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CORPORATE PROFILE
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Calumet Bancorp, Inc., headquartered in Dolton, Illinois, is the holding
company of Calumet Federal Savings and Loan Association of Chicago. Founded in
1910, Calumet Federal operates a community-based savings and loan with five
full-service offices located in southeastern Cook County, two offices in
Chicago and three suburban locations, currently serving over 16,000 households.
Calumet Federal offers a wide range of quality financial products and services
to meet the needs of the communities it serves. Calumet Federal's primary
business objective is making residential home loans and assisting customers to
save and to plan for their financial future.
The common stock of Calumet Bancorp, Inc. trades under the symbol CBCI on the
NASDAQ National Market System.
TABLE OF CONTENTS
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Letter to Shareholders 2
Directors and Officers 5
Shareholders' Information 6
Form 10-K
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TO OUR SHAREHOLDERS:
In 1997, the management, directors, and employees of Calumet Bancorp met the
challenges presented by the year's economy and delivered another year of
profitable performance. 1997 was our sixth year as a productive public company
and our 87th year in the financial services industry. Shareholder value as well
as our book value remains at an all-time high.
These results are attributed to the Company's sound, conservative management
philosophy whose primary goal is to enhance shareholder value. While
maintaining the highest level of safety and soundness we have worked hard to
make a profit managing the business of a community financial institution.
RESULTS OF OPERATIONS
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Net income increased by $2.6 million, to $8.0 million for 1997, from $5.4
million for 1996. Net interest income increased by $108,000, to $18.0 million
for 1997, from $17.9 million for 1996. The average yield on interest earning
assets increased to 8.51% during 1997, compared to 8.26% during 1996, while the
average cost of funds increased to 5.22% during 1997, only one basis point more
than the 5.21% during 1996, resulting in an increase in the rate spread to
3.29% in 1997, compared to 3.05% in 1996. The Company focused on improving
asset yields, retaining core deposits, and increasing account related fee
income.
Income from limited partnerships increased by $1.8 million, to $3.4 million in
1997, from $1.6 million in 1996, primarily because of gains on the sale of two
rental properties owned by partnerships. Operating expenses decreased by $2.7
million, to $9.5 million in 1997, from $12.2 million in 1996, primarily because
the Company made a payment of $2.3 million in 1996 for the Federal Deposit
Insurance Corporation (FDIC) special assessment to recapitalize the Savings
Association Insurance Fund (SAIF). Net income for 1997 also benefitted from a
$570,000 reduction in the FDIC premium for insurance of accounts which resulted
from the recapitalization of SAIF. Operating expenses as a percent of average
assets decreased to 1.93% in 1997, from 1.98% (before the special assessment)
in 1996. The Company's efficiency ratio improved to 44.3% in 1997, compared to
49.4% (before the special assessment) in 1996.
Return on average assets increased to 1.61% for 1997, from 1.08% for 1996. ROA
would have been 1.37% for 1996 without the FDIC special assessment. Return on
average stockholders' equity for 1997 was 10.20%, compared to 6.56% for 1996.
ROE would have been 8.35% for 1996 without the FDIC special assessment. Basic
earnings per share increased to $2.46 for 1997, compared to $1.44 for 1996,
while diluted earnings per share increased to $2.29 for 1997, from $1.36 for
1996. The FDIC special assessment reduced earnings per share by $0.43 ($0.40
diluted) for 1996.
STOCK SPILT & REPURCHASE PROGRAM
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On November 17, 1997, a three-for-two stock split, in the form of 50% common
stock dividend, was distributed to shareholders of record on November 3, 1997.
The stock split and the resulting reduction in the market price per share of the
common stock contributed to the broadening of public interest in the Company's
common stock and increased the availability of shares for purchase and sale.
Once again believing that investing in ourselves is a sound strategy, we
purchased 426,597 shares of our common stock at an average cost of $23.50 per
share during 1997. Repurchasing
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shares at less than book value increases earnings per share and book value per
share for remaining shareholders. Book value at the close of business on
December 31, 1997 was $25.98 per share.
CALUMET'S ROLE
Although the financial services industry has changed dramatically since
Calumet's beginnings as a local building and loan in 1910, our focus has not.
Safety and security of our customer's funds is our primary responsibility. Our
customers look to us for guidance and assistance in attaining specific goals,
whether those goals are to purchase a home, secure a comfortable retirement, or
save for their children's education.
Our service to the community changes as the needs of the people evolve. In 1997,
we made significant changes and improvements. Calumet Financial Corporation,
established in late 1996, has brought consumer and small business loans - new
services - to the community, as well as important fee income to the Company. We
changed our brokerage service provider to Fiserv Investor Services, Inc. One of
the main benefits of Investor Services, besides being priced lower than discount
brokerage firms, is the one-on-one individualized financial consultation by our
own personal registered representative.
We are continually looking to offer products and services to keep our current
customers satisfied and at the same time to attract new customers. We instituted
a large-scale certificate of deposit retention program to offer the attractive
options of various savings plans. At our East Side office, we built a
state-of-the-art drive-in facility for two Automatic Teller Machines (ATMs).
These additions to our ATM network are a valuable convenience to residents of
the East Side and South Chicago area.
Looking ahead, to the Millennium, the Year 2000 is a major data processing issue
for all businesses. Our staff took on this challenge early and we feel we will
be prepared in facing the Year 2000. Also looking to the future, we are
converting all of our teller and new account equipment and data processing to
the newest technologies available. This is a sizable investment for the Company,
but one necessary in order to improve response time and efficiency for our
customers.
Convenience is the reason that we offer our customers electronic banking
options. We want to supply the tools our customers need in order to fit their
banking into their individual lifestyles. We provide traditional electronic
banking choices to our customers, such as direct deposit and direct debit, along
with some of the newer options, including: our MasterMoney(R) debit card; a Web
site on the Internet (http://www.calumetbancorp.com) that provides information
about our products and services and current stock information, as well as
allowing our customers to communicate with us via e-mail; and CALVIN, our
24-hour telephone information service. In fact, we average over 13,800 inquiries
each month to CALVIN. Our customers are able to obtain current account
information, such as balances, checks paid, interest rates, and loan payment
amounts. CALVIN allows customers to check on their accounts or to balance their
checkbook, whenever they wish. We are planning to expand CALVIN to include
account transfers in the near future.
These services, like others that we offer, are designed to meet our customers'
needs at the time and place they choose. Our ultimate goal is to find better
ways to serve our customers. Committed service to our customers is how we stand
out among our competitors. In addition to offering the latest technologies, we
spend a great deal of time training our employees in the best customer service
techniques, sales programs, compliance issues, and product knowledge so that our
employees have the knowledge and tools they need to do their best. We stress
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personalized service and customer convenience through new technologies, and we
feel we can offer our current and future customers the best of both worlds.
COMMUNITY INVOLVEMENT
Calumet Federal is not solely a business, but a very important part of the
community. Our offices are spread out over a wide variety of low and middle
income areas in the southeast portion of Chicago and its suburbs. Our employees
live in these areas, and they feel a great sense of responsibility and
dedication to the community. They take a very active role by holding office on
the boards of organizations, and giving generously of their time and effort to
help others.
We are actively involved with various community groups promoting new and
rehabilitated housing to low and middle income areas in the community. Some of
these include the Claretian Associates Neighborhood Development Office, The
Southland Community Development Corporation, South Chicago Neighborhood Housing
Collaboration, The South East Chicago Development Commission, and the South
Suburban Action Conference/New Cities Development.
Our officers hold positions with the South Chicago Neighborhood Housing
Collaboration, South East Alcohol and Drug Abuse Center, The Dorchester
Foundation, Our Savior's Apartments developed through Lutheran Social Services
of Illinois, and Metropolitan Family Services, as well as local school boards
and neighborhood groups. Our employees support charitable events and take part
in fund-raising efforts.
Calumet is there for the community of which it is a part and continually looks
for new opportunities to help improve and enrich the lives of the residents of
the community.
LOOKING AHEAD
In 1998, we are focusing on improvements intended to strengthen our core
business and provide investors with the comfort and confidence of predictable,
controlled and well-managed growth. We will control costs, improve systems and
manage the retail business to deliver quality banking service.
We will be aided in these efforts by a seasoned and highly motivated
management team. Our employees hard work and dedication has made our Company
the success that it is. Our employees are also owners of the Company through
their employee benefit plans, which hold over 631,700 shares of Calumet
Bancorp stock. That's over 20% of the outstanding shares.
As we continue to grow, we are ever mindful of your investment in the Company.
Our future success depends upon the confidence, dedication and fresh
perspectives of each one of us working together as a team. We will work
together to enhance value for our shareholders, whose support we gratefully
acknowledge.
Sincerely,
/s/ Thaddeus Walczak
Thaddeus Walczak
Chairman of the Board
Chief Executive Officer
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DIRECTORS AND OFFICERS
CALUMET BANCORP, INC./CALUMET FEDERAL
CALUMET BANCORP, INC. OFFICERS SAVINGS AND LOAN ASSOCIATION OF CHICAGO DIRECTORS
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THADDEUS WALCZAK THADDEUS WALCZAK
Chairman of the Board Chairman of the Board
Chief Executive Officer Chief Executive Officer
CAROLE J. LEWIS CAROLE J. LEWIS
President President
JOHN GARLANGER DR. HENRY J. URBAN LOUISE CZAROBSKI
Senior Vice President/Treasurer Dentist Retired Executive Secretary
Continental Bank of Illinois
SUSAN M. LINKUS DARRYL ERLANDSON
Vice President/Secretary Vice President TYTUS R. BULICZ
Calumet Federal Savings Senior Project Engineer
JEAN A. ADAMS Navistar International
Vice President/General Cousel WILLIAM A. MCCANN
President
GERALD EBERHARDT William A. McCann Associates, Inc.
Vice President
CALUMET FEDERAL SAVINGS AND LOAN ASSOCIATION OF CHICAGO OFFICERS
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THADDEUS WALCZAK DEBORAH V. CATTONI
Chairman of the Board Vice President/Compliance Officer
Chief Executive Officer Administrative Personnel Officer
CAROLE J. LEWIS JOAN KONAR
President Vice President/East Side Office Manager
JOHN GARLANGER DOLORES MATHEWS
Senior Vice President/Treasurer Vice President/Sauk Village Office Manager
SUSAN M. LINKUS ELVIA PEREZ
Vice President/Secretary Vice President/South Chicago Office Manager
JEAN A. ADAMS ELSA P. CORTEZ
Vice President/General Counsel Vice President/Training and Sales
MICHAEL A. YORK JOHN E. ZART
Vice President/Controller Vice President/Community Reinvestment Officer
LORRAINE STRAKA GENIE MARCZAK
Vice President/Lending Vice President/Accounting
RONALD S. THEIS STEVEN M. STRAKA
Vice President/Accounting Vice President/Lending
DUANE D. TSCHETTER KATHLEEN J. LUCZAK
Vice President/Chief Appraiser Vice President/Lansing Office Manager
DIANE R. HANCZAR DARRYL ERLANDSON
Vice President/Marketing Vice President
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SHAREHOLDER'S INFORMATION
CORPORATE HEADQUARTERS
Calumet Bancorp, Inc.
1350 East Sibley Boulevard
Dolton, Illinois 60419
(708) 841-9010
GENERAL COUNSEL
Kemp & Grzelakowski,Ltd.
Oak Brook, Illinois
STOCK TRANSFER AGENT AND REGISTRAR
Inquiries regarding stock transfer, registration, lost
certificates or changes in name and address should
be directed to the stock transfer agent and registrar
by writing:
Harris Trust and Savings Bank
Attention: Shareholder Services
Post Office Box 755
Chicago, Illinois 60690
INDEPENDENT AUDITORS
Crowe, Chizek and Company LLP
Oak Brook, Illinois
INVESTOR INFORMATION
Shareholders, investors, and analysts interested
in additional information may contact:
John Garlanger, Senior Vice President and
Treasurer, at the corporate headquarters.
ANNUAL MEETING OF SHAREHOLDERS
The Annual Meeting of the Shareholders of
Calumet Bancorp, Inc. will be held at 1:00 P.M.,
April 29, 1998, at the following location:
Corporate Headquarters
Calumet Bancorp, Inc.
1350 East Sibley Boulevard
Dolton, Illinois 60419
All shareholders are cordially invited to attend.
At March 1, 1998, the Corporation had 344
shareholders of record and approximately 900
beneficial owners registered in street name.
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