<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
[x] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended September 30, 1998
Commission file number 01-12292
UPBANCORP, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 36-3207297
- -------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4753 N. BROADWAY, CHICAGO, ILLINOIS 60640 (773) 878-2000
- ------------------------------------------ ---------------
(Address of principal executive offices) (Registrant's telephone number
(zip code) including area code)
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 for the past 90 days. Yes X No
----------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date: Eight hundred sixty nine
thousand nine hundred ninety six(869,996) common shares were outstanding as
of November 9, 1998.
<PAGE>
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
UPBANCORP, INC.
CONSOLIDATED STATEMENTS OF CONDITION
<TABLE>
<CAPTION>
September 30,
1998 December 31,
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA) (Unaudited) 1997
<S> <C> <C>
ASSETS
Cash and due from banks $10,707 $6,678
Federal funds sold 14,750 500
Securities available-for-sale 43,025 47,421
Securities held-to-maturity
(FAIR VALUE OF $201 AND $201 IN 1998 AND 1997) 200 200
Mortgages held-for-sale 2,194 2,146
Loans (net of allowance for loan losses of
$2,446 and $2,010 in 1998 and 1997) 180,760 164,242
Premises and equipment, net 6,189 5,675
Other assets 3,903 4,515
--------- ---------
TOTAL ASSETS $261,728 $231,377
--------- ---------
--------- ---------
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Demand deposits $50,107 $40,088
Savings, NOW and money market deposits 102,580 98,660
Other time deposits 67,983 59,384
--------- ---------
Total deposits 220,670 198,132
Borrowed funds 16,425 10,037
Accrued interest and other liabilities 2,212 2,208
--------- ---------
TOTAL LIABILITIES 239,307 210,377
--------- ---------
SHAREHOLDERS' EQUITY
Common stock, $1 par value: 3,000,000 shares authorized:
1,000,000 issued in 1998 and 1997 1,000 1,000
Additional paid in capital 4,500 4,500
Retained earnings 18,476 16,961
Treasury stock - 128,484 shares in 1998 and 117,200 in 1997 (1,885) (1,480)
Accumulated other comprehensive income (net of tax),
unrealized gain (loss) on securities available-for-sale 330 19
--------- ---------
TOTAL SHAREHOLDERS' EQUITY 22,421 21,000
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $261,728 $231,377
--------- ---------
--------- ---------
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2.
<PAGE>
UPBANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
<TABLE>
<CAPTION>
For the three months For the nine months
ended September 30, ended September 30,
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) 1998 1997 1998 1997
- ---------------------------------------------------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans $4,310 $3,522 $12,328 $9,909
Interest on mortgages held-for-sale 26 22 83 54
Interest on federal funds sold 168 93 291 355
Interest and dividends on investments
Taxable 599 826 1,964 2,549
Non-taxable 54 32 152 85
------- -------- -------- --------
Total interest and dividends on investments 653 858 2,116 2,634
------- -------- -------- --------
Total interest income 5,157 4,495 14,818 12,952
------- -------- -------- --------
INTEREST EXPENSE
Interest on savings, NOW & MMA 690 652 1,997 1,919
Interest on other time deposits 920 827 2,632 2,332
Interest on borrowed funds 214 78 574 249
------- -------- -------- --------
Total interest expense 1,824 1,557 5,203 4,500
NET INTEREST INCOME 3,333 2,938 9,615 8,452
PROVISION FOR LOAN LOSSES 185 49 474 255
------- -------- -------- --------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 3,148 2,889 9,141 8,197
------- -------- -------- --------
NONINTEREST INCOME
Service charges on deposit accounts 382 178 1,086 905
Mortgage banking fees 260 282 947 640
Other noninterest income 115 210 256 355
Net gains (losses) on sale of loans 44 72 92 113
Net gains (losses) on sale of securities 0 (99) (28) (107)
------- -------- -------- --------
Total noninterest income 801 643 2,353 1,906
------- -------- -------- --------
NONINTEREST EXPENSE
Salaries and employee benefits 1,647 1,518 4,855 4,404
Net occupancy expense 181 196 541 511
Other expense
Equipment expense 209 246 624 508
Outside fees & services 162 210 515 821
Advertising & business development expenses 94 57 280 213
Supplies expense 70 45 212 173
Data processing expense 224 71 442 206
Regulatory services/fees 22 25 72 73
Other operating expense 362 312 1,087 997
------- -------- -------- --------
Total noninterest expense 2,971 2,680 8,628 7,906
------- -------- -------- --------
INCOME BEFORE INCOME TAXES 978 852 2,866 2,197
Income tax provision 344 311 1,022 798
------- -------- -------- --------
NET INCOME $634 $541 $1,844 $1,399
OTHER COMPREHENSIVE INCOME, NET OF INCOME TAXES
Unrealized securities gains (losses) 267 300 311 523
------- -------- -------- --------
COMPREHENSIVE INCOME $901 $841 $2,155 $1,922
------- -------- -------- --------
------- -------- -------- --------
NET INCOME PER SHARE $0.73 $0.61 $2.10 $1.58
------- -------- -------- --------
------- -------- -------- --------
WEIGHTED AVERAGE SHARES OUTSTANDING 872,796 882,800 877,820 882,800
------- -------- -------- --------
------- -------- -------- --------
CASH DIVIDENDS PAID 109 110 329 331
------- -------- -------- --------
------- -------- -------- --------
PAYOUT RATIO 17.19% 20.33% 17.84% 23.66%
------- -------- -------- --------
------- -------- -------- --------
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3.
<PAGE>
UPBANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
FOR THE NINE MONTHS ENDED SEPTEMBER 30,
(DOLLARS IN THOUSANDS) (UNAUDITED) 1998 1997
- ------------------------------------------------------------------------------- ---------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $1,844 $1,399
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loan losses 474 255
Depreciation and amortization 812 659
Net (gain) loss on sale of securities 28 107
Net (gain) loss on sale of mortgage loans (92) (113)
Net (gain) loss on sale of other real estate owned (52) 0
Change in deferred income taxes 261 5
Amortization (Accretion) on investment securities, net (84) (322)
Originations of mortgages held-for-sale (59,565) (15,829)
Proceeds from sales of mortgages held-for-sale 59,609 14,901
Changes in assets and liabilities:
(Increase) decrease in accrued interest receivable and other assets (214) (49)
Increase (decrease) in accrued interest payable and other liabilities 4 494
------ -------
NET CASH PROVIDED BY OPERATING ACTIVITIES 3,025 1,507
------ -------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of and proceeds from time deposits in other banks 0 0
Net (increase) decrease in federal funds sold (14,250) 7,948
Purchases of available-for-sale securities (22,023) (21,505)
Proceeds from maturities and redemptions of
available-for-sale securities 12,746 15,424
Proceeds from sale of available-for-sale securities 14,239 15,653
Purchases of held-to-maturity securities 0 (200)
Proceeds from maturities and redemptions of
held-to-maturity securities 0 0
Net (increase) decrease in loans (16,992) (19,444)
Purchases of premises and equipment (1,294) (246)
Proceeds from sale of other real estate 386 0
------ -------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (27,188) (2,370)
------ -------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in total deposits 22,538 4,798
Net increase (decrease) in borrowed funds 6,388 (4,583)
Cash dividends paid (329) (331)
Purchase of treasury stock (405) 0
------ -------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 28,192 (116)
------ -------
Net increase (decrease) in cash and due from banks 4,029 (979)
Cash and due from banks at beginning of period 6,678 9,804
------ -------
Cash and due from banks at end of period $10,707 $8,825
------ -------
------ -------
Supplemental disclosure of cash flow information:
Cash payments for: Interest $5,196 $4,421
Income taxes 1,207 488
Supplemental schedule of non-cash investing activities:
Other real estate acquired in settlement of loans $0 $0
------ -------
------ -------
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4.
<PAGE>
UPBANCORP, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY CAPITAL
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED)
<TABLE>
<CAPTION>
Accumulated
Additional Other
Common Paid In Retained Treasury Comprehensive
Stock Capital Earnings Stock Income Total
---------- ------------ ---------- ---------- --------------- ----------
<S> <C> <C> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1998 $1,000 $4,500 $16,961 ($1,480) $ 19 $21,000
Net income for the nine months
ended September 30, 1998 1,844 1,844
Cash dividends: $.375 per share (329) (329)
Unrealized gain (loss) on securities
available-for-sale, net of tax
of $199 311 311
Purchase of treasury stock (405) (405)
------ ------ ------- ------- ---- -------
BALANCE SEPTEMBER 30, 1998 $1,000 $4,500 $18,476 ($1,885) $330 $22,421
------ ------ ------- ------- ---- -------
------ ------ ------- ------- ---- -------
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED)
NOTE A: BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Rule 10-01
of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all adjustments
(consistent of normal accounting accruals) considered necessary for fair
presentation have been included.
Operating results of the nine months ended September 30, 1998 are not
necessarily indicative of the results that may be expected for the year ended
December 31, 1998. For further information, refer to the consolidated
financial statements and footnotes thereto included in the Company's annual
report on Form 10-K for the year ended December 31, 1997.
Prior period's amounts included in these financial statements have been
reclassified and/or restated to place them on a basis consistent with the
current period's financial statements.
NOTE B: INVESTMENT SECURITIES
AVAILABLE-FOR-SALE SECURITIES
The amortized cost and fair value of these are as follows at
September 30, 1998:
<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
-------------- ------------ ------------ ------------------
<S> <C> <C> <C> <C>
U. S. Treasury Securities $0 $0 $0 $0
U. S. Government agencies 27,749 348 0 28,097
States and political subdivisions 4,197 210 0 4,407
Mortgage-backed securities 5,862 18 190 5,690
Other securities 4,676 155 0 4,831
-------------- ------------ ------------ ------------------
Total available-for-sale securities $42,484 $731 $190 $43,025
-------------- ------------ ------------ ------------------
-------------- ------------ ------------ ------------------
</TABLE>
In accordance with SFAS No. 115, these securities are carried at their fair
value.
HELD-TO-MATURITY SECURITIES
The amortized cost and fair value of these are as follows at
September 30, 1998:
<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
-------------- ------------ ------------ ------------------
<S> <C> <C> <C> <C>
U. S. Treasury Securities $200 $1 $0 $201
-------------- ------------ ------------ ------------------
Total held-to-maturity securities $200 $1 $0 $201
-------------- ------------ ------------ ------------------
</TABLE>
In accordance with SFAS No. 115, these securities are carried at their
amortized cost.
5.
<PAGE>
NOTE C: LOANS AND NONPERFORMING ASSETS
The following summarizes loans at the dates indicated:
<TABLE>
<CAPTION>
Sep. 30, Dec. 31,
1998 1997
------------ ------------------
<S> <C> <C>
Commercial - Aircraft related $21,194 $17,846
Commercial - Other 30,311 30,361
Secured by real estate - Construction 17,903 9,440
Secured by real estate - Residential (1 to 4 family) 31,548 34,899
Secured by real estate - Residential (5 or more) 30,830 27,635
Secured by real estate - Non-Residential 45,029 40,984
Consumer and all other, net of unearned discount 6,391 5,087
------------ ------------------
Total loans 183,206 166,252
Less: Allowance for loan losses (2,446) (2,010)
------------ ------------------
Total loans, net of allowance for loan losses $180,760 $164,242
------------ ------------------
------------ ------------------
</TABLE>
The following summarizes the analysis of the allowance for loan losses for the
nine months ended:
<TABLE>
<CAPTION>
Sep. 30, Sep. 30,
1998 1997
------------ ------------------
<S> <C> <C>
Balance at beginning of year $2,010 $1,485
Charge-offs:
Commercial - Other 66 10
Consumer and all other, net of unearned discount 25 13
------------ ------------------
Total charge-offs 91 23
Recoveries:
Commercial - Other 53 38
Real Estate - Residential (5 or more) 0 86
Consumer and all other, net of unearned discount 0 1
------------ ------------------
Total recoveries 53 125
Net recoveries(charge-offs) (38) 102
Provision for loan losses 474 255
------------ ------------------
Balance at end of period $2,446 $1,842
------------ ------------------
------------ ------------------
</TABLE>
The following summarizes nonperforming assets at the dates indicated:
<TABLE>
<CAPTION>
Sep. 30, Dec. 31,
1998 1997
------------ ------------------
<S> <C> <C>
Nonaccrual loans $1,244 $252
Restructured loans 77 896
------------ ------------------
Total nonperforming loans 1,321 1,148
Other real estate owned (OREO) 0 334
------------ ------------------
Total nonperforming assets $1,321 $1,482
------------ ------------------
------------ ------------------
</TABLE>
NOTE D: SHAREHOLDERS' EQUITY
At a Special Meeting of Shareholders held October 20, 1998, the Corporation's
Certificate of Incorporation was amended to increase the number of authorized
shares of common stock from 300,000 to 3,000,000 and reduce the par value
from $10.00 to $1.00. On that same date, the Board of Directors approved a
four-for-one stock split, with a record date of October 20, 1998 and
effective date of October 31, 1998. Accordingly, all share and per share data
have been restated to reflect the split.
6.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
The following is management's discussion and analysis of certain significant
factors which have affected the Registrant's financial condition and results
of operations during the periods included in the consolidated financial
statements set forth in this filing. All share and per share data have been
restated to reflect the stock split described in the Notes to Consolidated
Financial Statements. The Registrant's Form 10-Q for the quarter ended
September 30,1997 is incorporated by reference.
RESULTS OF OPERATIONS
The Registrant's net income for the nine months ended September 30, 1998 was
$1,844 compared to $1,399 in 1997. Net income per share was $2.10, a 32%
increase over last year's $1.58. Return on average equity was 11.32% in 1998
compared to 9.58% in 1997, an 18% increase. Return on average assets was .99%
for 1998 compared to .83% in the previous year, a 19% increase.
The Registrant's net interest income was $9,615 for the first nine months of
1998, an increase of 13.76% over the $8,452 registered in the same period of
1997. An increase in average earning assets and a higher net margin of 5.69%
in 1998, as compared to 5.50% for 1997, were contributing factors in this
year's improvement. A continuation of strong growth in the loan portfolio,
particularly in loans secured by real estate and a decrease of more than $300
in average non-performing assets in 1998 as compared to 1997, were the main
components of both net interest income and net margin improvement.
The provision for loan losses was $474 in 1998 and $255 in 1997, reflecting a
10.2% increase in the loan portfolio since December 31, 1997. Net charge-offs
were $38 for the first three quarters of 1998, compared to net recoveries of
$102 in 1997. The allowance for loan losses as a percent of total loans was
1.33% at September 30, 1998 and 1.21% at December 31, 1997. Total
non-performing assets as a percent of total assets were .50% at September 30,
1998 and .64% at December 31, 1997.
Total noninterest income increased 23.45% to $2,353 for the first nine months
of 1998 over the previous year, due to a high level of activity in our
mortgage banking division. Net securities losses totaled $28 for 1998
compared to a net loss of $107 in the previous year. The securities were sold
to take advantage of the flattening of the yield curve in the first half of
the year. The proceeds were reinvested in state tax-exempt securities with a
higher effective yield and shorter term.
Total noninterest expense for the first nine months of 1998 increased 9.13%
to $8,628 from the year earlier period. The increase in salaries and employee
benefits in 1998 to $4,855 from $4,404 in 1997, is a direct result of the
increased volume in our mortgage banking division, along with a slight
increase at the core bank level. Net occupancy expense increased moderately
to $541 in 1998 from $511 in 1997, due to higher depreciation provisions
resulting from remodeling done at the Uptown location. Other expense
increased 8.06% to $3,232 in the first nine months of 1998 from $2,991 in the
comparable 1997 period. The increase in equipment expense, is a result of
higher depreciation expense arising from the purchase of computer equipment,
from our continuing effort to upgrade our technological capability, to serve
our customers.
BALANCE SHEET CHANGES
Total assets were $261,728 at quarter-end compared to $231,377 at December 31,
1997. The increase in cash and due from banks and federal funds sold are
a function of regular deposit activity and the current interest rate
environment. The decrease in securities from year-end 1997 resulted from
normal maturities and sales activity. The strong growth in our loan portfolio
continues (13.6% annualized).
Total deposits increased $22,538 or 11.4% from year-end. Noninterest bearing
deposits increased 19.8% or $7,953, due to core growth, as well as seasonal
fluctuations at each of the subsidiary banks. Interest bearing deposits
increased 9.2% or $14,585. Borrowed funds increased $6,388 from year-end
levels.
LIQUIDITY AND CAPITAL RESOURCES
The maintenance of an adequate level of liquidity is necessary to ensure that
sufficient funds are available to meet customers' loan demands and deposit
withdrawals. The banking subsidiaries' liquidity sources consist of
investment securities, maturing loans and other short-term investments.
Liquidity can also be obtained through liabilities such as core deposits,
funds borrowed, certificates of deposit and public fund deposits.
7.
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES - CONTINUED
At September 30, 1998, shareholders' equity was $22,421 compared to $21,000
at December 31, 1997, an increase of $1,421 or 6.7%. Total equity at
quarter-end was increased by an unrealized gain after-tax of $311 on
securities available-for-sale. Shareholders' equity as a percentage of total
assets at September 30, 1998 was 8.57%. The following table represents the
Registrant's consolidated regulatory capital position as of September 30,
1998.
Regulatory capital at September 30, 1998:
<TABLE>
<CAPTION>
Tier 1 Total
Leverage Risk-Based Risk-Based
Ratio Capital Capital
-------- ----------- -----------
<S> <C> <C> <C>
Upbancorp, Inc. ratio 8.5% 11.2% 12.5%
Regulatory minimum ratio 4.0% 4.0% 8.0%
Ratio considered "well- capitalized" 5.0% 6.0% 10.0%
</TABLE>
YEAR 2000 COMPLIANCE
The Corporation has established a Year 2000 Compliance Team (the "Team")
composed of representatives from key areas throughout the organization. It is
the mission of this Team to identify areas subject to complications related
to the year 2000 and to initiate measures designed to eliminate any adverse
effects on the Corporation's operations. The Team has identified all mission
critical software and hardware that may be adversely affected by the year
2000 and has required vendors to represent that the systems and products
provided are or will be compliant. The Corporation expects that all critical
software will be tested for compliance by December 31, 1998 and will be
upgraded as necessary. In addition, the Team is developing contingency plans
to address systems which do not become compliant by December 31, 1998.
This risk goes beyond any internal systems, it also involves our customers.
The Team has and will continue to take steps to educate and assist them with
identifying their year 2000 Issues.
Management believes that the Corporation has an effective year 2000
compliance program in place and that the expenditures required to bring its
systems into compliance will not have a material effect on the Corporation's
financial condition, operations or cash flow . Management expects total
additional out of pocket expenditures to be approximately $300,000. This
includes fees to consulting firms, costs to upgrade equipment specifically
for the purpose of year 2000 compliance and certain administrative expenses.
However, this is a complex issue and no assurances can be given that
compliance will be achieved without any unplanned outlays that would affect
future financial results.
FORWARD LOOKING STATEMENTS
Statements made about the Registrant's future economic performance, strategic
plans or objectives, revenue or earnings projections, or other financial
items and similar statements are not guarantees of future performance, but
are forward looking statements. By their nature, these statements are subject
to numerous uncertainties that could cause actual results to differ
materially from those in the statements. Important factors that might cause
the Registrant's actual results to differ materially include, but are not
limited to, the following:
- - Federal and state legislative and regulatory developments;
- - Changes in management's estimate of the adequacy of the allowance for loan
losses(and/or other significant estimates such as OREO, deferred tax
valuation allowance, etc);
- - Changes in the level and direction of loan delinquencies and write-offs;
- - Interest rate movements and their impact on customer behavior and
Upbancorp's net interest margin;
- - The impact of repricing and competitors' pricing initiatives on loan and
deposit products;
- - Upbancorp's ability to adapt successfully to technological changes to meet
customers' needs and developments in the marketplace;
- - Upbancorp's ability to access cost effective funding;
- - Economic conditions; and
- - Year 2000 related complications.
8.
<PAGE>
PART 2. - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
None required
ITEM 2 - CHANGES IN SECURITIES
None required
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
None required
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At a Special Meeting of Shareholders held October 20, 1998, the
following amendment to the Corporation's Certificate of
Incorporation was approved: The number of authorized shares of
common stock was increased from 300,000 to 3,000,000 and the par
value of each share of was reduced from $10.00 to $1.00.
The results of voting as follows:
<TABLE>
<CAPTION>
Votes
Votes for Against Abstentions
--------- ------- -----------
<C> <C> <C>
193,003 6,356 1,062
</TABLE>
ITEM 5 - OTHER INFORMATION
None required
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
None required
9.
<PAGE>
SIGNATURES
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.
Date: November 9, 1998 UPBANCORP, INC.
----------------------
(The Registrant)
/s/Richard K. Ostrom
-----------------------
Richard K. Ostrom
Chairman of the Board,
President and Chief
Executive Officer
10.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 10,707
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 14,750
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 43,025
<INVESTMENTS-CARRYING> 200
<INVESTMENTS-MARKET> 201
<LOANS> 183,206
<ALLOWANCE> 2,446
<TOTAL-ASSETS> 261,728
<DEPOSITS> 220,670
<SHORT-TERM> 3,425
<LIABILITIES-OTHER> 2,212
<LONG-TERM> 13,000
0
0
<COMMON> 1,000
<OTHER-SE> 21,421
<TOTAL-LIABILITIES-AND-EQUITY> 261,728
<INTEREST-LOAN> 12,328
<INTEREST-INVEST> 2,116
<INTEREST-OTHER> 374
<INTEREST-TOTAL> 14,818
<INTEREST-DEPOSIT> 4,629
<INTEREST-EXPENSE> 5,203
<INTEREST-INCOME-NET> 9,615
<LOAN-LOSSES> 474
<SECURITIES-GAINS> (28)
<EXPENSE-OTHER> 8,628
<INCOME-PRETAX> 2,866
<INCOME-PRE-EXTRAORDINARY> 2,866
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,844
<EPS-PRIMARY> 2.10
<EPS-DILUTED> 2.10
<YIELD-ACTUAL> 8.73
<LOANS-NON> 1,244
<LOANS-PAST> 0
<LOANS-TROUBLED> 77
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 2,010
<CHARGE-OFFS> 91
<RECOVERIES> 53
<ALLOWANCE-CLOSE> 2,446
<ALLOWANCE-DOMESTIC> 2,446
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
