===========

                                                                                     1997
Debt securities
      U.S. Government     $26,954,555     $   259,445     $          --       $27,214,000
                          ===========     ===========     ===============     ===========
</TABLE>
                                       25

<PAGE>
NOTE 3 - SECURITIES (Continued)

The amortized cost and fair value of debt  securities by  contractual  maturity,
are shown below.  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.
<TABLE>
<CAPTION>
                                                        September 30, 1998
                                                   -----------------------------
                                                    Amortized            Fair
                                                      Cost              Value
                                                   -----------       -----------
<S>                                                <C>               <C>        
Due in one year or less ....................       $12,037,305       $12,136,875
Due after one year through five years ......         5,026,746         5,195,312
                                                   -----------       -----------

                                                   $17,064,051       $17,332,187
                                                   ===========       ===========
</TABLE>
Proceeds from securities  available for sale during the year ended September 30,
1998 were  $10,286,815;  gross gains of $108,406  were  realized on these sales.
There  were no sales of  securities  available  for sale  during  the year ended
September 30, 1997. Proceeds from securities  available for sale during the year
ended September 30, 1996 were $2,032,376; gross gains of $1,438 were realized on
these sales.  No securities  classified as held to maturity were  transferred to
available for sale during the years ended September 30, 1998 or 1997.


NOTE 4 - LOANS RECEIVABLE

Loans receivable at year end are summarized as follows:
<TABLE>
<CAPTION>
                                                            1998             1997
                                                       ------------     ------------
<S>                                                    <C>              <C>                                   
Mortgage loans
    Principal balances
         Secured by one to four family residences      $308,626,708     $269,995,150
         Secured by other properties .............        1,715,486        1,856,007
         Construction loans ......................       11,511,693       11,796,566
                                                       ------------     ------------
                                                        321,853,887      283,647,723
    Less
         Undisbursed portion of construction loans        5,687,860        6,666,049
         Net deferred loan origination fees ......          392,456          337,509
                                                       ------------     ------------
             Total first mortgage loans ..........      315,773,571      276,644,165
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S>                                                    <C>              <C>     
Consumer and other loans
    Principal balances
         Home equity and second mortgage .........        8,789,814        7,804,899
         Other ...................................        1,259,950        1,133,388
                                                       ------------     ------------
             Total consumer and other loans ......       10,049,764        8,938,287

Less
    Allowance for loan losses ....................        1,390,389        1,387,989
    Loans in process .............................          245,345          207,541
                                                       ------------     ------------

                                                       $324,187,601     $283,986,922
                                                       ============     ============
</TABLE>
                                       26

<PAGE>
NOTE 4 - LOANS RECEIVABLE (Continued)

Activity in the allowance for loan losses for the years ended September 30 is as
follows:
<TABLE>
<CAPTION>
                                           1998           1997           1996
                                        ----------     ----------     ----------
<S>                                     <C>            <C>            <C>       
Balance at beginning of period ....     $1,387,989     $1,385,589     $1,372,357
Provision charged to income .......          2,400          2,400         13,200
Net recoveries (charge-offs) ......           --             --               32
                                        ----------     ----------     ----------

Balance at end of period ..........     $1,390,389     $1,387,989     $1,385,589
                                        ==========     ==========     ==========
</TABLE>

At September  30, 1998 and 1997, no portion of the allowance for loan losses was
allocated to impaired loan balances as the Company had no loans it considered to
be impaired loans as of or for the years ended September 30, 1998 and 1997.


NOTE 5 - LOAN SERVICING

Mortgage loans serviced for others are not included in the accompanying  balance
sheets. The unpaid principal balances at September 30 are as follows:

                                                   1998               1997
                                              ---------------    --------------

     Mortgage loans serviced for FNMA         $     1,955,651    $    2,531,364
                                              ===============    ==============
 
Custodial escrow balances  maintained for this loan servicing were approximately
$24,000 and $28,000 at September 30, 1998 and 1997, respectively.


NOTE 6 - PREMISES AND EQUIPMENT

Premises and equipment at September 30 are as follows:
<TABLE>
<CAPTION>

                                                       1998              1997
                                                   -----------      -----------
<S>                                                <C>              <C>        
Land and land improvements ...................     $   643,350      $   643,350
Buildings ....................................       2,557,674        2,554,705
Furniture, fixtures and equipment ............       1,297,483        1,310,475
Leasehold improvements .......................         291,005          291,005
                                                   -----------      -----------
                                                     4,789,512        4,799,535
Less accumulated depreciation and amortization      (1,984,962)      (2,089,043)
                                                   -----------      -----------

                                                   $ 2,804,550      $ 2,710,492
                                                   ===========      ===========
</TABLE>
                                       27
<PAGE>
NOTE 7 - DEPOSITS

The aggregate amount of deposits with a minimum denomination of $100,000 or more
was  approximately  $62,518,313  and $54,316,000 at September 30, 1998 and 1997,
respectively.  Depositors  have their accounts  insured up to applicable  limits
($100,000  per  depositor,   as  defined)  by  the  Federal  Deposit   Insurance
Corporation.

At September 30, 1998, the scheduled  maturities of  certificates of deposit are
as follows for the years ended September 30:

                           1999                    $      151,761,407
                           2000                            33,114,685
                           2001                             9,283,948
                           2002                            10,271,519
                           2003                             6,501,727
                           Thereafter                      23,707,903
                                                   ------------------

                                                   $      234,641,189


NOTE 8 - FEDERAL HOME LOAN BANK ADVANCES

At September  30,  1998,  advances  from the FHLB with fixed rates  ranging from
5.04% to 5.84% mature in the year ending September 30 as follows:

                         1999                     $    2,000,000
                         2000                          5,000,000
                         2001                                  -
                         2002                                  -
                         2003                                  -
                         Thereafter                    2,000,000
                                                  --------------

                                                  $    9,000,000

There were no outstanding advances at September 30, 1997.

These advances were required to be collateralized by pledged  securities with an
amortized cost of  approximately  $12,024,000 and a fair value of  approximately
$12,195,000.   In  addition,   qualifying   mortgage   loans  of   approximately
$305,152,000  were available as collateral  under a blanket lien  arrangement at
September 30, 1998.


NOTE 9 - EMPLOYEE BENEFITS

Employee   Pension  Plan:  The  pension  plan  is  part  of  a   noncontributory
multi-employer   defined-benefit   pension  plan  covering   substantially   all
employees.  As a  multi-employer  plan,  there is no separate  valuation of plan
benefits nor segregation of plan assets  specifically  for the Company.  For the
year ended  September 30, 1998,  the fund was fully  funded.  Expense under this
plan was approximately  $-0-, $-0- and $49,000 for the years ended September 30,
1998, 1997 and 1996, respectively.

                                       28
<PAGE>
NOTE 9 - EMPLOYEE BENEFITS (Continued)

401(k) Plan: The Company  maintains a 401(k) salary  reduction plan which covers
substantially  all  employees.  Participants  made  deferrals  from 1% to 15% of
compensation  and the Company matched 50% of elective  deferrals on the first 6%
of the participants' compensation through March 31, 1996. Between March 31, 1996
and  November  30,  1996,  participants  made  deferrals  on  the  first  2%  of
compensation,  however,  the Company did not provide any match of such  elective
deferrals.  After November 30, 1996,  participants may make deferrals from 1% to
15% of  compensation,  however,  the Company  does not provide any match of such
elective deferrals.  The Company provided  discretionary  contributions of 1% of
compensation  for the year ended September 30, 1996.  Contributions  and related
expense attributable to the plan were approximately $4,000 for each of the years
ended September 30, 1998, 1997 and 1996, respectively.

Recognition  and  Retention  Plans  ("RRP"):  In  October,   1995,  the  Company
established the RRP as a method of providing  directors,  officers and other key
employees of the Company with a proprietary  interest in the Company in a manner
designed to encourage such persons to remain with the Company. The terms of each
grant of stock pursuant to the RRP are identical;  only the participants and the
number of shares awarded to each participant vary. The Bank contributed funds to
the RRP for the purchase of 78,327 shares of Company  common stock at an average
price of $15.25  per  share.  On October  10,  1995,  awards of grants for these
shares were issued to various directors, officers and other key employees of the
Company.  These awards  generally  are to vest and be earned by the recipient at
the rate of 20% per year,  commencing  October 10, 1996. The unearned portion of
these stock  awards is  presented as a reduction  of  shareholders'  equity.  An
expense of approximately  $233,000 and $238,000 was recorded for these Plans for
the years ended September 30, 1998 and 1997, respectively.

Employee Stock Ownership Plan (ESOP):  In conjunction with the stock conversion,
the Company  established  an ESOP for eligible  employees.  Employees with 1,000
hours of  employment  with the Bank and who have attained age 21 are eligible to
participate.  The ESOP borrowed  $2,312,090 from the Company to purchase 231,209
shares of the common stock issued in the conversion at $10 per share. Collateral
for the loan is the  unearned  shares of common  stock  purchased  with the loan
proceeds  by the  ESOP.  The loan  will be repaid  principally  from the  Bank's
discretionary  contributions  to the ESOP  over a period of  twelve  years.  The
interest rate for the loan is a variable  monthly rate equal at all times to the
Applicable  Federal  Rate.  Shares  purchased by the ESOP are held in a suspense
account for  allocation  among  participants  as the loan is repaid.  Expense of
approximately $635,000,  $451,000 and $352,000 was recorded relative to the ESOP
for  the  years  ended  September  30,  1998,   1997  and  1996,   respectively.
Contributions  of $283,000,  $302,000 and $310,000  were made to the ESOP during
the years ended  September 30, 1998, 1997 and 1996,  respectively.  Dividends on
unearned shares are used to reduce the accrued  interest and principal amount of
the ESOPs loan payable to the Company.

Contributions  to the ESOP and shares  released from the suspense  account in an
amount  proportional  to the repayment of the ESOP loan are allocated among ESOP
participants on the basis of  compensation  in the year of allocation.  Benefits
generally  become 100% vested after five years of credited  service.  Credit for
vesting  purposes is given for years of service prior to the  effective  date of
the  ESOP.  Prior  to the  completion  of five  years  of  credited  service,  a
participant  who  terminates  employment  for reasons  other than death,  normal
retirement,  or  disability  does  not  receive  any  benefit  under  the  ESOP.
Forfeitures are reallocated among remaining participating employees, in the same
proportion as  contributions.  Benefits are payable in the form of stock or cash
upon termination of employment.  The Company's contributions to the ESOP are not
fixed, so benefits payable under the ESOP cannot be estimated.


                                       29
<PAGE>
NOTE 9 - EMPLOYEE BENEFITS (Continued)

ESOP participants are entitled to receive distributions from their ESOP accounts
only upon termination of service.  A participant  entitled to a distribution may
require the Company to  repurchase  the stock in the event that the stock is not
readily tradable on an established  market  (referred to as the put option).  In
general,  participants  are  entitled to exercise the put option for a period of
not more than 60 days following the date of  distribution  of the stock.  As the
Company's  common stock is traded on the NASDAQ National Market under the symbol
"HBFW", the provisions of the put option currently have no effect.

For the years ended September 30, 1998, 1997 and 1996, 21,504, 22,590 and 23,237
shares  with an  average  fair  value of  $29.56,  $19.96  and $15.07 per share,
respectively, were committed to be released.

The ESOP shares as of September 30 are as follows:
<TABLE>
<CAPTION>

                                            1998           1997           1996
                                        ----------     ----------     ----------
<S>                                     <C>            <C>            <C>   
Allocated shares ..................         79,681         58,177         35,587

Unearned shares ...................        151,528        173,032        195,622
                                        ----------     ----------     ----------

Total ESOP shares .................        231,209        231,209        231,209
                                        ==========     ==========     ==========

Fair value of unearned shares .....     $4,129,138     $4,196,026     $3,105,499
                                        ==========     ==========     ==========
</TABLE>


Stock  Option  Plan:  The Board of  Directors  of the  Company  adopted the Home
Bancorp 1995 Stock Option and Incentive  Plan (the "Plan") in  conjunction  with
the stock conversion.  The number of options authorized under the Plan is 10% or
330,317 shares of common stock issued in the conversion. Officers, directors and
key employees of the Company and its subsidiaries are eligible to participate in
the Plan.  The option  exercise  price must be at least 100% of the market value
(as defined in the Plan) of the common  stock on the date of the grant,  and the
option term cannot  exceed 10 years.  Eligible  officers  and  directors  of the
Company are able to exercise  options awarded to them at a rate of 20% per year,
October 10, 1996 being the first possible exercise date.


                                       30
<PAGE>
NOTE 9 - EMPLOYEE BENEFITS (Continued)

The Company  applied APB Opinion 25  "Accounting  for Stock Issued to Employees"
and  related  interpretations  in  accounting  for  its  Plan.  Accordingly,  no
compensation expense has been recognized for the Plan. SFAS No. 123, "Accounting
for Stock-Based Compensation," requires disclosures for stock-based compensation
awarded in fiscal years  beginning after December 15, 1994 for companies that do
not adopt its fair value  accounting  method for stock-based  compensation.  The
effects on the Company's net income and earnings per share under the  provisions
of SFAS No. 123 were not  material  for the years ended  September  30, 1997 and
1998. In future  years,  as  additional  options are granted,  the effect on net
income and earnings per share may increase.
<TABLE>
<CAPTION>
                                                    Available                 Options             Weighted-Average
                                                    For Grant               Outstanding            Exercise Price
                                                  ------------             ------------            ------------
<S>                                               <C>                      <C>                     <C>         
     Balance - October 10, 1995                        330,317                        -
     Granted (expire October 10, 2005)                (228,504)                 228,504            $      15.25
     Exercised                                               -                        -
     Forfeited                                               -                        -
                                                  ------------             ------------
     Balance - September 30, 1996                      101,813                  228,504

     Granted                                                 -                        -
     Exercised                                               -                  (14,824)                  15.25
     Forfeited                                               -                        -
                                                  ------------             ------------
     Balance - September 30, 1997                      101,813                  213,680                   15.25

     Granted                                                 -                        -
     Exercised                                               -                  (23,125)                  15.25
     Forfeited                                           3,789                   (3,789)
                                                  ------------             ------------
     Balance - September 30, 1998                      105,602                  186,766
                                                  ============             ============
</TABLE>

At year end 1998, options outstanding had a weighted-average remaining life of 7
years and an exercise price of $15.25.

Options exercisable at year end are as follows.

                                 Number              Weighted-Average
                              of Options             Exercise Price
                              ----------             --------------

     1998                        53,476                 $15.25
     1997                        30,877                  15.25


                                       31
<PAGE>
NOTE 10 - INCOME TAXES

The  Company  and the Bank file a  consolidated  federal  income tax return on a
fiscal year basis.  Prior to fiscal year 1997, if certain conditions were met in
determining  taxable income as reported on the  consolidated  federal income tax
return,  the Bank was allowed a special bad debt deduction based on a percentage
of taxable income (8.00% through 1996) or on specified experience formulas.  The
Bank  used the  percentage  of  taxable  income  method  for the tax year  ended
September 30, 1996. Tax legislation  passed in August 1996 now requires the Bank
to  deduct a  provision  for bad  debts for tax  purposes  based on actual  loss
experience  and recapture the excess bad debt reserve  accumulated  in tax years
beginning after September 30, 1987. The related amount of deferred tax liability
which must be  recaptured  is  approximately  $625,000 and is payable over a six
year period beginning no later than the tax year ending September 30, 1999.

Income tax expense for the years ended September 30 is:
<TABLE>
<CAPTION>
                                   1998               1997              1996
                               -----------        -----------       -----------
<S>                            <C>                <C>               <C> 
Federal
     Current ...........       $ 1,808,251        $   978,879       $ 1,410,864
     Deferred ..........           (91,695)           630,214          (390,632)
                               -----------        -----------       -----------
                                 1,716,556          1,609,093         1,020,232
State
     Current ...........           475,916            284,219           422,380
     Deferred ..........              (416)           162,032          (161,441)
                               -----------        -----------       -----------
                                   475,500            446,251           260,939
                               -----------        -----------       -----------

Income tax expense .....       $ 2,192,056        $ 2,055,344       $ 1,281,171
                               ===========        ===========       ===========
</TABLE>
The  differences  between the provision for income taxes shown on the statements
of income and amounts computed by applying the statutory federal income tax rate
of 34% to income before income taxes are as follows:
<TABLE>
<CAPTION>
                                                        1998             1997             1996
                                                    -----------      -----------      -----------
<S>                                                 <C>              <C>              <C>        
Income taxes at statutory rate ................     $ 1,733,339      $ 1,682,437      $   991,838
Increase in taxes resulting from:
    ESOP expense (market value in excess
      of cost of related shares) ..............         142,850           76,394          117,976
    State tax, net of federal income tax effect         300,510          294,526          172,220
    Other .....................................          15,357            1,987             (863)
                                                    -----------      -----------      -----------

    Income tax expense ........................     $ 2,192,056      $ 2,055,344      $ 1,281,171
                                                    ===========      ===========      ===========

    Effective tax rate ........................            43.0%            41.5%            43.9%
                                                    ===========      ===========      ===========
</TABLE>
                                       32
<PAGE>
NOTE 10 - INCOME TAXES (Continued)

Components of the net deferred tax asset as of September 30 are:
<TABLE>
<CAPTION>
                                                     1998            1997          1996
                                                  ---------      ---------      ---------
<S>                                               <C>            <C>            <C>  
Deferred tax assets:
    SAIF assessment .........................     $    --        $    --        $ 652,686
    Deferred loan fees ......................       155,452        133,687        155,588
    Recognition and retention plan ..........        41,703         94,673           --
    Other ...................................        13,798         18,602        125,953
                                                  ---------      ---------      ---------
         Total deferred tax assets ..........       210,953        246,962        934,227

Deferred tax liabilities:
    Bad debts ...............................       (75,181)       (76,133)       (41,936)
    Discount accretion ......................       (54,939)      (182,107)      (111,323)
    Net unrealized appreciation on securities
      available for sale ....................       (33,110)       (26,284)        (1,608)
                                                  ---------      ---------      ---------
         Total deferred tax liabilities .....      (163,230)      (284,524)      (154,867)
Valuation allowance .........................          --             --             --
                                                  ---------      ---------      ---------

Net deferred tax asset (liability) ..........     $  47,723      $ (37,562)     $ 779,360
                                                  =========      =========      =========
</TABLE>


Federal  income  tax  laws  provided  savings  banks  with  additional  bad debt
deductions  through  September  30,  1987,  totaling  $7,600,000  for the  Bank.
Accounting  standards do not require a deferred tax  liability to be recorded on
this amount,  which liability otherwise would total approximately  $2,600,000 at
September 30, 1998 and 1997. If the Bank were liquidated or otherwise  ceases to
be a bank or if tax laws were to change,  the  $2,600,000  would be  recorded as
expense.


NOTE 11 - CAPITAL STANDARDS

Savings  institutions  insured by the FDIC must meet various  regulatory capital
requirements. If a requirement is not met, regulatory authorities may take legal
or administrative actions, including restrictions on growth or operations or, in
extreme cases, seizure.



                                       33
<PAGE>
NOTE 11 - CAPITAL STANDARDS (Continued)

At September 30, the Bank's actual  capital levels and minimum  required  levels
(in thousands) were:
<TABLE>
<CAPTION>
                                                                                                    Minimum   
                                                                                                  Requirement
                                                                                                  To Be Well                    
                                                                                               Capitalized Under      
                                                                     For Capital               Prompt Corrective
                                          Actual                  Adequacy Purposes            Action Provisions
                                   Amount         Ratio         Amount          Ratio         Amount        Ratio
                                 ---------        -----        ---------         ----        --------       ----- 
                                                               (Dollars in thousands)
<S>                              <C>              <C>          <C>               <C>         <C>            <C>   
1998
Total Capital (to risk
  weighted assets)               $  35,232        18.97%       $  14,855         8.00%       $ 18,569       10.00%
Tier I (Core) Capital
  (to risk weighted
  assets)                        $  33,841        18.22%       $   7,428         4.00%       $ 11,141        6.00%
Tier I (Core) Capital
  (to adjusted total
  assets)                        $  33,841         9.23%       $  11,001         3.00%            N/A           N/A
Tangible Capital
  (to adjusted total
  assets)                        $  33,841         9.23%       $   5,500         1.50%            N/A           N/A
Tier I (Core) Capital
  (to average assets)            $  33,841         9.68%       $  13,982         4.00%       $ 17,478         5.00%

1997
Total Capital (to risk
  weighted assets)               $  34,601        21.38%       $  12,946         8.00%       $ 16,182       10.00%
Tier I (Core) Capital
  (to risk weighted
  assets)                        $  33,213        20.52%       $   6,473         4.00%       $  9,709        6.00%
Tier I (Core) Capital
  (to adjusted total
  assets)                        $  33,213         9.85%       $  10,120         3.00%            N/A           N/A
Tangible Capital
  (to adjusted total
  assets)                        $  33,213         9.85%       $   5,060         1.50%            N/A           N/A
Tier I (Core) Capital
  (to average assets)            $  33,213        10.03%       $  13,242         4.00%       $ 16,553         5.00%

</TABLE>
                                       34
<PAGE>
NOTE 11 - CAPITAL STANDARDS (Continued)

Regulations  of the Office of Thrift  Supervision  limit the amount of dividends
and  other  capital  distributions  that  may be paid by a  savings  institution
without  prior  approval  of the Office of Thrift  Supervision.  The  regulatory
restriction  is based on a  three-tiered  system with the  greatest  flexibility
being afforded to well-capitalized (Tier 1) institutions.  The Bank is currently
a Tier 1 institution.  Accordingly,  the Bank can make, without prior regulatory
approval,  distributions  during a calendar year up to 100% of its net income to
date during the  calendar  year plus an amount that would reduce by one-half its
"surplus  capital  ratio"  (the excess  over its  capital  requirements)  at the
beginning of the calendar year. Accordingly, at September 30, 1998 approximately
$8,680,000  of  the  Bank's  retained  earnings  is  potentially  available  for
distribution to the Company.

At the time of the conversion,  the Company established a liquidation account in
an amount  equal to its total  net  worth as of the date of the  latest  balance
sheet appearing in the final prospectus ($21,370,000 at September 30, 1994). The
liquidation  account will be maintained  for the benefit of eligible  depositors
who continue to maintain  their accounts at the Bank after the  conversion.  The
liquidation  account  will be  reduced  annually  to the  extent  that  eligible
depositors have reduced their qualifying deposits. Subsequent increases will not
restore an eligible account holder's interest in the liquidation account. In the
event of a complete  liquidation,  each eligible  depositor  will be entitled to
receive a distribution from the liquidation  account in an amount  proportionate
to the current  adjusted  qualifying  balances for the accounts  then held.  The
liquidation  account balance is not available for payment of dividends.  This is
less restrictive than the divided limitation discussed above.


NOTE 12 - FEDERAL DEPOSIT INSURANCE PREMIUM

The deposits of savings associations such as the Bank are insured by the Savings
Association  Insurance Fund ("SAIF"). A recapitalization plan signed into law on
September  30, 1996  provided  for a one-time  assessment  of 65.7 basis  points
applied to all SAIF deposits as of March 31, 1995.  Based on the Bank's deposits
as of this date, a one-time assessment of approximately  $1,648,000 was recorded
as a non-interest expense for the year ended September 30, 1996.

<PAGE>
NOTE 13 - OTHER NONINTEREST INCOME AND EXPENSE

Other  noninterest  income and  expenses  for the years ended  September  30 are
summarized as follows:
<TABLE>
<CAPTION>


                                             1998           1997           1996
                                         ----------     ----------     ----------
<S>                                      <C>            <C>            <C>                          
Other noninterest income
     Service charges and fees ......     $  155,615     $  147,890     $  129,656
     Late charges ..................         41,263         48,088         42,270
     Other .........................         50,786         50,735         55,098
                                         ----------     ----------     ----------

                                         $  247,664     $  246,713     $  227,024
                                         ==========     ==========     ==========
Other noninterest expenses
     Advertising and promotion .....     $  203,694     $  201,798     $  187,176
     Data processing ...............        309,994        252,750        250,114
     Professional fees .............        151,880        165,230        164,765
     Telephone, postage and supplies        181,532        154,751        172,657
     Other .........................        161,889        412,488        376,171
                                         ----------     ----------     ----------

                                         $1,008,989     $1,187,017     $1,150,883
                                         ==========     ==========     ==========
</TABLE>

                                       35
<PAGE>
NOTE 14 - COMMITMENTS AND CONTINGENCIES

In the  ordinary  course  of  business,  the  Company  has  various  outstanding
commitments   and  contingent   liabilities   that  are  not  reflected  in  the
accompanying  consolidated  financial  statements.  The  principal  commitments,
excluding loans in process, of the Company are as follows at September 30, 1998:
<TABLE>
<CAPTION>

                                       Fixed          Variable
                                        Rate           Rate             Total
                                   -----------      -----------      -----------
<S>                                <C>              <C>              <C>        
Mortgage loans ..............      $ 8,420,100      $ 1,105,650      $ 9,525,750
Consumer and other loans ....          242,000          379,550          621,550
                                   -----------      -----------      -----------

                                   $ 8,662,100      $ 1,485,200      $10,147,300
                                   ===========      ===========      ===========
</TABLE>

The principal  commitments,  excluding  loans in process,  of the Company are as
follows at September 30, 1997:
<TABLE>
<CAPTION>

                                         Fixed          Variable
                                          Rate            Rate           Total
                                      ----------      ----------      ----------
<S>                                   <C>             <C>             <C>       
Mortgage loans .................      $3,633,000      $1,745,000      $5,378,000
Consumer and other loans .......           3,000         409,000         412,000
                                      ----------      ----------      ----------

                                      $3,636,000      $2,154,000      $5,790,000
                                      ==========      ==========      ==========
</TABLE>


The majority of loan  commitments  have  commitment  periods up to 90 days, loan
terms ranging from 10 years to 30 years and  contractual  interest rates ranging
from 6.59% to 10.00%.

The Company has commitments for unused lines of credit  aggregating  $12,279,000
at September 30, 1998.

Since certain commitments to make loans and to fund lines of credit and loans in
process  expire without being used,  the amount does not  necessarily  represent
future cash  commitments.  In addition,  commitments  used to extend  credit are
agreements  to  lend to a  customer  as long as  there  is no  violation  of any
condition established in the contract.  The Company's exposure to credit loss in
the event of nonperformance by the other party to these financial instruments is
represented by the contractual amount of these instruments.  The Company follows
the same credit policy to make such  commitments  as is followed for those loans
recorded on the consolidated balance sheet.

At September 30, 1998, the Company has an approved line of credit of $15,000,000
with the Federal Home Loan Bank of  Indianapolis.  In the event the Company were
to draw on the line,  the Company  would pledge as  collateral,  securities  and
qualifying mortgage loans under a blanket lien arrangement.
<PAGE>
The Company has  long-term  leases for premises  which  expire at various  dates
through 2001. The Company pays taxes,  insurance and  maintenance  costs on such
premises.  Total  lease  expense  related to these  premises  was  approximately
$80,000 for each of the years ended September 30, 1998, 1997 and 1996.

The Company and the Bank are subject to certain claims and legal actions arising
in the  ordinary  course  of  business.  In the  opinion  of  management,  after
consultation  with legal counsel,  the ultimate  disposition of these matters is
not expected to have a material  adverse  effect on the  consolidated  financial
position of the Company.

                                       36
<PAGE>
NOTE 15 - SIGNIFICANT GROUP CONCENTRATIONS OF CREDIT RISK

The Company grants real estate and consumer loans including home improvement and
other consumer  loans  primarily in Allen and Adams  counties.  Loans secured by
residential  real  estate  mortgages  comprise  approximately  99% of  the  loan
portfolio.  The  Company  is also  involved  in the sale of  mortgage  loans and
servicing of these loans for secondary market agencies. The Company's policy for
collateral on mortgage loans allows  borrowings up to 95% of the appraised value
of the property as established by appraisers  approved by the Company's Board of
Directors,  provided  that private  mortgage  insurance is obtained in an amount
sufficient  to reduce the Company's  exposure to or below the 80%  loan-to-value
level. The percentage and  documentation  guidelines are designed to protect the
Company's  interest in the  collateral as well as to comply with  guidelines for
sale in the secondary market.


NOTE 16 - PARENT COMPANY FINANCIAL STATEMENTS

Presented below are condensed financial statements for the parent company,  Home
Bancorp:
<TABLE>
<CAPTION>
                            CONDENSED BALANCE SHEETS
                           September 30, 1998 and 1997

                                                         1998            1997
                                                     -----------     -----------
<S>                                                  <C>             <C>                    
ASSETS
Cash and cash equivalents ......................     $ 1,012,023     $ 2,772,237
Investment in subsidiary bank ..................      33,840,543      33,252,929
Securities available for sale ..................       5,137,188       5,090,938
Securities held to maturity ....................            --           990,443
Loan receivable from ESOP ......................       1,536,908       1,769,379
Other assets ...................................          31,346         143,547
                                                     -----------     -----------

     Total assets ..............................     $41,558,008     $44,019,473
                                                     ===========     ===========

LIABILITIES
Accrued expenses ...............................     $   519,729     $    28,421

SHAREHOLDERS' EQUITY ...........................      41,038,279      43,991,052
                                                     -----------     -----------

     Total liabilities and shareholders' equity      $41,558,008     $44,019,473
                                                     ===========     ===========

</TABLE>
                                       37
<PAGE>
NOTE 16 - PARENT COMPANY FINANCIAL STATEMENTS (Continued)
<TABLE>
<CAPTION>

                                 CONDENSED STATEMENTS OF INCOME

                                                               Year ended September 30,
                                                 ---------------------------------------------
                                                     1998             1997             1996
                                                 -----------      -----------      -----------
<S>                                              <C>              <C>              <C>        
Interest income ............................     $   500,331      $   459,166      $   727,979
Dividends from subsidiary bank .............       2,714,000        8,383,000          907,000
Net realized gains on sales of securities
  available for sale .......................            --               --              1,438
                                                 -----------      -----------      -----------
                                                   3,214,331        8,842,166        1,636,417

Operating expenses .........................         140,186          127,287          384,354
                                                 -----------      -----------      -----------

Income before income taxes and equity in
  undistributed earnings of subsidiary bank        3,074,145        8,714,879        1,252,063

Equity in undistributed (excess distributed)
  earnings of subsidiary bank ..............         (25,000)      (5,690,000)         521,000
                                                 -----------      -----------      -----------

Income before income taxes .................       3,049,145        3,024,879        1,773,063

Income tax expense .........................         143,145          131,879          137,063
                                                 -----------      -----------      -----------


Net income .................................     $ 2,906,000      $ 2,893,000      $ 1,636,000
                                                 ===========      ===========      ===========
</TABLE>
                                              38

<PAGE>
NOTE 16 - PARENT COMPANY FINANCIAL STATEMENTS (Continued)
<TABLE>
<CAPTION>

                                    CONDENSED STATEMENTS OF CASH FLOWS

                                                                        Year ended September 30,
                                                            ---------------------------------------------
                                                                1998             1997             1996 
                                                            -----------      -----------      -----------
<S>                                                         <C>              <C>              <C>        

Cash flows from operating activities
     Net income .......................................     $ 2,906,000      $ 2,893,000      $ 1,636,000
     Adjustments to reconcile net income to net
       cash provided by operating activities
         Equity in (undistributed) excess distributed
           income of subsidiary bank ..................          25,000        5,690,000         (521,000)
         Amortization and accretion, net ..............         197,337          226,069          200,417
         Net realized gains on sales of securities
           available for sale .........................            --               --             (1,438)
         Net change in other assets ...................         178,489          (55,035)          56,281
         Net change in accrued expenses ...............         458,198            8,454             (863)
                                                            -----------      -----------      -----------
              Net cash provided by operating activities       3,765,024        8,762,488        1,369,397

Cash flows from investing activities
     Proceeds from sales of securities available
       for sale .......................................            --               --          2,032,376
     Proceeds from maturities of securities held
       to maturity ....................................       1,000,000        3,000,000        4,000,000
     Purchase of securities available for sale ........            --         (5,078,125)      (2,030,938)
     Repayments on loan receivable from ESOP ..........         232,471          231,798          214,576
                                                            -----------      -----------      -----------
         Net cash provided by (used in) investing
           activities .................................       1,232,471       (1,846,327)       4,216,014

Cash flows from financing activities
     Purchase of treasury stock .......................      (6,437,191)      (6,106,642)      (9,294,413)
     Cash dividends paid ..............................        (673,174)        (477,214)        (263,947)
     Proceeds from exercise of stock options ..........         352,656          226,066             --
                                                            -----------      -----------      -----------
         Net cash used in financing activities ........      (6,757,709)      (6,357,790)      (9,558,360)
                                                            -----------      -----------      -----------

     Net change in cash and cash equivalents ..........      (1,760,214)         558,371       (3,972,949)

Cash and cash equivalents at beginning of period ......       2,772,237        2,213,866        6,186,815
                                                            -----------      -----------      -----------

Cash and cash equivalents at end of period ............     $ 1,012,023      $ 2,772,237      $ 2,213,866
                                                            ===========      ===========      ===========
</TABLE>

The extent to which the  Company may pay cash  dividends  to  shareholders  will
depend on the cash  currently  available at the  Company,  as well as the Bank's
ability to pay dividends to the Company (see Note 11).


                                       39
<PAGE>
NOTE 17 - FAIR VALUES OF FINANCIAL INSTRUMENTS

The  following  table shows the  estimated  fair value and the related  carrying
amounts of the Company's  financial  instruments at September 30, 1998 and 1997.
Items which are not financial instruments are not included.
<TABLE>
<CAPTION>


                                                       1 9 9 8                                1 9 9 7
                                                       -------                                -------
                                              Carrying           Estimated           Carrying            Estimated
                                               Amount           Fair Value            Amount            Fair Value
                                        ---------------     ---------------     ---------------    ----------------
<S>                                     <C>                 <C>                 <C>                <C>             
Cash and cash equivalents               $    23,365,826     $    23,366,000     $    16,445,298    $     16,445,000
Securities available for sale                 5,137,187           5,137,000          11,126,562          11,127,000
Securities held to maturity                  12,024,247          12,195,000          26,954,555          27,214,000
Loans receivable, net                       324,187,601         338,857,000         283,986,922         287,953,000
Federal Home Loan Bank
  stock                                       2,782,500           2,783,000           2,449,100           2,449,000
Demand and savings deposits                 (81,356,915)        (81,357,000)        (76,925,412)        (76,925,000)
Certificates of deposit                    (234,641,189)       (237,578,000)       (220,567,213)       (222,072,000)
FHLB advances                                (9,000,000)         (9,000,000)                  -                   -
Advances from borrowers for
  taxes and insurance                        (2,597,387)         (2,597,000)         (2,092,412)         (2,092,000)
</TABLE>

For purposes of the above  disclosures  of estimated  fair value,  the following
assumptions  were used as of September  30, 1998 and 1997.  The  estimated  fair
value for cash and cash  equivalents,  Federal Home Loan Bank stock,  demand and
savings  deposits  and  advances  from  borrowers  for  taxes and  insurance  is
considered to approximate cost. The estimated fair value for securities is based
on quoted market values for the individual securities or equivalent  securities.
The  estimated  fair value for loans is based on  estimates of the rate the Bank
would charge for similar such loans at September 30, 1998 and 1997,  applied for
the time period until the loans are assumed to reprice or be paid. The estimated
fair value for  certificates  of deposit is based on  estimates  of the rate the
Bank would pay on such deposits at September 30, 1998 and 1997,  applied for the
time  period  until  maturity.  The  estimated  fair value for FHLB  advances is
estimated by discounted  cash flow analysis  using current  market rates for the
estimated  life and credit risk.  The  estimated  fair value of other  financial
instruments and off-balance-sheet loan commitments  approximate cost and are not
considered significant for this presentation.

While these  estimates of fair value are based on  management's  judgment of the
most  appropriate  factors,  there is no assurance that were the Company to have
disposed of such items at September 30, 1998 and 1997, the estimated fair values
would  necessarily  have been  achieved at that date,  since  market  values may
differ  depending  on  various  circumstances.  The  estimated  fair  values  at
September  30, 1998 and 1997 should not  necessarily  be  considered to apply at
subsequent dates.

In addition, other assets and liabilities of the Company that are not defined as
financial  instruments  are  not  included  in the  above  disclosures,  such as
premises and equipment. Also, non-financial instruments typically not recognized
in financial statements  nevertheless may have value but are not included in the
above  disclosures.  These included,  among other items, the estimated  earnings
power of core deposit accounts, the earnings potential of loan servicing rights,
the trained work force, customer goodwill and similar items.


                                       40
<PAGE>

                      CORPORATE AND SHAREHOLDER INFORMATION


Company and Bank Address
         132 East Berry Street
         P. O. Box 989
         Fort Wayne, Indiana 46801-0989
         Telephone:      (219) 422-3502
         Facsimile:        219.426.7027


Stock Price Information
The  Company's  stock is traded on The Nasdaq  National  Market under the symbol
"HBFW."  The  table  below  shows  the  range of high and low bid  prices of the
Company's Common Stock for fiscal years 1997 and 1998. The information set forth
in the table below was provided by The Nasdaq  Stock  Market.  Such  information
reflects  interdealer prices,  without retail mark-up,  mark-down or commission,
and may not represent actual transactions for fiscal years:

Fiscal                     
                 1997          1998                           
          
Quarter  Div.    High      Low     Div.    High      Low
    I    .05    $19.50   $16.00    .05   $29.50    $24.00
   II    .05    $21.25   $19.00    .05   $37.875   $28.50
  III    .05    $20.875  $20.125   .08   $35.375   $29.125
   IV    .05    $25.75   $21.375   .08   $30.00    $26.625

Stock Price
September 30th:       $24.25                 $27.25
--------------------------------------------------------------------------------



The twelfth  quarterly  dividend  (Div.) Of $0.08 was declared on the  Company's
common stock  payable  January 7, 1999 to  shareholders  of record  December 22,
1998. For information  regarding  restrictions on dividends,  see Note 11 to the
Consolidated Financial Statements.

As of December 1, 1998,  the Company had  approximately  1,505  shareholders  of
record and 2,190,042 outstanding shares of Common Stock.


Investor Relations
Stockholders,  investors and analysts  interested in additional  information may
contact:

         W. Paul Wolf, CEO
         Home Bancorp
         132 East Berry Street
         P. O. Box 989
         Fort Wayne, IN  46801-0989
         (219) 422-3502

<PAGE>
Annual Report on Form 10-K
Copies of Home Bancorp's Annual Report for year ended September 30, 1998 on Form
10-K filed with the  Securities and Exchange  Commission  are available  without
charge to shareholders upon written request to:

         Investor Relations
         Home Bancorp
         P. O. Box 989
         Fort Wayne, IN 46801-0989


Annual Meeting
The annual  meeting of  shareholders  of Home Bancorp will be held at 2:00 p.m.,
local time, on Tuesday,  January 26, 1999, at the Holiday Inn Downtown, 300 East
Washington Boulevard, Fort Wayne, Indiana. Your attendance is appreciated.


Stock Transfer Agent and Registrar Home Bancorp's transfer agent,  Registrar and
Transfer  Company,  maintains all shareholder  records and can assist with stock
transfer and  registration  address  changes,  changes or  corrections in social
security or tax identification numbers and 1099 tax reporting questions.  If you
have questions, please contact the stock transfer agent at the address below:

         Registrar and Transfer Company
         10 Commerce Drive
         Cranford, New Jersey 07016
         Toll Free (800) 368-5948


Stock Listing
Home  Bancorp  stock is traded on The Nasdaq  National  Market  under the symbol
HBFW. The following newspaper stock tables list the Company as:

         The Journal Gazette.........................................HmeBc
         The News-Sentinel...........................................HmeBc
         Indianapolis Star...........................................HmeBc
         New York Times..............................................HmeBc
         USA Today...................................................HmeBc
         Chicago Tribune
         Wall Street Journal.........................................HmBcp

  

<PAGE>

Home Loan Bank   o    Banking Offices
   (year established)

Corporate                    132 E. Berry St. (46802)
   1893                        (219) 422-3502

Southtown                      1110 E. Tillman Rd. (46816)
   1971                        (219) 447-3531

Marketplace of Canterbury    5611 Saint Joe Rd. (46835)
   1975                        (219) 485-1619

Covington/Time Corners       6128 Covington Rd. (46804)
   1977                        (219) 432-0606

Northwest                      926 W. State Blvd. (46808)
   1987                        (219) 482-6391

Georgetown North             6411 E. State Blvd. (46815)
   1992                        (219) 486-0646

Dupont Crossing              720 E. Dupont Rd. (46825)
   1996                        (219) 490-4663

Decatur                      101 N. Second St.
   1973                      Decatur, Indiana (46733)
                               (219) 728-2155

New Haven                    1230 E. Lincoln Hwy.
   1987                      New Haven, Indiana (46774)
                               (219) 749-1780


                                       41
<PAGE>

                                Mission Statement

The mission statement of Home Loan Bank, subsidiary of Home Bancorp,  reflects a
chartered  course for  meeting  the  financial  needs of our  customers  with an
encouragement  of  investments  and  the  promotion  of home  ownership.  We are
committed to providing the highest quality financial  services for all customers
in our operating  areas,  while  maintaining a conservative,  well  capitalized,
liquid and profitable financial institution.

Further,  we shall perform our obligations in an ethical manner in the community
as a  responsible  corporate  citizen  and  acknowledge  the  holding  company's
ultimate responsible goal of shareholder enhancements.




                                       42


<PAGE>

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


                     MARKET MAKERS AS OF SEPTEMBER 30, 1998

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




                          ABN AMRO Chicago Corporation
                             Capital Resources, Inc.
                     Friedman, Billings, Ramsey & Co., Inc.
                           Herzog, Heine, Geduld, Inc.
                           J.J.B. Hilliard, W.L. Lyons
                          Keefe, Bruyette & Woods, Inc.
                       McDonald & Company Securities, Inc.
                        Sandler O'Neill & Partners, L.P.
                        Stifel, Nicolaus & Company, Inc.












                                       43
<PAGE>
DIRECTORS
    and
OFFICERS

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


Board of Directors
(Home Bancorp and Home Loan Bank)                 (Year appointed to Bank Board)

W. Paul Wolf   Chairman of the Board and President              1961
Rod M. Howard   Retired, Howard's Graphic Supply                1969
Walter A. McComb, Jr.   McComb Funeral Homes                    1982
Richard P. Hormann   DeHayes Group, Inc.                        1987
C. Philip Andorfer   CPA                                        1988
Luben Lazoff   Lazoff & Associates                              1991
Daniel F. Fulkerson   McMahon Paper Company                     1993
Matthew P. Forrester   Vice President and Treasurer             1994
Donald E. Thornton   Vice President of Lending                  1997
Officers of
Home Bancorp

W. Paul Wolf
Chairman, President and
Chief Executive Officer

Matthew P. Forrester
Vice President/Treasurer

Gary L. Hemrick
Vice President/Secretary

Luben Lazoff
Assistant Secretary


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



                                                                   


                                  Home Bancorp
                                      HBFW


                        132 East Berry St. o P.O. Box 989
                         Fort Wayne, Indiana 46801-0989

Telephone            (219) 422-3502
Facsimile              219.426.7027
<PAGE>


                         Officers of Home Loan Bank fsb

W. Paul Wolf
Chairman, President and CEO

Donald E. Thornton
Vice President of Lending/Secretary

Gary L. Hemrick
Vice President/Operations

Matthew P. Forrester
Vice President/Treasurer/CFO

John E. Fitzgerald
Vice President/CRA

Barbara J. Boyd
Vice President/Retail Banking

Gladys A. (Jo) Thomas
Vice President/Decatur Operations

Paul N. Lewark
Assistant Vice President

James M. Turner
Assistant Vice President

Robert P. Norton
Assistant Vice President

Betty A. Schlensker
Assistant Vice President

Irene A. Thain
Assistant Vice President

Robert V. Earl
Assistant Vice President

Stanley J. Amstutz
Assistant Vice President

Linda M. DeGroff
Assistant Vice President


<PAGE>

Mark R. Freudenberg
Assistant Vice President

Ruth A. Marburger
Assistant Vice President

Jody J. Morrissey
Assistant Vice President

Joseph M. Hayes
Assistant Vice President

Matthew L. Level
Assistant Vice President

Michael J. Jones
Assistant Vice President

Penny S. Parrish
Assistant Vice President

Todd A. Hall
Assistant Vice President

Timothy A. Sheppard
Assistant Treasurer

Luben Lazoff
Assistant Secretary

Jerry W. Gump
Internal Auditor/Compliance

John C. Monroe
Assistant Internal Auditor

Lupka Baloski
Personnel

Carol A. Tait
Administrative Assistant



                                       44

<PAGE>














                                                                   
                                                                    








                                  Home Bancorp
                   132 East Berry Street o P.O. Box 989 o Fort
                    Wayne, Indiana 46801-0989 Telephone (219)
                        422-3502 o Facsimile 219.426.7027