<PAGE>   1

                     St. Francis Capital Corporation [LOGO]

                         3545 SOUTH KINNICKINNIC AVENUE
                           MILWAUKEE, WISCONSIN 53235
                                 (414) 744-8600



                                                               December 16, 1996





Dear Shareholder:

         You are cordially invited to attend the Annual Meeting of Shareholders
(the "Annual Meeting") of St. Francis Capital Corporation (the "Company"), the
holding company for St. Francis Bank, F.S.B. and Bank Wisconsin, which will be
held on Wednesday, January 22, 1997, at 4:00 p.m., Milwaukee time, at the
Midway Hotel Airport, 5105 S. Howell Avenue, Milwaukee, Wisconsin.

         The attached Notice of Annual Meeting of Shareholders and Proxy
Statement describe the formal business to be conducted at the Annual Meeting.
We also have enclosed a copy of the Company's Summary Annual Report and the
Company's Form 10-K Annual Report for the fiscal year ended September 30, 1996.
Directors and officers of the Company, as well as representatives of KPMG Peat
Marwick LLP, the Company's independent auditors, will be present at the Annual
Meeting to respond to any questions that our shareholders may have.

         The vote of every shareholder is important to us.  Please sign and
return the enclosed appointment of proxy form promptly in the postage-paid
envelope provided, regardless of whether you are able to attend the Annual
Meeting in person.  If you attend the Annual Meeting, you may vote in person
even if you have already mailed your proxy.

         On behalf of the Board of Directors and all of the employees of the
Company and its subsidiaries, I wish to thank you for your continued support.



                                        Sincerely yours,




                                        John C. Schlosser
                                        President and Chief Executive Officer
<PAGE>   2
                     St. Francis Capital Corporation [LOGO]

                         3545 SOUTH KINNICKINNIC AVENUE
                           MILWAUKEE, WISCONSIN 53235
                                 (414) 744-8600
                               _________________

                    NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
                         TO BE HELD ON JANUARY 22, 1997
                               _________________

TO THE HOLDERS OF COMMON STOCK OF ST. FRANCIS CAPITAL CORPORATION:

         NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the
"Annual Meeting") of St. Francis Capital Corporation (the "Company") will be
held on Wednesday, January 22, 1997, at 4:00 p.m., Milwaukee time, at the
Midway Hotel Airport, 5105 S. Howell Avenue, Milwaukee, Wisconsin.

         The Annual Meeting is for the purpose of considering and voting upon
the following matters, all of which are set forth more completely in the
accompanying Proxy Statement:

                 1.       The election of three directors each for three-year
                          terms, and in each case until their successors are
                          elected and qualified;

                 2.       The approval of the St. Francis Capital Corporation
                          1997 Stock Option Plan;

                 3.       The ratification of the appointment of KPMG Peat
                          Marwick LLP as independent auditors of the Company
                          for the fiscal year ending September 30, 1997; and

                 4.       Such other matters as may properly come before the
                          Annual Meeting or any adjournments or postponements
                          thereof.  The Board of Directors is not aware of any
                          other such business.

         The Board of Directors has established December 1, 1996 as the record
date for the determination of shareholders entitled to notice of and to vote at
the Annual Meeting and any adjournments or postponements thereof.  Only
shareholders of record as of the close of business on that date will be
entitled to vote at the Annual Meeting or any adjournments or postponements
thereof.  In the event there are not sufficient votes for a quorum or to
approve or ratify any of the foregoing proposals at the time of the Annual
Meeting, the Annual Meeting may be adjourned or postponed in order to permit
further solicitation of proxies by the Company.

                                            BY ORDER OF THE BOARD OF DIRECTORS


Milwaukee, Wisconsin                        Brian T. Kaye
December 16, 1996                           Secretary


  YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. WHETHER OR NOT YOU
  PLAN TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE, SIGN, DATE AND RETURN THE
  ENCLOSED PROXY PROMPTLY IN THE ENVELOPE PROVIDED.

<PAGE>   3

                     St. Francis Capital Corporation [LOGO]

                         3545 SOUTH KINNICKINNIC AVENUE
                           MILWAUKEE, WISCONSIN 53235
                                 (414) 744-8600
                     _____________________________________

                                PROXY STATEMENT
                        _______________________________

                         ANNUAL MEETING OF SHAREHOLDERS
                         To Be Held On January 22, 1997
                 ______________________________________________


         This Proxy Statement is being furnished to holders of common stock,
$0.01 par value per share (the "Common Stock") of St. Francis Capital
Corporation (the "Company") in connection with the solicitation on behalf of
the Board of Directors of the Company of proxies to be used at the Annual
Meeting of Shareholders (the "Annual Meeting") to be held on Wednesday, January
22, 1997, at 4:00 p.m., Milwaukee time, at the Midway Hotel Airport, 5105 S.
Howell Avenue, Milwaukee, Wisconsin and at any adjournments or postponements
thereof.

         The 1996 Summary Annual Report and the Company's Form 10-K Annual
Report, including the Company's consolidated financial statements for the
fiscal year ended September 30, 1996, accompany this Proxy Statement and
appointment form of proxy (the "proxy"), which are being mailed to shareholders
on or about December 16, 1996.

         Only shareholders of record at the close of business on December 1,
1996 (the "Voting Record Date") will be entitled to vote at the Annual Meeting.
On the Voting Record Date, there were 5,371,064 shares of Common Stock
outstanding and the Company had no other class of securities outstanding.

         The presence, in person or by proxy, of the holders of at least a
majority of the total number of shares of Common Stock entitled to vote is
necessary to constitute a quorum at the Annual Meeting.  As to the election of
directors, the proxy being provided by the Board of Directors enables a
shareholder to vote for the election of the nominees proposed by the Board, or
to withhold authority to vote for one or more of the nominees being proposed.
Article VI of the Company's Articles of Incorporation provides that there will
be no cumulative voting by shareholders for the election of the Company's
directors.  Under the Wisconsin Business Corporation Law, directors are elected
by a plurality of the votes cast with a quorum present.  The affirmative vote
of at least a majority of the shares of Common Stock represented in person or
by proxy at the Annual Meeting is necessary to approve the St. Francis Capital
Corporation 1997 Stock Option Plan (the "1997 Stock Option Plan").  The
affirmative vote of a majority of the total votes cast in person or by proxy is
necessary to ratify the appointment of KPMG Peat Marwick LLP as auditors for
the fiscal year ending September 30, 1997.  Abstentions are included in the
determination of shares present and voting for purposes of whether a quorum
exists, while broker non-votes are not.  Neither abstentions nor broker
non-votes are counted in determining whether a matter has been approved.  In
the event there are not sufficient votes for a quorum or to approve or ratify
any proposal at the time of the Annual Meeting, the Annual Meeting may be
adjourned or postponed in order to permit the further solicitation of proxies.
<PAGE>   4
         As provided in the Company's Articles of Incorporation, record holders
of Common Stock who beneficially own in excess of 10% of the outstanding shares
of Common Stock (the "10% Limit") are not entitled to any vote in respect of
the shares held in excess of the 10% Limit.  A person or entity is deemed to
beneficially own shares owned by an affiliate of, as well as such persons
acting in concert with, such person or entity.  The Company's Articles of
Incorporation authorize the Board to make all determinations necessary to
implement and apply the 10% Limit, including determining whatever persons or
entities are acting in concert.

         Shareholders are requested to vote by completing the enclosed proxy
and returning it signed and dated in the enclosed postage-paid envelope.
Shareholders are urged to indicate their vote in the spaces provided on the
proxy.  Proxies solicited by the Board of Directors of the Company will be
voted in accordance with the directions given therein.  Where no instructions
are indicated, signed proxies will be voted FOR the election of each of the
nominees for director named in this Proxy Statement, FOR approval of the 1997
Stock Option Plan and FOR the ratification of the appointment of KPMG Peat
Marwick LLP as independent auditors of the Company for the fiscal year ending
September 30, 1997.  Returning your completed proxy form will not prevent you
from voting in person at the Annual Meeting should you be present and wish to
do so.

         Any shareholder giving a proxy has the power to revoke it any time
before it is exercised by (i) filing with the Secretary of the Company written
notice thereof (Brian T. Kaye, Secretary, St. Francis Capital Corporation, 3545
South Kinnickinnic Avenue, Milwaukee, Wisconsin 53235); (ii) submitting a
duly-executed proxy bearing a later date; or (iii) appearing at the Annual
Meeting and giving the Secretary notice of his or her intention to vote in
person.  If you are a shareholder whose shares are not registered in your own
name, you will need additional documentation from your record holder to vote
personally at the Annual Meeting.  Proxies solicited hereby may be exercised
only at the Annual Meeting and any adjournment or postponement thereof and will
not be used for any other meeting.

         The cost of solicitation of proxies by mail on behalf of the Board of
Directors will be borne by the Company.  The Company has retained D.F. King &
Co., Inc., a professional proxy solicitation firm, to assist in the
solicitation of proxies.  D.F. King & Co., Inc. will be paid a fee of $5,000,
plus reimbursement for out-of-pocket expenses.  Proxies also may be solicited
by personal interview or by telephone, in addition to the use of the mails by
directors, officers and regular employees of the Company and St. Francis Bank,
F.S.B. ("St. Francis Bank"), without additional compensation therefor.  The
Company also has made arrangements with brokerage firms, banks, nominees and
other fiduciaries to forward proxy solicitation materials for shares of Common
Stock held of record by the beneficial owners of such shares.  The Company will
reimburse such holders for their reasonable out-of-pocket expenses.

         Proxies solicited hereby will be returned to the Board of Directors,
and will be tabulated by inspectors of election designated by the Board of
Directors, who will not be employed by, or a director of, the Company or any of
its affiliates.


                                     -2-
<PAGE>   5
                SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

         The following table sets forth the beneficial ownership of shares of
Common Stock as of November 30, 1996 (except as noted otherwise below) by (i)
each shareholder known to the Company to beneficially own more than 5% of the
shares of Common Stock outstanding, as disclosed in certain reports regarding
such ownership filed with the Company and with the Securities and Exchange
Commission (the "SEC"), in accordance with Sections 13(d) or 13(g) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), (ii) each
director and director nominee of the Company, (iii) each of the executive
officers of the Company appearing in the Summary Compensation Table below, and
(iv) all directors and executive officers as a group.

<TABLE>
<CAPTION>
                                                            NUMBER OF SHARES
                                                              BENEFICIALLY
         NAME                                                   OWNED (1)                   PERCENT OF CLASS*
         ----                                                   ---------                   -----------------
<S>                                                             <C>                               <C>
Brandes Investment Partners, Incorporated (6) . . . . . .       472,535                            8.8%
Neumeier Investment Counsel (7) . . . . . . . . . . . . .       329,400                            6.1
St. Francis Bank, F.S.B.
  Employee Stock Ownership Trust (5)  . . . . . . . . . .       379,473                            7.1
John C. Schlosser (2)(3)(4) . . . . . . . . . . . . . . .       133,237                            2.5
Thomas R. Perz (2)(3)(4)  . . . . . . . . . . . . . . . .       135,441                            2.5
David J. Drury  . . . . . . . . . . . . . . . . . . . . .           225                             **
William F. Double (2)   . . . . . . . . . . . . . . . . .        48,841                             **
James C. Hazzard (3)(4) . . . . . . . . . . . . . . . . .         3,040                             **
Rudolph T. Hoppe (2)  . . . . . . . . . . . . . . . . . .        42,625                             **
Edward W. Mentzer (2) . . . . . . . . . . . . . . . . . .        55,396                            1.0
Jeffrey A. Reigle . . . . . . . . . . . . . . . . . . . .            --                             --
Edmund O. Templeton (2) . . . . . . . . . . . . . . . . .        75,678                            1.4
Brian T. Kaye (2)(3)(4) . . . . . . . . . . . . . . . . .        81,023                            1.5
Bruce R. Sherman (2)(3)(4)  . . . . . . . . . . . . . . .        80,425                            1.5
All directors and executive officers
  as a group (16 persons) (2)(3)(4) . . . . . . . . . . .       841,166                           14.8%
</TABLE>
_____________________________

*        As of the Voting Record Date.
**       Amount represents less than 1% of the total shares of Common Stock
outstanding.

(1)      Unless otherwise indicated, includes shares of Common Stock held
         directly by the individuals as well as by members of such individuals'
         immediate family who share the same household, shares held in trust
         and other indirect forms of ownership over which shares the
         individuals effectively exercise sole or shared voting and/or
         investment power.  Fractional shares of Common Stock held by certain
         executive officers under the St. Francis Bank, F.S.B. Employee Stock
         Ownership Plan ("ESOP") have been rounded to the nearest whole share.

(2)      Includes shares of Common Stock which the named individuals have the
         right to acquire within 60 days of the Voting Record Date pursuant to
         the exercise of stock options as follows:  Mr. Schlosser - 40,000
         shares; Mr.  Perz - 40,000 shares; Mr. Double - 21,146 shares; Mr.
         Hoppe - 13,592 shares; Mr. Mentzer - 27,336 shares; Mr.  Templeton -
         25,233 shares; Mr. Kaye - 40,000 shares; and Mr. Sherman - 33,644
         shares.

(3)      Does not include options for shares of Common Stock which do not vest
         within 60 days of the Voting Record Date which have been awarded to
         executive officers under the St. Francis Capital Corporation 1993
         Incentive Stock Option Plan.

(4)      Includes shares of Common Stock allocated to certain executive
         officers under the ESOP, for which such individuals possess shared
         voting power, of which approximately 14,854 have been allocated to the
         accounts of the named executive officers in the Summary Compensation
         Table as follows:  Mr. Schlosser - 3,941; Mr. Perz - 3,581; Mr. Kaye -
         3,356; Mr. Sherman - 3,186 and Mr. Hazzard-790.

(5)      First Bank Milwaukee, N.A. ("Trustee") is the trustee for the St.
         Francis Bank, F.S.B. Employee Stock Ownership Trust.  The Trustee's
         address is 201 West Wisconsin Avenue, Milwaukee, Wisconsin 53202.

(6)      Based upon Amendment No. 2 to a Schedule 13G, dated February 12, 1996,
         filed with the Company pursuant to the Exchange Act by Brandes
         Investment Partners, Incorporated, an investment advisor, located at
         12750 High Bluff Drive, Suite 420, San Diego, California 92130.

(7)      Based upon Amendment No. 1 to a Schedule 13G, dated February 2, 1996,
         filed with the Company pursuant to the Exchange Act by Neumeier
         Investment Counsel, an investment advisor, located at 26435 Carmel
         Rancho Blvd., Carmel, California 93923.





                                      -3-
<PAGE>   6
                  MATTERS TO BE VOTED ON AT THE ANNUAL MEETING
                                   MATTER 1.
                             ELECTION OF DIRECTORS

         Pursuant to the Articles of Incorporation of the Company, at the first
annual meeting of shareholders of the Company held on January 26, 1994,
directors of the Company were divided into three classes as equal in number as
possible.  Directors of the first class were elected to hold office for a term
expiring at the first succeeding annual meeting, directors of the second class
were elected to hold office for a term expiring at the second succeeding annual
meeting and directors of the third class were elected to hold office for a term
expiring at the third succeeding annual meeting, and in each case until their
successors are elected and qualified.  At each subsequent annual meeting of
shareholders, one class of directors, or approximately one-third of the total
number of directors, are to be elected for a term of three years.  There are no
family relationships among any of the directors and/or executive officers of
the Company.  No person being nominated as a director is being proposed for
election pursuant to any agreement or understanding between any person and the
Company.

         Unless otherwise directed, each proxy executed and returned by a
shareholder will be voted FOR the election of the nominees for director listed
below.  If any person named as nominee should be unable or unwilling to stand
for election at the time of the Annual Meeting, the proxies will nominate and
vote for any replacement nominee or nominees recommended by the Board of
Directors.  At this time, the Board of Directors knows of no reason why any of
the nominees listed below may not be able to serve as a director if elected.

         The following tables present information concerning the nominees for
director and continuing directors. All of the following nominees have served as
a director the Company since the Company's formation in December 1992, except
director David J. Drury who was elected by shareholders at the Company's annual
meeting of shareholders held in January 1996 and director nominee Jeffrey A.
Reigle.

<TABLE>
<CAPTION>
                                         Position with the Company       Director of       Director of
                                          and Principal Occupation       St. Francis      Bank Wisconsin
            Name             Age         During the Past Five Years       Bank Since          Since
            ----             ---         --------------------------       ----------          -----

                        NOMINEES FOR DIRECTOR FOR THREE-YEAR TERMS EXPIRING IN 2000
 <S>                         <C>      <C>                                     <C>              <C>
 Jeffrey A. Reigle           45       Director of  Bank Wisconsin, the        --               1994
                                      Company's   wholly-owned  state-
                                      chartered    bank    subsidiary;
                                      Since 1992,  President and Chief
                                      Executive   Officer   of   Regal
                                      Ware,  Inc.,  a  privately  held
                                      manufacturer  of   utensils  and
                                      electrical  appliances,  located
                                      in  Kewaskum,   Wisconsin;  From
                                      1989-1991,     Executive    Vice
                                      President-Housewares   of  Regal
                                      Ware, Inc.
</TABLE>





                                      -4-
<PAGE>   7
<TABLE>
<CAPTION>
                                         Position with the Company       Director of       Director of
                                          and Principal Occupation       St. Francis      Bank Wisconsin
            Name             Age         During the Past Five Years       Bank Since          Since
            ----             ---         --------------------------       ----------          -----
 <S>                         <C>                                                               <C>
 John C. Schlosser           68       Director,    President,    Chief       1978              1994
                                      Executive  Officer and  Chairman
                                      of  the  Board of  the  Company;
                                      Chairman  of  the Board  of  St.
                                      Francis  Bank; Director  of Bank
                                      Wisconsin.

 Edmund O. Templeton         53       Director  of the Company and St.       1990               --
                                      Francis   Bank;   Since    1969,
                                      President, Pilot  Systems, Inc.,
                                      a  privately  held company  that
                                      sells,  develops and  services a
                                      variety  of   computer  software
                                      programs     for    medium-sized
                                      manufacturing         companies,
                                      located      in      Brookfield,
                                      Wisconsin.

                             INFORMATION WITH RESPECT TO CONTINUING DIRECTORS

                                   DIRECTORS WHOSE TERMS EXPIRE IN 1998
 William F. Double           86       Director of the  Company and St.       1987               --
                                      Francis    Bank;     Prior    to
                                      retirement,  from 1976  to 1987,
                                      partner  in  the   law  firm  of
                                      Double    &   Double,    General
                                      Counsel to St. Francis Bank.


 Edward W. Mentzer           60       Director  of  the  Company,  St.       1982              1996
                                      Francis     Bank     and    Bank
                                      Wisconsin; Since  1995, Chairman
                                      of   the    Board   of   Plastic
                                      Engineered  Components  Inc.,  a
                                      privately      held      plastic
                                      injection     molded    products
                                      manufacturer,     located     in
                                      Waukesha,  Wisconsin; From  1992
                                      to  1995,  President,  and  from
                                      1989  to  1992, Chief  Executive
                                      Officer  of  Plastic  Engineered
                                      Components Inc.

</TABLE>




                                      -5-
<PAGE>   8

<TABLE>
<CAPTION>
                                         Position with the Company       Director of       Director of
                                          and Principal Occupation       St. Francis      Bank Wisconsin
            Name             Age         During the Past Five Years       Bank Since          Since
            ----             ---         --------------------------       ----------          -----
 <S>                         <C>      <C>                                    <C>               <C>
 Rudolph T. Hoppe            70       Director  of the Company and St.       1980               --
                                      Francis    Bank;    Prior     to
                                      retirement,  from 1965  to 1990,
                                      President  of  Glenora  Company,
                                      an    accounting,    tax     and
                                      investment     services    firm,
                                      located       in      Milwaukee,
                                      Wisconsin;    Director,   Plexus
                                      Corporation,  a publicly  traded
                                      electronic              products
                                      manufacturing     and     design
                                      company,   located  in   Neenah,
                                      Wisconsin.

 Thomas R. Perz              52       Director  and Vice  President of       1983
                                      the      Company;      Director,                         1994
                                      President  and  Chief  Executive
                                      Officer  of  St.  Francis  Bank;
                                      Director of Bank Wisconsin.

 David J. Drury              48       Director  of the  Company; Since        --                --
                                      1994,     President,    Stolper-
                                      Fabralloy    Company    LLC,   a
                                      privately  held manufacturer  of
                                      turbomachinery       components,
                                      located      in      Brookfield,
                                      Wisconsin;    From    1989-1993,
                                      Executive     Vice    President,
                                      Oldenburg   Group,   Inc.,    an
                                      industrial    holding   company,
                                      located       in      Milwaukee,
                                      Wisconsin; Since 1989,  director
                                      of Jason, Inc., a  publicly held
                                      manufacturer    of    automotive
                                      trim,      finishing,      power
                                      generation     and    industrial
                                      products, located  in Milwaukee,
                                      Wisconsin.
</TABLE>




         The affirmative vote of a plurality of the votes cast is required for
the election of directors.  Unless otherwise specified, the shares of Common
Stock represented by the proxies solicited hereby will be voted in favor of the
election of the above-described nominees.  The Board of Directors recommends
that you vote FOR election of the nominees for director.





                                      -6-
<PAGE>   9
                                   MATTER 2.
                                APPROVAL OF THE
                        ST. FRANCIS CAPITAL CORPORATION
                             1997 STOCK OPTION PLAN

         The Board of Directors of the Company proposes for consideration and
approval by the Company's shareholders the St. Francis Capital Corporation 1997
Stock Option Plan (the "1997 Stock Option Plan").  Absent shareholder approval,
the 1997 Stock Option Plan will not be effective and no grants of options to
purchase shares of Common Stock will be made thereunder.  Shareholder approval
of the 1997 Stock Option Plan will qualify the 1997 Stock Option Plan for
granting Incentive Stock Options under Section 422 of the Internal Revenue Code
of 1986, as amended (the "Internal Revenue Code"), and is a non-quantitative
listing requirement under the By-laws of the National Association of Securities
Dealers, Inc. ("NASD") which is applicable to all issuers, including the
Company, whose shares are traded on the NASDAQ National Market System.

   PURPOSE OF THE 1997 STOCK OPTION PLAN

         In connection with the conversion of St. Francis Bank from mutual to
stock form and the issuance of the Common Stock in connection therewith in 1993
(the "Conversion"), the Board of Directors adopted two stock option plans, the
St.  Francis Capital Corporation 1993 Stock Option Plan for Outside Directors
of the Company and its Affiliates (the "Directors' Plan") and the St. Francis
Capital Corporation 1993 Incentive Stock Option Plan (the "Incentive Stock
Option Plan"), which authorized in the aggregate options to purchase 140,185
and 560,740 shares of Common Stock, respectively.  The Directors' Plan and
Incentive Stock Option Plan were approved by the Company's shareholders at a
Special Meeting of Shareholders held on September 15, 1993.  In connection with
the Conversion, options to purchase 140,185 shares of Common Stock were granted
to directors of the Company under the Directors' Plan and options to purchase
391,198 shares of Common Stock were granted to officers of the Company under
the Incentive Stock Option Plan.  With the exception of options to purchase
8,500 shares of Common Stock granted to Mr. James C. Hazzard in connection with
his retention as President and Chief Executive Officer of Bank Wisconsin in
fiscal 1995, no additional option grants have been made to directors, executive
officers or employees of the Company or its subsidiaries.  No options remain
available for future grant under the Directors' Plan and options to purchase
167,441 shares of Common Stock remain available for future grant under the
Incentive Stock Option Plan.

         In November 1996, at the direction of the Board of Directors of the
Company, the Compensation Committee of the Board of Directors of the Company
reviewed the scope and adequacy of Company's current stock-based compensation
plans with the long-term objective of increasing the stock-based components of
total compensation paid to directors, officers and employees of the Company and
its subsidiaries.  The Board of Directors believes that increasing the
stock-based components of total compensation serves to further align the
interests of the Company's directors, officers and employees and its
shareholders.  Based upon such review, the Compensation Committee recommended,
and the Board of Directors approved, the proposed 1997 Stock Option Plan as a
method of increasing the stock-based components of total compensation and
providing an adequate reserve of options for additional corporate purposes such
as retaining existing directors, officers and employees, recruiting future
directors and officers, and for issuances in connection with potential
strategic acquisitions.





                                      -7-
<PAGE>   10
   ELIGIBILITY, TYPE OF OPTION GRANTS AND SHARES SUBJECT TO PLAN

         Under the proposed 1997 Stock Option Plan, all directors, officers and
employees of the Company and its subsidiaries are eligible to participate.  As
of December 1, 1996, the Company had 368 directors, officers and employees
eligible to participate in the 1997 Stock Option Plan.  The 1997 Stock Option
Plan authorizes the grant of (i) options to purchase shares of Common Stock
intended to qualify as incentive stock options under Section 422 of the
Internal Revenue Code ("Incentive Stock Options"); and (ii) options that do not
so qualify ("Non-Statutory Options").  If approved by shareholders, under the
1997 Stock Option Plan, options for a total of 220,000 shares of Common Stock,
or approximately 4.0% of the number of shares of Common Stock outstanding on
the Voting Record Date, will be made available for granting to eligible
participants.  The Company currently has no plans to grant options under the
1997 Stock Option Plan and would not have granted options under the 1997 Stock
Option Plan if such plan had been in effect in fiscal 1996.

         The shares of Common Stock to be issued by the Company upon the
exercise of options by optionees may be acquired either through open market
purchases by the Company, or issued from authorized but unissued shares of
Common Stock.  If additional authorized but unissued shares of Common Stock are
issued upon the exercise of options, the interests of existing shareholders
will be diluted.

   ADMINISTRATION

         The proposed 1997 Stock Option Plan will be administered jointly by
the Board of Directors of the Company and the Compensation Committee of the
Board of Directors of the Company.  The Compensation Committee will consist
solely of "non-employee directors" as that term is defined under Rule 16b-3
promulgated by the SEC under the Exchange Act and "outside directors" as that
term is defined under applicable regulations issued by the Internal Revenue
Service under the Internal Revenue Code.   The Board of Directors shall make
the following determinations with respect to grants to outside directors and
the Compensation Committee shall make the following determinations with respect
to grants to eligible participants other than outside directors:  (i) the
persons to whom options are granted; (ii) the terms at which options are to be
granted; (iii) the number of shares of Common Stock subject to an individual
grant; (iv) the vesting schedule applicable to  individual grants; and (v) the
expiration date of the option (which shall not be later than ten years from the
date the option is granted).  The exercise price may be paid in cash or shares
of Common Stock and shall be the fair market value (as defined in the 1997
Stock Option Plan) of the Common Stock on the date of grant or such greater
amount as determined by the Compensation Committee with respect to grants to
eligible participants other than outside directors, and by the Board of
Directors with respect to grants to outside directors.

   TERMS AND CONDITIONS OF OPTION GRANTS

         Options granted under the 1997 Stock Option Plan are subject to
certain terms and conditions as described herein.  Of the total number of
shares of Common Stock available for grant under the 1997 Stock Option Plan, a
participant may not be granted options to purchase more than 50,000 shares of
Common Stock in any period of three calendar years.

         The aggregate fair market value of shares of Common Stock with respect
to which Incentive Stock Options may be granted to an eligible participant
which are exercisable for the first time in any calendar year may not exceed
$100,000.  Any option granted in excess of such amount shall be treated as a
Non-Statutory Option.  Incentive Stock Options granted to any person who is the
beneficial owner of more than 10% of the outstanding shares of Common Stock may
be exercised only for a period of five years following the date of grant and
the exercise price at the time of grant must be equal to at least 110% of the
fair market value of the Common Stock on the date of the grant.





                                      -8-
<PAGE>   11
 

     No option granted under the 1997 Stock Option Plan will be exercisable
after three months after the date on which the optionee ceases to perform
services for the Company, except that in the event of death, retirement or
disability, all options, whether or not exercisable at such time, may be
exercisable for up to one year thereafter or such longer period as determined by
the Compensation Committee of the Company.  Options held by employees terminated
for cause will terminate on the date of termination.  Termination "for cause"
includes termination due to personal dishonesty, incompetence, willful
misconduct, the intentional failure to perform stated duties, breach of
fiduciary duty involving personal dishonesty, willful violations of law, the
entry of a final cease and desist order or the material breach of any provisions
of an employee's employment contract.

     In the event of a Change of Control of the Company, all Incentive Stock
Options and Non-Statutory Options, whether or not exercisable at such time,
shall become immediately exercisable.  If a participant is terminated due to
such Change of Control, all options shall be exercisable for a period of one
year following such Change of Control, or such longer period as determined by
the Compensation Committee; provided that in no event shall the period extend
beyond the option term and in the case of Incentive Stock Options, such options
shall not be eligible for treatment as Incentive Stock Options if exercised more
than three months following the date of a participant's cessation of employment.
"Change of Control" is defined to mean a change of control of a nature that: (i)
would be required to be reported to the SEC by the Company in a current report
on Form 8-K; or (ii) results in a change in control of St. Francis Bank or the
Company within the meaning of the Home Owners Loan Act of 1933 and the rules and
regulations promulgated by the Office of Thrift Supervision (or its predecessor
agency) (the "OTS").  In addition, under the 1997 Stock Option Plan, a Change of
Control shall be deemed to have occurred at such time as (i) any "person" (as
the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company or its subsidiaries
representing 25% or more of such entities' outstanding voting securities; (ii)
individuals who constitute the current Board of Directors of the Company (the
"Incumbent Board"), cease for any reason to constitute at least a majority
thereof, provided that any person becoming a director subsequent to the
effective date of the 1997 Stock Option Plan whose election was approved by a
vote of at least three-quarters of the directors comprising the Incumbent Board,
or whose nomination for election by the Company's shareholders was approved by
the same Nominating Committee serving under an Incumbent Board, shall be
considered as a member of the Incumbent Board; or (iii) a plan of
reorganization, merger, consolidation, sale of all or substantially all the
assets of the Company or similar transaction in which the Company is not the
surviving institution; or (iv) any change of control of the Company instituted
by an entity or individual other than current management of the Company.

     In the event of a participant's termination of employment, the Company, if
requested by the participant, may elect to pay the participant, or beneficiary
in the event of death, in exchange for cancellation of the option, the amount by
which the fair market value of the Common Stock exceeds the exercise price of
the option on the date of the participant's termination of employment.

     Incentive Stock Options may be transferred only by will or the laws of
descent and distribution.  Non-Statutory Options may be transferred by
participants pursuant to the laws of descent and distribution and during a
participant's lifetime by participants to members of their "immediate family"
(as defined in the 1997 Stock Option Plan), trusts for the benefit of members of
their immediate family and charitable institutions to the extent permitted under
Section 16 of the Exchange Act and subject to federal and state securities laws.





                                      -9-
<PAGE>   12
   FEDERAL INCOME TAX TREATMENT

         An optionee will not be deemed to have received taxable income upon
the grant or exercise of an Incentive Stock Option, provided that such shares
of Common Stock are held for at least one year after the date of exercise and
two years after the date of grant.  No gain or loss will be recognized by the
Company as a result of the grant or exercise of Incentive Stock Options.  An
optionee will be deemed to receive ordinary income upon exercise of
Non-Statutory Options in an amount equal to the amount by which the fair market
value of the Common Stock on the exercise date exceeds the exercise price.  The
amount of any ordinary income deemed to be received by an optionee due to a
premature disposition of the shares of Common Stock acquired upon the exercise
of an Incentive Stock Option or upon the exercise of a Non-Statutory Option
will be deductible expense for tax purposes for the Company.  At this time,
generally accepted accounting principles ("GAAP") do not require compensation
expense to be recorded for any options granted for which the exercise price
equals the market value on the date of grant.  When options are exercised, the
net proceeds received by the Company will be recorded as an increase in Common
Stock and paid-in capital.

   ADJUSTMENTS IN THE EVENT OF CAPITAL CHANGES

         In the event the number of shares of Common Stock are increased or
decreased or changed into or exchanged for a different number or kind of shares
of stock or other securities of the Company by reason of any stock dividend or
split, recapitalization, merger, consolidation, spin-off, reorganization,
combination or exchange of shares, or other similar corporate change, or other
increase or decrease in such shares without receipt or payment of consideration
by the Company, the following appropriate adjustments may be made to prevent
dilution or enlargement of the rights of participants, including any or all of
the following:  (i) adjustments in the aggregate number or kind of shares of
Common Stock which may be awarded; (ii) adjustments in the aggregate number or
kind of shares of Common Stock covered by outstanding option grants; and (iii)
adjustments in the purchase price of outstanding option grants.  No such
adjustments may, however, materially change the value of benefits available to
participants under a previously granted award.

   DURATION AND AMENDMENT OF 1997 STOCK OPTION PLAN

         No options will be awarded under the 1997 Stock Option Plan following
the tenth anniversary of approval of the 1997 Stock Option Plan by shareholders
of the Company.

         The Board of Directors of the Company may amend the 1997 Stock Option
Plan in any respect; provided, however, that certain provisions governing the
terms of Incentive Stock Option and Non-Statutory Option grants shall not be
amended more than once every six months to comport with the Internal Revenue
Code or the Employee Retirement Income Security Act of 1974, as amended, if
applicable.  In addition, the Board of Directors may determine that shareholder
approval of any amendment to the 1997 Stock Option Plan may be advisable for
any reason, including but not limited to, for the purpose of obtaining or
retaining any statutory or regulatory benefits under tax, securities or other
laws or satisfying applicable stock exchange listing requirements.

         THE AFFIRMATIVE VOTE OF A MAJORITY OF THE SHARES OF COMMON STOCK
REPRESENTED IN PERSON OR BY PROXY AND VOTED AT THE ANNUAL MEETING IS REQUIRED
FOR APPROVAL OF THE 1997 STOCK OPTION PLAN.  UNLESS MARKED TO THE CONTRARY, THE
SHARES OF COMMON STOCK REPRESENTED BY THE ENCLOSED PROXY WILL BE VOTED FOR
APPROVAL OF THE 1997 STOCK OPTION PLAN.  THE BOARD OF DIRECTORS RECOMMENDS THAT
YOU VOTE FOR APPROVAL OF THE 1997 STOCK OPTION PLAN.





                                      -10-
<PAGE>   13
                                   MATTER 3.
                    RATIFICATION OF APPOINTMENT OF AUDITORS

         The Company's independent auditors for the fiscal year ended September
30, 1996 were KPMG Peat Marwick LLP.  The Board of Directors of the Company has
reappointed KPMG Peat Marwick LLP to perform the audit of the Company's
financial statements for the year ending September 30, 1997.  Representatives
of KPMG Peat Marwick LLP will be present at the Annual Meeting and will be
given the opportunity to make a statement if they desire to do so and will be
available to respond to appropriate questions from the Company's shareholders.

         THE AFFIRMATIVE VOTE OF A MAJORITY OF THE SHARES OF COMMON STOCK
REPRESENTED IN PERSON OR BY PROXY AND VOTED AT THE ANNUAL MEETING IS REQUIRED
FOR RATIFICATION OF KPMG PEAT MARWICK LLP AS INDEPENDENT AUDITORS OF THE
COMPANY.  UNLESS MARKED TO THE CONTRARY, THE SHARES OF COMMON STOCK REPRESENTED
BY THE ENCLOSED PROXY WILL BE VOTED FOR RATIFICATION OF THE APPOINTMENT OF KPMG
PEAT MARWICK LLP AS THE INDEPENDENT AUDITORS OF THE COMPANY.  THE BOARD OF
DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT OF KPMG PEAT
MARWICK LLP AS THE INDEPENDENT AUDITORS OF THE COMPANY.

             MEETINGS OF THE BOARD OF DIRECTORS AND ITS COMMITTEES

         Regular meetings of the Board of Directors of the Company are held
eight times per year.  During the fiscal year ended September 30, 1996, the
Board of Directors of the Company held eight regular meetings and one special
meeting.  No incumbent director attended fewer than 75% of the aggregate total
number of meetings of the Board of Directors held and the total number of
committee meetings on which such director served during the fiscal year ended
September 30, 1996.

         In fiscal 1996, the Audit Committee of the Company consisted of the
same three directors, Messrs. Rudolph T.  Hoppe, Edward W. Mentzer and Edmund
O. Templeton, who are neither officers nor employees of the Company or its
subsidiaries ("Outside Directors").  In March 1996, the composition of the
Audit Committee was changed to include all Outside Directors of the Company,
including Messrs. Double, Drury, Hoppe, Mentzer and Templeton.  The Audit
Committee reviews the scope and timing of the audit of the Company's financial
statements by the Company's independent public accountants and reviews with the
independent public accountants the Company's management policies and procedures
with respect to auditing and accounting controls.  The Audit Committee also
reviews and evaluates the independence of the Company's accountants, approves
services rendered by such accountants and recommends to the Board the
engagement, continuation or discharge of the Company's accountants.  The
Company's Audit Committee met four times during the fiscal year ended September
30, 1996.

         Through February 1996, the Compensation Committee of the Board of
Directors of the Company consisted of Outside Directors, Messrs. Mentzer and
Templeton.  In March 1996, the composition of the Compensation Committee was
changed to include all Outside Directors of the Company, including Messrs.
Double, Drury, Hoppe, Mentzer and Templeton.  During the fiscal year ended
September 30, 1996, the Company did not pay separate compensation to its
executive officers and did not have any salaried employees.  However, pursuant
to an agreement between the Company and St. Francis Bank, the Company
reimburses St. Francis Bank for the services of St. Francis Bank's officers and
employees for time devoted to Company affairs.    In fiscal 1996, the
Compensation Committee of the Company reviewed and ratified the compensation
policies set by, and decisions made by, the Board of Directors of St. Francis
Bank and the Board of Directors of Bank Wisconsin.





                                      -11-
<PAGE>   14



     The Compensation Committee of the Company met four times during the fiscal
year ended September 30, 1996.  In November 1996, the Compensation Committee of
the Company met to issue the Compensation Committee Report which appears in this
Proxy Statement.  In fiscal 1997, executive compensation policies and programs
will be made and/or ratified by the Compensation Committee of the Company, which
will consider the recommendations of the Board of Directors of each of the
subsidiary banks.  For a further discussion of the compensation policies of the
Company, see "Compensation Committee Report."

     The entire Board of Directors of the Company acted as a Nominating
Committee for the selection of nominees for directors to stand for election at
the Annual Meeting.  In October and December 1996, the Board, acting as the
Nominating Committee, considered nominations for directors.  The Company's
By-laws allow for shareholder nominations of the directors and require such
nominations be made pursuant to timely notice in writing to the Secretary of the
Company.  See "Shareholder Proposals for the 1998 Annual Meeting."

                         COMPENSATION COMMITTEE REPORT

  COMPENSATION COMMITTEE

     Through February 1996, the Compensation Committee of the Board of Directors
of the Company consisted of Outside Directors, Messrs. Mentzer and Templeton. In
March 1996, the composition of the Compensation Committee was changed to include
all Outside Directors of the Company, including Messrs. Double, Drury, Hoppe,
Mentzer and Templeton.  During the fiscal year ended September 30, 1996, the
Company did not pay separate compensation to its executive officers and did not
have any salaried employees.  However, pursuant to an agreement between the
Company and St. Francis Bank, the Company reimburses St. Francis Bank for the
services of St. Francis Bank's officers and employees for time devoted to
Company affairs.  In fiscal 1996, the Compensation Committee of the Company
reviewed and ratified the compensation policies set by, and decisions made by,
the Board of Directors of St. Francis Bank and the Board of Directors of Bank
Wisconsin.  In November 1996, the Compensation Committee of the Company met to
issue this Compensation Committee Report. 

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

     Through February 1996, the Compensation Committee was composed of two
Outside Directors, Messrs. Mentzer and Templeton, who are not former officers
or employees of the Company or any of its subsidiaries.  In March 1996, the
Compensation Committee was composed of all Outside Directors.  There are no
interlocks, as defined under the rules and regulations of the SEC, between the
Compensation Committee and corporate affiliates of members of the Compensation
Committee. 

  COMPENSATION COMMITTEE REPORT

     Under rules established by the SEC, the Company is required to provide
certain data and information regarding the compensation and benefits provided to
the Company's Chief Executive Officer and certain other executive officers of
the Company.  The rules require compensation disclosure in the form of tables
and a report of the Compensation Committee which explains the rationale and
considerations that led to fundamental compensation decisions affecting such
individuals.  The Compensation Committee has prepared the following report, at
the direction of the Board of Directors of the Company, for inclusion in this
Proxy Statement.




                                      -12-
<PAGE>   15
         I.  EXECUTIVE COMPENSATION POLICY

         It is the policy of the Company and its subsidiary banks to maintain
an executive compensation program which will attract, motivate, retain and
reward senior executives and provide appropriate incentives intended to
generate long-term financial results which will benefit the Company, St.
Francis Bank and Bank Wisconsin, and shareholders of the Company.  The
Company's executive compensation program incorporates a pay-for-performance
policy that compensates executives for both corporate and individual
performance.  The executive compensation program is designed to achieve the
following objectives:

         -       Provide competitive compensation packages comparable to those
                 offered by other peer group financial institutions;

         -       Provide the Company and the subsidiary banks with the ability
                 to compete for and retain talented executives that are
                 critical to the Company's long-term success; and

         -       Provide incentives to achieve the Company's financial
                 performance objectives and exceptional individual performance
                 with the goal of enhancing shareholder value.

         The executive compensation package consists of three major components:
(i) cash compensation, including base salary and an annual incentive bonus;
(ii) long-term incentive compensation in the form of stock options awarded
under the St. Francis Capital Corporation 1993 Incentive Stock Option Plan; and
(iii) executive benefits.

         II.  COMPENSATION DECISIONS FOR FISCAL 1996

         In  fiscal 1995, St. Francis Bank retained an independent compensation
consultant to review the salary levels, incentive program and individual
performance goals for executive officers of St. Francis Bank.  The compensation
consultant's analysis included a review of senior officer salary studies and
surveys prepared by national and state trade associations, together with
available competitive compensation data.  The consultant made specific
recommendations regarding adjustments to the salary levels of St. Francis Bank
executive officers as well as adjustments to the incentive compensation targets
for fiscal 1995 and 1996.  These recommendations included proposed revisions to
the incentive compensation programs maintained by the Company's subsidiary
banks designed to ensure that incentives are based upon factors over which the
participants have direct influence and control, and are tied to longer-term
corporate performance.  In reviewing and approving compensation decisions for
fiscal 1995, 1996 and 1997, the Compensation Committee has, and intends to,
consider the guidelines and recommendations of the independent compensation
consultant.

         During fiscal 1996, the Board of Directors of St. Francis Bank
modified the existing Incentive Compensation Program ("SFB-ICP") pursuant to
which executive officers of St. Francis Bank receive cash incentive
remuneration.  Under the modified SFB-ICP, executive officers earn their
targeted incentive compensation based on St. Francis Bank achieving a target
level of net income (excluding gains on the sale of securities) for the fiscal
year and based upon participants achieving certain individual performance goals
established at the beginning of each fiscal year.  Previously, the SFB- ICP
provided for payment of incentive compensation based upon target levels of net
income, coupled with achievement of individual performance objectives.  The
Board of Directors of St. Francis Bank decided to modify the SFB-ICP parameter
in fiscal 1996 based upon the recommendations of the independent compensation
consultant that incentives should be based upon factors over which SFB-ICP
participants have direct influence and control.  The Company intends to further
modify its incentive programs for fiscal 1997 in pursuit of this objective as
discussed further herein.  Incentive compensation earned under the SFB-ICP is
established as a percentage of each officer's base salary.  Incentive
compensation may exceed established percentages of base salaries





                                      -13-
<PAGE>   16
if St. Francis Bank surpasses the target level of net income (excluding gains
on the sale of securities) and individual performance objectives are met, or
may be less than the established percentages if St. Francis Bank does not
achieve the target net income level and individual performance objectives are
not met.  The SFB-ICP provides for a target of 35% of base salary for St.
Francis Bank's President (Mr. Perz), a target of 30% of base salary for members
of St. Francis Bank's Investment Committee (Messrs. Kaye, Sherman and Sorenson)
and  targets of 25% and 20% for other Senior Vice Presidents of St. Francis
Bank.  The target net income level for St. Francis Bank is reviewed and
established annually by the Board of Directors of St. Francis Bank and may vary
from year to year, as may the specifics of the SFB-ICP.  St.  Francis Bank did
not achieve the net income target established for fiscal 1996, and therefore,
executive officers of St.  Francis Bank will earn incentive compensation at
levels less than the target SFB-ICP levels.  The aggregate pay-out under the
SFB-ICP for fiscal 1996 was $197,704.  The average bonus earned under the
SFB-ICP in fiscal 1996 by participants (other than Mr. Perz) was 17% of their
base salaries compared to 31% in fiscal 1995.

         During fiscal 1996, the Bank Wisconsin Incentive Compensation Program
(the "BW-ICP") was modified and redefined to include several executive officers
of Bank Wisconsin in addition to James C. Hazzard, President of Bank Wisconsin.
The BW-ICP provides for payment of cash incentive compensation as a percentage
of base salary based upon Bank Wisconsin achieving various levels of net income
and based upon participants achieving certain individual performance goals
established at the beginning of each fiscal year, and operates in a similar
manner as the SFB-ICP.  The BW-ICP provides for a target of 25% of base salary
for Mr. Hazzard and lesser percentages of base salary for other participants.
Bank Wisconsin exceeded its net income target established for fiscal 1996, and
therefore, executive officers of Bank Wisconsin will earn incentive
compensation in excess of the target BW-ICP levels.  The aggregate pay-out
under the BW- ICP was $63,500 for fiscal 1996.  The average bonus earned under
the BW-ICP in fiscal 1996 by Bank Wisconsin's executive officers (other than
Mr. Hazzard) was 8% of their base salaries.  Mr. Hazzard earned ICP
remuneration equal to $35,000 for fiscal 1996, or 35% of his $105,000 base
salary.

         Remuneration earned under the SFB-ICP and BW-ICP for the fiscal year
ended September 30, 1996 will be paid by St. Francis Bank and Bank Wisconsin in
January 1997.

         Senior officers of St. Francis Bank were awarded stock options during
the fiscal year ended September 30, 1993 in connection with the conversion of
St. Francis Bank from a federally-chartered mutual savings bank to a
federally-chartered state savings bank which was consummated in June 1993 (the
"Conversion") under the Incentive Stock Option Plan.  Mr. Hazzard was granted
stock options in fiscal 1995 in connection with his retention as President of
Bank Wisconsin.  No stock options were awarded to executive officers under the
Incentive Stock Option Plan during the fiscal year ended September 30, 1996.

         Executive benefits paid by St. Francis Bank and Bank Wisconsin to its
executive officers were based upon each officer's contribution to the success
of the subsidiary bank and reflected each officer's position, salary and
specific responsibilities.  Executive compensation and benefit plans applicable
to officers and directors of the subsidiary banks vary.  For a further
discussion of the executive benefits made available to officers of the
subsidiary banks during the fiscal year ended September 30, 1996, see
"Compensation of Executive Officers and Directors - Benefits."





                                      -14-
<PAGE>   17
         Stock options awarded to executive officers of St. Francis Bank during
the fiscal year ended September 30, 1993 in connection with the Conversion and
to Mr. Hazzard in connection with his retention as President of Bank Wisconsin
in fiscal 1995, and executive benefits paid during the fiscal year ended
September 30, 1996 were intended to promote the interests of St. Francis Bank,
Bank Wisconsin and the Company and its shareholders by enabling the subsidiary
banks to retain qualified management by providing competitive financial
incentives.


         III.  PRESIDENT AND CHIEF EXECUTIVE OFFICER COMPENSATION IN FISCAL 1996

         Effective October 1, 1995, John C. Schlosser relinquished his
responsibilities as Chief Executive Officer of St. Francis Bank, and Thomas R.
Perz was named Chief Executive Officer.  Mr. Schlosser continued as Chairman of
the Board of Directors of St. Francis Bank in fiscal 1996, and his base salary
(excluding amounts deferred under certain deferred compensation agreements with
St. Francis Bank) for fiscal 1996 remained the same as for fiscal 1995
($287,955), except that effective October 1, 1995, Mr. Schlosser was no longer
eligible to participate in the SFB-ICP.  In addition, during fiscal 1996, Mr.
Schlosser continued to serve as President, Chief Executive Officer and Chairman
of the Board of Directors of the Company.

         Following the 1997 Annual Meeting of Shareholders, Mr. Schlosser's
responsibilities and remuneration will be reduced as Mr. Schlosser will
relinquish his position as President and Chief Executive Officer of the Company
and all regular administrative activities for the Company.  Mr. Perz will
succeed Mr. Schlosser as President and Chief Executive Officer of the Company.
Mr. Schlosser will continue as Chairman of the Board of Directors of the
Company and will further serve the Company and its President in a consultive
role and on special projects.  Effective February 1, 1997, he will receive a
base salary of $150,000 per year under a contract extending until January 1999.

         In establishing the compensation of Messrs. Schlosser and Perz, the
Compensation Committee specifically considered St. Francis Bank's overall
operating performance and compared St. Francis Bank's operating results to
other thrifts headquartered in Wisconsin.  The Compensation Committee also
considered the individual performance of Messrs.  Schlosser and Perz and the
revised responsibilities of such individuals during fiscal 1996, including
their individual performance and ability to develop, train and motivate a
competent management team and to execute the directives of the Board, as well
as to manage St. Francis Bank and the Company in a profitable, safe and sound
manner.

         Mr. Perz's base salary (excluding ICP remuneration) for the fiscal
year ended September 30, 1996 remained at $224,448 (excluding amounts deferred
under his deferred compensation agreement with St. Francis Bank). Mr. Perz's
targeted ICP remuneration was set at 35% of base salary.  St. Francis Bank did
not meet the net income target established by the Board of Directors for fiscal
1996 under the SFB-ICP, and therefore, Mr. Perz will receive incentive
compensation equal to $53,127 for fiscal 1996 under the SFB-ICP, or 23.7% of
his $224,448 base salary established at the beginning of fiscal 1996.





                                      -15-
<PAGE>   18



     IV.  MODIFICATIONS TO COMPENSATION PROGRAMS IN FISCAL 1997

     In fiscal 1997, executive compensation policies and programs will be made
and/or ratified by the Compensation Committee of the Company which will consider
the recommendations of the Board of Directors of each of the subsidiary banks.
Based upon the recommendations of the independent compensation consultant
retained by St. Francis Bank in 1995 and the Compensation Committee's objective
to tie incentive compensation more directly to corporate performance, the
Compensation Committee has approved several additional modifications to its
incentive compensation programs for fiscal 1997.  The Company has established an
incentive compensation program for St. Francis Capital Corporation (the
"STFR-ICP") for fiscal 1997 in which certain executive officers of the Company
will participate.  Under the STFR-ICP, incentive compensation targets will
include various objective measures of Company-level performance. Individual
incentive compensation will be based upon the Company achieving specific
corporate performance targets applicable to various executive officer groups as
well as achievement of individual performance objectives.  The SFB-ICP will
operate as it did in fiscal 1996, except that the corporate performance
indicator will be redefined as net income excluding gains on the sale of
securities and excluding leverage income of St. Francis Bank, and eligible
participants will include only those executive officers of St. Francis Bank who
do not participate in the STFR-ICP.  The BW-ICP will remain the same for fiscal
1997.

     V.   SHAREHOLDER PROPOSAL TO APPROVE 1997 STOCK OPTION PLAN          

     In order to further promote the best interests of the Company and its
shareholders by providing key officers, employees and directors of the Company
and its subsidiaries with additional incentive to perform in a superior manner,
the Compensation Committee has reviewed and recommends that shareholders approve
the 1997 Stock Option Plan.  The Compensation Committee recommends the
establishment of the 1997 Stock Option Plan to recognize the contributions of
both existing and prospective directors, officers and employees of the Company
and its affiliates.  The Compensation Committee recognizes that stock options
are a performance-motivating incentive because they have no value unless the
price of the Common Stock increases above the exercise price applicable to
outstanding option grants.  In determining whether to grant options under the
proposed 1997 Stock Option Plan, the Board of Directors and the Compensation
Committee, on a subjective basis and within their sole discretion, will review
management recommendations and evaluate the overall financial performance of the
Company and its subsidiaries, or any specific measure of financial performance
thereof. Options may be granted for achievement of both long-term and short-term
corporate performance objectives and also may be based upon an evaluation of
individual contributions to Company and subsidiary performance.  The
Compensation Committee intends to grant options based upon review of various
corporate performance criteria, which may include the Company's ability to
improve return on assets, return on equity and efficiency ratio goals, as well
as earnings growth, new product development and growth in net income, deposits,
loans and any other targeted rate of improvement in the operations of the
Company and its subsidiaries. 



                                                        COMPENSATION COMMITTEE

                                                        WILLIAM F. DOUBLE
                                                        DAVID J. DRURY
                                                        RUDOLPH T. HOPPE
                                                        EDWARD W. MENTZER
                                                        EDMUND O. TEMPLETON




                                      -16-


                                                
<PAGE>   19
                COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS

EXECUTIVE COMPENSATION

         During the fiscal year ended September 30, 1996, the Company did not
pay separate compensation to its executive officers.  Separate compensation
will not be paid to the officers of the Company until such time as the officers
of the Company devote significant time to separate management of Company
affairs, which is not expected to occur until the Company becomes actively
involved in additional significant business beyond St. Francis Bank and Bank
Wisconsin.  The following table summarizes the total compensation earned by St.
Francis Bank's Chief Executive Officer and the next four highest paid executive
officers of the Company's subsidiaries whose compensation (salary and bonus)
exceeded $100,000 during the Company's fiscal years ended September 30, 1994,
1995 and 1996.

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                                                                     
                                                                        LONG-TERM                                    
                                                                       COMPENSATION                                  
                                                                       ------------                                  
                                                   ANNUAL               NUMBER OF                                    
                                             COMPENSATION(1)             SHARES                                      
                                          --------------------         SUBJECT TO               ALL OTHER            
NAME AND PRINCIPAL POSITION     YEAR      SALARY(2)   BONUS(3)         OPTIONS(4)             COMPENSATION(5)
---------------------------     ----      ---------   --------         ----------             ---------------
<S>                             <C>        <C>       <C>                    <C>                   <C>
John C. Schlosser . . . . .     1996       $287,955  $       --                --                 $61,855
  Chairman of the Board of      1995        292,955     129,580                --                  59,016
  St. Francis Bank and          1994        302,421      16,842                --                  63,493
  President and CEO of
  the Company

Thomas R. Perz  . . . . . .     1996        229,448      53,127                --                  52,058
  President and CEO             1995        229,448      88,044                --                  43,379
  of St. Francis Bank and       1994        205,326      10,612                --                  45,215
  and Vice President of
  the Company

Brian T. Kaye . . . . . . .     1996        161,114      36,251                --                  53,276
  Executive Vice President      1995        161,114      72,501                --                  48,876
  and Secretary of              1994        161,958       7,793                --                  42,149
  St. Francis Bank and
  Secretary of the Company

Bruce R. Sherman  . . . . .     1996        145,000      26,100                --                  49,176
  Senior Vice President and     1995        139,038      75,695                --                  45,663
  Treasurer of St. Francis      1994        140,177       6,955                --                  35,733
  Bank and Vice President
  of the Company

James C. Hazzard (6)  . . .     1996        105,000      35,000                --                  28,188
  President and CEO of          1995        100,000      25,000             8,500                      --
  Bank Wisconsin                1994        100,000          --                --                      --
</TABLE>


------------------------------
(FOOTNOTES ON FOLLOWING PAGE)





                                      -17-
<PAGE>   20
______________________________

(1)      Perquisites and other personal benefits provided to the named
         executive officers by the Company did not exceed the lesser of $50,000
         or 10% of each named executive officer's total annual salary and bonus
         during the fiscal years indicated, and accordingly, are not included.

(2)      Amounts shown include compensation earned and deferred at the election
         of the named executive officers during the fiscal years ended
         September 30, 1994, 1995 and 1996, including compensation deferred in
         fiscal 1994 and 1995 by Mr. Schlosser and in fiscal 1994, 1995 and
         1996 by Mr. Perz, respectively, under deferred compensation agreements
         entered into with St. Francis Bank.  See "-Deferred Compensation
         Agreements."

(3)      Senior officers of St. Francis Bank and Bank Wisconsin receive
         remuneration under separate Incentive Compensation Programs ("ICPs").
         The amounts indicated for the fiscal year ended September 30, 1996
         represent incentive compensation earned by the named executive
         officers under the ICPs for St. Francis Bank and Bank Wisconsin's
         fiscal year ended September 30, 1996 which will be paid in January
         1997.  Mr. Schlosser did not participate in the St. Francis Bank ICP
         in fiscal 1996.

(4)      The amount shown in this column represents the total number of shares
         of Common Stock subject to options granted to Mr. Hazzard during the
         fiscal year ended September 30, 1995 under the Incentive Stock Option
         Plan.

(5)      Amounts shown in this column represent contributions by the Bank
         pursuant to the St. Francis Bank, F.S.B. Money Purchase Pension Plan
         (the "Pension Plan"), the St. Francis Bank, F.S.B. 401(k) Savings Plan
         (the "401(k) Plan"), the ESOP, the Executive Split Dollar Life
         Insurance Plan (the "Split Dollar Plan"), and Long-Term Disability
         Policies during the fiscal years ended September 30, 1994, 1995 and
         1996.  The amounts shown for each individual for the fiscal year ended
         September 30, 1996 are derived from the following figures:  (i) Mr.
         Schlosser:  $11,388 - Pension Plan contribution; $3,000 - 401(k) Plan
         matching contribution; $26,294 - ESOP allocation; $20,000 - Split
         Dollar Plan premium; $1,173 - Long-Term Disability Policy premium;
         (ii) Mr. Perz: $11,388 - Pension Plan contribution; $3,000 - 401(k)
         Plan matching contribution; $26,294 - ESOP allocation; $7,000 - Split
         Dollar Plan premium; $4,376 - Long-Term Disability Policy premium;
         (iii) Mr. Kaye: $11,388 - Pension Plan contribution; $2,590 - 401(k)
         Plan matching contribution; $26,294 - ESOP allocation; $11,525 - Split
         Dollar Plan premium; $1,479- Long-Term Disability Policy premium; (iv)
         Mr. Sherman: $11,388 - Pension Plan contribution; $3,000 - 401(k) Plan
         matching contribution; $26,294- ESOP allocation; $7,979  - Split
         Dollar Plan premium; $506 - Long-Term Disability Policy premium; and
         (v) Mr. Hazzard: $7,748 - Pension Plan contribution; $2,117 - 401(k)
         Plan matching contribution; and $18,232- ESOP allocation.

(6)      Mr. Hazzard was hired on August 1, 1994; the salary amount indicated
         for fiscal 1994 has been annualized.  The ICP applicable to Mr.
         Hazzard for fiscal 1995 provided for a bonus payment equal to 25% of
         his base salary for fiscal 1995.





                                      -18-
<PAGE>   21
EMPLOYMENT AGREEMENTS

         In June 1993, St. Francis Bank entered into three-year employment
agreements with Messrs. Schlosser, Perz, Kaye and Sherman.  In fiscal 1994 and
1995, the terms of these agreements were extended for one year by Board action.
In lieu of renewal of the employment agreements in fiscal 1996, the Company and
St. Francis Bank entered into new three-year employment agreements with
Messrs. Perz, Kaye and Sherman to be effective as of October 1, 1996.  In
August 1994, the Company entered into a one-year employment agreement with Mr.
Hazzard which was subsequently assigned to Bank Wisconsin, and in October 1996,
Bank Wisconsin entered into a new three-year employment agreement with Mr.
Hazzard.  The term of these new employment agreements with Messrs. Perz, Kaye,
Sherman and Hazzard, which are described herein, may be restored to three years
by action of the Boards of Directors annually, subject to the Boards'
performance evaluation.  Effective October 1, 1996, the Company entered into a
separate employment agreement with Mr. Schlosser as discussed further herein.
These employment agreements are intended to ensure that the Company, St.
Francis Bank and Bank Wisconsin maintain a stable and competent management
base.

         Under the employment agreements in effect for fiscal 1996, the base
salaries for Messrs. Perz, Kaye, Sherman and Hazzard were $224,448, $161,114,
$145,000 and $105,000, respectively.  Base salaries may be increased by the
Board of Directors of the Company, St. Francis Bank or Bank Wisconsin, as
applicable, but may not be reduced except as part of a general pro rata
reduction in compensation for all executive officers.  In addition to base
salary, the agreements provide for payments from other incentive compensation
plans, and provide for other benefits, including participation in any group
health, life, disability, or similar insurance program and in any pension,
profit-sharing, employee stock ownership plan, deferred compensation, 401(k) or
other retirement plan maintained by St. Francis Bank and Bank Wisconsin, as
applicable.  The agreements also provide for participation in any stock-based
incentive programs made available to executive officers of the Company and its
subsidiaries.  The agreements with Messrs. Perz, Kaye, Sherman and Hazzard may
be terminated by the Company, St. Francis Bank or Bank Wisconsin, as
applicable, upon death, disability, retirement, for cause at any time, or in
certain events specified by the regulations of the OTS.  If the Company, St.
Francis Bank or Bank Wisconsin terminate the agreements due to death or
retirement, for cause or pursuant to OTS regulations, the executives shall be
entitled to receive all compensation and benefits in which they were vested as
of the termination date. If the agreements are terminated due to disability,
the executives shall be entitled to receive 100% of their base salary at the
rate in effect at the time of termination for a period of one year and
thereafter an amount equal to 75% of such base salary for any remaining portion
of the employment term (offset by any payments received by executives under any
employer disability plans or government social security or workers'
compensation programs), together with other compensation and benefits in which
they were vested as of the termination date.  If the Company, St. Francis Bank
or Bank Wisconsin terminate the agreements other than for the foregoing
reasons, or the executives terminate the agreements in accordance with the
terms stated therein, the executives are entitled to severance payments equal
to one year's base salary (in the case of Messrs. Kaye, Sherman and Hazzard)
and two year's base salary (in the case of Mr. Perz) (based upon the highest
base salary within the three years preceding the date of termination) and the
amount of bonus and incentive compensation paid to the executives in the most
recently completed calendar year of employment, payable over a twelve or
24-month period, as applicable.  In addition, the executives shall be entitled
to participate in all group insurance, life insurance, health and accident,
disability and certain other employee benefit plans maintained by the employer,
at no cost to the executives, for a period of one year (in the case of Messrs.
Kaye, Sherman and Hazzard) or two years (in the case of Mr. Perz), or such
earlier time as the executives are employed on a full-time basis by another
employer which provides substantially similar benefits.  The employment
agreements also contain covenant-not-to-compete provisions which prohibit the
executives from competing with a Significant Competitor (as defined therein) of
the Company, St. Francis Bank or Bank Wisconsin, as applicable, for a period of
twelve months following termination.





                                      -19-
<PAGE>   22
         The employment agreements provide for severance payments if the
executives' employment terminates following a change in control.  Under the
agreements, a "Change in Control" is generally defined to include any change in
control required to be reported under the federal securities laws, as well as
(i) the acquisition by any person of 25% or more of the Company's outstanding
voting securities, or (ii) a change in a majority of the directors of the
Company during any two-year period without approval of at least two-thirds of
the persons who were directors at the beginning of such period.  Within 24
months of the effective date of any Change in Control, the executives may
terminate the agreements in the event certain conditions contained therein are
satisfied, and shall be entitled to receive as severance three year's base
salary (based upon the highest base salary within in the three years preceding
the date of termination) and the amount of bonus and incentive compensation
paid to the executives in the most recently completed calendar year of
employment, payable over a three-year period.  In addition, the executives
shall be entitled to all other benefits and compensation which would have been
payable to them in the event of termination other than for death, disability,
cause or pursuant to OTS regulations, as described herein. In addition, the
executives are entitled to all qualified retirement and other benefits in which
they were vested.  If the severance benefits payable following a Change in
Control would constitute "parachute payments" within the meaning of Section
280G(b)(2) of the Internal Revenue Code, and the present value of such
"parachute payments" equals or exceeds three times the executive's average
annual compensation for the five calendar years preceding the year in which a
Change in Control occurred, the severance benefits shall be reduced to an
amount equal to the present value of 2.99 times the average annual compensation
paid to the executive during the five years immediately preceding such Change
in Control.

         The Company and Mr. Schlosser have entered into an employment
agreement to be effective as of October 1, 1996 through January 2, 1999.  The
employment agreement provides that Mr. Schlosser shall continue to serve as
President, Chief Executive Officer and Chairman of the Board of the Company
through January 22, 1997 and thereafter, for the balance of the employment
term, shall serve as Chairman of the Board of Directors of the Company and will
further serve the Company in a consultive role and on special projects.
Through January 31, 1997, Mr. Schlosser shall be compensated at a base rate of
$287,955 per annum and effective February 1, 1997, he shall receive a base
salary of $150,000 per year.  In addition to base salary, the agreement
provides for other benefits generally made available to other executive
officers of the Company and its subsidiaries, excluding benefits under the
Company's or its subsidiaries' bonus or stock-based plans.  The agreement also
provides for termination upon death, retirement, disability, for cause, and in
the case of certain events specified by OTS regulations.  If Mr. Schlosser
retires or dies, or Mr. Schlosser voluntarily terminates his employment
agreement, he or his estate shall be entitled to any compensation and benefits
in which he was vested as of his termination date.  If the agreement is
terminated due to Mr. Schlosser's disability, Mr. Schlosser shall be entitled
to receive 100% of his base salary at the rate in effect at the time of
termination for the remainder of the employment term up to one year and
thereafter at an annual rate equal to 75% of such base salary for any remaining
portion of the employment term (offset by any payments received by Mr.
Schlosser under any employer disability plans or governmental social security
or workers' compensation programs).  If Mr. Schlosser is terminated for cause,
Mr. Schlosser shall not be entitled to any severance payment; however, he
shall be entitled to any benefits in which he was vested as of the termination
date.  If Mr. Schlosser is terminated by the Company other than for cause,
death, disability or retirement, or Mr. Schlosser terminates the employment
agreement pursuant to the terms contained therein, he shall be entitled to
receive as severance, salary payments under the employment agreement for the
remainder of the employment term, together with certain other benefits subject
to certain terms and conditions.  The agreement also contains a
covenant-not-to-compete which prohibits Mr. Schlosser from competing with a
Significant Competitor (as defined therein) of the Company for a period of
twelve months following termination.





                                      -20-
<PAGE>   23
CONSULTING, NON-COMPETITION AND SUPPLEMENTAL COMPENSATION AGREEMENT

         In August 1992, St. Francis Bank and Mr. Schlosser entered into a
consulting, non-competition and supplemental compensation agreement (the
"Consulting Agreement") pursuant to which St. Francis Bank agreed to pay Mr.
Schlosser (or his beneficiary) monthly payments of $4,166.67 for 120 months
upon his attainment of age 70, death, disability or termination of his
employment following a change of control.  A "change of control" is defined to
include a change in the majority of St. Francis Bank's Board of Directors by
reason of the election of new directors not nominated by the Board, the merger
of St. Francis Bank, or the acquisition by any person or group of persons
acting in concert of 25% or more of the stock of St. Francis Bank.  Death
benefit payments may be paid in a lump sum to Mr. Schlosser's beneficiary.  No
benefits are payable if Mr. Schlosser's employment is terminated for cause.
"Cause" is defined as a willful and continued failure to perform his duties,
willful misconduct which is materially injurious to St. Francis Bank, a
criminal conviction involving the affairs of St. Francis Bank or removal by a
regulatory agency.  If requested by St. Francis Bank, Mr. Schlosser will
provide consulting services to St. Francis Bank during the period benefits are
paid under the Consulting Agreement.

DEFERRED COMPENSATION AGREEMENTS

         In December 1980, St. Francis Bank and Mr. Schlosser entered into a
deferred compensation agreement (the "1980 Agreement") in lieu of a $10,000 per
annum increase in Mr. Schlosser's base salary, pursuant to which St. Francis
Bank agreed to pay Mr. Schlosser (or his beneficiary) $156,000 over 13 years
following his normal retirement date, death or disability.  If Mr. Schlosser's
employment with St. Francis Bank terminates other than for death or disability,
he will receive a lump sum in an amount equal to $833 multiplied by the number
of months he was employed by St. Francis Bank from January 1, 1981 until the
date of termination.  In September 1986, St. Francis Bank and Mr. Schlosser
entered into a further deferred compensation agreement (the "1986 Agreement")
in lieu of a $5,000 per annum increase in Mr. Schlosser's base salary,
pursuant to which Mr. Schlosser (or his beneficiary) will receive $1,000 per
month following his normal retirement date, death or disability, with such
payments increasing 5% per annum until terminating after 15 years.  The 1986
Agreement further provides that if Mr. Schlosser's employment terminates prior
to retirement for any reason other than disability, no payments will be made.
Both the 1980 and 1986 Agreements are non-tax qualified, unfunded deferred
compensation plans.  Mr. Schlosser attained normal retirement age of 65 in
October 1993 and since January 1, 1994, St. Francis Bank has paid Mr. Schlosser
$1,000 per month under the 1980 Agreement and $1,000 per month plus the 5% per
annum increase which commenced January 1, 1995 under the 1986 Agreement.

         In September 1986, St. Francis Bank and Mr. Perz entered into a
deferred compensation agreement in lieu of a $5,000 per annum increase in Mr.
Perz' base salary, pursuant to which St. Francis Bank agreed to pay Mr. Perz
$3,333 per month for the first year upon his retirement, death or disability,
with such monthly payments to be increased 5% each year thereafter for the
following 14 years.  The deferred compensation agreement further provides that
if Mr. Perz' employment terminates before retirement for any reason other than
disability, no payments will be made.  The deferred compensation agreement is a
non-tax qualified, unfunded plan.

         In November 1987 and February 1988, Messrs. Mentzer and Perz each
entered into deferred compensation agreements whereby they agreed to defer
certain monthly directors' fees paid to them by St. Francis Bank.  The deferred
compensation agreements are non-tax qualified, unfunded plans which establish
deferred benefit accounts for both Messrs. Perz and Mentzer.  The deferred
benefit accounts are credited annually on April 30 of each year with interest
at a rate equal to one percentage point over the composite yield on Moody's
Long Term Bond Index Rate in effect on the preceding April 30.  Upon
retirement, deferred compensation with accrued interest is to be paid to each
director or his designated beneficiary over ten years in annual installment
portions as designated in the





                                      -21-
<PAGE>   24
deferred compensation agreements.  In the event of Mr. Perz' death before
retirement, his deferred compensation agreement provides that St. Francis Bank
shall pay his designated beneficiary an annual sum of $48,000 for a period of
ten years.  In the event of Mr. Mentzer's death before retirement, his deferred
compensation agreement provides his designated beneficiary shall receive the
balance in his director's deferred benefit account over a period of ten years.


BENEFITS

     EXECUTIVE SPLIT DOLLAR INSURANCE PROGRAM

         St. Francis Bank established a Split Dollar Life Insurance Plan,
effective September 13, 1992 (the "Split Dollar Plan"), in which Messrs.
Schlosser, Perz, Kaye, Sherman, Koepp and Messrs. James S. Eckel and George M.
Vranes, and Ms. Judith M. Gauvin and Ms. Marynell M. Costa, Senior Vice
Presidents of St. Francis Bank, and Mr. Jon D. Sorenson, Chief Financial
Officer and Treasurer of the Company and Senior Vice President of St. Francis
Bank, participate.  The life insurance benefit is equal to the executives'
salary up to $150,000.  The executive pays the PS-58 cost of the insurance and
St. Francis Bank pays the premium.  Upon the executive's death or the policy
maturity date, St. Francis Bank will receive all premiums paid on behalf of the
executive together with interest accrued thereon at a rate of 5% per annum and
the executive will receive the remainder of the death benefit or the cash
surrender value.

     401(K) PLAN

         St. Francis Bank and Bank Wisconsin participate in the St. Francis
Bank, F.S.B. 401(k) Savings Plan (the "401(k) Plan"), covering all of their
eligible employees.  Employees are eligible to participate after completing a
six- month period of employment and attaining age 21.  The 401(k) Plan permits
participants, subject to the limitations imposed by Section 401(k) of the
Internal Revenue Code, to make voluntary tax deferred contributions in amounts
between 2% and 7% of their annual compensation.  Each subsidiary bank makes a
semi-monthly contribution to the 401(k) Plan in an amount equal to 50% of the
first 4% of compensation deferred by the participant for those participants
currently employed.  Participants are 100% vested in their contributions and
the earnings thereon.  Participants become 20% vested in the employer
contributions credited to their accounts and the earnings thereon after one
year of credited service, with vesting increasing 20% per year thereafter to
100% vesting after five years.  Participants also become 100% vested on death,
disability and attainment of age 65.  Bank Wisconsin participation in the
401(k) Plan became effective as of January 1, 1995, and Bank Wisconsin
employees vesting schedules included prior service with the predecessor
institutions to Bank Wisconsin.  The 401(k) Plan permits participants to
receive distributions during service on account of hardship or upon attaining
age 59.  Distributions from the 401(k) Plan are made upon termination of
service either in a lump sum or in installments over a period not to exceed the
greater of the life expectancy of the participant or the joint survivor life
expectancy of the participant and his designated beneficiary.  Under the 401(k)
Plan, a separate account is established for each participating employee.
Participating employees may direct the trustee with respect to the investment
of assets held in their 401(k) Plan accounts among six investment options made
available by the trustee.  The 401(k) Plan's trustee is the Marshall & Ilsley
Trust Company.

     EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST

         In connection with the Conversion, St. Francis Bank established the
St. Francis Bank, F.S.B. Employee Stock Ownership Plan (the "ESOP") for its
eligible employees.  The ESOP borrowed funds from the Company to purchase
490,643 shares of Common Stock.  Collateral for the loan is the Common Stock
purchased by the ESOP.





                                      -22-
<PAGE>   25
Bank Wisconsin employees became eligible for participation in the ESOP
effective November 1995.  St. Francis Bank and Bank Wisconsin make scheduled
discretionary cash contributions to the ESOP sufficient to amortize the
principal and interest on the loan.  The loan will be repaid principally from
contributions of St. Francis Bank and Bank Wisconsin to the ESOP over a period
of twelve years.  Shares purchased by the ESOP will be held in a suspense
account for allocation among participants as the loan is repaid.  Benefits
generally become 20% vested after the three years of credited service, with
vesting increasing 20% per year thereafter to 100% vesting after seven years.
Participants also become 100% vested on death, disability and attainment of age
65.  Benefits may be payable, in either shares of Common Stock or cash, upon
death, retirement, early retirement, disability or separation from service.

     MONEY PURCHASE PENSION PLAN

         St. Francis Bank maintains the St. Francis Bank, F.S.B. Money Purchase
Pension Plan (the "Pension Plan"), a tax-qualified, defined contribution plan
covering all eligible employees.  Bank Wisconsin employees became eligible to
participate in the Pension Plan as of January 1, 1995.  Employees are eligible
to participate after completing a twelve-month period of 1,000 or more hours of
employment and attaining age 21.  As of December 31 of each plan year, St.
Francis Bank and Bank Wisconsin contribute to the Pension Plan on behalf of
those participants currently employed.  For plan years ending prior to January
1, 1993, St. Francis Bank contributed 14% of each participant's compensation up
to $15,300 and 18.3% of each participant's compensation in excess of $15,300.
For plan years ending after December 31, 1992, St. Francis Bank, and for plan
years commencing January 1, 1995, Bank Wisconsin, will contribute 4% of each
participant's compensation up to $15,300 and 8% of each participant's
compensation in excess of $15,300.  Benefits generally become 20% vested after
three years of credited service, with vesting increasing 20% per year
thereafter to 100% vesting after seven years.  Participants also become 100%
vested on death, disability or attainment of age 65.  Distributions from the
Pension Plan are made upon termination of service either in a lump sum or in
installments over a period not to exceed the greater of the life expectancy of
the participant or the life expectancy of the joint survivor of the participant
and his designated beneficiary.  Under the Pension Plan, a separate account is
established for each participating employee.  Participating employees may
direct the trustee with respect to the investment of assets held in their
Pension Plan accounts among six investment options made available by the
trustee.  The Pension Plan's trustee is the Marshall & Ilsley Trust Company.

     INCENTIVE STOCK OPTION PLAN

         In 1993, the Board of Directors of the Company adopted the St. Francis
Capital Corporation 1993 Incentive Stock Option Plan (the "Incentive Stock
Option Plan").  All employees of the Company and its subsidiaries are eligible
to participate in the Incentive Stock Option Plan.  As of September 30, 1996,
the Company and its subsidiaries had 344 eligible employees.  The Incentive
Stock Option Plan authorizes the grant of (i) options to purchase shares of
Common Stock intended to qualify as incentive stock options under Section 422A
of the Internal Revenue Code ("Incentive Stock Options"), (ii) options that do
not so qualify ("Non-Statutory Options"), and (iii) options which are
exercisable only upon a change in control of St. Francis Bank or the Holding
Company ("Limited Rights").  As of September 30, 1996, options to purchase
399,698 shares of Common Stock had been granted under the Incentive Stock
Option Plan and a total of 167,441 shares of Common Stock were available for
granting under the Incentive Stock Option Plan.





                                      -23-
<PAGE>   26
         The executive officers listed in the Summary Compensation Table did
not receive individual grants under the Incentive Stock Option Plan during the
fiscal year ended September 30, 1996.  The following table sets forth certain
information concerning the exercise of stock options granted under the
Incentive Stock Option Plan by each of the executive officers named in the
Summary Compensation Table during the fiscal year ended September 30, 1996.

<TABLE>
<CAPTION>
                                     AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
                                            AND FISCAL YEAR-END OPTION VALUES
                                                                                           VALUE OF
                                                          NUMBER OF                       UNEXERCISED
                                                          UNEXERCISED                     IN-THE-MONEY
                        NUMBER OF                           OPTIONS                        OPTIONS AT
                          SHARES                      AT FISCAL YEAR END             FISCAL YEAR END (1)
                         ACQUIRED       VALUE     ---------------------------      -------------------------
NAME                   ON EXERCISE     REALIZED   EXERCISABLE  UNEXERCISABLE       EXERCISABLE UNEXERCISABLE
----                   -----------     --------   -----------  -------------       ----------- -------------
<S>                         <C>         <C>          <C>            <C>            <C>             <C>
John C. Schlosser           0           $  0         40,000         30,093         $635,200        $477,877

Thomas R. Perz              0              0         40,000         30,093          635,200         477,877

Brian T. Kaye               0              0         40,000         18,176          635,200         288,635

Bruce R. Sherman            0              0         33,644          8,411          534,267         133,567

James C. Hazzard            0              0              0          8,500                0          75,480

</TABLE>
--------------------

(1)      The value of Unexercised In-the-Money Options is based upon the
         difference between the fair market value of the securities underlying
         the options ($25.88) and the exercise price of the options [($10.00)
         for Messrs. Schlosser, Perz, Kaye and Sherman; ($17.00) for Mr.
         Hazzard] at September 30, 1996.

         Incentive Stock Options granted to any person who is the beneficial
owner of more than 10% of the outstanding shares of Common Stock may be
exercised only for a period of five years following the date of grant and the
exercise price at the time of grant must be equal to at least 110% of the fair
market value of the Common Stock on the date of the grant.  No option granted
in connection with the Incentive Stock Option Plan will be exercisable three
months after the date on which the optionee ceases to perform services for St.
Francis Bank or the Company, except that in the event of death, disability or
retirement, options may be exercisable for up to one year thereafter or such
longer period as determined by the Company with respect to the exercise of
Non-Statutory Options.  If an optionee ceases to perform services for St.
Francis Bank or the Company due to retirement, Incentive Stock Options
exercised more than three months following the date the optionee ceases to
perform services shall be treated as Non-Statutory Stock Options.  Options of
employees terminated for cause will terminate on the date of termination.
Termination for cause includes termination due to the intentional failure to
perform stated duties, breach of fiduciary duty involving personal dishonesty
resulting in a material loss to the Company, willful violations of law or the
entry of a final cease and desist order which results in a material loss to the
Company.  Options will be immediately exercisable in the event of a change in
control.  "Change of control" is defined to include the acquisition of
beneficial ownership of 20% or more of any class of equity security by a person
or group of persons acting in concert, a tender offer or exchange offer, merger
or other form of business combination, a sale of assets or a contested election
of directors which results in a change in control of a majority of the Board of
Directors.





                                      -24-
<PAGE>   27
DIRECTORS' COMPENSATION

     BOARD FEES

          Effective October 1, 1995, the schedule of Board meetings and
directors' fees were revised significantly.  Because of the increased
responsibilities of the members of the Board of Directors of the Company,
including those resulting from the acquisition of Bank Wisconsin, and the
addition of directors to the Company Board that are not also directors of St.
Francis Bank, regularly scheduled Company Board meetings were no longer held on
the same date as St.  Francis Bank Board meetings.  Effective October 1, 1995,
regular Company Board meetings were held eight times per year.  Compensation
paid to Company directors in fiscal 1996 included an annual retainer of $12,000
per year plus a fee of $1,000 per regular meeting attended, $500 per special
meeting attended and $500 per Company Board committee meeting attended.
Effective January 1, 1996, Company directors who also were directors of St.
Francis Bank did not receive an annual retainer of $11,400 paid to St. Francis
Bank directors, but did receive $500 per regular and special meeting of the
Board of Directors of St. Francis Bank attended, and $500 per St. Francis Bank
loan committee meeting attended.  In fiscal 1996, Messrs. Schlosser, Perz and
Hazzard, directors of the Company who also currently serve as directors of Bank
Wisconsin, received an annual retainer of $1,800 plus $200 per meeting of the
Board of Directors of Bank Wisconsin attended, and $100 per Bank Wisconsin loan
committee meeting attended.

     STOCK OPTION PLAN FOR OUTSIDE DIRECTORS

         The Board of Directors of the Company has adopted the St. Francis
Capital Corporation 1993 Stock Option Plan for Outside Directors of the Company
and its Affiliates (the "Directors' Plan").  The Directors' Plan is
self-administered.  Upon completion of the Conversion in June 1993, each person
serving as an Outside Director was granted options to purchase shares of Common
Stock under a percentage formula which included credit for each year of service
on the Board or year of service as legal counsel to St. Francis Bank.  Under
the Directors' Plan and pursuant to the percentage formula, the Outside
Directors, Messrs. Double, Hoppe, Mentzer, Rice and Templeton, were granted
options to purchase, at $10.00 per share, 28,738, 28,038, 27,336, 30,840 and
25,233 shares of Common Stock, respectively, during the fiscal year ended
September 30, 1993.  Options granted under the Directors' Plan vested
approximately 33.33% on the date of completion of the Conversion and
approximately 33.33% on each anniversary date of the Conversion for the
following two years.  All options granted under the Directors' Plan will expire
upon the earlier of ten years following the date the option was granted or one
year following the date the optionee ceases to be a director.  No options were
granted under the Directors' Plan during the fiscal year ended September 30,
1996.


                               PERFORMANCE GRAPH

         The following graph shows a semi-annual comparison from September 1993
to September 1996 of the Company's cumulative shareholder return on the Common
Stock with (i) the cumulative total return on stocks included in the National
Association of Securities Dealers, Inc. Automated Quotation ("NASDAQ") Stock
Market Index (for United States companies) and (ii) the cumulative total return
on stocks of NASDAQ listed companies included in the Standard Industrial
Classification (SIC) codes 602 - 679 (the "Nasdaq Financial Index"), commencing
on September 30, 1993 through September 30, 1996.  The cumulative returns set
forth in each graph assume the reinvestment of dividends into additional shares
of the same class of equity securities at the frequency with which dividends
were paid on such securities during the applicable comparison period.





                                      -25-
<PAGE>   28
                           COMPARISON OF SEMI-ANNUAL
                   CUMULATIVE TOTAL RETURN AMONG THE COMPANY,
                      NASDAQ STOCK MARKET (U.S.) INDEX AND
                           NASDAQ FINANCIAL INDEX(1)


                              [PERFORMANCE GRAPH]

<TABLE>
<CAPTION>

                                09/30/93  03/31/94  09/30/94  03/31/95  09/30/95  03/31/96  09/30/96
                                --------  --------  --------  --------  --------  --------  --------
<S>                             <C>       <C>       <C>       <C>       <C>       <C>       <C>
Company Common Stock..........  $100.00   $98.31    $122.03   $123.73   $154.24   $186.10   $177.29
NASDAQ (U.S.) Stock Market....  $100.00   $97.67    $100.82   $108.65   $139.25   $147.54   $165.24
NASDAQ Financial..............  $100.00   $96.45    $105.39   $108.04   $133.37   $148.86   $165.29

</TABLE>


(1)      Assumes $100.00 invested on September 30, 1993, and all dividends
         reinvested through the end of the Company's fiscal year on September
         30, 1996.  The Company's Common Stock commenced trading on June 18,
         1993.  From September 30, 1993 to September 30, 1995, the Company did
         not pay dividends on its Common Stock.  On November 22, 1995, the
         Company paid its first quarterly dividend and has paid quarterly
         dividends of $0.10 per share since that time through September 30,
         1996.  The performance graph is based upon closing prices on the
         trading day specified.





                                      -26-
<PAGE>   29
              INDEBTEDNESS OF MANAGEMENT AND CERTAIN TRANSACTIONS

         Current federal law requires that all loans or extensions of credit to
officers and directors must be made on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for comparable
transactions with the general public and must not involve more than the normal
risk of repayment or present other unfavorable features.  In addition, loans
made to a director or executive officer in excess of the greater of $25,000 or
5% of St. Francis Bank's capital and surplus (up to a maximum of $500,000) must
be approved in advance by a majority of the disinterested members of the Board
of Directors.

         The policies of St. Francis Bank and Bank Wisconsin provide that all
loans or extensions of credit to executive officers and directors are to be
made in the ordinary course of business, on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with other persons, and may not involve more than the
normal risk of collectibility or present other unfavorable features.  All loans
were made by St. Francis Bank and Bank Wisconsin in the ordinary course of
business and were not made with favorable terms nor involved more than the
normal risk of collectibility or presented unfavorable features.   All loans or
extensions of credit to executive officers and directors were current as of
September 30, 1996.

         In fiscal 1996, St. Francis Bank retained Richard W. Double, Esq., a
partner in the law firm of Double & Double, as general counsel.  Mr. Richard
Double is the son of William F. Double, a director of the Company and St.
Francis Bank.  During the fiscal year ended September 30, 1996, St. Francis
Bank paid Mr. Richard Double and the law firm of Double & Double, in the
aggregate, $67,292 for legal services rendered to St. Francis Bank.


            SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

         Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's officers and directors, and persons who own more than
ten percent of the shares of Common Stock outstanding, to file reports of
ownership and changes in ownership with the SEC and the National Association of
Securities Dealers, Inc.  Officers, directors and greater than ten percent
shareholders are required by regulation to furnish the Company with copies of
all Section 16(a) forms they file.  Based upon review of the information
provided to the Company, the Company believes that during the fiscal year ended
September 30, 1996, officers, directors and greater than ten percent
shareholders complied with all Section 16(a) filing requirements.





                                      -27-