SECURITIES AND EXCHANGE COMMISSION
                    WASHINGTON, D.C.  20549
                                
                                
                            Form 8-K
                                
                         CURRENT REPORT
                                
               Pursuant to Section 13 or 15(d) of
              the Securities Exchange Act of 1934
                                
Date of Report (Date of earliest event reported):  August 2, 1996
                  Hinsdale Financial Corporation
      (Exact name of registrant as specified in its charter)

    Delaware                 0-20082                36-3811768    
(State or other       (Commission File No.)    (I.R.S. Employer
   jurisdiction                               Identification No.)
 of incorporation)




Registrant's telephone number, including area code:  (312) 464-3500 
                 



                          Not Applicable
  (Former name or former address, if changed since last report)
PAGE

Item 5.   Other Events.

     Hinsdale Financial Corporation (the "Registrant") entered into
an Agreement and Plan of Merger (the "Agreement") with Liberty
Bancorp, Inc. ("Liberty") as of August 2, 1996, which provides,
among other things, that (i) Liberty will be merged (the "Merger")
with and into the Registrant, with the Registrant as the surviving
corporation, which effective upon consummation of the transactions
contemplated in the Agreement, will amend its Certificate of
Incorporation to operate under the name "Alliance Bancorp" (ii)
Liberty Federal Savings Bank, the savings bank subsidiary of
Liberty ("Liberty Federal"), will be merged with and into Hinsdale
Federal Bank for Savings, the savings bank subsidiary of the
Registrant ("Hinsdale Federal") and the resulting bank will operate
under the new name of Liberty Federal Bank, (iii) each outstanding
share of Liberty common stock issued and outstanding at the
effective time of the Merger shall be converted into 1.054 shares
of common stock of Alliance Bancorp, and (iv) each share of the
Registrant's common stock issued and outstanding immediately prior
to the effective time of the Merger shall remain an outstanding
share of common stock of Alliance Bancorp.  The directors of
Registrant and Liberty have entered into agreements to vote shares
owned by them in favor of the Merger Agreement.

     In connection with the Agreement, the Registrant and Liberty
entered into a Stock Option Agreement in which Liberty granted to
the Registrant the option to purchase, under certain conditions, up
to 492,927 shares of Liberty common stock at an exercise price of
$24.125 per share. The option is exercisable only upon the
occurrence of certain events that would jeopardize completion of
the Merger.  The Stock Option Agreement also permits the Registrant
to require Liberty to repurchase the option shares.

     Also in connection with the Agreement, the Registrant and
Liberty entered into a Stock Option Agreement in which the
Registrant granted to Liberty the option to purchase, under certain
conditions, up to 535,340 shares of the Registrant's common stock
at an exercise price of $23.25 per share.  The option is
exercisable only upon the occurrence of certain events that would
jeopardize completion of the Merger.

     Consummation of the Merger is subject to certain conditions,
including the approval of stockholders of each of the Registrant
and of Liberty, and the receipt of all required regulatory
approvals. It is expected that the Merger will be completed during
the first quarter of 1997.

Item 7.   Financial Statements, Pro Forma Financial Information and
Exhibits.

     The following Exhibits are filed as part of this report:

     Exhibit 2 Agreement and Plan of Merger, dated as of August 2,
               1996, by and between Hinsdale Financial Corporation
               and Liberty Bancorp, Inc.; including Exhibits A, B,
               C & D, thereto.

     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, hereunto duly authorized.

                                  HINSDALE FINANCIAL CORPORATION


DATE:  August 16, 1996            By: /s/ Kenne P. Bristol       
                                      Kenne P. Bristol
                                      President and Chief
                                       Executive Officer