<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 June 30, 1999 Commission file number 01-12292
UPBANCORP, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
Delaware 36-3207297
<S> <C>
(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) (zip code) (Registrant's telephone number
including area code)
</TABLE>
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 three
thousand eight hundred eight (863,808) common shares were outstanding as of
August 6, 1999.
<PAGE>
PART 1 - Financial Information
Item 1. Financial Statements
UPBANCORP, INC.
CONSOLIDATED STATEMENTS OF CONDITION
<TABLE>
<CAPTION>
June 30,
1999 December 31,
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA) (Unaudited) 1998
- ----------------------------------------------------- ------------- --------------
<S> <C> <C>
Assets
Cash and due from banks $12,096 $9,165
Federal funds sold 2,753 10,000
Securities available-for-sale 43,016 42,179
Securities held-to-maturity
(FAIR VALUE OF $200 IN 1998) 0 200
Mortgages held-for-sale 1,849 4,067
Loans (net of allowance for loan losses of
$2,749 and $2,499 in 1999 and 1998) 227,901 192,596
Premises and equipment, net 6,364 6,349
Other assets 4,858 4,906
------------- --------------
Total Assets $298,837 $269,462
------------- --------------
------------- --------------
Liabilities and Shareholders' Equity
Liabilities
Demand deposits $50,606 $47,062
Savings, NOW and money market deposits 106,338 104,067
Other time deposits 84,562 74,905
------------- --------------
Total deposits 241,506 226,034
Borrowed funds 31,906 18,097
Accrued interest and other liabilities 2,516 2,693
------------- --------------
Total Liabilities 275,928 246,824
------------- --------------
Shareholders' Equity
Common stock, $1 par value: 3,000,000 shares authorized:
1,000,000 issued in 1999 and 1998 1,000 1,000
Additional paid in capital 4,500 4,500
Retained earnings 19,901 18,823
Treasury stock - 136,097 shares in 1999 and 130,004 in 1998 (2,142) (1,938)
Accumulated other comprehensive income, net of tax (350) 253
------------- --------------
Total Shareholders' Equity 22,909 22,638
------------- --------------
Total Liabilities and Shareholders' Equity $298,837 $269,462
------------- --------------
------------- --------------
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2.
<PAGE>
UPBANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
For the three months ended For the six months ended
June 30, June 30,
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) 1999 1998 1999 1998
- --------------------------------------------------------- -------- -------- -------- ---------
<S> <C> <C> <C> <C>
Interest Income
Interest and fees on loans $5,286 $4,194 $9,718 $8,018
Interest on mortgages held-for-sale 24 30 49 57
Interest on federal funds sold 6 87 62 123
Interest and dividends on investment
Taxable 532 679 1,068 1,365
Non-taxable 80 50 156 98
-------- -------- -------- ---------
Total interest and dividends on investments 612 729 1,224 1,463
-------- -------- -------- ---------
Total interest income 5,928 5,040 11,053 9,661
-------- -------- -------- ---------
Interest Expense
Interest on savings, NOW & MMA 679 675 1,324 1,307
Interest on other time deposits 1,025 885 1,969 1,712
Interest on borrowed funds 336 188 559 360
-------- -------- -------- ---------
Total interest expense 2,040 1,748 3,852 3,379
-------- -------- -------- ---------
Net Interest Income 3,888 3,292 7,201 6,282
Provision for Loan Losses 190 141 320 289
-------- -------- -------- ---------
Net Interest Income after Provision for Loan Losses 3,698 3,151 6,881 5,993
-------- -------- -------- ---------
Noninterest Income
Service charges on deposit accounts 435 317 842 704
Mortgage banking fees 243 323 466 687
Other noninterest income 125 75 235 141
Net gains (losses) on sale of loans 17 20 20 48
Net gains (losses) on sale of securities 13 (8) 36 (28)
-------- -------- -------- ---------
Total noninterest income 833 727 1,599 1,552
-------- -------- -------- ---------
Noninterest Expense
Salaries and employee benefits 1,817 1,667 3,663 3,208
Net occupancy expense 166 173 293 360
Other expense
Equipment expense 217 217 413 415
Outside fees & services 194 194 408 353
Advertising & business development expenses 116 87 197 178
Supplies and postage expense 122 93 239 218
Data processing expense 257 171 514 275
Regulatory services/fees 28 25 56 50
Other operating expense 355 302 672 600
-------- -------- -------- ---------
Total noninterest expense 3,272 2,929 6,455 5,657
-------- -------- -------- ---------
Income Before Income Taxes 1,259 949 2,025 1,888
Income taxes 452 323 722 678
-------- -------- -------- ---------
Net Income $807 $626 $1,303 $1,210
-------- -------- -------- ---------
-------- -------- -------- ---------
Basic Earnings per share $0.93 $0.71 $1.50 $1.37
-------- -------- -------- ---------
-------- -------- -------- ---------
Weighted average shares outstanding 865,396 878,198 867,167 880,377
-------- -------- -------- ---------
-------- -------- -------- ---------
Cash Dividends paid 112 110 225 220
-------- -------- -------- ---------
-------- -------- -------- ---------
Payout ratio 13.88% 17.57% 17.27% 18.18%
-------- -------- -------- ---------
-------- -------- -------- ---------
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3.
<PAGE>
UPBANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the six months ended June 30,
(DOLLARS IN THOUSANDS) (UNAUDITED) 1999 1998
- ------------------------------------------------------------------------------ -------- --------
<S> <C> <C>
Cash Flows from Operating Activities
Net Income $1,303 $1,210
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loan losses 320 289
Depreciation and amortization 609 529
Net (gain) loss on sale of securities (36) 28
Net (gain) loss on sale of mortgage loans (466) (687)
Net (gain) loss on sale of other real estate owned 0 0
Change in deferred income taxes 236 (12)
Amortization (Accretion) on investment securities, net (120) (48)
Originations of mortgages held-for-sale (27,478) (41,891)
Proceeds from sales of mortgages held-for-sale 30,162 42,152
Changes in assets and liabilities:
(Increase) decrease in accrued interest receivable and other assets 155 (332)
Increase (decrease) in accrued interest payable and other liabilities (177) (132)
-------- --------
Net cash provided by (used in) operating activities 4,508 1,106
-------- --------
Cash Flows from Investing Activities
Purchases of and proceeds from time deposits in other banks 0 0
Net (increase) decrease in federal funds sold 7,247 (55)
Purchases of available-for-sale securities (24,282) (21,660)
Proceeds from maturities and redemptions of
available-for-sale securities 5,279 11,484
Proceeds from sale of available-for-sale securities 17,333 14,239
Purchases of held-to-maturity securities 0 0
Proceeds from maturities and redemptions of
held-to-maturity securities 200 0
Net (increase) decrease in loans (35,625) (13,798)
Purchases of premises and equipment (581) (1,088)
Proceeds from sale of other real estate 0 0
-------- --------
Net cash provided by (used in) investing activities (30,429) (10,878)
-------- --------
Cash Flows from Financing Activities
Net increase (decrease) in total deposits 15,472 15,438
Net increase (decrease) in borrowed funds 13,809 6,089
Cash dividends paid (225) (220)
Purchase of treasury stock (204) (349)
-------- --------
Net cash provided by (used in) financing activities 28,852 20,958
-------- --------
Net increase (decrease) in cash and due from banks 2,931 11,186
Cash and due from banks at beginning of period 9,165 6,678
-------- --------
Cash and due from banks at end of period $12,096 $17,864
-------- --------
-------- --------
Supplemental disclosure of cash flow information:
Cash payments for: Interest $3,942 $3,412
Income taxes 566 777
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 SHAREHOLDERS' EQUITY
(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, 1999 $1,000 $4,500 $18,823 ($1,938) $253 $22,638
Net income for the six months
ended June 30, 1999 1,303 1,303
Unrealized gain (loss) on securities
available-for-sale, net of tax of $(386) (603) (603)
-------
Comprehensive Income 700
-------
Cash dividends: $.26 per share (225) (225)
Purchase of treasury stock (204) (204)
------ ---------- -------- -------- ------------- -------
Balance June 30, 1999 $1,000 $4,500 $19,901 ($2,142) ($350) $22,909
------ ---------- -------- -------- ------------- -------
------ ---------- -------- -------- ------------- -------
</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 (consisting of normal
recurring accruals) considered necessary for fair presentation have been
included.
Operating results of the three and six months ended June 30, 1999 are not
necessarily indicative of the results that may be expected for the year ended
December 31, 1999. 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, 1998.
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.
Prior period's amounts included in these financial statements have been
reclassified to place them on a basis consistent with the current period's
financial statements.
NOTE B: SECURITIES
SECURITIES AVAILABLE-FOR-SALE
The amortized cost and fair value of these are as follows at June 30, 1999:
<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
--------- ---------- ---------- -------
<S> <C> <C> <C> <C>
U. S. Treasury Securities $400 $0 $0 $400
U. S. Government agencies 25,499 0 250 25,249
States and political subdivisions 7,225 75 193 7,107
Mortgage-backed securities 5,700 0 277 5,423
Other securities 4,765 72 0 4,837
--------- ---------- ---------- -------
Total securities available-for-sale $43,589 $147 $720 $43,016
--------- ---------- ---------- -------
--------- ---------- ---------- -------
</TABLE>
In accordance with SFAS No. 115, these securities are carried at their fair
value.
SECURITIES HELD-TO-MATURITY
There were no securities held-to-maturity at June 30, 1999:
5.
<PAGE>
NOTE C: LOANS AND NONPERFORMING ASSETS
The following summarizes loans at the dates indicated:
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
-------- ------------
<S> <C> <C>
Commercial -- Aircraft related $ 40,540 $ 26,617
Commercial -- Other 37,612 33,395
Secured by real estate -- Construction 34,124 22,365
Secured by real estate -- Residential (1 to 4 family) 32,171 30,971
Secured by real estate -- Residential (5 or more) 28,472 29,900
Secured by real estate -- Non-Residential 51,188 45,640
Consumer and all other, net of unearned income 6,543 6,207
-------- ------------
Total loans 230,650 195,095
Less: Allowance for loan losses (2,749) (2,499)
-------- ------------
Total loans, net of allowance for loan losses $227,901 $192,596
-------- ------------
-------- ------------
</TABLE>
The following summarizes the analysis of the allowance for loan losses for the
six months ended:
<TABLE>
<CAPTION>
June 30, June 30,
1999 1998
-------- --------
<S> <C> <C>
Balance at beginning of year $2,499 $2,010
Charge-offs:
Commercial -- Other 0 42
Real Estate -- Residential (1 to 4 family) 75 0
Consumer and all other, net of unearned income 22 6
-------- --------
Total charge-offs 97 48
Recoveries:
Commercial -- Other 26 51
Consumer and all other, net of unearned income 1 0
-------- --------
Total recoveries 27 51
Net recoveries (charge-offs) (70) 3
Provision for loan losses 320 289
-------- --------
Balance at end of period $2,749 $2,302
-------- --------
-------- --------
</TABLE>
The following summarizes nonperforming assets at the dates indicated:
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
-------- ------------
<S> <C> <C>
Nonaccrual loans $920 $1,234
Restructured loans 62 75
-------- ------------
Total nonperforming loans 982 1,309
Other real estate owned (OREO) 0 0
-------- ------------
Total nonperforming assets $982 $1,309
-------- ------------
-------- ------------
</TABLE>
NOTE D: COMPREHENSIVE INCOME
The following summarizes Comprehensive Income for the six months ended:
<TABLE>
<CAPTION>
June 30, June 30,
1999 1998
-------- --------
<S> <C> <C>
Net Income $1,303 $1,210
Other Comprehensive Income, net of income taxes:
Unrealized gains(losses) on securities available-for-sale (603) 44
-------- --------
Comprehensive Income $700 $1,254
-------- --------
-------- --------
</TABLE>
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 Company'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 Company's Form 10-Q for the quarter ended June 30, 1998 is
incorporated by reference.
RESULTS OF OPERATIONS
The Company's net income for the six months ended June 30, 1999 was $1,303
compared to $1,210 in 1998. Net income per share was $1.50, a 9.3% increase
from last year's $1.37. Return on average equity was 11.53% in 1999 compared to
11.33% in 1998, a 1.7% increase. Return on average assets was .95% for 1999
compared to .99% in the previous year, a 4% decrease.
The Company's net interest income was $7,201 for the first six months of 1999,
an increase of 14.63% over the $6,282 registered in the same period of 1998. An
increase in average earning assets and a higher net margin of 5.73% in 1999 as
compared to 5.70% for 1998, were contributing factors in this year's
improvement. A continuation of strong growth in the loan portfolio,
particularly in aircraft related loans, as well as continued strength in real
estate lending were the main components in net interest income improvement.
The provision for loan losses was $320 in 1999 and $289 in 1998, reflecting
management's assessment of the current loan portfolio. Net charge-offs were $70
for the first six months of 1999, compared to net recoveries of $3 in the same
period for 1998. The allowance for loan losses as a percent of total loans was
1.19% at June 30, 1999 and 1.28% at December 31, 1998. Total nonperforming
assets as a percent of total assets were .33% at June 30, 1999 and .49% at
December 31, 1998.
Total noninterest income increased 3.03% to $1,599 for the first six months of
1999 over the previous year, as the decline from the high level of activity
experienced in our mortgage banking division in 1998 was offset by the increase
in service charges and other noninterest income. Net securities gains totaled
$36 for 1999 compared to a net loss of $28 in the same period for last year. The
securities were sold in anticipation of their early redemption. The proceeds
were reinvested in state tax exempt securities with a similar final maturity
and yield, and with greater protection from early redemption.
Total noninterest expense for the first six months of 1999 increased 14.11% to
$6,455 from the year earlier period. The increase in salaries and employee
benefits in 1999 to $3,663 from $3,208 in 1998, is a direct result of "staffing
up" for the two new Chicago branches, along with moderate salary increases and
higher benefit costs for the existing staff. Net occupancy expense decreased
$67 to $293 in 1999 from $360 in 1998, due primarily to full building occupancy
at the Uptown location. Other expense increased 19.63% to $2,499 in the first
six months of 1999 from $2,089 in the comparable 1998 period. The increase in
data processing and supplies expense is a result of the implementation of a new
wide-area network and outsourcing data processing at Uptown in the second
quarter of 1998, as well as the start up expenses associated with the
establishment of the two new Chicago branches in our continuing effort to
better serve our customers.
BALANCE SHEET CHANGES
Total assets were $298,837 at June 30, 1999 compared to $269,462 at December
31, 1998. The overall decrease in cash and due from banks and federal funds
sold are a function of regular deposit activity and funds management in the
current interest rate environment. The increase in the loan portfolio was funded
by deposit growth as well as the reduction in cash and equivalents, and greater
use of short-term borrowed funds.
Total deposits increased $15,472 or 6.85% from year-end. Noninterest bearing
deposits increased 7.53% or $3,544, due to core growth, as well as seasonal
fluctuations at each of the Subsidiary Banks. Interest bearing deposits
increased $11,933. Borrowed funds increased $13,809 from year-end levels due to
the purchase of Federal Funds as a means of funding the continued growth in the
loan portfolio.
7.
<PAGE>
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, borrowed funds,
certificates of deposit and public fund deposits.
At June 30 1999, shareholders' equity was $22,909 compared to $22,638 at
December 31, 1998, an increase of $271 or 1.20%. Accumulated other
comprehensive income at quarter-end decreased $603 due to unrealized losses in
securities available-for-sale, net of tax. Shareholders' Equity as a percentage
of total assets at June 30, 1999 was 7.67%. The following table represents the
Company's consolidated regulatory capital position as of June 30, 1999.
Regulatory capital at June 30, 1999:
<TABLE>
<CAPTION>
Tier 1 Total
Leverage Risk-Based Risk-Based
Ratio Capital Capital
-------- ---------- ----------
<S> <C> <C> <C>
Upbancorp, Inc. ratio 7.9% 9.6% 10.7%
Regulatory minimum ratio 4.0% 4.0% 8.0%
Ratio considered "well-capitalized" 5.0% 6.0% 10.0%
</TABLE>
FORWARD LOOKING STATEMENTS
Statements made about the Company'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 Company'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.
YEAR 2000 COMPLIANCE
The Company has appointed Year 2000 project teams, headed by full-time project
coordinators. Team members come from key areas throughout the organization and
have experience with the processes and systems in use by the Subsidiary Banks
(the "Banks"). It is the mission of these teams to identify the areas subject to
complications related to the Year 2000 and to initiate measures designed to
eliminate any adverse effects on the Company's operations.
The Banks' software and hardware systems provide essential support to all of
their businesses. Failure to properly address Year 2000 issues could result in
an adverse effect on the daily operations and financial performance of the
Banks. Additionally, those on whom the Banks rely or do business with could also
adversely affect the organization if they are not properly prepared. Given the
number of possible scenarios, it is impossible to determine the potential cost
of problems should the Banks remediation efforts or if the efforts of those with
whom they do business are not successful. In addition, should the Banks fail to
make satisfactory progress toward Year 2000 preparedness or not fully comply
with government agency mandated steps, actions could be taken by state or
federal regulators that would adversely affect the Banks business.
8.
<PAGE>
YEAR 2000 COMPLIANCE -- continued
The project teams have employed a five step plan to effectively deal with all
anticipated aspects of the Year 2000 issue. These steps are as follows:
1.) Awareness -- during this step the project was defined.
2.) Assessment -- all building, equipment, software and hardware
were inventoried and priority levels assigned according to
overall operational importance.
3.) Renovation -- changing existing processes, elimination or
replacement of unnecessary or outdated items. This included
an examination of core data processing systems and led to the
selection of a new vendor whose operating system is Year
2000 compliant.
4.) Validation -- involves the testing of systems, both mission
critical and non mission critical. Mission critical testing
was completed by June 30, 1999. Any system with changes made
after the initial testing will be retested to ensure its
compliance.
5.) Implementation -- review of test results by end users to
ensure that performance is as expected.
The teams have completed all phases identified above for Year 2000 readiness.
Additional testing will be as needed.
In addition to the five-step plan, the Banks have also undertaken the challenge
to review their customer bases and business suppliers for compliance. Several
approaches have been taken to achieve an understanding of how well prepared
these groups are. Questionnaires were sent to the Banks' larger customers and
suppliers. These questionnaires were followed up with personal interviews when
the responses did not provide clear indications of the entity's preparedness.
The Banks cannot control the success of any given entity's preparations but are
trying to have as complete an understanding as possible about all aspects of
their business. An education program was also developed to provide mandatory
training for all in-house personnel. They have also taken a leadership role in
educating their customers about Year 2000 issues. Direct mail has been used, as
well as peer group discussions monthly and participation/sponsorship in panel
discussions hosted by community groups. It is important that the citizens of
the communities which the Banks serve understand what the Year 2000 issues are
and what plans and progress that individuals, business and government agencies
are making to minimize any negative effects of Year 2000.
The Banks have been simultaneously developing business continuity plans to
implement should problems arise. These plans were completed and tested prior to
June 30, 1999. Additional testing will be performed as needed, to ensure their
viability.
Management believes that the Company 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 Company's financial
condition, operations or cash flows. Management expects total out of pocket
expenditures to be approximately $200-$250. 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.
9.
<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
None required
Item 5 -- Other Information
None required
Item 6 -- Exhibits and Reports on Form 8-K
None required
10.
<PAGE>
CONFORMED
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: August 6, 1999 UPBANCORP, INC.
----------------
(The Registrant)
\s\ Richard K. Ostrom
---------------------
Richard K. Ostrom
Chairman of the Board,
President and Chief
Executive Officer
11.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 12,096
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 2,753
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 43,016
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 232,499
<ALLOWANCE> 2,749
<TOTAL-ASSETS> 298,837
<DEPOSITS> 241,506
<SHORT-TERM> 13,906
<LIABILITIES-OTHER> 2,516
<LONG-TERM> 18,000
0
0
<COMMON> 1,000
<OTHER-SE> 21,909
<TOTAL-LIABILITIES-AND-EQUITY> 298,837
<INTEREST-LOAN> 9,767
<INTEREST-INVEST> 1,224
<INTEREST-OTHER> 62
<INTEREST-TOTAL> 11,053
<INTEREST-DEPOSIT> 3,293
<INTEREST-EXPENSE> 3,852
<INTEREST-INCOME-NET> 7,201
<LOAN-LOSSES> 320
<SECURITIES-GAINS> 36
<EXPENSE-OTHER> 6,455
<INCOME-PRETAX> 2,025
<INCOME-PRE-EXTRAORDINARY> 2,025
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,303
<EPS-BASIC> 1.50
<EPS-DILUTED> 1.50
<YIELD-ACTUAL> 8.75
<LOANS-NON> 920
<LOANS-PAST> 0
<LOANS-TROUBLED> 62
<LOANS-PROBLEM> 982
<ALLOWANCE-OPEN> 2,499
<CHARGE-OFFS> 97
<RECOVERIES> 27
<ALLOWANCE-CLOSE> 2,749
<ALLOWANCE-DOMESTIC> 2,749
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
