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

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, DC   20549

                                   FORM 10-Q

(Mark One)

             (X)  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1997


                                       OR

            (  )   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

           For the transition period from __________ to ____________


                         COMMISSION FILE NUMBER 0-20082

                                ALLIANCE BANCORP
             (Exact name of registrant as specified in its charter)


          DELAWARE                                       36-3811768
(State or other jurisdiction of                       (I.R.S. Employer
incorporation or organization)                       Identification No.)

ONE GRANT SQUARE, HINSDALE, ILLINOIS                        60521
(Address of principal executive offices)                 (Zip Code)


                                 (630) 323-1776
              (Registrant's telephone number, including area code)

   Indicate by check mark whether the registrant (1) has filed all the reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

YES  X       NO
   -----        ------

   Indicate the number of shares outstanding of each of the issuer's classes of
stock, as of the latest practicable date.

   Common Stock, $0.01 par value -5,328,938 shares outstanding as of May 6,
1997.
================================================================================
<PAGE>
 
                       ALLIANCE BANCORP AND SUBSIDIARIES
                                   FORM 10-Q

                                     Index
                                     -----
 
PART I.      FINANCIAL INFORMATION                                    PAGE
-------      ---------------------                                    ----

Item 1.     Financial Statements (unaudited) 
         
            Consolidated Statements of Financial Condition as of
            March 31, 1 1997 and December 31, 1996                      1
         
            Consolidated Statements of Income for the Three
            Months Ended March 31, 1997 and 1996                        2

            Consolidated Statements of Changes in Stockholders'
            Equity for the Three Months Ended March 31, 1997 and
            1996                                                        3

            Consolidated Statements of Cash Flows for the Three
            Months Ended March 31, 1997 and 1996                        4

            Notes to Consolidated Financial Statements                  5

Item 2.     Management's Discussion and Analysis of Financial 
            Condition and Results of Operations                         7
 
PART II.    OTHER INFORMATION
--------    -----------------
 
Item 1.     Legal Proceedings                                          16
 
Item 2.     Changes in Securities                                      16
            
Item 3.     Defaults upon Senior Securities                            16
            
            
Item 4.     Submission of Matters to a Vote of Security Holders        16
            
            
Item 5.     Other Information                                          16
            
Item 6.     Exhibits and Reports on Form 8-K                           16
            
 
            Signature Page                                             17
<PAGE>
 
ALLIANCE BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
 
 
<TABLE> 
<CAPTION> 
 
                                                        March 31, December 31,
(In thousands, except share data)                         1997       1996
------------------------------------------------------------------------------
                                                             (unaudited)
<S>                                              <C>              <C> 
Assets
Cash and due from banks                          $       14,242          7,645
Interest-bearing deposits                                12,485         19,596
Commercial paper                                          1,700              -
Investment securities available for sale,
 at fair value                                           24,017          1,998
Mortgage-backed securities available for sale,
 at fair value                                          126,686          5,140
Loans, net of allowance for losses of $5,478
 at March 31, 1997 and $2,272 at
 December 31, 1996                                    1,088,476        609,371 
Accrued interest receivable                               7,320          3,522
Real estate                                               2,217          1,586
Premises and equipment, net                               6,862          6,592
Stock in Federal Home Loan Bank of Chicago,
 at cost                                                 12,855          7,445
Other assets                                             16,281          5,069
------------------------------------------------------------------------------
                                                 $    1,313,141        667,964
==============================================================================

Liabilities and Stockholders' Equity 
Liabilities:
 Deposits                                        $    1,004,517        462,869
 Borrowed funds                                         158,750        131,900
 Collateralized mortgage obligations                      1,990          2,243
 Advances by borrowers for taxes and insurance           12,098          7,919
 Accrued expenses and other liabilities                  13,473          6,407
------------------------------------------------------------------------------
   Total liabilities                                  1,190,828        611,338
------------------------------------------------------------------------------
 
Stockholders' Equity:
 Preferred stock, $.01 par value; authorized
  1,500,000 shares; none outstanding                         -              -
 Common stock, $.01 par value;
  authorized 11,000,000 shares;                                         
  5,431,455 shares issued and 5,333,830
  outstanding at March 31, 1997                              
  2,790,085 shares issued and 2,695,085 
  outstanding at December 31, 1996                           54             27  
 Additional paid-in capital                              86,339         21,066
 Retained earnings, substantially restricted             38,012         37,117
 Treasury stock, at cost; 97,625 shares at March
 31, 1997 and 95,000 at December 31, 1996                (1,359)        (1,284) 
 Common stock purchased by:
  Employee Stock Ownership Plan                               -           (428)
 Unrealized gain (loss) on securities available
 for sale, net of tax                                      (733)           128
------------------------------------------------------------------------------
   Total stockholders' equity                           122,313         56,626
------------------------------------------------------------------------------
Commitments and contingencies 
------------------------------------------------------------------------------
                                                 $    1,313,141        667,964
==============================================================================
</TABLE>
See accompanying notes to unaudited consolidated financial statements.

                                       1
<PAGE>
 
ALLIANCE BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME

<TABLE> 
<CAPTION> 
                                                               Three Months Ended
                                                                    March 31, 
(In thousands, except per share amounts)                       1997          1996
----------------------------------------------------------------------------------
                                                                   (unaudited)
<S>                                                          <C>            <C> 
Interest Income:                                             
 Loans                                                       $  16,708      10,922
 Mortgage-backed securities                                      1,497         153
 Investment securities                                             473         173
 Interest-bearing deposits                                         137         248
 Commercial paper                                                   31           -
 Federal funds sold                                                 15           -
----------------------------------------------------------------------------------
  Total interest income                                         18,861      11,496
----------------------------------------------------------------------------------

Interest Expense:                                                        
 Deposits                                                        8,933       4,933
 Borrowed funds                                                  2,348       2,262
 Collateralized mortgage obligations                                60         117
----------------------------------------------------------------------------------
  Total interest expense                                        11,341       7,312
----------------------------------------------------------------------------------
  Net interest income                                            7,520       4,184
  Provision for loan losses                                          -           -
----------------------------------------------------------------------------------
  Net interest income after provision for loan losses            7,520       4,184
----------------------------------------------------------------------------------
                                                                         
Noninterest Income:                                                      
 Gain (loss) on sales of loans and mortgage-backed securities     (396)        210
 Income from real estate operations                                 59          97
 Servicing fee income                                              105         114
 Fees and commissions                                            2,910       2,985
 Other                                                              19         165
----------------------------------------------------------------------------------
  Total noninterest income                                       2,697       3,571
----------------------------------------------------------------------------------
                                                                         
Noninterest Expense:                                                     
 Compensation and benefits                                       4,382       3,334
 Occupancy expense                                               1,045         744
 Federal deposit insurance premiums                                128         258
 Computer services                                                 363         133
 Other                                                           1,971       1,323
----------------------------------------------------------------------------------
  Total noninterest expense                                      7,889       5,792
----------------------------------------------------------------------------------
  Income before income taxes                                     2,328       1,963
 Income tax expense                                                899         762
----------------------------------------------------------------------------------
  Net income                                                 $   1,429       1,201
==================================================================================
                                                                         
 Primary earnings per share                                  $    0.32        0.43
 Fully diluted earnings per share                            $    0.32        0.43
==================================================================================
</TABLE> 
 
See accompanying notes to unaudited consolidated financial statements.

                                       2
<PAGE>
 
ALLIANCE BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

<TABLE> 
<CAPTION> 
 
                                                                                                             Unrealized
                                                                                     Common      Common      Gain (Loss)
                                                 Additional                           Stock       Stock     on Securities
                                        Common    Paid-in   Retained    Treasury    Purchased   Purchased     Available
(In thousands)                           Stock    Capital   Earnings     Stock      By ESOP     By BRPs       for Sale      Total
----------------------------------------------------------------------------------------------------------------------------------
                                                                                   (unaudited)
<S>                                     <C>     <C>         <C>         <C>         <C>         <C>         <C>            <C> 
Three Months Ended March 31, 1996

Balance at December 31, 1995            $   27      20,881    33,986     (1,284)        (643)        (86)            227    53,108
Net income                                   -           -     1,201          -            -           -               -     1,201
Proceeds from exercise of stock options      -          69         -          -            -           -               -        69
Principal payment on ESOP loan               -           -         -          -           43           -               -        43
Change in net unrealized gain (loss) on 
 securities available for sale,
 net of tax                                  -           -         -          -            -           -             (80)      (80)
----------------------------------------------------------------------------------------------------------------------------------
Balance at March 31, 1996               $   27      20,950    35,187     (1,284)        (600)        (86)            147    54,341
----------------------------------------------------------------------------------------------------------------------------------

Three Months Ended March 31, 1997

Balance at December 31, 1996            $   27      21,066    37,117     (1,284)        (428)          -             128    56,626
Net income                                   -           -     1,429          -            -           -               -     1,429
Issuance of 2,620,270 shares for 
 merger of Liberty Bancorp                  26      65,106         -          -            -           -               -    65,132
Cash dividends declared, $0.10
 per share                                   -           -      (534)         -            -           -               -      (534)
Purchase of treasury shares                  -           -         -        (75)           -           -               -       (75)
Proceeds from exercise of stock
 options                                     1         167         -          -            -           -               -       168
Principal payment on ESOP loan               -           -         -          -          428           -               -       428
Change in net unrealized
 gain (loss) on securities
 available for sale, net of tax              -           -         -          -            -           -            (861)     (861) 

----------------------------------------------------------------------------------------------------------------------------------
Balance at March 31, 1997               $   54      86,339    38,012     (1,359)           -           -            (733)  122,313
================================================================================================================================== 
</TABLE> 
See accompanying notes to unaudited consolidated financial statements.

                                       3
<PAGE>
 
ALLIANCE BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE> 
<CAPTION> 
                                                                            Three Months Ended
                                                                                March 31,
(In thousands)                                                              1997            1996
---------------------------------------------------------------------------------------------------
                                                                                (unaudited)
<S>                                                                       <C>                <C> 
Cash Flows From Operating Activities:                                       
 Net income                                                               $   1,429           1,201
 Adjustments to reconcile net income to net cash                           
  provided by (used in) operating activities:                              
   Depreciation and amortization                                                410             295
   Amortization of premiums, discounts, and deferred loan fees                  307             113
   Additions to deferred fees                                                   (32)           (119)
   Amortization of collateralized mortgage obligations discount                  17              43
   Originations of loans held for sale                                      (95,680)       (128,915)
   Sale of loans originated for sale                                        100,984         121,688
   (Gain) loss on sales of loans and mortgage-backed securities                 396            (210)
   Decrease in Stock in Federal Home Loan Bank of Chicago                         -           2,220
   (Increase) decrease  in accrued interest receivable                          312             (36)
   (Increase) decrease in other assets                                        3,621            (324)
   Decrease in accrued expenses and other liabilities                        (4,628)           (742)
---------------------------------------------------------------------------------------------------
Net cash provided by (used in) operating activities                           7,136          (4,786)
---------------------------------------------------------------------------------------------------
                                                                           
Cash Flows From Investing Activities:                                      
 Proceeds from sales of loans                                                     -           4,803
 Loans originated or purchased for investment                               (27,621)        (12,525)
 Purchases of:                                                             
  Mortgage-backed securities available for sale                              (8,041)              -
  Investment securities available for sale                                   (3,613)              -
 Purchase of premises and equipment                                            (574)           (189)
 Net assets acquired through merger, net of cash acquired                    16,535               -
 Maturities of investment securities available for sale                       4,500               -
 Principal collected on loans                                                39,936          27,354
 Principal collected on mortgage-backed securities                            3,871             414
---------------------------------------------------------------------------------------------------
Net cash provided by investing activities                                    24,993          19,857
---------------------------------------------------------------------------------------------------
                                                                           
Cash Flows From Financing Activities:                                      
 Net increase in deposits                                                    26,008          12,740
 Proceeds from borrowed funds                                                40,000               -
 Repayment of borrowed funds                                                (96,484)        (16,613)
 Repayment of collateralized mortgage obligations                              (270)           (566)
 Net increase (decrease) in advance payments by borrowers for taxes and        (793)          1,745
  insurance                                                                
 Payment on ESOP loan                                                           428              43
 Proceeds from options exercised                                                168              69
---------------------------------------------------------------------------------------------------
Net cash used in financing activities                                       (30,943)         (2,582)
---------------------------------------------------------------------------------------------------
Net increase in cash and cash equivalents                                     1,186          12,489
Cash and cash equivalents at beginning of period                             27,241          29,030
---------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period                                $  28,427          41,519
===================================================================================================

Supplemental Disclosures of Cash Flow Information:                          
 Cash paid during the period for:                                           
  Interest                                                                $  10,909           7,342
  Income taxes                                                                  720           1,283
                                                                            
Supplemental Disclosures of Noncash Activities:                             
 Loans exchanged for mortgage-backed securities                           $   2,786           9,316
---------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to unaudited consolidated financial statements.

                                       4
<PAGE>
 
ALLIANCE BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended March 31, 1997 and 1996

(1)  Basis of Presentation

  The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles ("GAAP")
for interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X.  Accordingly, they do not include all of the
information and footnotes required by GAAP for complete financial statements.
In the opinion of management, all adjustments (consisting of only normal
recurring accruals) necessary for a fair presentation have been included.

  The unaudited consolidated financial statements include the accounts of
Alliance Bancorp ("the Company"), its wholly-owned subsidiaries: Liberty Lincoln
Service Corporation II and Liberty Federal Bank ("the Bank"), and the Bank's
wholly-owned subsidiaries: Preferred Mortgage Associates, Ltd. ("Preferred"),
Liberty Financial Services, Inc., Liberty Lincoln Service Corporation and NASCOR
II Corporation.  All material intercompany balances and transactions have been
eliminated.

(2)  Acquisition

  On February 10, 1997, Hinsdale Financial Corporation, the holding company for
Hinsdale Federal Bank for Savings, and Liberty Bancorp, Inc., the holding
company for Liberty Federal Savings Bank, consummated their merger in a stock-
for-stock exchange.  The resulting organization was renamed Alliance Bancorp.
Liberty Federal Savings Bank was merged into Hinsdale Federal Bank for Savings,
and the resulting Bank operates under the name Liberty Federal Bank.

  The transaction was accounted for under the purchase method of accounting and
1.054 shares of Hinsdale Financial Corporation common stock was exchanged for
each share of Liberty Bancorp outstanding common stock.  There were 2,620,270
shares of Hinsdale Financial Corporation shares issued for 2,488,675 shares of
Liberty Bancorp.  Liberty Bancorp had total assets of $680 million and deposits
of $516 million at the date of the merger.  The fair value of the net assets
acquired approximated the purchase price, accordingly; no goodwill was recorded.
The current quarter ended March 31, 1997 included the earnings of Liberty
Bancorp from the date of merger.

  The following unaudited pro forma financial information presents the combined
results of operations of Hinsdale Financial Corporation and Liberty Bancorp,
Inc. as if the acquisition had occurred as of the beginning of 1997 and 1996.
The pro forma financial information does not necessarily reflect the results of
operations that would have occurred had the companies constituted a single
entity during such periods.
<TABLE>
<CAPTION>
 
 
                                          Three Months Ended March 31,
(In thousands, except per share amounts)        1997        1996
----------------------------------------------------------------------
<S>                                       <C>             <C> 
  Net Interest Income                         $ 8,953       $ 8,628
  Net Income                                  $ 1,451       $ 2,261
  Primary Earnings Per Share                  $  0.32       $  0.40
  Fully Diluted Earnings Per Share            $  0.32       $  0.40
 
</TABLE>

(3)  Change in Fiscal Year

  As a result of the merger with Liberty Bancorp, Inc., the Company has changed
its fiscal year end from September 30 to December 31.  Therefore, the current
quarter ended March 31, 1997 represents the first quarter for the year ending
December 31, 1997.

                                       5
<PAGE>
 
ALLIANCE BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended March 31, 1997 and 1996

(4)  Earnings per Share

  Earnings per share of common stock have been determined by dividing net income
for the period by the weighted average number of common and common equivalent
shares outstanding.  Stock options are regarded as common share equivalents and
are therefore considered in both primary and fully diluted earnings per share
calculations.  Common stock equivalents are computed using the treasury stock
method.

(5)  Commitments and Contingencies

  At March 31, 1997, the Company had outstanding commitments to originate and
purchase loans of $45.5 million, of which $24.8 million were fixed-rate and
$20.7 million were adjustable-rate commitments.  Unused equity lines of credit
available to customers were $72.5 million at March 31, 1997.

  As a result of the merger, the Bank assumed two credit enhancement agreements
with local municipalities to guarantee the repayment of an aggregate of $4.0
million on municipal revenue bonds ( the "Bonds"), which are secured by first
mortgages on apartment building projects.  To secure the guarantees of the
Bonds, the Bank has pledged mortgage-backed securities issued by the Government
National Mortgage Association ("GNMA").  The Bank's obligations on these Bonds
expire in the year 1998 or the dates the Bonds are repaid, if earlier.  In the
event of default on the Bonds, the Bank's maximum liability would be its pro
rata amount of the credit guaranty and if the Bank does not act to meet its
agreed upon obligations, the collateral pledged as security for the Bank's
guarantee may be liquidated and the proceeds used to repay the defaulted Bonds.
The Bank's position in such case would be secured by a first mortgage lien on
the underlying apartment properties and a lien against all income derived
therefrom.

(6)  Reclassifications

  Certain reclassifications of prior year amounts have been made to conform with
current year presentation.

                                       6
<PAGE>
 
ALLIANCE BANCORP AND SUBSIDIARIES
Management's Discussion and Analysis of Financial Condition and Results of
Operations

GENERAL

  On February 10, 1997, Hinsdale Financial Corporation ("Hinsdale Financial")
completed a merger of equals with Liberty Bancorp Inc. of Chicago, Illinois
("Liberty Bancorp"). Liberty Bancorp was merged with and into Hinsdale
Financial.  Concurrent with the merger, Hinsdale Financial changed its name to
Alliance Bancorp ("the Company"), and 2,620,270 shares of the Company's common
stock were exchanged for all of the outstanding shares of Liberty Bancorp.
Additionally in connection with the merger, the wholly-owned subsidiary of
Liberty Bancorp, Liberty Federal Savings Bank ("Liberty Federal Savings"), was
merged with and into the wholly-owned subsidiary of Hinsdale Financial, Hinsdale
Federal Bank for Savings ("Hinsdale Federal"), which then changed its name to
Liberty Federal Bank ("Liberty Federal", the "Bank").  The merger of Liberty
Bancorp with and into the Company was recorded as a purchase accounting
transaction, in which all of Liberty Bancorp's assets and liabilities were
recorded at fair value at the closing date.  The fair value of net assets
acquired approximated the purchase price; accordingly, no goodwill was recorded.
Liberty Bancorp had total assets of $680 million and deposits of $516 million at
the date of the merger.

  The Company is a registered savings and loan holding company incorporated
under the laws of the state of Delaware and is engaged in the business of
providing financial service products to the public through its wholly-owned
subsidiary, Liberty Federal Bank.

  The Bank, a Federal savings bank chartered under the authority of the Office
of Thrift Supervision ("OTS"), originally was organized in 1934, and changed its
charter from a federal savings and loan association to a federal savings bank in
1991.  The Bank is a member of the Federal Home Loan Bank ("FHLB") System and
its deposit accounts are insured to the maximum allowable amount by the Federal
Deposit Insurance Corporation ("FDIC").  The Bank is regulated by the OTS and
the FDIC and is further regulated by the Board of Governors of the Federal
Reserve System as to reserves required to be maintained against deposits and
certain other matters.

  The Bank is a community-oriented company providing financial services through
14 retail banking facilities in Chicago, north and western Cook County and
DuPage County in Illinois.  The Bank offers a variety of deposit products in an
attempt to attract funds from the general public in the highly competitive
market areas surrounding its offices.  In addition to deposit products, the Bank
also offers its customers financial advice and security brokerage services
through INVEST Financial Corporation ("INVEST").  The Bank invests its retail
deposits in mortgage and consumer loans, investment securities and mortgage-
backed securities, secured primarily by one-to four-family residential loans.

  The earnings of the Bank are primarily dependent on its net interest income,
which is the difference between the interest income earned on its loan,
mortgage-backed securities, and investment portfolios, and its cost of funds,
consisting of the interest paid on its deposits and borrowings.  The Bank has
determined to place additional emphasis on expanding its portfolio of home
equity lines of credit, the interest rates on which adjust with the prime rate,
multi-family mortgage loans and commercial real estate loans.

  The Bank's earnings are also affected by noninterest income, including income
related to loan origination fees contributed by the Bank's wholly-owned
subsidiary, Preferred Mortgage Associates, Ltd. ("Preferred") and the noncredit
consumer related financial services offered by the Bank, such as net commissions
received by the Bank from securities brokerage services, commissions from the
sale of insurance products, loan servicing income, fee income on transaction
accounts, and interchange fees from its shared ATMs.  The Bank's noninterest
income has also been affected by gains from the sale of various assets,
including loans, mortgage-backed securities, and real estate.  Noninterest
expense consists principally of employee compensation, occupancy expense,
federal deposit insurance premiums, and other general and administrative
expenses of the Bank and Preferred.

  The Bank's results of operations are also significantly affected by general
economic and competitive conditions, particularly changes in market interest
rates, government policies and actions of regulatory authorities.

                                       7
<PAGE>
 
LIQUIDITY/CAPITAL RESOURCES

  The Company's primary sources of funds are deposits, borrowings, proceeds from
principal and interest payments on loans and mortgage-backed securities and the
sale of securitized loans.  While maturities and scheduled amortization of loans
and mortgage-backed securities are a predictable source of funds, deposit flows
and mortgage prepayments are greatly influenced by interest rate cycles and
economic conditions.

  The Bank is required by regulation to maintain specific minimum levels of
liquid investments.  Regulations currently in effect require the Bank to
maintain liquid assets at least equal to 5.0% of the sum of its average daily
balance of net withdrawable accounts and short-term borrowed funds.  This
regulatory requirement may be changed from time to time by the OTS to reflect
current economic conditions and deposit flows.  The Bank's average liquidity
ratio was 5.18% for the quarter ended March 31, 1997.

  The Company's most liquid assets are cash and cash equivalents, which include
investments in highly liquid, short-term investments and interest-bearing
deposits. The levels of these assets are dependent on the Company's operating,
financing, lending and investing activities during any given period.  At March
31, 1997, cash and cash equivalents totaled $28.4 million.

  Liquidity management for the Company is both a daily and long-term function of
the Company's management strategy.  Excess funds are generally invested in
short-term investments and interest-bearing deposits.  In the event that the
Company should require funds beyond its ability to generate them internally,
additional sources of funds are available through the use of Federal Home Loan
Bank of Chicago ("FHLB") advances.

  The Company's cash flows are comprised of three classifications: cash flows
from operating activities, cash flows from investing activities, and cash flows
from financing activities.  Cash flows provided by operating activities,
consisting primarily of interest and dividends received less interest paid on
deposits, and the origination and sale of loans, were $7.1 million for the three
months ended March 31, 1997.  Net cash provided by investing  activities,
consisting primarily of disbursements for loans originated or purchased for
investment, purchases of mortgage-backed and investment securities, offset by
principal collections on loans and mortgage-backed securities was $25.0 million
for the three months ended March 31, 1997.  Net cash used in financing
activities, consisting primarily of net activity in deposit and escrow accounts,
net repayment of borrowed funds and the repayment of collateralized mortgage
obligations, totaled $30.9 million for the three months ended March 31, 1997.

  In connection with the Company's loan origination activities, the Company's
interest rate risk management policy specifies the use of certain hedging
activities in an attempt to reduce exposure to changes in loan market prices
from the time of commitment until securitization.  The Company will engage in
hedging transactions as a method of reducing its exposure to interest rate risk
present in the secondary market.  The Company's hedging transactions are
generally forward commitments to sell fixed-rate mortgage-backed securities at a
specified future date.  The loans securitized through the Federal National
Mortgage Association ("FNMA") are generally used to satisfy these forward
commitments.  The sale of fixed-rate mortgage-backed securities for future
delivery presents a risk to the Company that, if the Company is not able to
deliver the mortgage-backed securities on the specified delivery date, it may be
required to repurchase the forward commitment to sell at the then current market
price.  At March 31, 1997 the Company had no forward commitments to sell FNMA
mortgage-backed securities.

  The Bank's tangible capital ratio at March 31, 1997 was 8.17%.  This exceeded
the tangible capital requirement of 1.5% of adjusted assets by $87.1 million.
The Bank's leverage capital ratio at March 31, 1997 was 8.28%.  This exceeded
the leverage capital requirement of 3.0% of adjusted assets by $69.1 million.
The Bank's risk-based capital ratio was 15.15% at March 31, 1997.  The Bank
currently exceeds the risk-based capital requirement of 8.0% of risk-weighted
assets by $53.2 million.

CHANGES IN FINANCIAL CONDITION

  The Company had total assets of $1.3 billion at March 31, 1997, an increase of
$645 million, or 96.6%, from December 31, 1996, primarily as a result of the
merger. Liberty Bancorp's assets at date of merger were comprised of: commercial
paper, $1.7 million; investment securities, $22.6 million; mortgage-backed
securities, $118.7 million; and loans, $497.4 million.

                                       8
<PAGE>
 
  Deposits totaled $1.0 billion at March 31, 1997, an increase of $541.6
million, or 117.0%, of which $515.6 million was due to the merger.  Borrowed
funds totaled $158.8 million at March 31, 1997, an increase of $26.9 million, or
20.4% from December 31, 1996.  Borrowed funds consisted of $105.9 million in
FHLB advances and $52.9 million in reverse repurchase agreements collateralized
by mortgage-backed securities.  The reverse repurchase agreements were acquired
as a result of the merger.

  Stockholders' equity totaled $122.3 million at March 31, 1997, an increase of
$65.7 million, or 116.0%.  As a result of the merger, 2,620,270 additional
shares of common stock were issued and exchanged for Liberty Bancorp common
stock.  At March 31, 1997, the number of common shares outstanding was 5,333,830
and the book value per common share outstanding was $22.93 per share.  On March
21, 1997, the Company declared a $0.10 per share cash dividend payable April 18,
1997 to shareholders of record on March 31, 1997.

RECENT AND PROPOSED CHANGES IN ACCOUNTING RULES

  In February 1997, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 128, "Earnings Per Share."  SFAS 128 is effective for financial
statements for both interim and annual periods ending after December 15, 1997.
Statement 128 supersedes APB Opinion No. 15, Earnings Per Share and specifies
the computation, presentation and disclosure requirements for earnings per share
("EPS") for entities with publicly held common stock or potential common stock.
Statement 128 was issued to simplify the computation of EPS and to make the U.S.
standard more compatible with the EPS standards of other countries and that of
the International Accounting Standards Committee.  It replaces Primary EPS and
Fully Diluted EPS with Basic EPS and Diluted EPS, respectively.  It also
requires dual presentation of Basic EPS and Diluted EPS on the face of the
income statement for all entities with complex capital structures and requires a
reconciliation of the numerator and denominator of the Basic EPS computation to
the numerator and denominator of the Diluted EPS computation.

  Basic EPS, unlike Primary EPS, excludes all dilution while Diluted EPS, like
Fully Diluted EPS, reflects the potential dilution that could occur if
securities or other contracts to issue common stock were exercised or converted
into common stock or resulted in the issuance of common stock that then shared
in earnings of the entity.  For many entities Basic EPS will be higher than
Primary EPS and Diluted EPS will be approximately the same as Fully Diluted EPS.
Management believes that the result of adopting this statement will result in
higher Basic EPS and will remain approximately the same for Fully Diluted EPS.

                                       9
<PAGE>
 
ASSET QUALITY
NON-PERFORMING ASSETS

  The following table sets forth information as to non-accrual loans and real
estate owned at the dates indicated.  The Company discontinues the accrual of
interest on loans ninety days or more past due, at which time all accrued but
uncollected interest is reversed.  There were no loans at March 31, 1997 nor
during the quarter ended March 31, 1997, which met the definition of an impaired
loan.  A loan is considered impaired when it is probable that a creditor will be
unable to collect contractual principal and interest due according to the
contractual terms of the loan agreement.  Loans considered for impairment do not
include residential mortgage and consumer installment loans.

<TABLE>
<CAPTION>
 
                                                          Quarter Ended
                                   ------------------------------------------------------------
                                   March 31,   December 31,  September 30,  June 30,  March 31,
(Dollars in thousands)                1997         1996          1996         1996      1996
-----------------------------------------------------------------------------------------------
<S>                                <C>         <C>           <C>            <C>       <C>  
Non-accrual mortgage loans
 90 days or more past due          $   1,761          1,163         932       731        866
Non-accrual consumer loans                                       
 90 days or more past due                  -              -           -         -          -
                                   ------------------------------------------------------------
                                                                 
Total non-performing loans             1,761          1,163         932       731        866
Total foreclosed real estate             553            545         207       160          -
                                   ------------------------------------------------------------
Total non-performing assets        $   2,314          1,708       1,139       891        866
                                   ------------------------------------------------------------
Total non-performing loans                                       
 to total loans                         0.16%          0.18        0.15      0.12       0.13
                                                                 
Total non-performing assets                                      
 to total assets                        0.18%          0.26        0.17      0.13       0.13
</TABLE>

CLASSIFICATION OF ASSETS

  The Company regularly reviews the assets in its portfolio to determine whether
any assets require classification in accordance with applicable regulations.

  As of March 31, 1997, the Company had total classified assets of $553,200, all
of which were classified "substandard".  Substandard assets consisted of
foreclosed single family residential loans (real estate owned).

                                       10
<PAGE>
 
ASSET/LIABILITY MANAGEMENT

  The Company manages its exposure to interest rate risk by emphasizing the
origination and purchase of adjustable-rate mortgage ("ARM") loans.  Management
believes that investing in ARM loans, short-term profits are possibly sacrificed
compared to the yields obtainable through investment in fixed-rate loans,
however, the Company's exposure to the risk of interest rate fluctuations is
reduced, thereby enhancing long-term profitability. The fixed-rate mortgage
loans the Bank originates are securitized and sold into the secondary market,
with servicing retained, as part of its operation and interest rate risk
management strategy.  More recently, the Company has placed additional emphasis
on origination of home equity lines of credit, the interest rates on which
adjust with the prime rate.  An increase in home equity lines of credit should
enhance the Bank's interest rate spread and its interest rate risk management.

  The Bank seeks to lengthen the maturities of its deposits by emphasizing
savings certificates with maturities of three months or more.  At March 31,
1997, savings certificates with original maturities of three months or more
totaled $678.8 million, or 67.6%, of total deposits.  The Bank seeks to reduce
its risk of early withdrawals from its longer term savings certificates by
requiring early withdrawal penalties on all certificates.  The Bank does not
actively solicit high-rate jumbo certificates of deposit or brokered funds.

  Matching of assets and liabilities may be analyzed by examining the extent to
which such assets and liabilities are interest rate sensitive by monitoring an
institution's interest rate sensitivity gap.  An asset or liability is
considered interest rate sensitive within a specific time period if it will
mature or reprice within that time period.  The interest rate sensitivity gap is
defined as the difference between the amount of interest-earning assets
anticipated, based upon certain assumptions, to mature or reprice within a
specific time period and the amount of interest-bearing liabilities anticipated,
based upon certain assumptions, to mature or reprice within that time period.  A
gap is considered positive when the amount of interest rate sensitive assets
exceeds the amount of interest rate sensitive liabilities.  A gap is considered
negative when the amount of interest rate sensitive liabilities exceeds the
amount of interest rate sensitive assets.  During a period of rising interest
rates, a negative gap would tend to adversely affect net interest income while a
positive gap would tend to result in an increase in net interest income.  During
a period of falling interest rates, a negative gap would tend to result in an
increase in net interest income while a positive gap would tend to adversely
affect net interest income.  The Company's one-year interest sensitivity gap as
a percent of total assets was a negative 2% at March 31, 1997.

  The following table sets forth the amounts of interest-earning assets and
interest-bearing liabilities outstanding at March 31, 1997, which are
anticipated by the Company to reprice or mature in each of the future time
periods shown.  Except as stated below, the amounts of assets and liabilities
shown which reprice or mature during a particular period were based upon the
contractual terms of the asset or liability or certain assumptions concerning
the amortization and prepayment of such assets and liabilities.  Regular savings
accounts, NOW accounts and money market accounts, which collectively totaled
$277 million at March 31, 1997, were assumed to be withdrawn at annual
percentage rates of 17%, 37% and 79%, respectively.  The collateralized mortgage
obligations were assumed to prepay at the same rate used for the mortgage-backed
securities collateralizing these obligations.  Management believes that these
assumptions approximate actual experience and considers them reasonable,
although the actual amortization and repayment of assets and liabilities may
vary substantially.

                                       11
<PAGE>
 
INTEREST RATE SENSITIVITY GAP ANALYSIS

<TABLE> 
<CAPTION> 
                                                               At March 31, 1997
                                           --------------------------------------------------------
                                                       More Than   More Than
                                              1 Year     1 Year     3 Years    More Than
(Dollars in thousands)                       Or Less   To 3 Years  To 5 Years   5 Years     Total
---------------------------------------------------------------------------------------------------
<S>                                        <C>         <C>         <C>         <C>        <C>  
Interest-Earning Assets:
Mortgage loans (1)                         $ 479,645      333,742      80,144     93,507    987,038
Equity lines of credit (1)                    67,934            -           -          -     67,934
Consumer loans and leases (1)                 20,321       13,053       1,933      1,913     37,220
Mortgage-backed securities (2)                68,050       14,428      10,776     34,434    127,688
Interest-bearing deposits                     12,485            -           -          -     12,485
Investment securities (2)                     29,274        7,909         247      1,250     38,680
---------------------------------------------------------------------------------------------------
 Total interest-earning assets               677,709      369,132      93,100    131,104  1,271,045
 
Interest-Bearing Liabilities
Regular savings accounts                      17,427       42,235      24,089     58,291    142,042
NOW interest-bearing accounts                 10,447        9,772       3,646     23,348     47,213
Money market accounts                         43,368       17,254       8,703     18,098     87,423
Certificate accounts                         493,824      148,230      36,339        406    678,799
Borrowed funds                               133,490       20,260       5,000          -    158,750
Collateralized mortgage obligations            1,655          335           -          -      1,990
---------------------------------------------------------------------------------------------------
 Total interest-bearing liabilities          700,211      238,086      77,777    100,143  1,116,217
---------------------------------------------------------------------------------------------------
Interest sensitivity gap                   $ (22,502)     131,046      15,323     30,961    154,828
===================================================================================================
Cumulative interest sensitivity gap        $ (22,502)     108,544     123,867    154,828
===================================================================================================
Cumulative interest sensitivity gap as a
 percentage of total assets                    (1.71)%       8.26        9.42      11.78
Cumulative net interest-earning assets as
 a percentage of interest-sensitive
 liabilities                                   96.79 %     111.57      112.19     113.87 
---------------------------------------------------------------------------------------------------
</TABLE>

(1) For purposes of the gap analysis, mortgage, equity and consumer loans and
    leases are not reduced by the allowance for loan losses and are reduced for
    non-performing loans.
(2) Mortgage-backed and investment securities are not increased (decreased) by
    unrealized gains (losses) resulting from the adoption of FASB No. 115.

  Certain shortcomings are inherent in the method of analysis presented in the
foregoing table. For example, although certain assets and liabilities may have
similar maturities or periods to repricing, they may react in different degrees
to changes in market interest rates. Also, the interest rates on certain types
of assets and liabilities may fluctuate in advance of changes in market interest
rates, while interest rates on other types may lag behind changes in market
rates. Additionally, certain assets, such as ARM loans, have features which
restrict changes in interest rates on a short-term basis and over the life of
the asset. Further, in the event of a change in interest rates, prepayment and
early withdrawal levels would likely deviate significantly from those assumed in
calculating the table. Finally, the ability of many borrowers to service their
debt may decrease in the event of an interest rate increase.

ANALYSIS OF NET INTEREST INCOME

  Net interest income represents the difference between income on interest-
earning assets and expense on interest-bearing liabilities.  Net interest income
depends upon the volume of interest-earning assets and interest-bearing
liabilities and the interest rate earned or paid on them.

                                       12
<PAGE>
 
AVERAGE BALANCE SHEETS

  The following table sets forth certain information relating to the Company's
Consolidated Statements of Financial Condition and reflects the average yield on
assets and the average cost of liabilities for the periods indicated.  Such
yields and costs are derived by dividing income or expense by the average
balance of assets or liabilities, respectively, for the periods shown.  Average
balances are derived from average daily balances and include non-performing
loans.  The yields and costs include fees which are considered adjustments to
yields.

<TABLE>
<CAPTION>
 
                                                             Three Months Ended March 31,
                                        --------------------------------------------------------------------
                                                        1997                                1996
                                        --------------------------------------------------------------------
                                                                  Average                            Average
                                           Average                 Yield/      Average                Yield/
(Dollars in thousands)                     Balance      Interest    Cost       Balance     Interest    Cost
------------------------------------------------------------------------------------------------------------
<S>                                     <C>           <C>         <C>        <C>         <C>         <C>
Assets:

Interest-earning assets:

Mortgage loans, net                     $   828,125   $   14,946     7.22%   $ 570,390   $   10,090     7.08%
Equity lines of credit                       64,121        1,230     7.78       29,808          638     8.58
Consumer loans and leases                    26,508          532     8.03        9,125          194     8.50
Mortgage-backed securities                   87,657        1,497     6.83        7,498          153     8.16
Interest-bearing deposits                     9,438          137     5.81       30,933          248     3.17
Federal funds sold                            1,069           15     5.61            -            -        -
Commercial paper                              2,183           31     5.68            -            -        -
Investment securities                        27,396          473     6.95       10,979          173     6.31
------------------------------------------------------------------------------------------------------------
Total interest-earning assets             1,046,497       18,861     7.22      658,733       11,496     6.98

Noninterest-earning assets                   47,478                             21,256
------------------------------------------------------------------------------------------------------------
Total assets                            $ 1,093,975                          $ 679,989
============================================================================================================
 
Liabilities and Stockholders' Equity:

Interest-bearing liabilities:

Deposits:

Savings accounts                        $   653,811   $    8,194     5.08%   $ 346,340   $    4,399     5.09%
NOW noninterest-bearing accounts             40,469            -        -       36,753            -        -
NOW interest-bearing accounts                39,811          148     1.51       22,693           89     1.57
Money market accounts                        76,493          591     3.13       55,019          445     3.24
------------------------------------------------------------------------------------------------------------
Total deposits                              810,584        8,933     4.47      460,805        4,933     4.29

Funds borrowed:

Borrowed funds                              156,402        2,348     6.01      141,788        2,262     6.31

Collateralized mortgage obligations           1,984           60    12.10        3,424          117    13.67
------------------------------------------------------------------------------------------------------------
Total funds borrowed                        158,386        2,408     6.08      145,212        2,379     6.48
------------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities          968,970       11,341     4.73      606,017        7,312     4.82

Other liabilities                            25,350                             20,510
------------------------------------------------------------------------------------------------------------
Total liabilities                           994,320                            626,527

Stockholders' equity                         99,655                             53,462
------------------------------------------------------------------------------------------------------------
Total liabilities and
   stockholders' equity                 $ 1,093,975                          $ 679,989
============================================================================================================ 
Net interest income/
   interest rate spread                               $    7,520     2.49%               $    4,184     2.16%
============================================================================================================ 
Net interest-earning assets/
   net interest margin                  $    77,527                  2.87%   $  52,716                  2.54%
============================================================================================================ 
Interest-earning assets to
   interest-bearing liabilities                1.08X                              1.09X
============================================================================================================ 
</TABLE>

                                       13
<PAGE>
 
RATE/VOLUME ANALYSIS

  The following table presents the extent to which changes in interest rates and
changes in the volume of interest-earning assets and interest-bearing
liabilities have affected the Company's interest income and interest expense
during the periods indicated.  Information is provided in each category with
respect to (i) changes attributable to changes in volume (changes in volume
multiplied by prior rate), (ii) changes attributable to changes in rate (changes
in rate multiplied by prior volume), and (iii) the net change. The changes
attributable to the combined impact of volume and rate have been allocated
proportionately to the changes due to volume and the changes due to rate.
<TABLE>
<CAPTION>
 
 
                                      Three Months Ended March 31, 1997
                                                Compared To 
                                      Three Months Ended March 31, 1996
                                      ---------------------------------
                                              Increase (Decrease)
                                             In Net Interest Income
                                                     Due To
                                      ---------------------------------
 
(In thousands)                            Volume       Rate       Net
-----------------------------------------------------------------------
<S>                                      <C>           <C>       <C> 
Interest-Earning Assets:                               
Mortgage loans, net                      $  4,652        204      4,856
Equity lines of credit                        658        (66)       592
Consumer loans and leases                     350        (12)       338
Mortgage-backed securities                  1,373        (29)     1,344
Interest-bearing deposits                    (236)       125       (111)
Federal funds sold                             15          -         15
Commercial paper                               31          -         31
Investment securities                         281         19        300
-----------------------------------------------------------------------
 Total                                      7,124        241      7,365
-----------------------------------------------------------------------
                                                       
Interest-Bearing Liabilities:                          
Deposits                                    3,791        209      4,000
Funds borrowed                                190       (161)        29
-----------------------------------------------------------------------
 Total                                      3,981         48      4,029
-----------------------------------------------------------------------
Net change in net interest income        $  3,143        193      3,336
=======================================================================
</TABLE>

COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED
MARCH 31, 1997 AND MARCH 31, 1996

GENERAL

  The operating results for the three months ended March 31, 1997 include the
combined entities from the date of merger (February 10, 1997).  Net income
totaled $1,429,000, or  $0.32 per fully diluted share for the three months ended
March 31, 1997, as compared to $1,201,000, or $0.43 per fully diluted share
reported for the quarter ended March 31, 1996.  Net interest income for the
three months ended March 31, 1997 was $7.5 million, an increase of $3.3 million
from the March 31, 1996 quarter of $4.2 million.

INTEREST INCOME

  Interest income for the quarter ended March 31, 1997 totaled $18.9 million, an
increase of $7.4 million, or 64.1%, from the prior year's quarter.  Interest
income on mortgage loans increased $4.9 million, or 48.1%, to $14.9 million from
the March 1996 quarter. The average balance of the mortgage portfolio increased
$257.7 million, or 45.2%, primarily as a result of the merger.  The annualized
average yield on the mortgage loan portfolio increased to 7.22% for the three
months ended March 31, 1997 from 7.08% for the 1996 period.  Interest income on
equity lines of credit increased $592,000, or 92.8%, to $1.2 million from the
prior year's quarter, primarily as a result of the Bank's promotion of this
product.  The average balance of equity lines of credit increased $34.3 million,
or 115.1%, to $64.1 million from $29.8 million from the March 1996 quarter.
Interest income on consumer loans and

                                       14
<PAGE>
 
leases increased $338,000 to $532,000 for the three months ended March 31, 1997.
The average balance of the consumer loans and leases increased $17.4 million
from the 1996 period, primarily as a result of the merger. Interest income on
mortgage-backed securities for the three months ended March 31, 1997 increased
$1.3 million to $1.5 million from the March 1996 quarter. The average balance of
the mortgage-backed securities portfolio increased $80.2 million from the 1996
period, primarily as a result of the merger. The average balance of the
investment securities portfolio increased $16.4 million from the 1996 period,
primarily as a result of the merger.

INTEREST EXPENSE

  Interest expense on deposit accounts increased $4.0 million, or 81.1%, to $8.9
million, for the quarter ended March 31, 1997 compared to the prior year's
quarter.  The annualized average cost of deposits for the three months ended
March 31, 1997 was 4.47%, an increase from the annualized average cost of 4.29%
for the March 1996 period.  The average deposit base increased $349.8 million to
$810.6 million during the 1997 period, primarily as a result of the merger.  For
the quarter ended March 31, 1997, the Company recorded interest expense on
borrowed funds of $2.3 million on an average balance of $156.4 million at an
annualized cost of 6.01%  primarily related to FHLB advances.  The average
balance of the Collateralized Mortgage Obligations ("CMO") bonds outstanding
decreased $1.4 million, or 42.1%, to $2.0 million for the three months ended
March 31, 1997 compared to the 1996 period, due to payments and prepayments of
the mortgage-backed securities held as collateral for the bonds.  The interest
expense on the CMO bonds for the 1997 period decreased $57,000 to $60,000
compared to the three months ended March 31, 1996.  The annualized average cost
on the CMO bonds decreased to 12.10% for the 1997 quarter from 13.67% for the
three months ended March 31, 1996, due to adjustments to the discount on the
bonds for changes in the estimated average maturities of the collateral.

NET INTEREST INCOME

  Net interest income for the three months ended March 31, 1997 increased $3.3
million or 79.7%, to $7.5 million from the 1996 period.  The annualized average
yield on interest-earning assets increased from 6.98% to 7.22% when comparing
the 1996 and 1997 quarters.  The annualized average cost of interest-bearing
liabilities decreased from 4.82% to 4.73%.  This resulted in an annualized
average net interest rate spread of 2.49% for the three-month period ended March
31, 1997 compared to 2.16% for the prior year's period.  Both the average
balance of interest-earning assets and interest-bearing liabilities increased
during the quarter ended March 31, 1997 compared to the 1996 quarter.

PROVISION FOR LOAN LOSSES

  Based on management's evaluation of the loan portfolio, no provision for loan
losses was recorded during the quarter ended March 31, 1997.  The amount of non-
performing loans at March 31, 1997, was $1,761,000, or 0.16% of total loans,
compared to $866,000 or 0.13% of total loans at March 31, 1996.

NONINTEREST INCOME

  Total noninterest income for the three months ended March 31, 1997 was $2.7
million, a decrease of $874,000 from the 1996 period.  The current quarter
included a loss of $391,000 on sales of $59 million of adjustable rate mortgage
loans compared to a gain of $210,000 recorded for the 1996 quarter.  The loan
sale loss and subsequent reinvestment of the proceeds was completed to enhance
the Bank's asset and liability mix.  Other noninterest income for the quarter
ended March 31, 1996 included a $104,000 tax refund and $53,000 from the
redemption of an equity investment.

NONINTEREST EXPENSE

  Noninterest expense for the quarter ended March 31, 1997 totaled $7.9 million,
an increase of $2.1 million, or 36.2% from the prior year's quarter.  The
current quarter included $553,000 in non-recurring merger related expenses.  The
remaining increases are primarily related to the combination of the operations
of the two companies.

                                       15
<PAGE>
 
PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

                Not Applicable.

Item 2.  Changes in Securities

                Not Applicable.

Item 3.  Defaults Upon Senior Securities

                Not Applicable.

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

                Not Applicable.

Item 5.  Other Information

Item 6.  Exhibits and Reports on Form 8-K.

                (a) Exhibit No. 11 Statement re: Computation of Per Share
                    Earnings

<TABLE>
<CAPTION>
 
                                               Quarter Ended
                                               March 31, 1997
                                               --------------
<S>                                           <C>
Net income                                      $   1,429,000
                                                -------------
Weighted average common shares outstanding          4,138,100
                                                 
Common stock equivalents due to                       
 dilutive effect of stock options                     339,341
                                                -------------
Total weighted average common shares                
 and equivalents outstanding                        4,477,441
                                                -------------
Primary earnings per share                      $        0.32
                                                -------------
Total weighted average common shares                
 and equivalents outstanding                        4,477,441
                                                 
Additional dilutive shares using end of          
 period market value versus                      
 average market value for the period                    
 when utilizing the treasury stock               
 method regarding stock options                         5,083
                                                -------------
Total weighted average common shares             
 and equivalents outstanding                        
 for fully diluted computation                      4,482,524
                                                -------------
                                                 
Fully diluted earnings per share                $        0.32
                                                -------------
</TABLE>                                    
                (b)  Reports on Form 8-K.           
                                            
        A report on Form 8-K was filed by the Registrant on February 24, 1997
       for the purposes of reporting, pursuant to Items 2 and 8 of the Form 8-K,
       that the Registrant completed the merger with Liberty Bancorp, Inc. on
       February 10, 1997 and changed its year end from September 30 to December
       31 in connection with the merger.

                                       16
<PAGE>
 
                                  SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                                Alliance Bancorp



Dated:    May 12,1997                            /s/ Kenne P. Bristol
          ----------------------                 ----------------------------
                                                 Kenne P. Bristol
                                                 President and
                                                 Chief Executive Officer
                                         
                                         
Dated:    May 12, 1997                           /s/ Richard A. Hojnicki
          ----------------------                 ----------------------------
                                                 Richard A. Hojnicki
                                                 Executive Vice President and
                                                 Chief Financial Officer
 

                                       17