SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 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 June 30, 1998

                                       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 0-28696

                           Home Bancorp of Elgin, Inc.
             (Exact name of registrant as specified in its charter)

          Delaware                                     36-4090333
(State or other jurisdiction of                      (I.R.S. Employer
 incorporation or organization)                    Identification No.)

                  16 North Spring Street, Elgin, Illinois 60120
                    (Address of principal executive offices)
                                   (Zip Code)

                                 (847) 742-3800
               (Registrant's telephone number including area code)

                                       N/A
                                       ---
              (Former name, former address and former fiscal year,
                          if changed from last Report)

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934 during the  preceding  twelve  months (or for such shorter  period that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.    Yes [X]       No   [ ].

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


                                                    Outstanding  at
                        Class                        June 30, 1998
                        -----                        -------------

                    Common Stock,
                    par value $.01                      6,855,799
<PAGE>
                                TABLE OF CONTENTS



<TABLE>
<S>       <C>                                                                                       <C>
                                     PART I -- FINANCIAL INFORMATION
 
Item 1.   Financial Statements of Home Bancorp of Elgin, Inc.

          Consolidated Balance Sheets (Unaudited) -- June 30, 1998
          and December 31, 1997 ................................................................... 1

          Consolidated Statements of Earnings (Unaudited) -- Three and six months ended
          June 30, 1998 and 1997 .................................................................. 2

          Consolidated Statements of Cash Flows (Unaudited) -- Three and six months ended
          June 30, 1998 and 1997 .................................................................. 3

          Notes to Unaudited Consolidated Financial Statements .................................... 4

Item 2.   Management's Discussion and Analysis of Financial Condition and
          Results of Operations ................................................................... 5

Item 3.   Quantitative and Qualitative Disclosures About Market Risk.............................. 15


                                      PART II -- OTHER INFORMATION

Item 1.   Legal Proceedings ...................................................................... 15

Item 2.   Changes in Securities and Use of Proceeds .............................................. 15

Item 3.   Defaults upon Senior Securities ........................................................ 15

Item 4.   Submission of Matters to a Vote of Security Holders .................................... 15

Item 5.   Other Information ...................................................................... 16

Item 6.   Exhibits and Reports on Form 8-K ....................................................... 16

Signatures........................................................................................ 17
</TABLE>



                                      - i -


<PAGE>

Part I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

HOME BANCORP OF ELGIN, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
      (Unaudited)


<TABLE>
<CAPTION>
                                                                                   June 30,           December 31,
                                                                                     1998                 1997
                                                                                     ----                 ----
                                                                                       (In thousands, except
                                                                                           share amounts)

<S>                                                                              <C>                  <C>         
ASSETS
 Cash and due from banks.....................................................    $      4,768         $      6,852
 Interest-earning deposits...................................................          30,400               34,708
 Loans receivable, net.......................................................         319,925              298,661
 Government National Mortgage Association
   mortgage-backed securities held to maturity...............................              72                   92
 Accrued interest receivable.................................................           1,554                1,437
 Real estate owned and in judgment, at lower of cost or fair value...........             229                  286
 Federal Home Loan Bank of Chicago stock, at cost............................           2,954                2,606
 Office properties and equipment, net........................................           6,910                7,113
 Prepaid expenses and other assets...........................................             844                  840
                                                                                 ------------         ------------
   Total assets..............................................................    $    367,656         $    352,595
                                                                                 ============         ============

LIABILITIES AND STOCKHOLDERS' EQUITY
 Savings deposits............................................................    $    267,291         $    248,218
 Borrowed funds .............................................................              --                5,000
 Advance payment by borrowers for taxes and insurance........................           2,378                2,285
 Accrued interest payable and other liabilities..............................           1,975                1,877
                                                                                 ------------         ------------
   Total liabilities.........................................................         271,644              257,380
                                                                                 ------------         ------------

Stockholders' Equity:
 Preferred stock, $.01 par value, 3,000,000 shares
   authorized; none outstanding..............................................            --                   --
 Common stock, $.01 par value; 12,000,000 shares
    authorized, 7,009,250 shares issued; 6,855,799 shares
    outstanding at June 30, 1998 and at December 31, 1997....................              70                   70
 Additional paid-in capital..................................................          68,670               68,324
 Retained earnings, substantially restricted.................................          37,926               38,095
 Treasury stock, at cost (153,451 shares) ...................................          (2,470)              (2,470)
 Common stock acquired by Recognition and Retention Plan.....................          (3,449)              (3,898)
 Common stock acquired by Employee Stock Ownership Plan .....................          (4,735)              (4,906)
   Total stockholders' equity................................................          96,012               95,215
                                                                                 ------------         ------------
 Total liabilities and stockholders' equity..................................    $    367,656         $    352,595
                                                                                 ============         ============
</TABLE>


See accompanying notes to unaudited consolidated financial statements.

                                      - 1 -

<PAGE>
HOME BANCORP OF ELGIN, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF EARNINGS
             (Unaudited)


<TABLE>
<CAPTION>
                                                                      For the Three                 For the Six
                                                                       Months Ended                 Months Ended
                                                                        June 30,                       June 30,
                                                            --------------------------------- ---------------------------
                                                                  1998             1997             1998             1997
                                                            ---------------- ---------------- ---------------- ----------
                                                                                   (In thousands, except
                                                                                    per share amounts)

<S>                                                             <C>              <C>               <C>             <C>     
INTEREST INCOME
 Loans secured by real estate..............................     $ 5,954          $ 5,281         $ 11,716         $ 10,382
 Other loans...............................................          15               15               29               30
 Mortgage-backed securities held to maturity...............           1                2                3                5
 Investment securities held to maturity....................          --              508               --            1,189
 Interest-earning deposits.................................         575              444            1,185              746
 Federal Home Loan Bank of Chicago stock...................          47               44               90               89
                                                                -------          -------          -------          -------
    Total interest income..................................       6,592            6,294           13,023           12,441
INTEREST EXPENSE
 Savings deposits..........................................       2,879            2,607            5,606            5,176
 Borrowed funds............................................          --                5               16                5
                                                                -------          -------          -------          -------
    Total interest expense.................................       2,879            2,612            5,622            5,181
                                                                -------          -------          -------          -------
 Net interest income before provision for loan losses......       3,713            3,682            7,401            7,260
 Provision for loan losses.................................          30               30               60               60
                                                                -------          -------          -------          -------
 Net interest income after provision for loan losses.......       3,683            3,652            7,341            7,200
                                                                -------          -------          -------          -------
NON-INTEREST INCOME
 Service fee income........................................         255              245              485              495
 Gain on sale of real estate owned.........................          13               --               13               34
 Other income..............................................           8                6               16              194
                                                                -------          -------          -------          -------
    Total non-interest income..............................         276              251              514              723
NON-INTEREST EXPENSE
 Compensation and benefits.................................       1,470            1,357            3,069            2,589
 Occupancy expense.........................................         394              405              799              802
 Federal deposit insurance premiums........................          59               63              119               94
 Advertising and promotion.................................         108              111              223              208
 Automated teller machines.................................         106              107              205              203
 Professional services ....................................          98               92              308              215
 Data processing...........................................         227              225              460              460
 Other.....................................................         366              368              709              725
                                                                -------          -------          -------          -------
    Total non-interest expense.............................       2,828            2,728            5,892            5,296
                                                                -------          -------          -------          -------
 Income before income tax expense..........................       1,131            1,175            1,963            2,627
 Income tax expense........................................         439              456              761            1,019
                                                                -------          -------          -------          -------
    Net income ............................................     $   692          $   719          $ 1,202          $ 1,608
                                                                =======          =======          =======          =======
Earnings per share:
 Basic ....................................................     $  0.11          $  0.11          $  0.19          $  0.25
                                                                =======          =======          =======          =======
 Diluted...................................................     $  0.11          $  0.11          $  0.19          $  0.25
                                                                =======          =======          =======          =======
</TABLE>


See accompanying notes to unaudited consolidated financial statements.

                                      - 2 -
<PAGE>
HOME BANCORP OF ELGIN, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
    (Unaudited)

<TABLE>
<CAPTION>
                                                                        For the Three Months Ended       For the Six Months Ended
                                                                                 June 30,                           June 30,
                                                                    ---------------------------------- ----------------------------
                                                                          1998             1997              1998          1997
                                                                    ---------------- ----------------- ---------------- ----------
                                                                                               (In thousands)

<S>                                                                    <C>              <C>               <C>              <C>    
Cash flows from operating activities:
 Net income.......................................................     $   692          $   719           $ 1,202          $ 1,608
 Adjustments to reconcile net income to net
  cash provided by operating activities:
 Depreciation and amortization ...................................         152              157               304              314
 Provision for possible loan losses...............................          30               30                60               60
 Accretion of discounts, net......................................          --             (166)              ---              (476)
 Market adjustment for committed ESOP shares......................         113               82               346              152
 Cost of ESOP shares released ....................................          --              171               ---
 Cost of RRP......................................................         225              150               450              150
 Increase (decrease) in deferred loan fees........................          21              (70)              136             (119)
 Gain on sale of real estate owned ...............................         (13)              --               (13)             (34)
 Real estate owned expense........................................          (3)              --                 8               --
 Increase in accrued interest receivable..........................        (110)            (442)             (117)             (68)
 Increase in prepaid expenses and other assets, net...............         (29)             (79)               (4)            (150)
 Increase (decrease) in accrued interest payable and other 
  liabilities, net................................................        (239)             435                97             (368)
                                                                          ----          -------            ------          -------
    Net cash provided by operating activities.....................         839              816             2,640            1,069
                                                                        ------           ------            ------          -------
Cash flows from investing activities:
 Net increase in loans receivable.................................     (18,297)         (17,894)          (21,460)         (18,502)
 Repayment of mortgage-backed securities held to maturity.........           8               18                19               28
 Maturities of investment securities held to maturity.............          --           15,229               ---           20,374
 Purchase of office properties and equipment......................         (82)             (20)             (101)            (105)
 Proceeds from the sale of REO....................................          62               --                62              359
 Proceeds from the sale of office properties and equipment........          --               --               ---               --
 Redemption (purchase) of stock in the Federal Home Loan Bank
   of Chicago.....................................................        (348)              72              (348)              72
                                                                          ----           ------            ------         --------
    Net cash provided by (used in) investing activities...........     (18,657)          (2,595)          (21,828)           2,226
                                                                       -------          -------           -------         --------
Cash flows from financing activities:
 Increase (decrease) in Federal Home Loan Bank of Chicago advances           --           5,000            (5,000)           5,000
 Net increase (decrease) in savings deposits......................        (453)          (3,950)           19,073           (2,708)
 Purchase of RRP stock............................................          --           (4,498)              --            (4,498)
 Purchase of Treasury stock.......................................          --           (2,470)              --            (2,470)
 Dividends paid on common stock...................................        (686)            (701)           (1,371)            (701)
 Net increase (decrease) in advance payments by borrowers for
  taxes and  insurance............................................        (971)            (885)               93               78
                                                                       -------          -------           -------         --------
 Net cash used in financing activities............................      (2,110)          (7,504)           12,795           (5,299)
                                                                       -------          -------           -------         --------
 Decrease in cash and cash equivalents............................      19,928            9,283             6,393            2,004
 Cash and cash equivalents at beginning of period.................      55,096           35,282            41,561           28,003
                                                                       -------          -------           -------         --------
 Cash and cash equivalents at end of period.......................     $35,168          $25,999           $35,168         $ 25,999
                                                                       =======          =======           =======         ========

 Supplemental  disclosure of cash flow information:
  Cash paid during the period for:
        Interest..................................................     $2,879           $ 2,600           $5,630           $5,179
        Income taxes..............................................        868              445             1,034              496
</TABLE>


See accompanying notes to unaudited consolidated financial statements.

                                      - 3 -
<PAGE>
HOME BANCORP OF ELGIN, INC. AND SUBSIDIARY
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


(1)     Basis of Presentation

        The consolidated financial statements included herein have been prepared
by the Company  without audit.  In the opinion of management,  the quarterly and
six month unaudited  consolidated  financial statements include all adjustments,
consisting of normal recurring  accruals,  necessary for a fair  presentation of
the  financial  position  and  results  of  operations  at and for  the  periods
presented.  Certain  information and footnote  disclosures  normally included in
accordance with generally accepted accounting  principles have been condensed or
omitted  pursuant to the rules and  regulations  of the  Securities and Exchange
Commission.  The Company  believes that the disclosures are adequate to make the
information  presented  not  misleading,  however,  the  results for the periods
presented  are not  necessarily  indicative  of results to be  expected  for the
entire year.

(2)     Earnings Per Share

        Earnings  per share of common  stock for the three and six months  ended
June 30, 1998 have been  calculated  according to the guidelines of Statement of
Financial  Accounting  Standards  No. 128,  "Earnings  Per Share"  ("SFAS 128").
Earnings  per share for the three and six months  ended June 30,  1997 have been
restated  to comply  with the  provisions  of SFAS  128.  ESOP  shares  are only
considered  outstanding  for  earnings  per  share  calculations  when  they are
released or committed to be released.

<TABLE>
<CAPTION>
                                                                      For the Three                    For the Six
                                                                       Months Ended                    Months Ended
                                                                        June 30,                         June 30,
                                                            ---------------------------------  ----------------------------
                                                                  1998             1997              1998          1997
                                                            ----------------  ---------------  ----------------- ----------
                                                                                     (In thousands, except
                                                                                      per share amounts)
<S>                                                          <C>              <C>                <C>               <C>         
Basic:
  Net Income...............................................  $   691,762       $    719,187      $  1,201,501      $  1,607,571
  Weighted average common shares outstanding ..............    6,382,302          6,438,921         6,381,164         6,450,660
                                                            ------------        -----------     -------------     -------------
  Basic earnings per share.................................  $      0.11       $       0.11      $       0.19      $      0.25
                                                            ============        ===========      ============     =============
  Diluted:
  Net income...............................................  $    691,762      $    719,187      $  1,201,501      $  1,607,571
  Weighted average common shares outstanding...............     6,382,302         6,438,921         6,381,164         6,450,660
  Stock options............................................        88,133            31,635           108,420            12,093
                                                            -------------       -----------      -------------    -------------
  Diluted weighted average common shares
     outstanding...........................................  $  6,470,435      $  6,470,556      $  6,489,584      $  6,462,753
                                                              -----------       -----------      ------------      ------------
  Diluted earnings per share...............................  $       0.11      $       0.11      $       0.19      $      0.25
                                                            =============       ============     ============     =============
</TABLE>


(3)     Definitive Merger Agreement

        The Company  executed a Definitive  Merger  Agreement on June 2, 1998 to
merge  with State  Financial  Services  Corporation  ("State"),  a bank  holding
company headquartered in Hales Corners,  Wisconsin.  The organization  resulting
from the merger will retain the name of State  Financial  Services  Corporation.
The merger is  expected to be  accounted  for as a pooling of  interests  and is
subject  to  several  contingencies,   including  SEC  registration,  regulatory
approval, and shareholder approval from both the Company and State shareholders.
The Company and State have also entered into a Stock Option  Agreement  whereby,
subject to certain  conditions,  the  Company  would grant to State an option to
acquire up to 19.9% of the Company's outstanding shares.

(4)     Commitments and Contingencies

        At June 30, 1998, the Company had  outstanding  commitments to originate
mortgage  loans  of  $9.0  million,   of  which  $8.5  million  were  fixed-rate
commitments.

                                      - 4 -

<PAGE>


ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
            RESULTS OF OPERATIONS

GENERAL

        On September  26, 1996,  Home Federal  Savings and Loan  Association  of
Elgin ("Home Federal" or the "Association") completed its conversion from mutual
to stock form and became a  wholly-owned  subsidiary  of Home  Bancorp of Elgin,
Inc. ("Home Bancorp" or the "Company"). On such date, the Company sold 7,009,250
shares of its common stock,  par value $.01 per share,  to the public,  at a per
share price of $10.00.  The conversion and offering  raised $62.4 million in net
proceeds.

        Home Bancorp's sole business  activity  consists of the ownership of the
Association.  The Company also invests in short-term investment grade marketable
securities and other liquid  investments.  The Association's  principal business
consists of attracting  deposits from the public and investing  those  deposits,
along  with funds  generated  from  operations,  primarily  in loans  secured by
mortgages  on one- to  four-family  residences.  The  Association's  results  of
operations  are  dependent  primarily  on  net  interest  income,  which  is the
difference  between the interest income earned on its  interest-earning  assets,
such as  loans,  interest-earning  deposits  and  securities,  and the  interest
expense  on its  interest-bearing  liabilities,  such as  savings  deposits  and
borrowed  funds.  The  Association  also generates  non-interest  income such as
service  charges  and  other  fees.  The  Association's   non-interest  expenses
primarily  consist of employee  compensation and benefits,  occupancy  expenses,
federal  deposit  insurance  premiums,  data processing fees and other operating
expenses.  The  Association'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 agencies.

                                      - 5 -

<PAGE>
     The selected financial ratios and other data of the Company set forth below
is derived in part from, and should be read in  conjunction  with, the Unaudited
Consolidated  Financial  Statements of the Company and Notes  thereto  presented
elsewhere in this report.


<TABLE>
<CAPTION>
                                                           At or For the                     At or For the
                                                        Three Months Ended                 Six Months Ended
                                                              June 30,                          June 30,
                                                     ---------------------------  ---------------------------------
                                                        1998           1997             1998               1997
                                                     ------------   ------------  --------------------  -----------
                                                                   (Dollars in thousands, except
                                                                   shares and per share amounts)
                                                                            (Unaudited)

<S>                                                        <C>            <C>               <C>              <C>  
SELECTED FINANCIAL RATIOS(1):
 PERFORMANCE RATIOS:
 Return on average assets...........................       0.75%          0.81%             0.65%            0.90%
 Return on average equity...........................       2.89           2.92              2.52             3.23
 Average interest rate spread(2)....................       3.02           3.09              3.08             3.07
 Net interest margin(3).............................       4.17           4.29              4.20             4.25
 Average interest-earning assets to average
   interest-bearing liabilities.....................     135.65         139.59            135.07           138.98
 Non-interest expense to average assets.............       3.06           3.06              3.20             2.97
 CAPITAL RATIOS(1):
 Average equity to average assets...................      25.85          27.57             25.96            27.87
 Consolidated equity to total assets at end of period     26.11          26.70             26.11            26.70
 Tangible capital(4)................................      20.42          20.27             20.42            20.27
 Core capital(4)....................................      20.42          20.27             20.42            20.27
 Total risk-based capital(4)........................      35.41          39.45             35.41            39.45
 ASSET QUALITY RATIOS AND OTHER DATA(1):
 Total non-performing loans(5)......................  $     816    $     1,214       $       816      $     1,214
 Real estate owned, net.............................        229            225               229              225
 Non-performing loans to total loans(6).............       0.25%          0.43%             0.25%            0.43%
 Non-performing assets to total assets..............       0.28           0.41              0.28             0.41
 Allowance for loan losses to:
   Non-performing loans.............................     137.47          82.75            137.47            82.75
   Total loans(6)...................................       0.35           0.36              0.35             0.36
 Number of shares outstanding.......................  6,855,799      6,855,799         6,855,799        6,855,799
 Book value per share............................... $    14.00    $     13.73      $      14.00      $     13.73
</TABLE>

------------
(1)  With the exception of end-of-period ratios, all ratios are based on average
     monthly  balances  during the indicated  periods and are  annualized  where
     appropriate.  Capital  Ratios and Asset  Quality  Ratios And Other Data are
     end-of-period ratios and data.

(2)  The average  interest rate spread  represents  the  difference  between the
     weighted-average yield on interest-earning  assets and the weighted-average
     cost of interest-bearing liabilities.

(3)  The net interest  margin  represents net interest income as a percentage of
     average  interest-earning  assets.  

(4)  These  regulatory  capital  ratios are for Home  Federal  Savings  and Loan
     Association of Elgin only.

(5)  Non-performing loans consist of non-accrual loans; the Company did not have
     any loans that were 90 days or more past due and still  accruing  at any of
     the dates referred to in the table above. 

(6)  Total loans represents  gross loans  less  deferred loan  fees and loans in
     process.

                                      - 6 -
<PAGE>
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 relative amounts of interest-earning assets and
interest-bearing liabilities and the interest rates earned or paid on them.

      The  following  table  sets  forth  certain  information  relating  to the
Company's statements of financial condition and the statements of operations for
the three and six months ended June 30, 1998 and 1997,  and reflects the average
yield on assets and 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 monthly balances. The yields and costs include
fees which are considered adjustments to yields.

                                      - 7 -

<PAGE>
<TABLE>
<CAPTION>
                                                                        For the Three Months Ended June 30,
                                                  ---------------------------------------------------------------------------
                                                                1998                                  1997
                                                  ----------------------------------  ---------------------------------------
                                                                           Average                                 Average
                                                   Average                 Yield/       Average                    Yield/
                                                   Balance     Interest     Cost        Balance      Interest       Cost
                                                   -------     --------     ----        -------      --------       ----
                                                                          (Dollars in thousands)
<S>                                               <C>           <C>          <C>       <C>             <C>          <C>  
ASSETS:
 Interest-earning assets:
    Real estate loans(1).......................   $ 313,926     $ 5,954      7.59%     $ 273,367       $ 5,281      7.73%
    Other loans................................         676          15      8.88            652            15      9.20
    Mortgage-backed securities.................          75           1      5.33            122             2      6.56
    Investment securities......................          --          --        --         33,843           508      6.00
    Interest-earning deposits..................      38,316         575      6.00         32,563           444      5.45
    FHLB of Chicago stock......................       2,954          47      6.36          2,606            44      6.75
                                                   --------     -------     -----      ---------       -------      ----
       Total interest-earning assets...........     355,947       6,592      7.41%       343,153         6,294      7.34%
                                                   --------     -------     -----      ---------       -------      ----
 Allowance for loan losses.....................      (1,111)                                (995)
 Non-interest earning assets...................      15,250                               14,593
                                                   --------                            ---------
       Total asset.............................   $ 370,086                            $ 356,751
                                                   ========                             ========

LIABILITIES AND EQUITY:
 Interest-bearing liabilities:
    NOW/Super NOW accounts.....................  $   43,643     $   233      2.14%     $  42,072      $   230      2.19%
    Money market accounts......................      15,542         126      3.24         16,450          130      3.16
    Passbook accounts..........................      60,438         470      3.11         63,260          484      3.06
    Certificates of deposit....................     142,770       2,050      5.74        123,714        1,763      5.70
    Borrowed funds.............................          --          --        --            330            5      6.06
                                                   --------     -------     -----       --------       ------     -----
      Total interest-bearing liabilities.......     262,393       2,879      4.39%       245,826        2,612      4.25%
                                                   --------     -------     -----       --------       ------     -----
 Non-interest bearing NOW accounts.............       6,652                                 5,928
 Other non-interest-bearing liabilities........       5,377                                 6,632
                                                   --------                             --------
       Total liabilities.......................     274,422                               258,386
                                                   --------                             --------
   Stockholders' equity........................      95,664                                98,365
                                                   --------                             --------
       Total liabilities and stockholders'
          equity..............................   $ 370,086                             $ 356,751
                                                   =======                              ========
 Net interest income...........................                 $ 3,713                                $ 3,682
                                                                =======                                 ======
 Interest rate spread(2).......................                              3.02%                                  3.09%
                                                                            =====                                   ====
 Net interest margin(3)........................                              4.17%                                  4.29%
                                                                            =====                                   ====
 Ratio of interest-earning assets to
   interest-bearing liabilities................                  135.65%                               139.59%
                                                                =======                                =======
</TABLE>



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

(1)  In  computing  the average  balance of loans,  non-accrual  loans have been
     included.

(2)  Interest rate spread  represents the  difference  between the average yield
     earned on interest-earning  assets and the average cost of interest-bearing
     liabilities.

(3)  Net  interest  margin  represents  net interest  income as a percentage  of
     average interest-earning assets.

                                      - 8 -
<PAGE>
<TABLE>
<CAPTION>
                                                                     For the Six Months Ended June 30,
                                                  ---------------------------------------------------------------------------
                                                                1998                                  1997
                                                  ----------------------------------  ---------------------------------------
                                                                           Average                                 Average
                                                   Average                 Yield/       Average                    Yield/
                                                   Balance     Interest     Cost        Balance      Interest       Cost
                                                   -------     --------     ----        -------      --------       ----
                                                                          (Dollars in thousands)
<S>                                           <C>         <C>           <C>         <C>            <C>             <C>   
ASSETS:
 Interest-earning assets:
    Real estate loans(1)....................   $ 306,206   $ 11,716      7.65%       $ 267,492      $ 10,382        7.76 %
    Other loans.............................         640         29      9.06              652            30          9.20
    Mortgage-backed securities..............          79          3      7.60              129             5          7.75
    Investment securities...................          --         --        --           42,228         1,189          5.63
    Interest-earning deposits...............      42,632      1,185      5.56           28,675           746          5.20
    FHLB of Chicago stock...................       2,780         90      6.47            2,642            89          6.74
                                                   -----         --      ----            -----            --          ----
       Total interest-earning assets........     352,337     13,023      7.39%         341,818        12,441          7.28%
                                                 -------     ------      ----          -------        ------          ---- 
 Allowance for loan losses..................      (1,097)                                 (980)
 Non-interest earning assets................      16,566                                15,907
                                                  ------                                ------
       Total assets.........................   $ 367,806                             $ 356,745
                                               =========                             =========
                                               
LIABILITIES AND EQUITY:
 Interest-bearing liabilities:
    NOW/Super NOW accounts..................   $  43,339   $    454      2.10%       $  42,297       $   453          2.14%
    Money market accounts...................      15,752        256      3.25           16,647           262          3.15
    Passbook accounts.......................      60,284        922      3.06           63,033           962          3.05
    Certificates of deposit.................     140,899      3,974      5.64          123,805         3,499          5.65
    Borrowed funds..........................         584         16      5.48              165             5          6.06
                                                     ---         --      ----              ---             -          ----
       Total interest-bearing liabilities...     260,858      5,622        4.31%       245,947         5,181          4.21%
                                                 -------      -----        ----        -------         -----          ---- 
 Non-interest bearing NOW accounts..........       6,567                                 5,701
 Other non-interest-bearing liabilities.....       4,876                                 5,657
                                                   -----                                 -----
       Total liabilities....................     272,301                               257,305
                                                 -------                               -------
   Stockholders' equity.....................      95,505                                99,440
                                                  ------                                ------
       Total liabilities and stockholders'
        equity..............................   $ 367,806                             $ 356,745
                                               =========                             =========
 Net interest income........................               $  7,401                              $ 7,260
                                                           ========                              =======
 Interest rate spread(2)....................                               3.08%                                  3.07%
                     ==                                                    ====                                   ==== 
 Net interest margin(3).....................                               4.20%                                  4.25%
                    ==                                                     ====                                   ==== 
 Ratio of interest-earning assets to
   interest-bearing liabilities.....................         135.07%                              138.98%
                                                             ======                               ====== 
</TABLE>


---------

(1)  In  computing  the average  balance of loans,  non-accrual  loans have been
     included.

(2)  Interest rate spread  represents the  difference  between the average yield
     earned on interest-earning  assets and the average cost of interest-bearing
     liabilities.

(3)  Net  interest  margin  represents  net interest  income as a percentage  of
     average interest-earning assets.

                                      - 9 -
<PAGE>
COMPARISON OF FINANCIAL CONDITION AT JUNE 30, 1998 AND DECEMBER 31, 1997

         TOTAL ASSETS.  Total assets increased $15.1 million or 4.3% from $352.6
million at December 31, 1997 to $367.7 million at June 30, 1998. The increase in
total assets was primarily due to funds received from the $19.1 million increase
in savings  deposits which were partially  offset by  disbursements  of funds to
repay $5.0 million in borrowed funds.

         CASH AND DUE FROM BANK.  Cash and due from banks decreased $2.1 million
or 30.4% from $6.9  million at  December  31,  1997 to $4.8  million at June 30,
1998.  This  decrease was  primarily due to the use of funds for the increase in
loans receivable.

         INTEREST-EARNING  DEPOSITS.  Interest-earning  deposits  decreased $4.3
million or 12.4% from $34.7  million at December  31,  1997 to $30.4  million at
June 30,  1998.  This  decrease  was  primarily  due to the use of funds for the
increase in loans receivable.

         LOANS RECEIVABLE.  Loans receivable increased  $21,264,000 or 7.1% from
$298,661,000  at  December  31,  1997 to  $319,925,000  at June 30,  1998.  This
increase was  primarily due to aggressive  marketing of the  Association's  loan
products.

         SAVINGS DEPOSITS. Savings deposits increased $19.1 million or 7.7% from
$248.2  million at December 31, 1997 to $267.3  million at June 30,  1998.  This
increase  was  primarily  due to  the  offering  of a  special  rate  short-term
certificate  of deposit.  The proceeds  were used  primarily for the increase in
loans receivable and the repayment of borrowed funds.

         BORROWED  FUNDS.  Borrowed funds  decreased $5.0 million as a result of
all borrowed  funds being repaid with the proceeds  from the increase in savings
deposits.

         STOCKHOLDERS'  EQUITY.  Stockholders' equity increased $797,000 or 0.8%
from $95.2  million at  December  31,  1997 to $96.0  million at June 30,  1998.
Additional  paid-in  capital  increased  $346,000  or 0.5% from  $68,324,000  at
December 31, 1997 to $68,670,000 at June 30, 1998, primarily due to market value
adjustments  on Employee  Stock  Ownership  Plan (the "ESOP")  shares  released.
Common stock acquired by the  Recognition  and Retention Plan ("RRP")  decreased
$449,000 or 11.5% from $3,898,000 at December 31, 1997 to $3,449,000 at June 30,
1998 due to RRP expense. Common stock acquired by the ESOP decreased $171,000 or
3.5% from $4.9 million at December 31, 1997 to $4.7 million at June 30, 1998 due
to the release of stock for the ESOP.  Retained earnings  decreased  $169,000 or
0.4% from $38.1  million at December 31, 1997 to $37.9 million at June 30, 1998.
This decrease was due to $1,371,000 in dividends paid on common stock, which was
offset by $1,202,000 in net income for the six months ended June 30, 1998.

COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED 
JUNE 30, 1998 AND 1997

         GENERAL.  Net income  decreased  $27,000 or 3.8% from $719,000 or $0.11
diluted  earnings per share for the three months ended June 30, 1997 to $692,000
or $0.11  diluted  earnings  per share for the three months ended June 30, 1998.
The $27,000 decrease was primarily due to an increase of $100,000 in noninterest
expense which was partially offset by a $31,000 increase in net interest income,
a $25,000 increase in noninterest income and a decrease of $17,000 in income tax
expense.

         INTEREST INCOME.  Interest income increased  $298,000 or 4.7% from $6.3
million for the three  months  ended June 30, 1997 to $6.6 million for the three
months ended June 30, 1998.  This  increase was  primarily due to an increase in
the average  yield on interest  earning  assets of 7 basis points from 7.34% for
the three  months  ended June 30, 1997 to 7.41% for the three  months ended June
30, 1998 and an increase in the average  balance of  interest-earning  assets of
$12,794,000 or 3.7% from  $343,153,000  for the three months ended June 30, 1997
to  $355,947,000  for the three months ended June 30, 1998.  The increase in the
average   yield  was  primarily   due  to  a  change  in  the   composition   of
interest-earning  assets.  The average  balance of real estate  loans  increased
$40.6 million, which is a higher yielding asset, while investment securities and
interest-earning  deposits  decreased  $28.1  million,  which are lower yielding
assets.  The increase in the average balance was primarily due to receipt of the
proceeds from the increase in savings deposits.

                                     - 10 -
<PAGE>
         INTEREST  EXPENSE.  Interest expense  increased  $267,000 or 10.2% from
$2,612,000  for the three months ended June 30, 1997 to $2,879,000 for the three
months ended June 30, 1998.  This increase was primarily due to a 14 basis point
increase in the cost of average interest-bearing  liabilities from 4.25% for the
three  months  ended June 30, 1997 to 4.39% for the three  months ended June 30,
1998 and a $16.6  million  increase in the average  balance of  interest-bearing
liabilities  from  $245.8  million for the three  months  ended June 30, 1997 to
$262.4  million for the three  months  ended June 30,  1998.  The 14 basis point
increase in the cost of average  interest-bearing  liabilities was primarily due
to higher costing  certificates of deposit.  The increase in the average balance
of interest-bearing  liabilities was primarily due to the Association's offering
of a special rate short-term certificate of deposit.

         NET INTEREST  INCOME  BEFORE  PROVISION  FOR LOAN LOSSES.  Net interest
income  before  provision  for  loan  losses  increased  $31,000  or  0.8%  from
$3,682,000  for the three months ended June 30, 1997 to $3,713,000 for the three
months ended June 30, 1998.  This increase was primarily due to a $12,794,000 or
3.7%  increase  in  the  average   balance  of   interest-earning   assets  from
$343,153,000  for the three months ended June 30, 1997 to  $355,947,000  for the
three  months  ended  June 30,  1998 and an  increase  of 7 basis  points in the
average  yield from 7.34% for the three  months ended June 30, 1997 to 7.41% for
the three months ended June 30, 1998. These increases were partially offset by a
$16,567,000 increase in the average balance of interest-bearing liabilities from
$245,826,000  for the three months ended June 30, 1997 to  $262,393,000  for the
three  months  ended June 30, 1998 and a 14 basis point  increase in the average
cost from 4.25% for the three  months ended June 30, 1997 to 4.39% for the three
months ended June 30, 1998.

         PROVISION  FOR LOAN LOSSES.  The  provision for loan losses was $30,000
for each  period.  Management  determined  that keeping the  provision  for loan
losses at the same level was  appropriate  in light of its current review of the
Association's  loan  portfolio,  asset quality,  delinquent  and  non-performing
loans,  the  historically low loan loss experience and the national and regional
economies.  The ratio of the allowance for loan losses to  non-performing  loans
was 137.47% and 82.75% at June 30, 1998 and 1997, respectively, and the ratio of
the  allowance  for loan  losses  to total  loans  was  0.35%  and 0.36% at such
respective dates. Management believes that the provision for loan losses and the
allowance for loan losses are  reasonable and adequate to cover any known losses
and any  losses  reasonably  expected  in the  existing  loan  portfolio.  While
management estimates loan losses using the best available  information,  such as
independent  appraisals  on  collateral,  no assurance  can be given that future
additions to the  allowance  will not be necessary  based on changes in economic
and real estate market conditions,  further information obtained regarding known
problem  loans,   identification   of  additional   problem  loans,   regulatory
examinations and other factors, both within and outside of management's control.

         NONINTEREST INCOME.  Noninterest income increased $25,000 or 10.0% from
$251,000  for the three  months  ended June 30, 1997 to  $276,000  for the three
months  ended  June 30,  1998.  This  increase  was  primarily  due to a $10,000
increase  in service  fee income as a result of changes in the service fee rates
and a $13,000 gain on sale of real estate owned.

         NONINTEREST  EXPENSE.  Noninterest  expense increased  $100,000 or 3.7%
from $2.7  million for the three  months ended June 30, 1997 to $2.8 million for
the three months  ended June 30, 1998.  This  increase was  primarily  due to an
increase in compensation  and benefits  expense which was partially  offset by a
decrease in  occupancy  expense.  Compensation  and benefits  expense  increased
$113,000 or 8.3% from  $1,357,000  for the three  months  ended June 30, 1997 to
$1,470,000 for the three months ended June 30, 1998. This increase was primarily
due to an  increase in ESOP  expense of $35,000  and an increase  related to the
Company's  RRP expense of $75,000 in 1998.  The increase in ESOP expense was due
to a larger  market value  adjustment  because of the increase in the  Company's
average  stock price.  The RRP plan was not in effect for the entire three month
period ended June 30, 1997.  Occupancy  expense  decreased  $11,000 or 2.7% from
$405,000  for the three  months  ended June 30, 1997 to  $394,000  for the three
months  ended  June 30,  1998  primarily  due to a decrease  in office  building
repairs and maintenance expense.

                                     - 11 -

<PAGE>
         INCOME TAX EXPENSE.  Income tax expense  decreased $17,000 or 3.7% from
$456,000  for the three  months  ended June 30, 1997 to  $439,000  for the three
months ended June 30, 1998.  This decrease was primarily due to a lower level of
taxable income. The effective tax rate was 38.8% for the three months ended June
30, 1997 and 1998.

COMPARISON OF OPERATING RESULTS FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997

         GENERAL.  Net income  decreased  $406,000 or 25.2% from  $1,608,000  or
$0.25  diluted  earnings  per share for the six months  ended  June 30,  1997 to
$1,202,000 or $0.19 diluted earnings per share for the six months ended June 30,
1998.  The  $406,000  decrease  was  primarily  due to a decrease of $209,000 in
noninterest  income and a $596,000 increase in noninterest  expense.  These were
offset,  in part, by a $141,000 increase in net interest income before provision
for loan losses and a $258,000 decrease in income tax expense.

         INTEREST INCOME.  Interest income increased $582,000 or 4.7% from $12.4
million  for the six months  ended June 30,  1997 to $13.0  million  for the six
months ended June 30, 1998.  This  increase was  primarily due to an increase in
the average yield on interest  earning  assets of 11 basis points from 7.28% for
the six months  ended June 30,  1997 to 7.39% for the six months  ended June 30,
1998 and an increase in the average balance of interest-earning  assets of $10.5
million or 3.1% from $341.8  million  for the six months  ended June 30, 1997 to
$352.3  million  for the six months  ended June 30,  1998.  The  increase in the
average   yield  was  primarily   due  to  a  change  in  the   composition   of
interest-earning  assets.  The average  balance of real estate  loans  increased
$38.7 million, which is a higher yielding asset, while investment securities and
interest-earning  deposits  decreased  $28.3  million,  which are lower yielding
assets.  The increase in the average balance was primarily due to receipt of the
proceeds from the increase in savings deposits.

         INTEREST  EXPENSE.  Interest  expense  increased  $441,000 or 8.5% from
$5,181,000  for the six months  ended June 30,  1997 to  $5,622,000  for the six
months ended June 30, 1998.  This increase was primarily due to a 10 basis point
increase in the cost of average interest-bearing  liabilities from 4.21% for the
six months  ended June 30, 1997 to 4.31% for the six months  ended June 30, 1998
and a  $14.9  million  increase  in  the  average  balance  of  interest-bearing
liabilities from $245.9 million for the six months ended June 30, 1997 to $260.9
million for the six months ended June 30, 1998.  The 10 basis point  increase in
the cost of average interest-bearing  liabilities was primarily due to the $17.1
million increase in higher costing  certificates of deposit. The increase in the
average  balance  of  interest-bearing  liabilities  was  primarily  due  to the
Association's offering of a special rate short-term certificate of deposit.

         NET INTEREST  INCOME  BEFORE  PROVISION  FOR LOAN LOSSES.  Net interest
income  before  provision  for  loan  losses  increased  $141,000  or 1.9%  from
$7,260,000  for the six months  ended June 30,  1997 to  $7,401,000  for the six
months ended June 30, 1998.  This increase was primarily due to a $10,519,000 or
3.1%  increase  in  the  average   balance  of   interest-earning   assets  from
$341,818,000  for the six months ended June 30, 1997 to $352,337,000 for the six
months  ended June 30, 1998 and an  increase  of 11 basis  points in the average
yield  from 7.28% for the six  months  ended June 30,  1997 to 7.39% for the six
months  ended  June  30,  1998.  These  increases  were  partially  offset  by a
$14,911,000 increase in the average balance of interest-bearing liabilities from
$245,947,000  for the six months ended June 30, 1997 to $260,858,000 for the six
months  ended June 30,  1998 and a 10 basis point  increase in the average  cost
from  4.21% for the six months  ended June 30,  1997 to 4.31% for the six months
ended June 30, 1998.

         PROVISION  FOR LOAN LOSSES.  The  provision for loan losses was $60,000
for each  period.  Management  determined  that keeping the  provision  for loan
losses at the same level was  appropriate  in light of its current review of the
Association's  loan  portfolio,  asset quality,  delinquent  and  non-performing
loans,  the  historically low loan loss experience and the national and regional
economies.  The ratio of the allowance for loan losses to  non-performing  loans
was 137.47% and 82.75% at June 30, 1998 and 1997, respectively, and the ratio of
the  allowance  for loan  losses  to total  loans  was  0.35%  and 0.36% at such
respective dates. Management believes that the provision for loan losses and the
allowance for loan losses are  reasonable and adequate to cover any known losses
and any  losses  reasonably  expected  in the  existing  loan  portfolio.  While
management estimates loan losses using the best available  information,  such as
independent appraisals on collateral, no assurance can be given that future

                                     - 12 -
<PAGE>

additions to the  allowance  will not be necessary  based on changes in economic
and real estate market conditions,  further information obtained regarding known
problem  loans,   identification   of  additional   problem  loans,   regulatory
examinations and other factors, both within and outside of management's control.

         NONINTEREST INCOME. Noninterest income decreased $209,000 or 28.9% from
$723,000  for the six months  ended June 30, 1997 to $514,000 for the six months
ended June 30, 1998.  This  decrease was  primarily due to the $178,000 or 91.8%
decrease in other income from $194,000 for the six months ended June 30, 1997 to
$16,000 for the six months  ended June 30,  1998.  This  decrease was due to the
receipt of $182,000 in excess funds from the  liquidation  of the  Association's
pension plan in 1997 in connection  with the  Association's  conversion to stock
form in  September  1996,  a  non-recurring  item.  There was also a decrease of
$10,000 in service  fee income  and a $21,000  decrease  in gain on real  estate
owned.

         NONINTEREST  EXPENSE.  Noninterest  expense increased $596,000 or 11.3%
from $5.3 million for the six months ended June 30, 1997 to $5.9 million for the
six months ended June 30, 1998.  This increase was primarily due to increases in
compensation  and benefits,  federal deposit  insurance  premiums,  advertising,
promotion and professional  services expenses,  which were partially offset by a
decrease in other expense.  Compensation and benefits expense increased $480,000
or 18.5% from  $2,589,000  for the six months ended June 30, 1997 to  $3,069,000
for the six months ended June 30, 1998.  This  increase was due, in part,  to an
increase in ESOP  expense of $198,000  which  resulted,  in part,  from a market
value adjustment for shares  released,  due to the repayment of principal on the
ESOP loan by the ESOP trustee from plan earnings.  There was no similar  expense
in the six months ended June 30, 1997.  There was also an increase in the amount
of the market value adjustment  because of the increase in the Company's average
stock price.  Expenses  associated with the RRP increased  $300,000 in 1998. The
RRP was not in  effect  in the  first  four  months  of  1997.  Advertising  and
promotion  expense  increased  $15,000 or 7.2% from  $208,000 for the six months
ended June 30, 1997 to $223,000  for the six months  ended June 30,  1998.  This
increase was primarily due to additional  expenses  incurred in connection  with
the special rate short-term certificate of deposit offered during the six months
ended June 30, 1998.  Professional  services expense  increased $93,000 or 43.3%
from  $215,000  for the six months  ended June 30, 1997 to $308,000  for the six
months ended June 30, 1998. This increase was primarily due to the Company's use
of additional professional consulting services in connection with evaluating the
Company's strategic options, and matters related to the State merger.

         INCOME TAX EXPENSE. Income tax expense decreased $258,000 or 25.3% from
$1,019,000 for the six months ended June 30, 1997 to $761,000 for the six months
ended June 30, 1998. This decrease was primarily due to a lower level of taxable
income.  The effective tax rate was 38.8% for the six months ended June 30, 1997
and 1998.

LIQUIDITY AND CAPITAL RESOURCES

         The Company's primary sources of funds are savings deposits,  principal
and  interest  payments  on loans  and  securities  and,  to a  limited  extent,
borrowings from the FHLB of Chicago. While maturities and scheduled amortization
of loans and  securities  provide an  indication of the timing of the receipt of
funds,  changes in interest rates,  economic conditions and competition strongly
influence  mortgage  prepayment  rates and savings  deposit flows,  reducing the
predictability of the timing of sources of funds.

         The  Association  is required to maintain an average  daily  balance of
liquid assets as a percentage of net withdrawable  savings deposit accounts plus
short-term  borrowings,  as defined by the  regulations  of the OTS. The minimum
required  liquidity ratio is currently 4.0%. At June 30, 1998, the Association's
liquidity  ratio was 5.82%.  The levels of the  Association's  liquid assets are
dependent on the  Association's  operating,  financing and investing  activities
during any given period.  Management believes it will have adequate resources to
fund all  commitments on a short-term and long-term basis in accordance with its
business strategy.

                                     - 13 -
<PAGE>
         The primary investing  activities of the Company are the origination of
mortgage and other loans and, to a much more limited extent,  the purchase of U.
S.  Government or U. S.  Government  agency  securities.  See the  "Consolidated
Statements of Cash Flows" in the  unaudited  consolidated  financial  statements
included in this Form 10-Q for the sources and uses of cash flows for  operating
activities,  investing activities and financing activities for the three and six
month periods ended June 30, 1998 and 1997.

         The Company has other  sources of  liquidity  if a need for  additional
funds arises,  including the ability to obtain FHLB of Chicago advances of up to
$59.0 million based on the Association's  current  investment in FHLB of Chicago
stock. There were no borrowings outstanding at June 30, 1998.

         At June 30, 1998, the  Association  had  outstanding  loan  origination
commitments of $9.0 million, undisbursed loans in process of $778,000 and unused
lines of consumer credit of $254,000.  The Association  anticipates that it will
have  sufficient  funds  available  to meet its  current  origination  and other
lending commitments.  Certificates of deposit scheduled to mature in one year or
less from June 30, 1998 totaled $90.9 million. Based upon the Association's most
recent experience and pricing strategy,  management  believes that a significant
portion of such deposits will remain with the Association.

         At June  30,  1998,  the  Association  exceeded  all of its  regulatory
capital  requirements with a tangible capital level of $71.1 million,  or 20.42%
of total adjusted  assets,  which is above the required level of $5.2 million or
1.5%; core capital of $71.1 million,  or 20.42% of total adjusted assets,  which
is above the  required  level of $10.4  million  or 3.0%;  and total  risk-based
capital of $72.2 million, or 35.41% of risk-weighted  assets, which is above the
required level of $16.3 million, or 8.0%.

         At June 30, 1998,  the total  stockholders'  equity of Home Bancorp was
$96.0 million, and the ratio of stockholders' equity to total assets was 26.11%.

THE YEAR 2000 PROBLEM

         The "Year 2000 Problem" centers on the inability of computer systems to
recognize  the Year 2000.  Many  existing  computer  programs  and systems  were
originally  programmed  with six digit  dates that  provided  only two digits to
identify the calendar year in the date field,  without  considering the upcoming
change  in the  century.  With the  impending  millennium,  these  programs  and
computers will  recognize "00" as the year 1900 rather than the year 2000.  Like
most  financial  service  providers,  the  Company  and the  Association  may be
significantly  affected by the Year 2000  Problem due to the nature of financial
information.  Furthermore,  if computer  systems are not  adequately  changed to
identify  the  Year  2000,  many  computer  applications  could  fail or  create
erroneous results.

         In order to address the Year 2000 issue and to minimize  its  potential
adverse  impact,  management  has begun a process to identify areas that will be
affected by the Year 2000 Problem, assess its potential impact on the operations
of the  Association,  monitor the  progress of third party  software  vendors in
addressing  the  matter,  test  changes  provided  by these  vendors and develop
contingency   plans  for  any  critical   systems   that  are  not   effectively
reprogrammed.  The  Company's  plan is  divided  into  these  five  phases:  (1)
awareness;   (2)   assessment;   (3)  renovation;   (4)   validation;   and  (5)
implementation.

         The Company  has  substantially  completed  the first two phases of the
plan and is currently working  internally and with external vendors on the final
three  phases.  Because  the Company  outsources  its data  processing  and item
processing operations,  a significant component of the Year 2000 plan is working
with external  vendors to test and certify their systems as Year 2000 compliant.
The Company's  external  vendors have surveyed  their  programs to inventory the
necessary changes and have begun correcting the applicable computer programs and
replacing equipment so that the Company's  information systems will be Year 2000
compliant  prior to December  31,  1998.  This will enable the Company to devote
substantial  time to the testing of the upgraded systems prior to the arrival of
the  millennium.  The Company expects to complete its timetable for carrying out
its plans to address Year 2000 issues, and to finish initial testing by December
31, 1998.

                                     - 14 -
<PAGE>
          In addition, monitoring and managing the Year 2000 project will result
in additional direct and indirect costs to the Company and the Association.  The
Company  currently  estimates that the aggregate  direct and indirect costs will
not exceed  $200,000  and does not believe  that such costs will have a material
effect  on its  results  of  operations.  Both  direct  and  indirect  costs  of
addressing  the Year 2000 Problem will be charged to earnings as incurred.  Such
costs have not been material to date.

         The costs of the  project  and the date on which the  Company  plans to
complete the Year 2000  modifications  are based on management's best estimates,
which were derived utilizing numerous assumptions of future events including the
continued availability of certain resources,  third party modification plans and
other factors.  However,  there can be no guarantee that these estimates will be
achieved,  and actual  results  could differ  materially  from those  plans.  In
addition, there can be no guarantee that the systems of other companies on which
the  Company's  systems  rely will be  timely  converted,  or that a failure  to
convert  by another  company,  or a  conversion  that is  incompatible  with the
Company's systems, would not have a material adverse effect on the Company.

OTHER

         The Office of Thrift Supervision  approved the stock repurchase program
("Repurchase  Program"),  that was  adopted  by the  Board of  Directors  of the
Company on June 18,  1998.  The  Repurchase  Program  authorizes  the Company to
repurchase up to 342,789 shares, or five percent,  of its 6,855,799  outstanding
common shares.  The Repurchase Program is authorized to continue for a period up
to  twelve  months.  The  repurchases  will  be  made  from  time to time at the
discretion of management.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

         In management's opinion, there has not been a material change in market
risk from December 31, 1997 as reported in Item 7A of the Company's Form 10-K.

Part II -- OTHER INFORMATION

Item 1.  Legal Proceedings

                  None

Item 2.  Changes in Securities and Use of Proceeds

                  None

Item 3.  Defaults upon Senior Securities

                  None

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

         The Company held its Annual meeting of Stockholders  (the "Meeting") on
April  16,  1998.  The  purpose  of the  meeting  was to vote  on the  following
proposals:

         1.       The election of three directors for terms of three years each;

         2.       The  ratification  of the appointment of KPMG Peat Marwick LLP
                  as  independent  auditors  of the  Company for the year ending
                  December 31, 1998.

         With  respect to  Proposal  1, all of the  directors  nominated  by the
Company were elected at the Meeting. In addition, Proposal 2 was approved at the
Meeting. The voting results for the proposals were as follows:

                                     - 15 -
<PAGE>

<TABLE>
<S>                                     <C>                    <C>         <C>      
Proposal 1:  Election of Directors      George L. Perucco       For        5,818,435
                                                                Against      204,817
                                        Lyle N. Dolan           For        5,818,435
                                                                Against      204,817

                                        Donald E. Laird         For        5,818,435
                                                                Against      204,817

                                        Broker Non-Votes:                       None

Proposal 2: Ratification of                                     For        5,869,612
   Independent Auditors

                                                                Against       89,165
                                                                Abstain       64,475

                                        Broker Non-Votes:                       None
</TABLE>



Item 5.  Other Information

                  None

Item 6.  Exhibits and Reports on Form 8-K

        (a)      Exhibit 27 -- Financial Data Schedule*

        (b)      Reports on Form 8-K


        The Registrant filed a report on Form 8-K on June 15, 1998 and Amendment
No. 1 thereto on June 17, 1998  relating to the signing of a  definitive  merger
agreement, dated June 1, 1998, with State Financial Services Corporation.










-------
* Submitted only with filing in electronic format.

                                     - 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.

                                           Home Bancorp of Elgin, Inc.
                                           ----------------------------------
                                           (Registrant)

                                   By:     /s/Lyle N. Dolan
                                           ----------------------------------
                                           Lyle N. Dolan
                                           Executive Vice President and Chief
                                           Financial and Accounting Officer


July 30, 1998

                                     - 17 -