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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For fiscal year ended December 31, 1995
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For transition period from __________ to __________
Commission File Number 0 -17609
WEST SUBURBAN BANCORP, INC.
---------------------------------------------
(Exact name of Registrant as specified in its charter)
ILLINOIS 36-3452469
- --------------------------------- ---------------------------------------
(State or other jurisdiction (I.R.S. Employer Identification Number)
of incorporation or organization)
711 SOUTH MEYERS ROAD, LOMBARD, ILLINOIS 60148
- ---------------------------------------- -------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (708) 629-4200
- -------------------------------------------------- --------------
Securities registered pursuant to Section 12(b) of the Act:
- -----------------------------------------------------------
Name of Each Exchange
Title of Each Class on which Registered
------------------- -------------------
None None
Securities registered pursuant to Section 12(g) of the Act:
- -----------------------------------------------------------
CLASS A COMMON STOCK, NO PAR VALUE
----------------------------------
(Title of Class)
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 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this 10-K or any amendment
to this form 10-K. [ ]
The index to exhibits is located on page 28 of 89 total sequentially numbered
pages.
The aggregate market value of voting common stock of Registrant held by
non-affiliates as of December 31, 1995 was $68,516,608 (1). At December 31,
1995, the total number of shares of Class A Common Stock outstanding was 347,015
and the total number of shares of Class B Common Stock outstanding was 85,480.
Documents Incorporated by Reference:
Portions of the Annual Report to Shareholders for the fiscal year ended
December 31, 1995 are incorporated by reference into Parts I, II and IV hereof,
to the extent indicated herein. Portions of the Proxy Statement for the Annual
Meeting of Shareholders to be held May 8, 1996 are incorporated by reference in
Part III hereof, to the extent indicated herein.
- ------------------------
(1) Based on the last reported price of an actual transaction in
Registrant's common stock on March 14, 1996, and reports of beneficial
ownership filed by directors and executive officers of Registrant and by
beneficial owners of more than 5% of the outstanding shares of common
stock of Registrant; however, such determination of shares owned by
affiliates does not constitute an admission of affiliate status or
beneficial interest in shares of common stock of Registrant.
2
WEST SUBURBAN BANCORP, INC.
1995 Form 10-K Annual Report
Table of Contents
PART I
Sequential
Page Number
Item 1. Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Item 2. Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
Item 3. Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . .21
Item 4. Submission of Matters to a Vote of Security Holders. . . . . . . . .21
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters. . . . . . . . . . . . . . . . . . . . . .22
Item 6. Selected Financial Data. . . . . . . . . . . . . . . . . . . . . . .22
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations. . . . . . . . . . . . . .23
Item 8. Financial Statements and Supplementary Data. . . . . . . . . . . . .23
Item 9. Changes in and Disagreements With Accountants on Accounting and
Financial Matters. . . . . . . . . . . . . . . . . . . . . . . 23
PART III
Item 10. Directors and Executive Officers of the Registrant . . . . . . . . 24
Item 11. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . 24
Item 12. Security Ownership of Certain Beneficial Owners and
Management . . . . . . . . . . . . . . . . . . . . . . . . . 24
Item 13. Certain Relationships and Related Transactions . . . . . . . . . . 24
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports
on Form 8-K. . . . . . . . . . . . . . . . . . . . . . . . . 25
Form 10-K Signature Page . . . . . . . . . . . . . . . . . . . . . . . . . .27
3
PART I
ITEM 1. BUSINESS
REGISTRANT AND ITS SUBSIDIARIES
West Suburban Bancorp, Inc., an Illinois corporation (the "Company"), is a
multi-bank holding company registered under the Bank Holding Company Act of
1956, as amended (the "BHC Act"), and a thrift holding company registered under
the Home Owner's Loan Act, as amended (the "HOLA"). The Company's operating
subsidiaries consist of: West Suburban Bank, Lombard, Illinois; West Suburban
Bank of Downers Grove/Lombard, Downers Grove, Illinois; West Suburban Bank of
Darien, Darien, Illinois; West Suburban Bank of Carol Stream/Stratford Square,
Bloomingdale, Illinois; and West Suburban Bank of Aurora, F.S.B., Aurora,
Illinois. West Suburban Bank, West Suburban Bank of Downers Grove/Lombard, West
Suburban Bank of Darien and West Suburban Bank of Carol Stream/Stratford Square
may be referred to collectively as the "Bank Subsidiaries," West Suburban Bank
of Aurora, F.S.B. may be referred to as "WSB Aurora" and the Bank Subsidiaries
and WSB Aurora may be referred to collectively as the "Subsidiaries."
The Company was incorporated in 1986 and became the parent bank holding company
of the Bank Subsidiaries in 1988. On July 13, 1990, the Company acquired WSB
Aurora, a federally-chartered thrift, thereby also becoming a thrift holding
company.
The Subsidiaries are headquartered in the near western suburbs of Chicago among
some of the faster growing areas in Illinois. Due to the nature of the market
areas served by the Subsidiaries, the Subsidiaries provide a wide range of
financial services to individuals and small and medium sized businesses. The
western suburbs of Chicago have a diversified economy, with many new corporate
headquarters and numerous small and medium sized industrial and non-industrial
businesses providing employment.
The Subsidiaries engage in a general full service retail banking business and
offer a broad variety of consumer and commercial products and services. The
Subsidiaries also offer trust services, safe deposit boxes and extended banking
hours, including Sunday hours and 24-hour banking through either a proprietary
network of 36 automated teller machines ("ATMs") or Tele-Bank 24, a bank-by-
phone system. Other consumer related services are available including financial
services and a competitively priced VISA card through West Suburban Bank Card
Services. During 1995, the Subsidiaries began to offer their customers a debit
card called the West Suburban Bank Check Card. The West Suburban Bank Check Card
allows customers to make purchases with funds from their checking accounts
without writing checks.
Although each Subsidiary operates under the direction of its own board of
directors, the Company has standard operating policies regarding asset/liability
management, liquidity management, investment management, lending practices and
deposit structure management. The Company has historically centralized certain
operations where economies of scale can be achieved.
4
The following table sets forth financial and other information concerning the
Subsidiaries as of December 31, 1995:
SUBSIDIARIES OF WEST SUBURBAN BANCORP, INC. (1)
(Dollars in thousands)
Return on Average
Name of Subsidiary Share- --------------------
(Year Formed/Year Number of Total holder's Net
Affiliated With the Parent) Locations (2) Assets Equity Income Assests Equity
- --------------------------- --------------- --------- ---------- -------- --------- --------
West Suburban Bank
(1962/1988) 29 $425,016 $35,821 $5,112 1.3% 14.9%
West Suburban Bank of
Downers Grove/
Lombard
(1972/1988) 29 151,838 14,709 1,951 1.4% 14.2%
West Suburban Bank of
Darien
(1973/1988) 29 229,062 19,354 2,907 1.3% 15.9%
West Suburban Bank
of Carol Stream/
Stratford Square
(1975/1988) 29 205,370 15,215 2,269 1.3% 15.9%
West Suburban Bank
of Aurora, F.S.B.
(1926/1990) 3 152,163 16,392 1,426 1.0% 8.9%
- ----------------
(1) The data presented in this table is not intended to present the Company's
consolidated financial results for 1995. The Company's consolidated
financial statements are provided in this Form 10-K in response to Item
14.
(2) The number of locations reflected for the Bank Subsidiaries includes all
facilities at which customers of any Bank Subsidiary can conduct their
banking business, and includes a facility which consists solely of a
proprietary stand-alone ATM facility.
COMPETITION
The Company encounters competition in all areas of its business pursuits. It
competes for loans, deposits, fiduciary and other services with financial and
other institutions located both within and outside of its market area. In order
to compete effectively, to develop its market base, to maintain flexibility and
to move in pace with changing economic and social conditions, the Company
continuously refines and develops its products and services. The principal
methods of competition in the financial services industry are price, service and
convenience.
EMPLOYEES
The Company employed 646 persons (505 full time equivalent employees) on
December 31, 1995. The Company believes that its relations with its employees
are good.
5
SUPERVISION AND REGULATION
General
The growth and earnings performance of the Company can be affected not only by
management decisions and general economic conditions, but also by the policies
of various governmental regulatory authorities including, but not limited to,
the Board of Governors of the Federal Reserve System (the "FRB"), the Federal
Deposit Insurance Corporation (the "FDIC"), the Illinois Commissioner of Banks
and Trust Companies (the "Commissioner"), the Office of Thrift Supervision (the
"OTS"), the Internal Revenue Service, the Illinois Department of Revenue and the
Securities and Exchange Commission (the "SEC"). Financial institutions and their
holding companies are extensively regulated under federal and state law. The
effect of such statutes, regulations and policies can be significant, and cannot
be predicted with a high degree of certainty.
Federal and state laws and regulations generally applicable to financial
institutions, such as the Company, regulate the scope of business, investments,
loans, deposit insurance, reserves against deposits, capital adequacy, the
establishment of branches, mergers, consolidations, dividends and other aspects
of their operations. The system of supervision and regulation applicable to the
Company and the Subsidiaries establishes a comprehensive framework for the
operations of the Company and the Subsidiaries and is intended primarily for the
protection of the FDIC's deposit insurance funds and the depositors, rather than
the shareholders, of financial institutions.
The following references to material statutes and regulations affecting the
Company and the Subsidiaries are brief summaries thereof and do not purport to
be complete, and are qualified in their entirety by reference to such statutes
and regulations. Any change in applicable law or regulations may have a material
effect on the business of the Company.
Recent Regulatory Developments
On August 8, 1995, the FDIC amended its regulations to change the range of
deposit insurance assessments charged to members of the Bank Insurance Fund (the
"BIF"), such as the Bank Subsidiaries, from the then-prevailing range of .23% to
.31% of deposits, to a range of .04% to .31% of deposits. Additionally, because
the change in BIF-assessments was applied retroactively to June 1, 1995, BIF-
member institutions, including the Bank Subsidiaries, received a refund of the
difference between the amount of assessments previously paid at the higher
assessment rates for the period from June 30, 1995, and the amount that would
have been paid for that period at the new rates. In the case of the Bank
Subsidiaries, this refund totaled $495,276. The FDIC did not, however, change
the assessment rates charged to members of the Savings Association Insurance
Fund (the "SAIF"), such as WSB Aurora, and SAIF-insured institutions continue to
pay assessments ranging from .23% to .31% of deposits. As a result of the change
in the assessment rates charged to BIF-member institutions, WSB Aurora currently
pays significantly higher deposit insurance assessments as a member of the SAIF
than members of the BIF.
The difference between the deposit insurance assessments paid by BIF-member
institutions and those paid by SAIF-member institutions will increase further in
calendar year 1996. On November 14, 1995, the FDIC reduced the deposit insurance
assessments for BIF-member institutions by four basis points. As a result, the
range of BIF assessments for the semi-annual assessment period commencing
January 1, 1996 will be between 0% and .27% of deposits. BIF-member institutions
which qualify for the 0% assessment category will, however, still have to pay
the $1,000 minimum semi-annual assessment required by federal statute.
The FDIC changed the range for BIF-member deposit insurance assessments to their
current levels because the ratio of the insurance reserves of the BIF to total
BIF-insured deposits exceeds the statutorily designated reserve ratio of 1.25%.
Because the SAIF does not meet this designated reserve ratio, the FDIC is
prohibited by federal law from reducing the deposit insurance assessments
charged to SAIF-member institutions to the same levels currently charged to BIF-
member institutions. Legislative proposals pending before the Congress would
recapitalize the SAIF to the designated reserve ratio by imposing a special
6
assessment against SAIF-insured institutions, payable in a single installment,
sufficient in the aggregate to increase the ratio of the insurance reserves of
the SAIF to total SAIF-insured deposits to 1.25%. Based upon the information
currently available to the Company with respect to the manner in which any such
special assessment would be calculated under the pending legislation, the
Company estimates that the imposition of a special assessment under the pending
legislation would result in a one-time charge to WSB Aurora of approximately
$1.0 million. At such time as the SAIF meets the designated reserve ratio of
1.25%, the assessment rates charged SAIF-member institutions could be reduced to
levels consistent with those charged to BIF-member institutions. Legislation has
also been introduced in the Congress that would, among other things, require
federal thrift institutions to convert to state or national banks and merge the
BIF and the SAIF into a single deposit insurance fund administered by the FDIC.
At this time, it is not possible to predict whether, or in what form, any such
legislation will be adopted or the impact, if any, such legislation if adopted
would have on the Company, the Bank Subsidiaries or WSB Aurora.
The Company
GENERAL. The Company, as the controlling shareholder of the Bank Subsidiaries,
is a bank holding company. As a bank holding company, the Company is registered
with, and is subject to regulation by, the FRB under the BHC Act. In accordance
with FRB policy, the Company is expected to act as a source of financial
strength to the Bank Subsidiaries and to commit resources to support the Bank
Subsidiaries in circumstances where the Company might not do so absent such
policy. Under the BHC Act, the Company is subject to periodic examination by the
FRB and is required to file periodic reports of its operations and such
additional information as the FRB may require.
Because the Company's principal place of business is in Illinois, the Company is
also subject to the requirements of the Illinois Bank Holding Company Act.
Further, due to the Company's ownership of WSB Aurora, a federally chartered
savings association, the Company is a savings and loan holding company within
the meaning of the HOLA and, as such, is subject to the examination,
supervision, reporting and enforcement requirements of the OTS.
INVESTMENTS AND ACTIVITIES. Under the BHC Act, a bank holding company must
obtain FRB approval before: (i) acquiring, directly or indirectly, ownership or
control of any voting shares of another bank or bank holding company if, after
such acquisition, it would own or control more than 5% of such shares (unless it
already owns or controls the majority of such shares); (ii) acquiring all or
substantially all of the assets of another bank or bank holding company; or
(iii) merging or consolidating with another bank holding company.
Prior to September 29, 1995, the BHC Act prohibited the FRB from approving any
direct or indirect acquisition by a bank holding company of more than 5% of the
voting shares, or of all or substantially all of the assets, of a bank located
outside of the state in which the operations of the bank to be acquired is
located specifically authorized such an acquisition. Pursuant to amendments to
the BHC Act which took effect September 29, 1995, the FRB may now allow a bank
holding company to acquire banks located in any state of the United States
without regard to geographic restrictions or reciprocity requirements imposed by
state law, but subject to certain other acceptable conditions, if any, imposed
by that state that apply to all holding companies, including, for example,
limitations on the aggregate amount of deposits that may be held by a holding
company and all of its insured depository institutions.
The BHC Act also prohibits, with certain exceptions noted below, the Company
from acquiring direct or indirect ownership or control of more than 5% of the
voting shares of any company which is not a bank and from engaging in any
business other than that of banking, managing and controlling banks or
furnishing services to banks and their subsidiaries, except that bank holding
companies may engage in, and may own shares of companies engaged in, certain
businesses found by the FRB to be "so closely related to banking ... as to be a
proper incident thereto." Under current regulations of the FRB, the Company and
any non-bank subsidiaries are permitted to engage in, among other activities,
such banking-related businesses as the operation of a thrift, sales and consumer
finance, equipment leasing, the operation of a computer service bureau,
including software development, mortgage banking and mortgage brokerage. The BHC
Act does not place territorial restrictions on the activities of non-bank
subsidiaries of bank holding companies.
7
The HOLA prohibits a savings and loan holding company, such as the Company,
directly or indirectly or through any subsidiary, from: acquiring control of, or
acquiring by merger or purchase of assets, another savings association or
savings and loan holding company without the prior written approval of the OTS;
acquiring or retaining, with certain exceptions, more than 5% of the voting
shares of a non-subsidiary savings association, a non-subsidiary savings and
loan holding company, or a non-subsidiary company engaged in activities other
than those permitted by the HOLA; or acquiring or retaining control of a
depository institution that is not federally insured.
Federal law also prohibits the acquisition of "control" of a bank or bank
holding company, such as the Company, without prior notice to certain federal
bank regulators. "Control" is defined in certain cases as the acquisition of 10%
of the outstanding shares of a bank or bank holding company.
CAPITAL REQUIREMENTS. The FRB uses capital adequacy guidelines in its
examination and regulation of bank holding companies. If capital falls below
minimum guideline levels, a bank holding company, among other things, may be
denied approval to acquire or establish additional banks or non-bank businesses.
The FRB's capital guidelines establish the following minimum regulatory capital
requirements for bank holding companies: a risk-based requirement expressed as a
percentage of total risk-weighted assets, and a leverage requirement expressed
as a percentage of total assets. The risk-based requirement consists of a
minimum ratio of total capital to total risk-weighted assets of 8%, of which at
least one-half must be Tier 1 capital (which consists principally of
shareholders' equity). The leverage requirement consists of a minimum ratio of
Tier 1 capital to total assets of 3% for the most highly rated companies, with a
minimum requirement of 4% to 5% for all others.
The risk-based and leverage standards presently used by the FRB are minimum
requirements, and higher capital levels will be required if warranted by the
particular circumstances or risk profiles of individual banking organizations.
Further, any banking organization experiencing or anticipating significant
growth would be expected to maintain capital ratios, including tangible capital
positions (I.E., Tier 1 capital less all intangible assets), well above the
minimum levels.
As of December 31, 1995, the Company had regulatory capital in excess of the
FRB's minimum requirements, with a Tier 1 risk-based capital ratio of 11.92%, a
total risk-based capital ratio of 12.90% and a leverage ratio of 9.72%.
DIVIDENDS. The FRB has issued a policy statement on the payment of cash
dividends by bank holding companies. In the policy statement, the FRB expressed
its view that a bank holding company experiencing earnings weaknesses should not
pay cash dividends exceeding its net income or which could only be funded in
ways that weakened the bank holding company's financial health, such as by
borrowing. Additionally, the FRB possesses enforcement powers over bank holding
companies and their non-bank subsidiaries to prevent or remedy actions that
represent unsafe or unsound practices or violations of applicable statutes and
regulations. Among these powers is the ability to proscribe the payment of
dividends by banks and bank holding companies.
In addition to the restrictions on dividends imposed by the FRB, the Illinois
Business Corporation Act, as amended, prohibits the Company from paying a
dividend if, after giving effect to the dividend, the Company would be insolvent
or the net assets of the Company would be less than zero or less than the
maximum amount then payable to shareholders of the Company who would have
preferential distribution rights if the Company were liquidated.
FEDERAL SECURITIES REGULATION. The Company's common stock is registered with the
SEC under the Securities Act of 1933, as amended, and the Securities Exchange
Act of 1934, as amended (the "Exchange Act"). Consequently, the Company is
subject to the information, proxy solicitation, insider trading and other
restrictions and requirements of the SEC under the Exchange Act.
8
The Subsidiaries
GENERAL. The Bank Subsidiaries are Illinois-chartered banks, the deposit
accounts of which are insured by the BIF of the FDIC. As BIF-insured, Illinois-
chartered banks, the Bank Subsidiaries are subject to the examination,
supervision, reporting and enforcement requirements of the Commissioner, as the
chartering authority for Illinois banks, and the FDIC, as administrator of the
BIF.
WSB Aurora is a federally chartered savings association, the deposits of which
are insured by the SAIF of the FDIC. As a SAIF-insured, federally chartered
savings association, WSB Aurora is subject to the examination, supervision,
reporting and enforcement requirements of the OTS, as the chartering authority
for federal savings associations, and the FDIC as administrator of the SAIF. WSB
Aurora is also a member of the Federal Home Loan Bank System, which provides a
central credit facility primarily for member institutions.
DEPOSIT INSURANCE. As FDIC-insured institutions, the Bank Subsidiaries and WSB
Aurora are required to pay deposit insurance premium assessments to the FDIC.
The amount each FDIC-insured institution pays for deposit insurance coverage is
determined in accordance with a risk-based assessment system under which all
insured depository institutions are placed into one of nine categories and
assessed insurance premiums based upon their level of capital and supervisory
evaluation. Institutions classified as well-capitalized (as defined by the FDIC)
and considered healthy, pay the lowest premium while institutions that are less
than adequately capitalized (as defined by the FDIC) and considered of
substantial supervisory concern pay the highest premium. For the semi-annual
assessment period ended December 31, 1995, BIF assessments ranged from .04% to
.31% of deposits, while SAIF assessments ranged from .23% to .31% of deposits.
The premiums currently paid by WSB Aurora for membership in the SAIF are
substantially higher than the premiums currently paid by the Bank Subsidiaries
for membership in the BIF. See "Recent Regulatory Developments." Risk
classification of all insured institutions is made by the FDIC for each semi-
annual assessment period.
The FDIC may terminate the deposit insurance of any insured depository
institution if the FDIC determines, after a hearing, that the institution has
engaged or is engaging in unsafe or unsound practices, is in an unsafe or
unsound condition to continue operations or has violated any applicable law,
regulation, order, or any condition imposed in writing by, or written agreement
with, the FDIC. The FDIC may also suspend deposit insurance temporarily during
the hearing process for a permanent termination of insurance if the institution
has no tangible capital. Management of the Company is not aware of any activity
or condition that could result in termination of the deposit insurance of any of
the Bank Subsidiaries or WSB Aurora.
CAPITAL REQUIREMENTS. The FDIC has established the following minimum capital
standards for state-chartered insured non-member banks, such as the Bank
Subsidiaries: a leverage requirement consisting of a minimum ratio of Tier 1
capital to total assets of 3% for the most highly-rated banks with minimum
requirements of 4% to 5% for all others and a total risk-based capital
requirement consisting of a minimum ratio of total capital to total risk-
weighted assets of 8%, at least one-half of which must be Tier 1 capital.
The OTS has established the following minimum capital standards for savings
associations, such as WSB Aurora: a core capital requirement, consisting of a
minimum ratio of core capital (consisting primarily of stockholders' equity) to
total assets of 3%; a tangible capital requirement consisting of a minimum ratio
of tangible capital (defined as core capital minus all intangible assets other
than a specified amount of purchased mortgage servicing rights) to total assets
of 1.5%; and a risk-based capital requirement, consisting of a minimum ratio of
total capital to total risk-weighted assets of 8%, at least one-half of which
must consist of core capital.
The capital requirements described above are minimum requirements. Higher
capital levels may be required if warranted by the particular circumstances or
risk profiles of individual institutions. For example, the regulations of the
FDIC and the OTS provide that additional capital may be required to take
adequate account of the risks posed by concentrations of credit, nontraditional
activities and the institution's ability to manage such risks.
9
Further, a savings association may be required to maintain additional capital to
account for its interest rate risk ("IRR") exposure. Under OTS regulations, the
OTS quantifies each savings association's level of IRR exposure based on data
reported by each association, using an OTS model designed to measure the change
in the net present value of the association's assets, liabilities and off-
balance sheet positions resulting from a hypothetical 200 basis point increase
or decrease in interest rates. IRR exposure, as measured by the OTS, is used as
the basis for determining whether the association must hold additional risk-
based capital to account for IRR.
Similarly, on August 2, 1995, the FDIC published amendments to its risk-based
capital standards designed to take into account IRR exposure. The amendments
provide that a bank's exposure to declines in the economic value of its capital
due to changes in interest rates will be among the factors considered by the
FDIC in evaluating a bank's capital adequacy. Although the IRR amendments do not
establish a system for measuring IRR exposure, concurrently with the adoption of
the amendments, the FDIC, together with the FRB and the Office of the
Comptroller of the Currency, issued a proposed joint policy statement setting
out a framework that would be used to measure the IRR exposure of individual
banks. The proposed policy statement would generally require banks to quantify
their level of IRR exposure using a measurement system developed by the
regulators that weights a bank's assets, liabilities and off-balance sheet
positions by risk factors designed to reflect the approximate change in each
instrument's value that would result from 200 basis point changes in interest
rates. The level of IRR exposure reflected by this measurement system, would
then be considered by the agencies in assessing a bank's capital adequacy.
Although it is not presently possible to predict whether, or in what form, the
proposed policy statement will be adopted, management does not anticipate that
the adoption of a policy statement substantially in the form proposed would have
a material adverse effect on the ability of the Bank Subsidiaries to maintain
compliance with applicable capital requirements.
During the year ended December 31, 1995, none of the Bank Subsidiaries or WSB
Aurora was required by the FDIC or the OTS, respectively, to increase its
capital to an amount in excess of the minimum regulatory requirement. As of
December 31, 1995, each of the Bank Subsidiaries and WSB Aurora exceeded its
minimum regulatory capital requirements.
The following table sets forth selected regulatory capital ratios of the Bank
Subsidiaries at December 31, 1995:
Tier 1 Total
Risk-Based Risk-Based Leverage
Institution Capital Capital Ratio
- ----------- ------- ------- -----
West Suburban Bank 10.26% 11.24% 8.43%
West Suburban Bank of Downers Grove/Lombard 13.45 14.61 9.69
West Suburban Bank of Darien 11.10 12.11 8.45
West Suburban Bank of Carol Stream/Stratford Square 11.12 11.97 7.41
At December 31, 1995, WSB Aurora maintained a core capital ratio of 10.77%, a
tangible capital ratio of 12.91% and a total risk-based capital ratio of 13.93%.
Federal law provides the federal banking regulators with broad power to take
prompt corrective action to resolve the problems of undercapitalized
institutions. The extent of the regulators' powers depends on whether the
institution in question is "well capitalized," "adequately capitalized,"
"undercapitalized," "significantly undercapitalized" or "critically
undercapitalized." Depending upon the capital category to which an institution
is assigned, the regulators' corrective powers include: requiring the submission
of a capital restoration plan; placing limits on asset growth and restrictions
on activities; requiring the institution to issue additional capital stock
(including additional voting stock) or to be acquired; restricting transactions
with affiliates; restricting the interest rate the institution may pay on
deposits; ordering a new election of directors of the institution; requiring
that senior executive officers or directors be dismissed; prohibiting the
institution from accepting deposits from correspondent banks; requiring the
institution to divest certain
10
subsidiaries; prohibiting the payment of principal or interest on subordinated
debt; and ultimately, appointing a receiver for the institution.
Additionally, institutions insured by the FDIC may be liable for any loss
incurred by, or reasonably expected to be incurred by, the FDIC in connection
with the default of commonly controlled FDIC insured depository institutions or
any assistance provided by the FDIC to commonly controlled FDIC insured
depository institutions in danger of default.
DIVIDENDS. Under the Illinois Banking Act, Illinois-chartered banks may not pay,
without prior regulatory approval, dividends in excess of their adjusted
profits.
OTS regulations impose limitations upon all capital distributions by thrifts,
including cash dividends. The rule establishes three tiers of institutions. An
institution that exceeds all fully phased-in capital requirements before and
after the proposed capital distribution ("Tier 1 Institution") could, after
prior notice to, but without the approval of, the OTS, make capital
distributions during a calendar year of up to the higher of (i) 100% of its net
income to date during the calendar year plus the amount that would reduce by
one-half its "surplus capital ratio" (the excess capital over its fully
phased-in capital requirements) at the beginning of the calendar year, or (ii)
75% of its net income over the most recent preceding four quarter period. Any
additional capital distributions would require prior regulatory approval. As of
December 31, 1995, WSB Aurora was a Tier 1 Institution.
The payment of dividends by any financial institution or its holding company is
affected by the requirement to maintain adequate capital pursuant to applicable
capital adequacy guidelines and regulations. As described above, the Company,
the Bank Subsidiaries and WSB Aurora each exceeded its minimum capital
requirements under applicable guidelines as of December 31, 1995. As of December
31, 1995, approximately $20.7 million was available to be paid as dividends to
the Company by the Bank Subsidiaries and WSB Aurora.
INSIDER TRANSACTIONS. The Bank Subsidiaries and WSB Aurora are subject to
certain restrictions imposed by the Federal Reserve Act on any extensions of
credit to the Company and the Subsidiaries, on investments in the stock or other
securities of the Company and the Subsidiaries and the acceptance of the stock
or other securities of the Company or the Subsidiaries as collateral for loans.
Certain limitations and reporting requirements are also placed on extensions of
credit by the Bank Subsidiaries and WSB Aurora to their respective directors and
officers, to directors and officers of the Company and the Subsidiaries, to
principal stockholders of the Company, and to "related interests" of such
directors, officers and principal stockholders. In addition, such legislation
and regulations may affect the terms upon which any person becoming a director
or officer of the Company or one of the Subsidiaries or a principal stockholder
of the Company may obtain credit from banks with which one of the Bank
Subsidiaries or WSB Aurora maintains a correspondent relationship.
SAFETY AND SOUNDNESS STANDARDS. On July 10, 1995, the federal banking
regulators, including the FDIC and the OTS, published final guidelines
establishing operational and managerial standards to promote the safety and
soundness of federally insured depository institutions. The guidelines, which
took effect on August 9, 1995, establish standards for internal controls,
information systems, internal audit systems, loan documentation, credit
underwriting, interest rate exposure, asset growth, and compensation, fees and
benefits. In general, the guidelines prescribe the goals to be achieved in each
area, and each institution will be responsible for establishing its own
procedures to achieve those goals. If an institution fails to comply with any of
the standards set forth in the guidelines, the institution's primary federal
regulator may require the institution to submit a plan for achieving and
maintaining compliance. The preamble to the guidelines states that the agencies
expect to require a compliance plan from any institution whose failure to meet
one or more of the standards is of such severity that it could threaten the safe
and sound operation of the institution. Failure to submit an acceptable
compliance plan, or failure to adhere to a compliance plan that has been
accepted by the appropriate regulator, would constitute grounds for further
enforcement action. The federal banking agencies have also published for comment
proposed asset quality and earnings standards which, if adopted, would be added
to the safety and soundness guidelines. This proposal, like the final
guidelines, would establish the goals to be achieved with respect to asset
quality and earnings,
11
and each institution would be responsible for establishing its own procedures to
meet such goals.
BRANCHING AUTHORITY. All banks located in Illinois have traditionally been
restricted as to the number and geographic location of branches which they may
establish. On June 7, 1994, Governor Edgar signed into law legislation
eliminating all branching restrictions. Accordingly, as of that date, the Bank
Subsidiaries were allowed to establish branches anywhere in Illinois without
regard to the location of other bank main offices or the number of branches
previously maintained by the Bank Subsidiaries establishing the branch. Federal
savings associations, such as WSB Aurora, have for some time had similar
branching rights.
Effective June 1, 1997 (or earlier if expressly authorized by applicable state
law), the Riegle-Neal Interstate Banking and Branch Efficiency Act of 1994 (the
"Riegle-Neal Act") allows banks to establish interstate branch networks through
acquisitions of other banks, subject to certain conditions, including certain
limitations on the aggregate amount of deposits that may be held by the
surviving bank and all of its insured depository institution affiliates. The
establishment of DE NOVO interstate branches or the acquisition of individual
branches of a bank in another state (rather than the acquisition of an out-of-
state bank in its entirety) is allowed by the Riegle-Neal Act only if
specifically authorized by state law. The legislation allows individual states
to "opt-out" of certain provisions of the Riegle-Neal Act by enacting
appropriate legislation prior to June 1, 1997. Illinois has enacted legislation
permitting interstate bank mergers beginning on June 1, 1997. Federal savings
associations, such as WSB Aurora, currently have nationwide interstate branching
authority under the HOLA and OTS regulations.
STATE BANK ACTIVITIES. Under federal law, as implemented by final regulations
adopted by the FDIC, FDIC insured state banks are prohibited, subject to certain
exceptions, from making or retaining equity investments of a type, or in an
amount, that are not permissible for a national bank. Federal law, as
implemented by FDIC regulations, also prohibits FDIC insured state banks and
their subsidiaries, subject to certain exceptions, from engaging as principal in
any activity that is not permitted for a national bank or its subsidiary,
respectively, unless the bank meets, and continues to meet, its minimum
regulatory capital requirements and the FDIC determines the activity would not
pose a significant risk to the deposit insurance fund of which the bank is a
member. Impermissible investments and activities must be divested or
discontinued within certain time-frames set by the FDIC in accordance with
federal law. These restrictions have not had, and are not currently expected to
have, a material impact on the operations of the Bank Subsidiaries.
QUALIFIED THRIFT LENDER TEST. Under the HOLA, as implemented by OTS regulations,
WSB Aurora is required to satisfy a qualified thrift lender ("QTL") test. In
order to meet the current QTL test WSB Aurora generally is required to invest at
least 65% of its portfolio assets in "qualified thrift investments," as measured
on a monthly average basis in nine out of every 12 months. Qualified thrift
investments for purposes of the current QTL test consist principally of
residential mortgage loans, mortgage-backed securities and other housing and
consumer-related investments. The term "portfolio assets" is statutorily defined
to mean a savings association's total assets less goodwill and other intangible
assets, the association's business property and a limited amount of its liquid
assets. As of December 31, 1995, WSB Aurora satisfied the QTL test.
LIQUIDITY REQUIREMENTS. OTS regulations currently require each savings
association to maintain, for each calendar month, an average daily balance of
liquid assets (including cash, certain time deposits, bankers' acceptances, and
specified United States Government, state or federal agency obligations) equal
to at least 5% of the average daily balance of its net withdrawable accounts
plus short-term borrowings (those repayable in 12 months or less) during the
preceding calendar month. This liquidity requirement may be changed from time to
time by the OTS to an amount within a range of 4% to 10% of such accounts and
borrowings, depending upon economic conditions and the deposit flows of savings
associations. OTS regulations also require each savings association to maintain,
for each calendar month, an average daily balance of short-term liquid assets
(generally liquid assets having maturities of 12 months or less) equal to at
least 1% of the average daily balance of its net withdrawable accounts plus
short-term borrowings during the preceding calendar month. Penalties may be
imposed for failure to meet liquidity ratio requirements. At December 31, 1995,
WSB Aurora was in compliance with OTS liquidity requirements, with an overall
liquidity ratio of 5.54% and a short-term liquidity ratio of 4.45%.
12
EXECUTIVE OFFICERS OF THE COMPANY
The names and ages of the executive officers of the Company, along with a brief
description of the business experience of each such person, during the past five
years, and certain other information is set forth below:
Name (Age) and Position
and Offices with the Company Principal Occupations and Employment
(year first elected to office) for Past Five Years and Other Information
- ---------------------------------------------------------------------- -----------------------------------------------------
Kevin J. Acker (46) Director and President of West Suburban Bank of
Chairman of the Board (1993) and Vice Carol Stream/Stratford Square since 1982.
President (1986)
John A. Clark (47) Director and Executive Vice President of West Suburban
President and Chief Executive Officer (1986) Bank since 1984, Vice President Loans for West Suburban
Bank of Downers Grove/Lombard, West Suburban Bank of
Darien and West Suburban Bank of Carol Stream/Stratford
Square since 1988. Director and President of WSB Aurora
from July, 1990 to January, 1992 and Director and
Executive Vice President of WSB Aurora since January,
1992.
Keith W. Acker (46) Director, President and Chairman of the Board of
Chief Operating Officer (1996) West Suburban Bank since 1986.
Duane G. Debs (39) Vice President and Comptroller of the Bank
Chief Financial Officer, Vice President, Subsidiaries since 1987 and of WSB Aurora since July,
Secretary and Treasurer (1993) 1990. Director of West Suburban Bank of Downers
Grove/Lombard since January, 1993.
13
STATISTICAL DATA
The statistical data required by Securities and Exchange Act of 1934, as amended
(the "1934 Act") Industry Guide 3, "Statistical Disclosure By Bank Holding
Companies," has been incorporated by reference from the Company's 1995 Annual
Report to Shareholders (attached as Exhibit 13.1 hereto) or is set forth below.
This data should be read in conjunction with the Company's 1995 Consolidated
Financial Statements and related notes, and the discussion included in
Management's Discussion and Analysis of Financial Condition and Results of
Operations as set forth in the Company's 1995 Annual Report to Shareholders. All
dollar amounts of the statistical data included below are expressed in
thousands.
Investment Securities
The following table sets forth by category the amortized cost of securities at
December 31 (dollars in thousands):
1995 1994 1993
---------- ---------- ----------
Available For Sale:
Corporate $69,731 $45,623 $139,555
U.S. Government agencies and corporations 36,119 51,638 44,129
U.S. Treasury 16,291 16,427 ---
States and political subdivisions 1,157 --- ---
Equity securities 10,841 11,942 5,350
---------- ---------- ----------
Total investment securities available for sale 134,139 125,630 189,034
---------- ---------- ----------
Held To Maturity:
Corporate --- 30,645 ---
U.S. Government agencies and corporations 83,237 55,783 ---
States and political subdivisions 32,800 22,131 19,119
---------- ---------- ----------
Total investment securities held to maturity 116,037 108,559 19,119
---------- ---------- ----------
Total investment securities $250,176 $234,189 $208,153
---------- ---------- ----------
---------- ---------- ----------
The following table sets forth by contractual maturity the amortized cost and
weighted average yield (not tax-effected) of investment securities available for
sale at December 31, 1995 (dollars in thousands):
U.S. Government
agencies and States and Political
Corporate corporations U.S. Treasury Subdivisions
------------------- ------------------- ------------------- -------------------
Weighted Weighted Weighted Weighted
Amortized Average Amortized Average Amortized Average Amortized Average
Cost Yield Cost Yield Cost Yield Cost Yield
--------- -------- --------- -------- --------- -------- --------- --------
Within one year $9,729 6.49% $ --- ---% $ --- ---% $ --- ---%
After 1 year but within 5 55,889 6.59 22,347 6.20 16,291 4.88 100 5.09
After 5 years but within 10 1,721 6.50 13,662 6.16 --- --- 1,057 5.34
After 10 years 2,392 8.56 110 --- --- --- --- ---
--------- -------- --------- -------- --------- -------- --------- --------
Total $69,731 6.64% $36,119 6.18% $16,291 4.88% $1,157 5.32%
--------- -------- --------- -------- --------- -------- --------- --------
--------- -------- --------- -------- --------- -------- --------- --------
14
The following table sets forth, by contractual maturity, the amortized cost and
weighted average yield of investment securities held to maturity at December 31,
1995. Yields on tax-exempt securities represent actual coupon yields (dollars in
thousands):
U.S. Government
agencies and States and political
corporations subdivisions
----------------- --------------------
Weighted Weighted
Amortized Average Amortized Average
Cost Yield Cost Yield
-------- -------- --------- ------
Within one year $18,709 6.24% $ 1,272 4.40%
After 1 year but within 5 30,165 6.20 7,720 4.59
After 5 years but within 10 34,363 5.69 11,341 4.87
After 10 years -- -- 12,467 5.69
Total $83,237 6.00% $32,800 5.07%
Loan Portfolio
The following table sets forth the major loan categories at December 31 (dollars
in thousands):
1995 1994 1993 1992 1991
-------- -------- -------- -------- --------
Commercial $200,986 $156,896 $177,054 $144,581 $148,451
Installment 37,986 33,542 33,714 43,700 54,955
Real estate:
Mortgage 302,062 305,010 288,683 272,199 273,374
Home equity 120,802 120,373 115,910 121,918 119,009
Construction 81,787 72,990 47,442 42,321 55,015
Held for sale 1,523 449 4,543 3,527 4,551
VISA-credit card 19,034 21,342 22,601 27,138 32,500
Other 5,407 7,048 11,479 4,647 7,447
-------- -------- -------- -------- --------
Total loans 769,587 717,650 701,426 660,031 695,302
Less:
Allowance for loan losses 8,900 8,445 7,125 8,024 6,489
-------- -------- -------- -------- --------
Loans, net $760,687 $709,205 $694,301 $652,007 $688,813
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
The following table sets forth the maturity and interest rate sensitivity of
selected loan categories at December 31, 1995 (dollars in thousands):
Remaining Maturity
--------------------------------------------
One year One to Over
or less five years five years Total
--------- ---------- ---------- --------
Commercial $149,639 $ -- $51,347 $200,986
Real estate-construction 81,787 -- -- 81,787
-------- ------- ------- --------
Total $231,426 $ -- $51,347 $282,773
-------- ------- ------- --------
-------- ------- ------- --------
Variable rate $ -- $ -- $ --
Fixed rate -- 51,347 51,347
------- ------- --------
Total $ -- $51,347 $51,347
------- ------- -------
------- ------- -------
15
Nonperforming Loans
The following table sets forth the aggregate amount of nonperforming loans and
selected ratios at December 31 (dollars in thousands):
1995 1994 1993 1992 1991
------- ------- ------- ------- --------
Nonaccrual loans $488 $279 $3,234 $8,468 $3,576
Restructured loans ---- ---- 3,234 6,000 ----
Accruing loans past due over 90 days 11,405 4,448 3,958 5,295 5,416
------- ------- ------- ------- --------
Total nonperforming loans 11,893 4,727 10,426 19,763 8,992
Other real estate 8,317 10,458 9,954 4,584 5,339
------- ------- ------- ------- --------
Total nonperforming assets $20,210 $15,185 $20,380 $24,347 $14,331
------- ------- ------- ------- --------
------- ------- ------- ------- --------
Ratio of nonperforming loans to
net loans 1.6% .7% 1.5% 3.0% 1.3%
------- ------- ------- ------- --------
------- ------- ------- ------- --------
Ratio of nonperforming assets to
total assets 1.8% 1.5% 2.0% 2.4% 1.5%
------- ------- ------- ------- --------
------- ------- ------- ------- --------
The Company's normal policy is to discontinue accruing interest on a loan when
it becomes 90 days past due or when management believes, after considering
economic and business conditions and collection efforts, that the borrower's
financial condition is such that collection of principal or interest is
doubtful. In some circumstances a loan that is more than 90 days past due can
remain on accrual status if it can be established that payment will be received
within another 90 days or if it is adequately secured. When a loan has been
placed on nonaccrual status, interest that has been earned but not collected is
charged back to the appropriate interest income account. When payments are
received on nonaccrual loans they are first applied to principal, then to
expenses incurred for collection and finally to interest income. The gross
amount of interest that would have been recorded if all nonperforming loans had
been accruing interest at their original terms was approximately fifty-three
thousand dollars for the year ended December 31, 1995 and no interest was
recorded in operations for the year ended December 31, 1995.
As of December 31, 1995, due to information regarding possible credit problems
of borrowers or possible deficits in the cash flow of property given as
collateral, management had doubts as to the ability of certain borrowers to
comply with the present repayment terms of loans, which are not nonaccrual and
not nonperforming, with an aggregate principal amount of $4.9 million.
Accordingly, management may be required to categorize some or all of these loans
as nonperforming assets in the future.
Allowance for Loan Losses
The allowance for loan losses reduces the level of gross loans outstanding by an
estimate of uncollectible loans. When management determines that loans are
uncollectible, they are charged-off against the allowance. Periodically, a
provision for loan losses is charged against current income. Management attempts
to maintain the allowance for loan losses at a level adequate to absorb
anticipated loan losses. The amount of the allowance is established based upon
past loan loss experience and other factors which, in management's judgment,
deserve consideration in estimating loan losses. Other factors considered by
management in this regard include growth and composition of the loan portfolio,
the relationship of the allowance for loan losses to outstanding loans and
economic conditions in the Company's market area. Based on such reviews,
management at this time does not anticipate any increase in nonperforming assets
that will have a significant effect on its operations because the estimated
exposure to losses has already been substantially reflected in its allowance for
loan losses. This could, however, change dramatically if a significant decline
in the real estate market area served by the Company occurs.
16
The following table sets forth the activity in the allowance for loan losses for
the years ended and at December 31 (dollars in thousands):
1995 1994 1993 1992 1991
---- ---- ---- ---- -----
Allowance for loan losses at beginning of
period $8,445 $7,125 $8,024 $6,489 $5,197
Loans charged-off:
Commercial 914 302 5,862 1,697 1,192
Installment 47 162 245 516 1,120
Real estate mortgages 311 463 318 33 48
Home equity 46 7 21 65 38
VISA - credit card 404 356 531 1,110 964
Other 7 2 50 14 28
----- ----- ----- ----- -----
Total loans charged-off 1,729 1,292 7,027 3,435 3,390
Loan recoveries:
Commercial 100 66 274 236 289
Installment 56 98 186 446 333
Real estate mortgages 8 5 8 -- 5
Home equity -- -- -- -- 38
VISA - credit card 169 227 318 365 347
Other 1 -- 3 18 6
----- ----- ----- ----- -----
Total loan recoveries 334 396 789 1,065 1,018
----- ----- ----- ----- -----
Net loans charged-off 1,395 896 6,238 2,370 2,372
Provision for loan losses 1,850 2,216 5,339 3,905 3,664
----- ----- ----- ----- -----
Allowance for loan losses at end of period $8,900 $8,445 $7,125 $8,024 $6,489
----- ----- ----- ----- -----
----- ----- ----- ----- -----
Allowance for loan losses to total loans 1.16% 1.18% 1.02% 1.22% .93%
----- ----- ----- ----- -----
----- ----- ----- ----- -----
Net chargeoffs to average total loans .19% .13% .96% .35% .34%
----- ----- ----- ----- -----
----- ----- ----- ----- -----
The entire allowance for loan losses is available to absorb losses in any
particular category of loans, notwithstanding management's allocation of
the allowance. The following table sets forth the allocation of allowance
for loan losses and the percentage of loans in each category to total loans
at December 31 (dollars in thousands):
1995 1994 1993 1992 1991
---------------- --------------- --------------- ---------------- ----------------
Amount % Amount % Amount % Amount % Amount %
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Commercial $4,403 36.7% $3,714 32.0% $3,312 24.8% $4,406 21.9% $3,410 21.3%
Installment and other 385 5.6 331 5.7 369 6.5 492 7.3 495 9.1
Real estate 1,877 39.4 576 42.5 1,273 48.9 1,113 48.2 607 47.8
Home equity 302 15.7 301 16.8 290 16.6 305 18.5 342 17.1
VISA - credit card 523 2.6 664 3.0 626 3.2 676 4.1 390 4.7
Unallocated 1,410 -- 2,859 -- 1,255 -- 1,032 -- 1,245 --
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total $8,900 100.0% $8,445 100.0% $7,125 100.0% $8,024 100.0% $6,489 100.0%
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
17
Deposits
The following table sets forth by category average daily deposits and rates for
the years ended December 31 (dollars in thousands):
1995 1994 1993
----------------- ----------------- -----------------
Average Average Average
Balance Rate Balance Rate Balance Rate
-------- ---- -------- ---- -------- ----
Demand and other noninterest-
bearing $100,269 --% $96,428 --% $91,529 --%
Money-market savings and NOW
deposits 498,191 3.4 486,863 2.6 469,641 2.3
Time deposits:
Less than $100,000 308,039 5.6 275,693 4.6 282,884 4.8
$100,000 and over 49,427 5.8 37,849 4.7 26,821 5.0
-------- ---- -------- ---- -------- ----
Total $955,926 3.9% $896,833 3.0% $870,875 3.0%
-------- ---- -------- ---- -------- ----
-------- ---- -------- ---- -------- ----
The following table sets forth by maturity time deposits $100 and over at
December 31 (dollars in thousands):
1995
-------
Within Three months $42,605
After 3 months but within 12 months 12,673
After 1 year but within 5 years --
After 5 years 12,785
-------
Total $68,063
-------
-------
Return on Equity and Assets and Other Financial Ratios
The following table sets forth selected financial ratios at and for the years
ended December 31:
1995 1994 1993
------ ------ ------
Return on average total assets 1.27% 1.29% 1.20%
Return on average shareholders' equity 13.03 13.29 13.25
Cash dividends declared to net income 47.97 45.65 43.50
Average shareholders' equity to average total assets 9.71 9.67 9.03
18
ITEM 2. PROPERTIES
The Company and the Subsidiaries occupy a total of approximately 219,000 square
feet in 32 locations. The Company's principal offices are located in
approximately 32,500 square feet of office space at 711 South Meyers Road,
Lombard, Illinois. As indicated below, West Suburban Bank also operates the
facility located at 711 South Meyers Road, Lombard, Illinois as a branch.
The following table sets forth certain information concerning the facilities of
the Subsidiaries:
Location of Approximate
Name of Subsidiary Facilities Square Feet Status
- ------------------ ---------- ----------- ------
West Suburban Bank 711 S. Meyers Rd. 32,500 Owned
Lombard, IL
West Suburban Bank 701 S. Meyers Rd. 5,200 Owned
Lombard, IL
West Suburban Bank 717 S. Meyers Rd. 7,100 Owned
Lombard, IL
West Suburban Bank 100 S. Main St. 325 Owned
Lombard, IL
West Suburban Bank Mr. Z's 100 Lease
401 S. Main St. expires
Lombard, IL 1998
West Suburban Bank 707 N. Main St. 4,100 Owned
Lombard, IL
West Suburban Bank 29 E. St. Charles Rd. 3,200 Lease
Villa Park, IL expires
2000
West Suburban Bank 17 W. 754 22nd St. 6,100 Owned
Oakbrook, IL
West Suburban Bank Lexington Square 100 Lease
400 W. Butterfield Rd. expires
Elmhurst, IL 1998
West Suburban Bank 210 W. Wesley St. 700 Lease
Wheaton, IL expires
1996
West Suburban Bank 879 Geneva Rd. 3,550 Lease
Carol Stream, IL expires
2003
West Suburban Bank 6400 S. Cass Ave. 3,090 Lease
Westmont, IL expires
2000
19
Location of Approximate
Name of Subsidiary Facilities Square Feet Status
- ------------------ ---------- ----------- ------
West Suburban Bank 221 S. West St. 800 Owned
Wheaton, IL
West Suburban Bank 1104 W. Boughton Rd. 4,500 Owned
Bolingbrook, IL
West Suburban Bank 295 W. Loop Rd. 4,500 Owned
Wheaton, IL
West Suburban Bank 2800 S. Finley Rd. 10,700 Owned
of Downers Grove/ Downers Grove, IL
Lombard
West Suburban Bank Route 59 and 1,800 Lease
of Downers Grove/ Meadow Ave. expires
Lombard Warrenville, IL 1999
West Suburban Bank Beacon Hill 100 Month
of Downers Grove/ 2400 S. Finley Rd. to month
Lombard Lombard, IL
West Suburban Bank Lexington Square 100 Lease
of Downers Grove/ 555 Foxworth Blvd. expires
Lombard Lombard, IL 1996
West Suburban Bank 100 S. Main St. 325 Owned
of Downers Grove/ Lombard, IL
Lombard
West Suburban Bank 1122 S. Main St. 6,400 Owned
of Downers Grove/ Lombard, IL
Lombard
West Suburban Bank 8001 S. Cass Ave. 17,800 Owned
of Darien Darien, IL
West Suburban Bank 1005 75th St. 800 Owned
of Darien Darien, IL
West Suburban Bank 672 E. Boughton Rd. 7,100 Owned
of Darien Bolingbrook, IL
West Suburban Bank 355 W. Army Trail Rd. 10,700 Owned
of Carol Stream/ Bloomingdale, IL
Stratford Square
West Suburban Bank 401 N. Gary Ave. 6,400 Owned
of Carol Stream/ Carol Stream, IL
Stratford Square
20
Location of Approximate
Name of Subsidiary Facilities Square Feet Status
- ------------------ ---------- ----------- ------
West Suburban Bank 1380 Army Trail Rd. 2,300 Lease
of Carol Stream/ Carol Stream, IL expires
Stratford Square 2000
West Suburban Bank 1657 Bloomingdale Rd. 4,100 Owned
of Carol Stream/ Glendale Heights, IL
Stratford Square
West Suburban Bank 1061 W. Stearns Rd. 3,400 Owned
of Carol Stream/ Bartlett, IL
Stratford Square
West Suburban Bank 315 S. Randall Rd. 1,400 Owned
of Carol Stream/ St. Charles, IL
Stratford Square
West Suburban Bank 101 N. Lake St. 19,000 Owned
of Aurora, F.S.B. Aurora, IL
West Suburban Bank 2000 W. Galena Blvd. 48,000 Owned
of Aurora, F.S.B Aurora, IL
West Suburban Bank 1830 Douglas St. 2,500 Owned
of Aurora, F.S.B. Montgomery, IL
ITEM 3. LEGAL PROCEEDINGS
There are no material pending legal proceedings to which the Company or the
Subsidiaries is a party other than ordinary routine litigation incidental to
their respective businesses.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
21
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company's authorized and outstanding equity securities consist of Class A
Common Stock, no par value, and Class B Common Stock, no par value. Except as
required by law, rights and privileges of the holders of the Class A Common
Stock and Class B Common Stock are identical.
The Company's per share book value as of the end of each quarter and dividend
information for each quarter is set forth in the following table:
Class A and Class B
---------------------------------
Year Quarter Book Value Dividends Declared
- ---- ------- ---------- ------------------
1995 4th $254.73 $3.75
3rd 246.47 3.75
2nd 242.69 3.75
1st 237.68 3.75
1994 4th $226.53 $3.50
3rd 227.93 3.50
2nd 225.32 3.50
1st 225.59 3.25
The Company's common stock is not traded on any national or regional exchange.
While there is no established trading market for the Company's common stock, the
Company is aware that from time to time limited or infrequent quotations are
made with respect to the Company's common stock and that there occurs limited
trading in the Company's common stock resulting from private transactions not
involving brokers or dealers. Transactions in the Company's common stock have
been infrequent. As of March 15, 1996, the Company had 347,015 shares of Class A
Common Stock outstanding and approximately 943 shareholders of record, and had
85,480 shares of Class B Common Stock outstanding and approximately 236
shareholders of record. Management is aware of approximately 28 transactions
during 1995 involving the sale of approximately 973 shares of Class A Common
Stock and approximately 3 transactions during 1995 involving the sale of
approximately 108 shares of Class B Common Stock. The average sale price in such
transactions was approximately $251.85.
ITEM 6. SELECTED FINANCIAL DATA
The Company hereby incorporates by reference the information called for by Item
6 of this Form 10-K from the section entitled "Selected Financial Data" of the
Company's Annual Report to Shareholders for the fiscal year ended December 31,
1995 (attached as Exhibit 13 hereto).
22
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The Company hereby incorporates by reference the information called for by Item
7 of this Form 10-K from the section entitled "Management's Discussion and
Analysis of Financial Condition and Results of Operations" of the Company's
Annual Report to Shareholders for the fiscal year ended December 31, 1995
(attached as Exhibit 13 hereto).
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Company hereby incorporates by reference the information called for by Item
8 of this Form 10-K from the Consolidated Financial Statements and from the
section entitled "Selected Quarterly Financial Data" as set forth in the
Company's Annual Report to Shareholders for the fiscal year ended December 31,
1995 (attached as Exhibit 13 hereto).
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL MATTERS
None.
23
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Company hereby incorporates by reference the information called for by Item
10 of this Form 10-K regarding directors of the Company from the section
entitled "Election of Directors" of the Company's 1996 Proxy Statement.
Section 16(a) of the of 1934 Act requires that the Company's executive officers
and directors and persons who own more than 10% of their Company's common stock
file reports of ownership and changes in ownership with the Securities and
Exchange Commission and with the exchange on which the Company's shares of
common stock are traded. Such persons are also required to furnish the Company
with copies of all Section 16(a) forms they file. Based solely on the Company's
review of the copies of such forms furnished to the Company and, if appropriate,
representations made to the Company by any such reporting person concerning
whether a Form 5 was required to be filed for the 1995 fiscal year, the Company
is not aware that any of its directors and executive officers or 10%
shareholders failed to comply with the filing requirements of Section 16(a)
during the period commencing January 1, 1995 through December 31, 1995 except
that Mr. Howard failed to file his Form 4, reporting August, 1995 transactions,
on a timely basis.
ITEM 11. EXECUTIVE COMPENSATION
The Company hereby incorporates by reference the information called for by Item
11 of this Form 10-K from the section entitled "Executive Compensation" of the
Company's 1996 Proxy Statement; provided, however, Report of the Board of
Directors on Executive Compensation is specifically not incorporated into this
Form 10-K.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The Company hereby incorporates by reference the information called for by Item
12 of this Form 10-K from the section entitled "Security Ownership of Certain
Beneficial Owners" of the Company's 1996 Proxy Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company hereby incorporates by reference the information called for by Item
13 of this Form 10-K from the section entitled "Transactions with Directors,
Officers and Associates" of the Company's 1996 Proxy Statement.
24
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
ITEM (A)1 AND 2. FINANCIAL STATEMENTS
WEST SUBURBAN BANCORP, INC. AND SUBSIDIARIES
LIST OF FINANCIAL STATEMENTS AND
FINANCIAL STATEMENT SCHEDULES
The following audited Consolidated Financial Statements of the Company and its
subsidiaries and related notes and independent auditors' report are incorporated
by reference from the Company's Annual Report to Shareholders for the fiscal
year ended December 31, 1995 (attached as Exhibit 13 hereto).
Annual Report
Page No.
--------------
Report of Independent Auditors 5
Consolidated Balance Sheets - December 31, 1995 and 1994 6
Consolidated Statements of Income - Years Ended
December 31, 1995, 1994 and 1993 7
Consolidated Statements of Changes in Shareholders'
Equity - Years Ended December 31, 1995, 1994 and 1993 8
Consolidated Statements of Cash Flows - Years Ended
December 31, 1995, 1994 and 1993 9
Notes to Consolidated Financial Statements 11
The following Condensed Financial Information-Parent Only is incorporated by
reference from Note 16 to the Company's audited Consolidated Financial
Statements as set forth in the Company's Annual Report to Shareholders for the
fiscal year ended December 31, 1995 (attached as Exhibit 13).
Annual Report
Page No.
--------------
Condensed Balance Sheets - December 31, 1995 and 1994 21
Condensed Statements of Income - Years Ended
December 31, 1995, 1994 and 1993 21
Condensed Statements of Cash Flows - Years Ended
December 31, 1995, 1994 and 1993 22
SCHEDULES
Schedules other than those listed above are omitted for the reason that they are
not required or are not applicable or the required information is shown in the
financial statements incorporated by reference or notes thereto.
25
ITEM 14(a)3. EXHIBITS
The exhibits required by Item 601 of Regulation S-K are included with this Form
10-K and are listed on the "Index to Exhibits" immediately following the
signature page.
ITEM 14(b). REPORTS ON FORM 8-K
None
***
Upon written request to the Chairman of the Board of West Suburban Bancorp,
Inc., 711 South Meyers Road, Lombard, Illinois, 60148, copies of the exhibits
listed above are available to shareholders of the Company by specifically
identifying each exhibit desired in the request. A fee of $.20 per page of
exhibit will be charged to shareholders requesting copies of exhibits to cover
copying and mailing costs.
26
FORM 10-K SIGNATURE PAGE
Pursuant to the requirements of Section 13 or 15(d) 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.
WEST SUBURBAN BANCORP, INC.
(Registrant)
By /s/ John A. Clark
-----------------------------
John A. Clark
Chief Executive Officer
Date: March 28, 1996
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities indicated on the 28th day of March, 1996.
SIGNATURE TITLE
--------- -----
/s/ Kevin J. Acker 3/28/96 Chairman of the Board
- ----------------------------- ---------- and Director
Kevin J. Acker Date
/s/ John A. Clark 3/28/96 Chief Executive
- ----------------------------- ---------- Officer and
John A. Clark Date Director
/s/ Duane G. Debs 3/28/96 Chief Financial
- ----------------------------- ---------- Officer and Chief
Duane G. Debs Date Accounting Officer
/s/ David Bell 3/28/96 Director
- ----------------------------- ----------
David Bell Date
/s/ Peggy P. LoCicero 3/28/96 Director
- ----------------------------- -----------
Peggy P. LoCicero Date
/s/ Charles P. Howard 3/28/96 Director
- ----------------------------- -----------
Charles P. Howard Date
The foregoing includes all of the Board of Directors of the Company.
27
INDEX TO EXHIBITS
(continued)
Exhibit Sequential
Number Description Page No.
- ------- ----------- ----------
3.1 Articles of Incorporation - Incorporated by reference N/A
from Exhibit 3.1 of Form S-1 of the Company dated
November 10, 1988, under Registration No. 33-25225
3.2 Form of Certificate of Amendment to Articles of N/A
Incorporation - Incorporated by reference from Exhibit
3.2 of Form S-1 of the Company dated November 10, 1988,
under Registration No. 33-25225
3.3 Certificate of Amendment to Articles of Incorporation N/A
dated May 10, 1990 - Incorporated by reference from
Exhibit 3.3 of the Form 10-K of the Company dated March
28, 1991, Commission File No. 0-17609
3.4 By-Laws - Incorporated by reference to Exhibit 3.3 of N/A
Form S-1 of the Company dated November 10, 1988,
Registration No. 33-25225
4.1 Specimen of Class A Common Stock certificate Incorporated N/A
by reference from Exhibit 4.1 of the Form 10-K of the
Company dated March 28, 1991, Commission File No. 0-17609
4.2 Specimen of Class B Common Stock certificate - Incorporated N/A
by reference from Exhibit 4.1 of the Form S-1 of the
Company dated November 10, 1988, Registration No. 33-25225
4.3 Articles of Incorporation of the Company (see Exhibits 3.1, N/A
3.2, 3.3 and 3.4 above)
4.4 By-Laws of the Company (see Exhibit 3.4 above) N/A
28
INDEX TO EXHIBITS
(continued)
Exhibit Sequential
Number Description Page No.
- ------- ----------- ----------
10.1 Employment Agreement between one of the N/A
Company's subsidiaries and Ralph Acker, dated December 31,
1985 - Incorporated by reference from Exhibit 10.1 of
Form S-1 of the Company dated November 10, 1988,
Registration No. 33-25225
10.2 Employment Agreement between one of the N/A
Company's subsidiaries and John A. Clark, dated May 10,
1989 - Incorporated by reference from Exhibit 10.2 of
Form 10-K of the Company dated March 28, 1990, Commission
File No. 0-17609
10.3 Employment Agreement between one of the Company's N/A
subsidiaries and Keith W. Acker, dated November 10, 1989 -
Incorporated by reference from Exhibit 10.3 of Form 10-K of
the Company dated March 28, 1990, Commission File No. 0-17609
10.4 Employment Agreement between one of the Company's N/A
subsidiaries and Craig R. Acker, dated May 10, 1989 -
Incorporated by reference from Exhibit 10.4 of Form 10-K
of the Company dated March 28, 1990, Commission File
No. 0-17609
10.5 Employment Agreement between one of the Company's N/A
subsidiaries and Alana S. Acker, dated May 9, 1989 -
Incorporated by reference to Exhibit 10.5 of Form 10-K
of the Company dated March 28, 1990, Commission File
No. 0-17609
29
INDEX TO EXHIBITS
(continued)
Exhibit Sequential
Number Description Page No.
- ------- ----------- ----------
10.6 Employment Agreement between one of the Company's N/A
subsidiaries and Kevin J. Acker, dated May 9, 1989 -
Incorporated by reference from Exhibit 10.6 of Form 10-K
of the Company dated March 28, 1990, Commission File
No. 0-17609
10.7 Employment Agreement between one of the Company's N/A
subsidiaries and Gregory Ruffolo, dated May 9, 1989 -
Incorporated by reference from Exhibit 10.7 of Form 10-K
of the Company dated March 28, 1990, Commission File
No. 0-17609
10.8 Employment Agreement between one of the Company's N/A
subsidiaries and Michael P. Brosnahan, dated May 10,
1989 - Incorporated by reference from Exhibit 10.8 of
Form 10-K of the Company dated March 28, 1990, Commission
File No. 0-17609
10.9 Employment Agreement between one of the Company's N/A
subsidiaries and Gregory L. Young, dated November 14,
1990 - Incorporated by reference from Exhibit 10.9 of
Form 10-K of the Company dated March 28, 1991, Commission
File No. 0-17609
10.10 Deferred Compensation Agreement between one of the Company's N/A
subsidiaries and John A. Clark, dated November 14, 1990 -
Incorporated by reference from Exhibit 10.10 of Form 10-K of
the Company dated March 28, 1991, Commission File No. 0-17609
10.11 Deferred Compensation Agreement between one of the Company's N/A
subsidiaries and Keith W. Acker, dated November 14, 1990 -
Incorporated by reference from Exhibit 10.11 of Form 10-K of
the Company dated March 28, 1991, Commission File No. 0-17609
30
INDEX TO EXHIBITS
(continued)
Exhibit Sequential
Number Description Page No.
- ------- ----------- ----------
10.12 Deferred Compensation Agreement between one of the Company's N/A
subsidiaries and Craig R. Acker, dated November 14, 1990 -
Incorporated by reference from Exhibit 10.12 of Form 10-K of
the Company dated March 28, 1991, Commission File No. 0-17609
10.13 Deferred Compensation Agreement between one of the Company's N/A
subsidiaries and Michael P. Brosnahan, dated November 14,
1990 - Incorporated by reference from Exhibit 10.13 of
Form 10-K of the Company dated March 28, 1991, Commission File
No. 0-17609
10.14 Deferred Compensation Agreement between one of the Company's N/A
subsidiaries and Gregory L. Young, dated November 14, 1990 -
Incorporated by reference from Exhibit 10.14 of Form 10-K of
the Company dated March 28, 1991, Commission File No. 0-17609
10.15 Deferred Compensation Agreement between one of the Company's N/A
subsidiaries and Alana S. Acker, dated November 13, 1990 -
Incorporated by reference from Exhibit 10.15 of Form 10-K of
the Company dated March 28, 1991, Commission File No. 0-17609
10.16 Deferred Compensation Agreement between one of the Company's N/A
subsidiaries and Gregory M. Ruffolo, dated November 13, 1990 -
Incorporated by reference from Exhibit 10.16 of Form 10-K of
the Company dated March 28, 1991, Commission File No. 0-17609
31
INDEX TO EXHIBITS
(continued)
Exhibit Sequential
Number Description Page No.
- ------- ----------- ----------
10.17 Deferred Compensation Agreement between one of the Company's N/A
subsidiaries and Kevin J. Acker, dated November 13, 1990 -
Incorporated by reference from Exhibit 10.17 of Form 10-K of
the Company dated March 28, 1991, Commission File No. 0-17609
10.18 Employment Agreement between one of the Company's subsidiaries N/A
and Stanley C. Celner, Jr., dated December 10, 1991 -
Incorporated by reference from Exhibit 10.18 of Form 10-K of
the Company dated March 28, 1992, Commission File No. 0-17609
10.19 Deferred Compensation Agreement between one of the Company's N/A
subsidiaries and Stanley C. Celner, Jr., dated December 10,
1991 - Incorporated by reference from Exhibit 10.19 of Form
10-K of the Company dated March 28, 1992, Commission File
No. 0-17609
10.20 Employment Agreement between one of the Company's subsidiaries N/A
and Duane G. Debs, dated as of March 8, 1993 - Incorporated by
reference from Exhibit 10.20 of Form 10-K of the Company dated
March 28, 1994, Commission File No. 0-17609
10.21 Deferred Compensation Agreement between one of the Company's N/A
subsidiaries and Duane G. Debs, dated as of March 8, 1993 -
Incorporated by reference from Exhibit 10.21 of Form 10-K of
the Company dated March 28, 1994, Commission File No. 0-17609
10.22 Employment Agreement between one of the Company's subsidiaries N/A
and Jacqueline R. Weigand, dated as of March 8, 1993 -
Incorporated by reference from Exhibit 10.22 of Form 10-K of
the Company dated March 28, 1994, Commission File No. 0-17609
10.23 Deferred Compensation Agreement between one of the Company's N/A
subsidiaries and Jacqueline R. Weigand, dated as of March 8,
1993 - Incorporated by reference from Exhibit 10.23 of Form
10-K of the Company dated March 28, 1994, Commission File
No. 0-17609
10.24 Employment Agreement between one of the Company's subsidiaries N/A
and Timothy P. Dineen, dated as of March 8, 1993 -
Incorporated by reference from Exhibit 10.24 of Form 10-K of
the Company dated March 28, 1994, Commission File No. 0-17609
32
INDEX TO EXHIBITS
(continued)
Exhibit Sequential
Number Description Page No.
- ------- ----------- ----------
10.25 Deferred Compensation Agreement between one of the Company's N/A
subsidiaries and Timothy P. Dineen, dated as of March 8,
1993 - Incorporated by reference from Exhibit 10.25 of Form
10-K of the Company dated March 28, 1994, Commission File
No. 0-17609
10.26 Employment Agreement between one of the Company's subsidiaries N/A
and Pamela N. Greening, dated as of March 8, 1993 -
Incorporated by reference from Exhibit 10.26 of Form 10-K of
the Company dated March 28, 1994, Commission File No. 0-17609
10.27 Deferred Compensation Agreement between one of the Company's N/A
subsidiaries and Pamela N. Greening, dated as of March 8,
1993 - Incorporated by reference from Exhibit 10.27 of Form
10-K of the Company dated March 28, 1994, Commission File
No. 0-17609
10.28 Employment Agreement between one of the Company's subsidiaries N/A
and Steven A. Jennrich, dated as of January 12, 1994 -
Incorporated by reference from Exhibit 10.28 of Form 10-K of
the Company dated March 28, 1995, Commission File No. 0-17609
10.29 Deferred Compensation Agreement between one of the Company's N/A
subsidiaries and Steven A. Jennrich, dated as of January 12,
1994 - Incorporated by reference from Exhibit 10.29 of Form
10-K of the Company dated March 28, 1995, Commission File
No. 0-17609
10.30 Amended Employment Agreement between one of the Company's N/A
subsidiaries and Jacqueline R. Weigand, dated as of August 9,
1994 - Incorporated by reference from Exhibit 10.30 of Form
10-K of the Company dated March 28, 1995, Commission File
No. 0-17609
10.31 Amended Employment Agreement between one of the Company's N/A
subsidiaries and Timothy P. Dineen, dated as of August 9,
1994 - Incorporated by reference from Exhibit 10.31 of Form
10-K of the Company dated March 28, 1995, Commission File
No. 0-17609
10.32 Employment Agreement between one of the Company's N/A
subsidiaries and George E. Ranstead, dated as of November 9,
1994 - Incorporated by reference from Exhibit 10.32 of Form
10-K of the Company dated March 28, 1995, Commission File
No. 0-17609
10.33 Deferred Compensation Agreement between one Company's N/A
subsidiaries and George E. Ranstead, dated as of November 9,
1994 - Incorporated by reference from Exhibit 10.33 of Form
10-K of the Company dated March 28, 1995, Commission File
No. 0-17609
10.34 Employment Agreement between one of the Company's N/A
subsidiaries and David S. Orr, dated as of November 9, 1994 -
Incorporated by reference from Exhibit 10.34 of Form 10-K of
the Company dated March 28, 1995, Commission File No. 0-17609
33
INDEX TO EXHIBITS
(continued)
Exhibit Sequential
Number Description Page No.
- ------- ----------- ----------
10.35 Deferred Compensation Agreement between one of the N/A
Company's subsidiaries and David S. Orr, dated as of
November 9, 1994 - Incorporated by reference from Exhibit
10.35 of Form 10-K of the Company dated March 28, 1995,
Commission File No. 0-17609
10.36 Employment Agreement Amendment entered into between a 35
Subsidiary of the Company and each of John A. Clark,
Kevin J. Acker, Craig R. Acker, Keith W. Acker and Alana S.
Acker, each agreement dated as of August 8, 1995.
10.37 Employment Agreement Amendment entered into between a 41
Subsidiary of the Company and each of Michael P. Brosnahan,
Duane G. Debs, Stanley C. Celner, Jr., Timothy P. Dineen,
Pamela N. Greening, Steven A. Jennrich, David S. Orr, George
Ranstead, Gregory M. Ruffolo, Jacqueline R. Weigand and
Gregory L. Young, each agreement dated as of August 8, 1995.
11 Statement regarding computations of earnings per share 47
for the Registrant
13 Annual Report to Shareholders of the Company for fiscal 48
year ended December 31, 1995
21 Subsidiaries of Registrant 88
27 Financial Data Schedule 89
34