Back to GetFilings.com
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, 1997
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: (630) 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 71 total sequentially numbered
pages.
The aggregate market value of voting common stock of Registrant held by
non-affiliates as of December 31, 1997 was $147,048,300 (1). At December 31,
1997, 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, 1997 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 13, 1998 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 February 9, 1998, 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.
1997 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 7A. Quantitative and Qualitative Disclosures about Market Risk . . . . 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
This report may contain certain forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. The Company (as defined
below) intends such forward-looking statements to be covered by the safe
harbor provisions for forward-looking statements contained in the Private
Securities Reform Act of 1995, and is including this statement for purposes
of indicating such intent. Forward-looking statements which are based on
certain assumptions and describe future plans, strategies and expectations of
the Company, are generally identifiable by use of the words "believe,"
"expect," "intend," "anticipate," "estimate," "project" or similar
expressions. The Company's ability to predict results or the actual effect of
future plans or strategies is inherently uncertain. Factors which could have
a material adverse affect on the operations and future prospects of the
Company and its subsidiaries include, but are not limited to, changes in
interest rates, general economic conditions, legislative/regulatory changes,
monetary and fiscal policies of the U.S. Government, including policies of
the U.S. Treasury and the Federal Reserve Board, the quality or composition
of their loan or investment portfolios, demand for loan products, deposit
flows, competition, demand for financial services in the Company's market
area and accounting principles, policies and guidelines. These risks and
uncertainties should be considered in evaluating forward-looking statements
and undue reliance should not be placed on such statements. Further
information concerning the Company and its business, including additional
factors that could materially affect the Company's financial results, is
included in the Company's filings with the Securities and Exchange Commission.
PART I
ITEM 1. BUSINESS
REGISTRANT AND ITS SUBSIDIARY
West Suburban Bancorp, Inc., an Illinois corporation (together with the Bank
(as defined below) and the Bank's subsidiaries, the "Company"), is a bank
holding company registered under the Bank Holding Company Act of 1956, as
amended (the "BHC Act") and the parent company of West Suburban Bank,
Lombard, Illinois. West Suburban Bank, may be referred to as the "Bank."
During the first quarter of 1997, the Bank received approvals from the
Federal Deposit Insurance Corporation, the Office of the Illinois
Commissioner of Banks and Real Estate and the Office of Thrift Supervision to
merge the four bank subsidiaries and the thrift subsidiary into one state
chartered bank under the name "West Suburban Bank." On May 17, 1997, the
Company's subsidiaries were merged and since that date, the Company has
conducted its banking activities through its single bank subsidiary. The
merger had no significant impact on the Company's financial condition or
results of operations.
The Company was incorporated in 1986 and became the parent bank holding
company of the Bank and the Company's former bank subsidiaries in 1988.
On July 13, 1990, the Company acquired its former thrift subsidiary, a
federally-chartered thrift, thereby becoming a thrift holding company until
the former thrift was merged into the Bank in 1997.
The Bank is headquartered in the western suburbs of Chicago among some of the
faster growing areas in Illinois. Due to the nature of the market areas
served by the Bank, the Bank provides 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.
4
The Bank engages in a general full service retail banking business and offers
a broad variety of consumer and commercial products and services. The Bank
also offers 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. The Bank offers its customers a debit card called the
West Suburban Bank Check Card.
5
The following table sets forth financial and other information concerning the
Bank as of December 31, 1997:
WEST SUBURBAN BANK
(Dollars in thousands)
Share- Return on Average
Year Formed/Year Number of Total holder's Net -----------------------
Affiliated With the Parent Locations Assets Equity Income Assets Equity
- -------------------------- --------- ---------- -------- ------- -------- --------
West Suburban Bank
(1962/1988) 32 $1,292,148 $110,286 $21,957 1.7% 19.6%
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 590 persons (460 full time equivalent employees) on
December 31, 1997. The Company believes that its relations with its employees
are good.
6
SUPERVISION AND REGULATION
General
Financial institutions and their holding companies are extensively regulated
under federal and state law. As a result, the growth and earnings
performance of the Company can be affected not only by management decisions
and general economic conditions, but also by the requirements of applicable
state and federal statutes and regulations and 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
Real Estate (the "Commissioner"), the Internal Revenue Service and state
taxing authorities and the Securities and Exchange Commission (the "SEC").
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 and its subsidiary, regulate, among other
things, the scope of business, investments, reserves against deposits,
capital levels relative to operations, the nature and amount of collateral
for loans, the establishment of branches, mergers, consolidations and
dividends. The system of supervision and regulation applicable to the Company
and its subsidiaries establishes a comprehensive framework for their
respective operations 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 its 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 and its subsidiaries.
Recent Regulatory Developments
PENDING LEGISLATION. Legislation is pending in the Congress that would allow
bank holding companies to engage in a wider range of nonbanking activities,
including greater authority to engage in securities and insurance activities.
The expanded powers generally would be available to a bank holding company
only if the bank holding company and its bank subsidiaries remain
well-capitalized and well-managed. Additionally, the pending legislation
would eliminate the federal thrift charter and merge the FDIC's Bank
Insurance Fund ("BIF") and Savings Association Insurance Fund ("SAIF"). At
this time, the Company is unable to predict whether the proposed legislation
will be enacted and, therefore, is unable to predict the impact such
legislation may have on the operations of the Company and the Bank.
The Company
GENERAL. The Company, as the sole stockholder of the Bank, 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 BHCA. In accordance with FRB
policy, the Company is expected to act as a source of financial strength to
the Bank and to commit resources to support the Bank in circumstances where
the Company might not do so absent such policy. Under the BHCA, the Company
is subject to periodic examination by the FRB and is required to file with
the FRB periodic reports of its operations and such additional information as
the FRB may require. The Company is also subject to regulation by the
Commissioner under the Illinois Bank Holding Company Act, as amended.
INVESTMENTS AND ACTIVITIES. Under the BHCA, 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 (iii)
merging or consolidating with another bank holding company.
7
Subject to certain conditions (including certain deposit concentration limits
established by the BHCA), the FRB may allow a bank holding company to acquire
banks located in any state of the United States without regard to whether the
acquisition is prohibited by the law of the state in which the target bank is
located. In approving interstate acquisitions, however, the FRB is required
to give effect to applicable state law limitations on the aggregate amount of
deposits that may be held by the acquiring bank holding company and its
insured depository institution affiliates in the state in which the target
bank is located (provided that those limits do not discriminate against
out-of-state depository institutions or their holding companies) or which
require that the target bank have been in existence for a minimum period of
time (not to exceed five years) before being acquired by an out-of-state bank
holding company.
The BHCA also prohibits, with certain exceptions, 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. The principal exception to this prohibition
allows bank holding companies to engage in, and to 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 its 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, and mortgage
banking and brokerage. The BHCA generally does not place territorial
restrictions on the domestic activities of non-bank subsidiaries of bank
holding companies.
Federal law also prohibits acquisition of "control" of a bank, such as the
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. Bank holding companies are required to maintain
minimum levels of capital in accordance with FRB capital adequacy guidelines.
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%, at least one-half of which must be Tier I
capital. The leverage requirement consists of a minimum ratio of Tier I
capital to total assets of 3% for the most highly rated companies, with
minimum requirements of 4% to 5% for all others. For purposes of these
capital standards, Tier I capital consists primarily of permanent
stockholders' equity less intangible assets (other than certain mortgage
servicing rights and purchased credit card relationships) and total capital
means Tier I capital plus certain other debt and equity instruments which do
not qualify as Tier I capital and a portion of the Company's allowance for
loan and lease losses.
The risk-based and leverage standards described above are minimum
requirements, and higher capital levels will be required if warranted by the
particular circumstances or risk profiles of individual banking
organizations. For example, the FRB's capital guidelines contemplate that
additional capital may be required to take adequate account of, among other
things, interest rate risk, or the risks posed by concentrations of credit,
nontraditional activities or securities trading activities. Further, any
banking organization experiencing or anticipating significant growth would be
expected to maintain capital ratios, including tangible capital positions
(I.E., Tier I capital less all intangible assets), well above the minimum
levels.
8
As of December 31, 1997, the Company had regulatory capital in excess of the
FRB's minimum requirements, with a risk-based capital ratio of 13.7% and a
leverage ratio of 10.2%.
DIVIDENDS. The FRB has issued a policy statement with regard to the payment
of cash dividends by bank holding companies. In the policy statement, the
FRB expressed its view that a bank holding company should not pay cash
dividends which exceed its net income or which can only be funded in ways
that weaken 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 that may be 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.
The Bank
GENERAL. The Bank is an Illinois-chartered bank, the deposit accounts of
which are insured by the BIF of the FDIC. As a BIF-insured,
Illinois-chartered bank, the Bank is 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.
DEPOSIT INSURANCE. As an FDIC-insured institution, the Bank is required to
pay deposit insurance premium assessments to the FDIC. The FDIC has adopted
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 respective levels of capital and results of
supervisory evaluations. 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. Risk classification of all insured institutions is made by the FDIC
for each semi-annual assessment period.
During the year ended December 31, 1997, BIF assessments ranged from 0% of
deposits to 0.27% of deposits. For the semi-annual assessment period
beginning January 1, 1998, BIF assessment rates will continue to range from
0% of deposits to 0.27% of deposits.
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 the Bank.
FICO ASSESSMENTS. Since 1987, a portion of the deposit insurance assessments
paid by SAIF members has been used to cover interest payments due on the
outstanding obligations of the FICO, the entity created to finance the
recapitalization of the Federal Savings and Loan Insurance Corporation, the
SAIF's predecessor insurance fund. Pursuant to federal legislation enacted
September 30, 1996, commencing January 1, 1997, both SAIF members and BIF
members became subject to assessments to cover the interest payments on
outstanding FICO obligations. Such FICO assessments are in addition to
amounts assessed by the FDIC for deposit insurance. Until January 1, 2000,
the FICO assessments
9
made against BIF members may not exceed 20% of the amount of the FICO
assessments made against SAIF members. Between January 1, 2000, and the
maturity of the outstanding FICO obligations in 2019, BIF members and SAIF
members will share the cost of the interest on the FICO bonds on a PRO RATA
basis. During the year ended December 31, 1997, the FICO assessment rate for
SAIF members was approximately 0.063% of deposits while the FICO assessment
rate for BIF members was approximately 0.013% of deposits. During the year
ended December 31, 1997, the Bank paid FICO assessments totaling $.17 million.
COMMISSIONER ASSESSMENTS. All Illinois banks are required to pay supervisory
fees to the Commissioner to fund the operations of the Commissioner. The
amount of such supervisory fees is based upon each institution's total
assets, including consolidated subsidiaries, as reported to the Commissioner.
During the year ended December 31, 1997, the Bank paid supervisory fees to
the Commissioner totaling $.13 million.
CAPITAL REQUIREMENTS. The FDIC has established the following minimum capital
standards for state-chartered insured non-member banks, such as the Bank: a
leverage requirement consisting of a minimum ratio of Tier I capital to total
assets of 3% for the most highly-rated banks with minimum requirements of 4%
to 5% for all others, 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 be Tier I capital. For purposes of these capital
standards, Tier I capital and total capital consist of substantially the same
components as Tier I capital and total capital under the FRB's capital
guidelines for bank holding companies (SEE "--The Company--Capital
Requirements").
The capital requirements described above are minimum requirements. Higher
capital levels will be required if warranted by the particular circumstances
or risk profiles of individual institutions. For example, the regulations of
the FDIC provide that additional capital may be required to take adequate
account of, among other things, interest rate risk or the risks posed by
concentrations of credit, nontraditional activities or securities trading
activities.
During the year ended December 31, 1997, the Bank was not required by the
FDIC to increase its capital to an amount in excess of the minimum regulatory
requirements. As of December 31, 1997, the Bank exceeded its minimum
regulatory capital requirements with a leverage ratio of 8.3% and a
risk-based capital ratio of 11.6%.
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
subsidiaries; prohibiting the payment of principal or interest on
subordinated debt; and ultimately, appointing a receiver for the institution.
DIVIDENDS. Under the Illinois Banking Act, Illinois-chartered banks may not
pay dividends in excess of their adjusted profits.
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, and a financial
institution generally is prohibited from paying any dividends if, following
payment thereof, the institution would be undercapitalized. As described
above, the Bank exceeded its minimum capital requirements under applicable
guidelines as of December 31, 1997. As of
10
December 31, 1997, approximately $16.1 million was available to be paid as
dividends to the Company by the Bank. Notwithstanding the availability of
funds for dividends, however, the FDIC may prohibit the payment of any
dividends by the Bank if the FDIC determines such payment would constitute an
unsafe or unsound practice.
INSIDER TRANSACTIONS. The Bank is subject to certain restrictions imposed by
the Federal Reserve Act on extensions of credit to the Company and its
subsidiaries, on investments in the stock or other securities of the Company and
its subsidiaries and the acceptance of the stock or other securities of the
Company or its subsidiaries as collateral for loans. Certain limitations and
reporting requirements are also placed on extensions of credit by the Bank to
its directors and officers, to directors and officers of the Company and its
subsidiaries, to principal stockholders of the Company, and to "related
interests" of such directors, officers and principal stockholders. In addition,
federal law and regulations may affect the terms upon which any person becoming
a director or officer of the Company or one of its subsidiaries or a principal
stockholder of the Company may obtain credit from banks with which the Bank
maintains a correspondent relationship.
SAFETY AND SOUNDNESS STANDARDS. The federal banking agencies have adopted
guidelines which establish operational and managerial standards to promote the
safety and soundness of federally insured depository institutions. The
guidelines set forth standards for internal controls, information systems,
internal audit systems, loan documentation, credit underwriting, interest rate
exposure, asset growth, compensation, fees and benefits, asset quality and
earnings. In general, the guidelines prescribe the goals to be achieved in each
area, and each institution is 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 an institution whose failure to meet
one or more of the guidelines is of such severity that it could threaten the
safety and soundness of the institution. Failure to submit an acceptable plan,
or failure to comply with a plan that has been accepted by the appropriate
federal regulator, would constitute grounds for further enforcement action.
BRANCHING AUTHORITY. Illinois banks, such as the Bank, have the authority under
Illinois law to establish branches anywhere in the State of Illinois, subject to
receipt of all required regulatory approvals.
Effective June 1, 1997 (or earlier if expressly authorized by applicable
state law), the Riegle-Neal Interstate Banking and Branching 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 mergers
beginning on June 1, 1997, subject to certain conditions, including a
prohibition against interstate mergers unless any Illinois bank involved has
been in existence and continuous operation for more than five years.
STATE BANK ACTIVITIES. Under federal law and FDIC regulations, 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 and FDIC regulations also prohibit
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
11
frames set by the FDIC. These restrictions have not had, and are not
currently expected to have, a material impact on the operations of the Bank.
FEDERAL RESERVE SYSTEM. FRB regulations, as presently in effect, require
depository institutions to maintain non-interest earning reserves against
their transaction account balances (primarily NOW and regular checking
accounts), as follows: for transaction account balances aggregating $47.8
million or less, the reserve requirement is 3% of total transaction account
balances; and for transaction account balances aggregating in excess of $47.8
million, the reserve requirement is $1.4 million plus 10% of the aggregate
amount of total transaction account balances in excess of $47.8 million. The
first $4.7 million of otherwise reservable balances are exempted from the
reserve requirements. These reserve requirements are subject to annual
adjustment by the FRB. The Bank is in compliance with the foregoing
requirements.
INSURANCE SUBSIDIARY. The Bank is the sole shareholder of West Suburban
Insurance Services, Inc. ("WSIS"), an Illinois corporation licensed as a general
insurance agency by the Illinois Department of Insurance (the "Department").
WSIS is subject to supervision and regulation by the Department with regard to
compliance with the laws and regulations governing insurance agents and by the
Commissioner and the FDIC with regard to compliance with the banking laws and
regulations applicable to subsidiaries of Illinois-chartered, FDIC-insured
banks.
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 (48) Senior Vice President, Marketing since
Chairman of the Board (1993) 1997. Director and President of
and Vice President (1986) West Suburban Bank of Carol
Stream/Stratford Square 1982 - May
1997
Keith W. Acker (48) Director and President of West Suburban
Chief Operating Officer (1996) Bank since 1986. Chairman of the
Board of West Suburban Bank 1986 -
May 1997
Duane G. Debs (41) Senior Vice President and Comptroller
President (1997) and Chief since 1997. President of West
Financial Officer (1993) Suburban Bank of Downers
Grove/Lombard 1996 - May 1997.
Director of West Suburban Bank of
Downers Grove/Lombard 1993 - May
1997. Vice President and Comptroller
of the Bank since 1987
Michael P. Brosnahan (48) Senior Vice President, Loans since 1989.
Vice President (1997) Director of West Suburban Bank of
Aurora 1990-May 1997
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 1997 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 1997 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 1997 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):
1997 1996 1995
-------- --------- --------
Available For Sale:
Corporate $170,335 $ 64,634 $ 69,731
U.S. government agencies and corporations 26,550 63,591 36,119
U.S. Treasury 12,084 16,151 16,291
States and political subdivisions 1,178 1,168 1,157
Equity securities 8,745 14,070 10,841
-------- -------- --------
Total investment securities available for
sale 218,892 159,614 134,139
-------- -------- --------
Held To Maturity:
U.S. government agencies and corporations 162,176 130,250 83,237
States and political subdivisions 37,116 39,941 32,800
-------- -------- --------
Total investment securities held to
maturity 199,292 170,191 116,037
-------- -------- --------
Total investment securities $418,184 $329,805 $250,176
-------- -------- --------
-------- -------- --------
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, 1997 (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 $43,867 7.45% $10,017 6.44% $4,005 5.25%
After 1 year but within 5 122,345 6.87 11,441 6.98 8,079 5.94 $773 4.04%
After 5 years but within 10 4,123 8.19 5,007 4.19 205 5.50
After 10 years 85 200 5.05
-------- ----- ------- ----- ------- ----- ------ -----
Total $170,335 7.05% $26,550 6.25% $12,084 5.71% $1,178 4.46%
-------- ----- ------- ----- ------- ----- ------ -----
-------- ----- ------- ----- ------- ----- ------ -----
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, 1997. 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 $13,014 6.90% $3,190 4.04%
After 1 year but within 5 147,762 6.30 14,970 4.13
After 5 years but within 10 1,400 6.43 6,269 4.91
After 10 years 12,687 6.25
-------- ----- ------- -----
Total $162,176 6.35% $37,116 4.98%
-------- ----- ------- -----
-------- ----- ------- -----
Loan Portfolio
The following table sets forth the major loan categories at December 31 (dollars
in thousands):
1997 1996 1995 1994 1993
-------- -------- -------- -------- --------
Commercial $213,167 $232,210 $200,986 $156,896 $177,054
Installment 41,191 37,511 37,986 33,542 33,714
Real estate:
Mortgage 292,675 299,664 302,062 305,010 288,683
Home equity 127,587 124,805 120,802 120,373 115,910
Construction 72,415 73,432 81,787 72,990 47,442
Held for sale 4,491 1,043 1,523 449 4,543
VISA-credit card 16,235 17,951 19,034 21,342 22,601
Other 4,549 7,229 5,407 7,048 11,479
-------- -------- -------- -------- --------
Total loans 772,310 793,845 769,587 717,650 701,426
Less:
Allowance for loan losses 9,772 9,603 8,900 8,445 7,125
-------- -------- -------- -------- --------
Loans, net $762,538 $784,242 $760,687 $709,205 $694,301
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
At December 31, 1997, the Company had $20.1 million outstanding in loans, leases
and debt securities (the "Instruments") represented by or secured by leases
originated by one customer of the Company. Collectibility of the Instruments
is primarily dependent on the collection of the payments required to be made
under the underlying leases. All Instruments were current as to principal and
interest at December 31, 1997.
15
The following table sets forth the maturity and interest rate sensitivity of
selected loan categories at December 31, 1997 (dollars in thousands):
Remaining Maturity
---------------------------------------------
One year One to Over
or less five years five years Total
-------- ---------- ---------- --------
Real estate-construction $72,415 $72,415
Other Loans 484,039 $182,184 $33,672 699,895
-------- -------- ------- --------
Total $556,454 $182,184 $33,672 $772,310
-------- -------- ------- --------
-------- -------- ------- --------
Variable rate $72,217 $72,217
Fixed rate 109,967 $33,672 143,639
-------- ------- --------
Total $182,184 $33,672 $215,856
-------- ------- --------
-------- ------- --------
Nonperforming Loans
The following table sets forth the aggregate amount of nonperforming loans and
selected ratios at December 31 (dollars in thousands):
1997 1996 1995 1994 1993
------- ------ ------- ------- -------
Nonaccrual loans $3,042 $2,283 $1,478 $279 $3,234
Restructured loans 3,234
Accruing loans past due over 90 days 4,829 3,813 11,405 4,448 3,958
------- ------- ------- ------- -------
Total nonperforming loans 7,871 6,096 12,883 4,727 10,426
Other real estate 2,450 2,757 8,317 10,458 9,954
------- ------- ------- ------- -------
Total nonperforming assets $10,321 $8,853 $21,200 $15,185 $20,380
------- ------- ------- ------- -------
------- ------- ------- ------- -------
Ratio of nonperforming loans to
net loans 1.0% 0.8% 1.7% 0.7% 1.5%
------- ------- ------- ------- -------
------- ------- ------- ------- -------
Ratio of nonperforming assets to
total assets 0.8% 0.7% 1.8% 1.5% 2.0%
------- ------- ------- ------- -------
------- ------- ------- ------- -------
The Company's 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 fully secured and in process of collection. 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 nonaccruing loans
had been accruing interest at their original terms was approximately $321 for
the year ended December 31, 1997 and no interest on nonaccruing loans was
recorded in operations for the year ended December 31, 1997.
The Company's impaired loans consisted of commercial and non-residential
mortgage loans totaling $17,156 at December 31, 1997 and $17,755 at December 31,
1996. Of these impaired loans, $2,496 required a valuation allowance of $676 at
December 31, 1997 compared to impaired loans of $1,422 with a valuation
allowance of $182 at December 31, 1996. The average outstanding balance of
impaired loans was approximately $15,718 and $17,389 for the years ended
December 31, 1997 and 1996, respectively. The interest income recognized on
impaired loans was approximately $1,783 and $1,706 for the years ended December
31, 1997 and 1996, respectively. The Company had no impaired real estate
construction loans during 1997 or 1996.
16
Allowance for Loan Losses
The allowance for loan losses is established through a provision for loan losses
charged to expense. Loans are charged against the allowance for loan losses when
management believes that the collectibility of the principal is unlikely. The
allowance is an amount that management believes will be adequate to absorb
losses on existing loans that may become uncollectible, based on evaluations of
the collectibility of loans and prior loan loss experience. The evaluations take
into consideration such factors as changes in the nature and volume of the loan
portfolio, overall portfolio quality, review of specific problem loans and
current economic conditions that may affect the borrowers' ability to pay.
The Company reviews its commercial and real estate construction and
non-residential mortgage loans on a quarterly basis to determine the amount of
impairment, if any. Impairment is measured based on the present value of
expected future cash flows discounted at the loan's effective interest rate, the
loan's observable market price, or the fair value of the loan's collateral, if
repayment of the loan is collateral dependent. A valuation allowance is
maintained for the amount of impairment. Generally, loans 90 or more days past
due and all loans on a nonaccrual basis are considered impaired. Interest income
on impaired loans is recognized in a manner consistent with the Company's
interest policy. Based on such reviews, management at this time does not
anticipate any increase in nonperforming assets that will have a significant
affect 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.
The following table sets forth the activity in the allowance for loan losses for
the years ended and at December 31 (dollars in thousands):
1997 1996 1995 1994 1993
------ ------ ------ ------ ------
Allowance for loan losses at beginning of period $9,603 $8,900 $8,445 $7,125 $8,024
Loans charged-off:
Commercial 956 484 914 302 5,862
Installment 213 87 47 162 245
Real estate mortgages 58 4 311 463 318
Home equity 31 46 7 21
VISA - credit card 452 495 404 356 531
Other 22 27 7 2 50
------ ------ ------ ------ ------
Total loans charged-off 1,732 1,097 1,729 1,292 7,027
Loan recoveries:
Commercial 48 112 100 66 274
Installment 65 31 56 98 186
Real estate mortgages 6 6 8 5 8
Home equity 1
VISA - credit card 153 142 169 227 318
Other 6 3 1 3
------ ------ ------ ------ ------
Total loan recoveries 278 295 334 396 789
------ ------ ------ ------ ------
Net loans charged-off 1,454 802 1,395 896 6,238
Provision for loan losses 1,623 1,505 1,850 2,216 5,339
------ ------ ------ ------ ------
Allowance for loan losses at end of period $9,772 $9,603 $8,900 $8,445 $7,125
------ ------ ------ ------ ------
------ ------ ------ ------ ------
Allowance for loan losses to total loans 1.27% 1.21% 1.16% 1.18% 1.02%
------ ------ ------ ------ ------
------ ------ ------ ------ ------
Net chargeoffs to average total loans .19% .10% .19% .13% .96%
------ ------ ------ ------ ------
------ ------ ------ ------ ------
17
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):
1997 1996 1995 1994 1993
-------------- -------------- -------------- -------------- --------------
Amount % Amount % Amount % Amount % Amount %
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Commercial $4,000 37.0% $4,299 38.5% $4,403 36.7% $3,714 32.0% $3,312 24.8%
Installment and other 331 5.9 392 5.6 385 5.6 331 5.7 369 6.5
Real estate 1,993 38.5 1,895 37.9 1,877 39.4 576 42.5 1,273 48.9
Home equity 638 16.5 312 15.7 302 15.7 301 16.8 290 16.6
VISA - credit card 440 2.1 493 2.3 523 2.6 664 3.0 626 3.2
Unallocated 2,370 2,212 1,410 2,859 1,255
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total $9,772 100.0% $9,603 100.0% $8,900 100.0% $8,445 100.0% $7,125 100.0%
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Deposits
The following table sets forth by category average daily deposits and rates for
the years ended December 31 (dollars in thousands):
1997 1996 1995
------------------ ------------------ -----------------
Average Average Average
Balance Rate Balance Rate Balance Rate
---------- ---- --------- ---- --------- ----
Demand and other noninterest-
bearing $110,248 $103,448 $100,269
NOW accounts and savings
deposits 523,616 2.8% 524,669 2.9% 498,191 3.4%
Time deposits:
Less than $100,000 421,156 5.9 334,177 5.7 308,039 5.6
$100,000 and over 87,996 5.8 63,079 5.8 49,427 5.8
---------- ---- --------- ---- --------- ----
Total $1,143,016 3.9% $1,025,373 3.7% $955,926 3.9%
---------- ---- --------- ---- --------- ----
---------- ---- --------- ---- --------- ----
The following table sets forth by maturity time deposits $100 and over at
December 31 (dollars in thousands):
1997
-------
Within 3 months $31,684
After 3 months but within 12 months 20,975
After 1 year but within 5 years 27,678
After 5 years 3,746
-------
Total $84,083
-------
-------
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:
1997 1996 1995
------ ------ ------
Return on average total assets 1.71% 1.38% 1.27%
Return on average shareholders' equity 17.48 13.93 13.03
Cash dividends paid to net income 34.74 42.73 47.16
Average shareholders' equity to average total assets 9.78 9.90 9.71
18
ITEM 2. PROPERTIES
The Company and the Bank occupy a total of approximately 225,000 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, the 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 Bank:
Location of Facilities Approximate Square Feet Status
- ------------------------------ ------------------------- ------------------
711 S. Meyers Rd. 32,500 Owned
Lombard, IL
701 S. Meyers Rd. 5,200 Owned
Lombard, IL
717 S. Meyers Rd. 7,100 Owned
Lombard, IL
100 S. Main St. 650 Owned
Lombard, IL
Mr. Z's 100 Lease expires 2003
401 S. Main St.
Lombard, IL
707 N. Main St. 4,100 Owned
Lombard, IL
29 E. St. Charles Rd. 3,200 Lease expires 2000
Villa Park, IL
17 W. 754 22nd St. 6,100 Owned
Oakbrook, IL
Lexington Square 100 Lease expires 1998
400 W. Butterfield Rd.
Elmhurst, IL
2200 Feldot Ln. 4,430 Owned
Naperville, IL
879 Geneva Rd. 3,550 Lease expires 2003
Carol Stream, IL
6400 S. Cass Ave. 3,090 Lease expires 2000
Westmont, IL
221 S. West St. 800 Owned
Wheaton, IL
1104 W. Boughton Rd. 4,500 Owned
Bolingbrook, IL
295 W. Loop Rd. 4,500 Owned
Wheaton, IL
19
Location of Facilities Approximate Square Feet Status
- ------------------------------ ------------------------- ------------------
2800 S. Finley Rd. 10,700 Owned
Downers Grove, IL
Route 59 and Meadow Ave. 3,675 Owned
Warrenville, IL
Beacon Hill 100 Month to Month
2400 S. Finley Rd.
Lombard, IL
Lexington Square 100 Lease expires 1998
555 Foxworth Blvd.
Lombard, IL
1122 S. Main St. 6,400 Owned
Lombard, IL
8001 S. Cass Ave. 17,800 Owned
Darien, IL
1005 75th St. 800 Owned
Darien, IL
672 E. Boughton Rd. 7,100 Owned
Bolingbrook, IL
355 W. Army Trail Rd. 10,700 Owned
Bloomingdale, IL
401 N. Gary Ave. 6,400 Owned
Carol Stream, IL
1380 Army Trail Rd. 2,300 Lease expires 2000
Carol Stream, IL
1657 Bloomingdale Rd. 4,100 Owned
Glendale Heights, IL
1061 W. Stearns Rd. 3,400 Owned
Bartlett, IL
315 S. Randall Rd. 1,400 Owned
St. Charles, IL
101 N. Lake St. 19,000 Owned
Aurora, IL
2000 W. Galena Blvd. 48,000 Owned
Aurora, IL
1830 Douglas St. 2,500 Owned
Montgomery, IL
20
ITEM 3. LEGAL PROCEEDINGS
There are no material pending legal proceedings to which the Company or the Bank
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
---- ------- ---------- ------------------
1997 4th $306.02 $5.00
3rd 299.48 4.50
2nd 290.87 4.50
1st 282.10 4.50
1996 4th $273.62 $4.00
3rd 266.00 4.00
2nd 265.31 4.00
1st 258.36 4.00
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, 1998, the
Company had 347,015 shares of Class A Common Stock outstanding held by
approximately 894 shareholders of record, and had 85,480 shares of Class B
Common Stock outstanding held by approximately 208 shareholders of record.
Management is aware of approximately 22 transactions during 1997 involving
the sale of approximately 1,418 shares of Class A Common Stock and
approximately 3 transactions during 1997 involving the sale of approximately
101 shares of Class B Common Stock. The average sale price in such
transactions was approximately $338.55.
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, 1997 (attached as Exhibit 13.1 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, 1997 (attached as Exhibit 13.1 hereto).
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company hereby incorporates by reference the information called for by
Item 7A of this Form 10-K from the Interest Rate Senstitivty section included
in "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, 1997 (attached as Exhibit 13.1 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, 1997 (attached as Exhibit 13.1 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 1998 Proxy Statement.
Section 16(a) of the 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 1997 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, 1997 through December
31, 1997.
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 1998 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 1998 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 1998 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, 1997 (attached as Exhibit 13.1 hereto).
ANNUAL REPORT
PAGE NO.
------------
Report of Independent Auditors 6
Consolidated Balance Sheets - December 31, 1997 and 1996 7
Consolidated Statements of Income - Years Ended
December 31, 1997, 1996 and 1995 8
Consolidated Statements of Changes in Shareholders'
Equity - Years Ended December 31, 1997, 1996 and 1995 9
Consolidated Statements of Cash Flows - Years Ended
December 31, 1997, 1996 and 1995 10
Notes to Consolidated Financial Statements 12
The following Condensed Financial Information-Parent Only is incorporated by
reference from Note 15 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, 1997 (attached as Exhibit 13.1).
ANNUAL REPORT
PAGE NO.
------------
Condensed Balance Sheets - December 31, 1997 and 1996 22
Condensed Statements of Income - Years Ended
December 31, 1997, 1996 and 1995 23
Condensed Statements of Cash Flows - Years Ended
December 31, 1997, 1996 and 1995 23
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 Chief Financial Officer 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/ DUANE G. DEBS
----------------------------------------
Duane G. Debs
President and Chief Financial Officer
Date: March 28, 1998
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, 1998.
SIGNATURE TITLE
- --------------------- --------------------------------
/s/ KEVIN J. ACKER 3/28/98 Chairman of the
- --------------------- --------- Board and Director
Kevin J. Acker Date
/s/ DUANE G. DEBS 3/28/98 President, Chief Financial
- --------------------- --------- Officer, Chief Accounting Officer
Duane G. Debs Date and Director
/s/ DAVID BELL 3/28/98
- --------------------- --------- Director
David Bell Date
/s/ PEGGY P. LOCICERO 3/28/98
- --------------------- --------- Director
Peggy P. LoCicero Date
/s/ CHARLES P. HOWARD 3/28/98
- --------------------- --------- Director
Charles P. Howard Date
The foregoing includes all of the Board of Directors of the Company.
27
INDEX TO EXHIBITS
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 from 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 - N/A
Incorporated 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 - N/A
Incorporated 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 N/A
(see Exhibits 3.1, 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 dated May 1, 1997 N/A
between the Company and Mr. Kevin J. Acker -
Incorporated by reference from Exhibit 10.1 of
Form 10-Q of the Company dated August 14,
1997, Commission File No. 0-17609
10.2 Employment Agreement dated May 1, 1997 N/A
between the Company and Mr. Keith Acker -
Incorporated by reference from Exhibit 10.2 of
Form 10-Q of the Company dated August 14,
1997, Commission File No. 0-17609
10.3 Employment Agreement dated May 1, 1997 N/A
between the Company and Mr. Duane G. Debs -
Incorporated by reference from Exhibit 10.3 of
Form 10-Q of the Company dated August 14,
1997, Commission File No. 0-17609
10.4 Employment Agreement dated May 1, 1997 N/A
between the Company and Mr. Michael P.
Brosnahan - Incorporated by reference from Exhibit
10.4 of Form 10-Q of the Company dated August 14,
1997, Commission File No. 0-17609
10.5 Form of Amended Deferred Compensation Agreement N/A
between the Company and Messrs. Kevin J. Acker,
Keith W. Acker, Duane G. Debs and Michael P.
Brosnahan - Incorporated by reference from Exhibit
10.5 of Form 10-Q of the Company dated August 14,
1997, Commission File No. 0-17609
13.1 Annual Report to Shareholders of the 30
Company for fiscal year ended December 31, 1997
21.1 Subsidiaries of Registrant 69
27 Financial Data Schedule 70
29