CHICAGO - St. Paul Bancorp said it agreed to buy Elm Financial Services Inc., for about $49.1 million, or $22.45 a share.

The buyer's chief subsidiary, St. Paul Federal, is the largest independent thrift headquartered in Illinois, with assets of $3.6 billion. Elm is the holding company for Elmhurst Federal Savings Bank, which has eight banking facilities with assets of $380 million.

148-Unit ATM Network

As a result of the proposed acquisition, St. Paul will have 45 retail banking offices and a 148-unit proprietary ATM network in metropolitan Chicago.

Under the agreement, the purchase price calls for $12.35 in cash and $10.10 in St. Paul Bancorp stock. The book value of Elm Financial Services was $21.60 a common share at March 31.

The number of St. Paul Bancorp shares to be issued is subject to adjustment for fluctuations in St. Paul Bancorp's stock price before completion.

The letter of intent was approved by the boards of both companies. The proposed acquisition is now subject to, among other things, regulatory approvals, a definite agreement, and the approval of Elm Financial's stockholders. Approval by St. Paul Bancorp's tockholders is not required.

The agreement provides for payments to St. Paul Bancorp by Elm Financial Services in the event of certain third party proposals to acquire Elm, and other events resulting in termination of the proposed transaction. Completion is anticipated by early 1993.

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