FIRST OAK BANCSHARES, 10-K405, 1996-03-28

FIRST OAK BANCSHARES
10-K405, 1996-03-28
STATE COMMERCIAL BANKS

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<PAGE>

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K

Annual Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1995
------------------------------

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from __________ to ___________

Commission file number 0-14468.
--------

First Oak Brook Bancshares, Inc.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)

Delaware 36-3220778
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

1400 Sixteenth Street, Oak Brook, Illinois 60521
- ------------------------------------------- ---------
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code (708) 571-1050
--------------

Securities registered pursuant to Section 12(b) of the Act: None
----

Securities registered pursuant to Section 12(g) of the Act:
Class A Common Stock ($2 par value)

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 and 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 ((S)229.405 of this chapter) 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 Form
10-K or any amendment to this Form 10-K. [X]

The aggregate market value of the voting stock held by non-affiliates of the
registrant as of March 15, 1996 was: $56,831,712 based upon the last sales price
of the registrant's Class A Common stock at $24.00 per share as reported by the
National Association of Securities Dealers Automated Quotation System.

The number of shares outstanding of each of the registrant's classes of common
stock as of March 15, 1996: 1,524,160 shares of Common Stock and 1,838,682
shares of Class A Common Stock.

Documents incorporated by reference: Portions of the Company's Annual Report to
Shareholders for the fiscal year ended December 31, 1995, and Proxy Statement
for its 1996 Annual Meeting of Shareholders to be filed on or about April 5,
1996 are incorporated by reference into Parts I., II. and III. hereof, to the
extent indicated in the Form 10-K Cross-Reference Index.
<PAGE>

FORM 10-K CROSS-REFERENCE INDEX

Certain information required to be included in Form 10-K is also included in the
1995 Annual Report to Shareholders or in the Proxy Statement used in connection
with the 1996 Annual Meeting of Shareholders to be held on May 7, 1996. The
following Cross-Reference Index shows the page location in the 1995 Annual
Report or in the Proxy Statement of only that information which is to be
incorporated by reference into Form 10-K. All other sections of the 1995 Annual
Report or the Proxy Statement are not required in Form 10-K and should not be
considered a part thereof.
<TABLE>
<CAPTION>
1995 1995 1996
FORM ANNUAL PROXY
Item No. Part I 10-K REPORT STATEMENT
----- ------ ---------
<S> <C> <C> <C>
1. Business............................................ 2-11
Statistical Disclosure by Bank Holding Companies... 22-34

2. Properties.......................................... 12-13

3. Legal Proceedings................................... 14

4. Submission of Matters to a Vote of Security Holders. 14

Part II

5. Market for Registrant's Common Equity
and Related Stockholder Matters.................... 45-46
48

6. Selected Financial Data............................. 22

7. Management's Discussion and Analysis of
Financial Condition and Results of Operation....... 22-34

8. Financial Statements and Supplementary Data......... 35-47

9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure................ 15

Part III

10. Directors and Executive Officers of the Registrant.. 6

11. Executive Compensation.............................. 10-13

12. Security Ownership of Certain Beneficial
Owners and Management.............................. 2-3

13. Certain Relationships and Related Transactions...... 7

Part IV

14. Exhibits, Financial Statement Schedules
and Reports on Form 8-K............................ 17-20

Signatures.......................................... 21
</TABLE>

1
<PAGE>

PART I
ITEM 1. BUSINESS

General
- -------

First Oak Brook Bancshares, Inc. ("the Company") was organized under Delaware
law on March 3, 1983, as a bank holding company under the Bank Holding Company
Act of 1956, as amended. The Company owns all of the outstanding capital stock
of Oak Brook Bank ("Bank"), Oak Brook, Illinois, which is an Illinois state-
chartered bank. The bank has seven locations in DuPage County and two locations
in Cook County.

The Company has two classes of common stock, Class A Common stock and Common
stock. The Common stock is convertible into Class A Common at any time on a
one-for-one basis. The Company has authorized shares of Class A Common and
Common stock of 4,000,000 and 3,000,000, respectively.

As of December 31, 1995, the Company had total assets of $678,102,000; loans of
$362,728,000, deposits of $555,086,000, and shareholders' equity of $53,762,000.

The business of the Company consists primarily of the ownership, supervision and
control of its subsidiary bank. The Company provides its subsidiary bank with
advice, counsel and specialized services in various fields of financial, audit,
legal and banking policy and operations. The Company also engages in
negotiations designed to lead to the acquisition of other banks and closely
related businesses.

The Bank is engaged in the general retail and commercial banking business. The
services offered include demand, savings, and time deposits, corporate cash
management services, commercial lending products such as commercial loans,
mortgages and letters of credit, and personal lending products such as
residential mortgages, home equity lines, auto loans and credit card products.
In addition, related products and services are offered including discount
brokerage, mutual funds and annuity sales, and foreign currency and precious
metal sales. Oak Brook Bank has a full service trust and land trust department.

The Bank originates the following types of loans: commercial, real estate (land
acquisition, development & construction, commercial mortgages, residential
mortgages and home equity), credit card and consumer installment loans. The
extension of credit inherently involves certain levels and types of risk
(general economic, default, concentration, interest rate and credit) which the
Company prudently manages through the establishment of lending, credit and
asset/liability management policies and procedures.

2
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Loans originated comply with the Bank's loan policies and governmental rules,
regulations and laws. While the subsidiary bank's loan policy varies for
different loan products, the policy generally covers such items as: percentages
to be advanced against collateral, blanket or specific liens, insurance
requirements, maximum terms, down payment requirements, debt-to-income ratio,
credit history and other matters of credit concern.

The Bank's loan policy grants limited loan approval authority to designated loan
officers. Where a credit request exceeds the loan officer's approval authority,
approval by a more senior lending officer and/or bank loan committee is
required. The loan policy sets forth those credit requests that either because
of the amount and/or type, require the approval of the bank loan committee.

The chart that follows sets forth the credit risks, loan origination procedures,
underwriting standards and lien position generally associated with the Bank's
lending in each major loan category. The major loan categories are residential
real estate, including purchase money, refinances and home equity; commercial
real estate, including land acquisition, development and construction loans;
commercial loans; auto loans (direct and indirect); credit cards and student
loans. These loans, except for credit cards, are made generally in the Chicago
Metropolitan area and are generally secured by collateral located in the Chicago
Metropolitan area.

The chart sets forth the information generally considered in approving these
loans and the collateral stated for each category is the collateral generally
required for these loans. Each loan is reviewed on its own merits and the
information set forth in the chart does not necessarily apply to each loan
within those categories. The lien position (if any) and collateral
documentation for commercial loans, commercial real estate and construction
loans are structured specifically for each loan.

3
<PAGE>

LOAN TYPE
YEAR END BAL. PRINCIPAL SIGNIFICANT MAJOR
(000'S) CREDIT LOAN ORIGINATION UNDERWRITING
% OF LOANS RISKS DOCUMENTATION STANDARDS LIEN POSITION
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
COMMERCIAL Borrower default Personal financial Determination of eligible and Unsecured:
- -Working capital Industry change statements of ineligible receivables Companies with
- -Term General economic guarantors Advances generally not to exceed significant
conditions Personal tax returns of 80% of eligible collateral net worth
guarantors Advances generally not to exceed relative to
BALANCE $38,171 Business financial 80% of cost on new equipment debt and
% 10.5% statements, or tax Advances generally not to exceed solid
returns (if applicable) 80% of liquidation value on used operating
Cash flow projections equipment history
Credit history Annual credit review Secured:
Mercantile reports Debt to tangible net worth normally Blanket first
Supplier references less than 4 to 1 lien on
Customer references Assessment of company's cash flow all business
If applicable -net annual cash flow should be assets
-Collateral valuation 120% of the total estimated (unmonitored
-A/R, A/P listing and aging annual debt service (with a 100% or with
-Machin.,F,F,&E,inv.lists floor) limited
-Pre-loan audit Maximum length of term loans monitoring)
generally 7 years Secured:
Personal guarantees of owners Specific first
(excluding public companies and lien on
private companies with significant assets being
net worth) financed
Periodic monitoring of A/R (including
Periodic audit for asset based loans leases)
Loan covenant restrictions
-Other borrowings
-Payment of dividends
-Limit on owner withdrawals
-Sale of company
-Capitol expenditures
Evidence of insurance
- ----------------------------------------------------------------------------------------------------------------------------------
COMMERCIAL Market changes Personal financial Loans to appraised value generally Secured by
MORTGAGES Casualty statements of not to exceed 75% (with a ceiling first
Borrower default guarantors of 85%) mortgages
BALANCE $55,437 Personal tax returns of Assessment of property's cash flow Assignment of
% 15.2% guarantors -net annual cash flow should be rents/leases
Business financial 120% of the total estimated Security
statements, or tax annual debt service (with a 100% agreement on
returns (if applicable) floor) fixtures
Cash flow projections Personal guarantees of owners Assignment of
Credit history Evidence of insurance beneficial
Lender references Tax and insurance reserves (if interest (if
Appraisals applicable) applicable)
Environmental assessments Environmental
Credit history of tenants indemnity
Financial information on agreement
tenants
Review of leases
Market trends and
conditions
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

4
<PAGE>

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
LOAN TYPE
YEAR END BAL. PRINCIPAL SIGNIFICANT MAJOR
(000'S) CREDIT LOAN ORIGINATION UNDERWRITING
% OF LOANS RISKS DOCUMENTATION STANDARDS LIEN POSITION
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
LAND Market changes Personal financial Land acquisition loan to value Secured:
ACQUISITION, Project statements of generally not exceed 50% (with a First mortgages
DEVELOPMENT completion guarantors ceiling of 65%) Assignment of
AND Borrower default Personal tax returns of Land development loan to value rents/leases
CONSTRUCTION Casualty guarantors generally not exceed 75% Assignment of
Business financial Construction loan to value generally unit sale
BALANCE $28,770 statements or tax not exceed 75% (with a ceiling of contracts
% 7.9% returns (if applicable) 85%) Assignment of
Cash flow projections Assessment of project cash flow plans,
Credit history -Net annual cash flow should be specifications
Industry experience and 120% of the total estimated annual construction
reputation debt service (with a floor of 100%) and service
Contractor references Disbursement escrows contracts
Lender references Personal guarantees Assignment of
Market trends and Evidence of insurance developers
conditions Inspection rights
Project feasibility Environmental
-Market acceptance Residential subdivision projects indemnity
-Project marketing strategy - Minimum unit release agreement
-Engineering study requirements for accelerated
Appraisals payback
Environmental assessments - Interest reserves (if applicable)

Review of other current
projects by developer

- ----------------------------------------------------------------------------------------------------------------------------------
RESIDENTIAL
REAL
ESTATE

A) PORTFOLIO Borrower default Application (including Debt to income generally not to Secured
1) Purchase -Job lost financials) exceed 39% gross annual income -First mortgages
money -Excessive debt Verification of employment Principal/interest/taxes/insurance Assignment of
2) Refinance -Future death, and income less than 28% of gross annual beneficial
disability or Verification of deposits income interest (if
divorce (excl.-home equity) Loan to value applicable)
Decline in market Last three years W-2's and -generally not to exceed 80% for
value tax returns loans under $500,000
B) SECONDARY Completion of Three years business tax -generally not to exceed 65%
MARKET construction returns (if self- (ceiling of 75%) for loans
1) Purchase Casualty employed) greater than $500,000
money Collateral appraisal
2) Refinance Credit history

BALANCE $81,226 Insurance (flood, hazard)
% 22.3% Two year job history or employment
in related field.
No serious prior derogatory credit
history
No current delinquencies

Secondary market loans (additional
to above):
-Loan to value which exceed 80%
require private mortgage insurance
-Investor approval

C) HOME EQUITY Same as above Same as above Same as above -Second mortgages

BALANCE $47,357
% 13.0%

- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

- ----------------------------------------------------------------------------------------------------------------------------------
CONSUMER
INSTALLMENT

Auto Borrower default Application (with Debt to income ratio generally not Secured,
(primarily -Job lost financials) to exceed 39% of gross annual recorded lien
indirect) -Excessive debt Verification of employment income on title
-Future death, Verification of residence No serious prior derogatory credit Single interest
disability or Credit history history insurance
BALANCE divorce Evidence of insurance No current delinquencies
$40,769 Collateral value Stable employment and residence
% 11.2% decline Established credit unless down
Casualty payment greater-than 25%

Dealer
-Business decline New dealerships are Direct:
-Industry decline submitted for credit New cars - loans generally not to
-General approval exceed 80% of purchase price
economic -Review dealers track Used cars (generally not older than
conditions record (reference 4 years)-loans limited to 100% of
-Fraud checks) NADA loan value
-Submit dealer financial
statements
-Dealer's industry Indirect:
reputation New cars-
-Mercantile report -invoice up to $18,000, will finance
-Annual review up to $500 over invoice
-Signed dealer agreement -invoice over $18,000, will finance
up to $1,000 over invoice
Used cars (generally not older than
4 years)-loans limited to 100% of
NADA loan

Student Loss of Application Unsecured,
Government Government
BALANCE guaranty guaranty
$5,847
% 1.6%

Other Various Various Various Various

BALANCE
$7,804
% 2.2%

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</TABLE>

6
<PAGE>

Competition
- -----------

The Company and its subsidiary bank operate primarily in DuPage County,
Illinois, with seven locations, and two locations in Cook County, Illinois, one
of which is located in western Cook County and the other on Chicago's North
Shore.

At June 30, 1995, the Company's seven DuPage County, Illinois, offices held $468
million in deposits for an approximate 5.2% market share in relation to the
total deposits in DuPage County commercial banks. The Company's two offices in
Cook County, Illinois contained $74 million in deposits for an approximate .1%
market share of Cook County. The Company's offices are part of the Chicago
banking market, as defined by the Federal Reserve Bank of Chicago, consisting of
Cook, DuPage and Lake Counties, which at June 30, 1995 had $90.0 billion in
deposits.

The Company's subsidiary bank is located in a highly competitive market facing
competition for deposits, loans and other banking services from many financial
intermediaries, including savings and loan associations, finance companies,
credit unions, mortgage companies, retailers, stockbrokers, insurance companies
and investment companies, many of which have greater assets and resources than
the Company.

Regulation and Supervision
- --------------------------

General
- -------

The Company is a bank holding company subject to the restrictions and
regulations adopted under the Bank Holding Company Act of 1956, as amended (the
"BHCA"), and interpreted by the Board of Governors of the Federal Reserve System
(the "Federal Reserve Board"), and the Company is also subject to Federal
Securities Laws and Delaware Law. The BHCA requires every bank holding company
to obtain the prior approval of the Federal Reserve Board before acquiring
direct or indirect ownership or control of 5% or more of the voting shares of
any bank or bank holding company. However, no acquisition may be approved if it
is prohibited by applicable state law. The Company is examined by the Federal
Reserve Bank of Chicago.

The subsidiary bank is subject to extensive governmental regulation and periodic
regulatory reporting requirements. The regulations by various governmental
entities, as well as Federal and State laws of general application affect the
Company and the subsidiary bank in many ways including but not limited to:
requirements to maintain reserves against deposits, payment of FDIC insurance,
restrictions on investments, establishment of lending limits and payment of
dividends. The subsidiary bank is primarily supervised and examined by the
Illinois Commissioner of

7
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Banks and Trust Companies and the Federal Deposit Insurance Corporation.

The Federal Reserve Bank examines and supervises bank holding companies pursuant
to risk-based capital adequacy guidelines. These guidelines establish a uniform
capital framework that is sensitive to risk factors, including off-balance sheet
exposures, for all federally supervised banking organizations. This can impact
a bank holding company's ability to pay dividends and expand its business
through the acquisition of subsidiaries if capital falls below the levels
established by these guidelines. As of December 31, 1995 the Company's Tier 1,
total risk-based capital and leveraged ratios were in excess of minimum
regulatory guidelines and also exceed the FDIC criteria for "well capitalized"
banks. See the Company's Annual Report at page 34 for a more detailed
discussion of the Risk Based Assessment System and the impact upon the Company
and its subsidiary bank.

Federal Deposit Insurance Corporation's Reduction of Insurance Assessments
- --------------------------------------------------------------------------

Under Federal law, the FDIC has authority to impose special assessments on
insured depository institutions, to repay FDIC borrowings from the United States
Treasury or other sources, and to establish semi-annual assessment rates for
Bank Insurance Fund ("BIF") member banks to maintain the BIF at the designated
reserve ratio required by law. Effective January 1, 1996, the FDIC reduced the
assessment rate schedule for all BIF members as set forth below:

BIF RATES
------------------------------------------------
Supervisory Subgroup
Capital -----------------------------
Group A B C
------- ------- ------- -------
<S> <C> <C> <C>
Well capitalized 0c* 3c 17c
Adequate 3 10 24
Under capitalized 10 24 27
</TABLE>

*Subject to the statutory minimum of $2,000 per institution per year.

The assessment schedule requires a minimum annual fee of $2,000 per institution
for the banks in the highest capital group and supervisory subgroup. Congress
is still debating the merger of the BIF and the Savings Association Insurance
Fund ("SAIF") funds which, if it occurs, may increase the BIF members assessment
to pay for SAIF debt.

8
<PAGE>

The Riegle/Neal Interstate Banking and Branching Efficiency Act of 1994 "The
- ----------------------------------------------------------------------------
Interstate Banking Act"
- -----------------------

The Interstate Banking Act allowed "adequately capitalized" and "adequately
managed" bank holding companies to acquire banks in any state as of September
29, 1995. The Act also allows interstate merger transactions after June 1,
1997.

The Interstate Banking Act amends Section (d) of the Bank Holding Company Act of
1956 authorizing the Federal Reserve to approve a bank holding company's
application to acquire either control or substantial assets of a bank located
outside of the bank holding company's home state regardless of whether the
acquisition would be prohibited by state law. The Federal Reserve may approve
these transactions only for "adequately capitalized" and "adequately managed"
bank holding companies.

The Interstate Banking Act also amended the Federal Deposit Insurance Act and
beginning June 1, 1997 responsible agencies may approve merger transactions
between insured banks with different home states regardless of whether the
transaction is prohibited under state law. Through interstate merger
transactions, banks will be able to acquire branches of out of state banks by
converting their offices into branches of the resulting bank. The Act provides
that it will be the exclusive means for bank holding companies to obtain
interstate branches. In these transactions, the resulting bank must remain
"adequately capitalized" and "adequately managed" upon completion of the merger.
The Act also states that a home state may enact a law preventing these
transactions, Illinois will allow these transactions effective June 1, 1997.
Each state has until June 1, 1997 to enact such legislation.

Financial Institutions Reform, Recovery and Enforcement Act of 1989 "FIRREA"
- ----------------------------------------------------------------------------

The FIRREA has broadened the regulatory powers of federal bank regulatory
agencies. One of the provisions of FIRREA contains a "cross-guarantee"
provision which could impose liability on the Company for losses incurred by the
FDIC in connection with assistance provided to or the failure of any of the
Company's insured depository institutions. In addition, under Federal Reserve
Board policy the Company is expected to act as a source of financial strength to
its subsidiary bank and to commit resources to support the subsidiary bank. As
a result of such policies, the Company could be required to commit resources to
its subsidiary bank in circumstances where it might not do so absent such
policies.

9
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Comprehensive Environmental Response Compensation and Liability Act "CERCLA"
- ----------------------------------------------------------------------------

In 1992 the U.S. Environmental Protection Agency (USEPA) adopted the CERCLA
which provided lenders with an exemption from liability if the lender did not
participate in the management of the contaminated property. The Secured Lender
Exemption Rule protected secured lenders from CERCLA liability if they did not
exercise significant control over the borrowers day-to-day operations and did
not fail to foreclose and promptly dispose of the contaminated property.
However, the Third Circuit Court of Appeals decision in Frank J. Kelley,
Attorney General for the State of Michigan, v. Environmental Protection Agency,
Chemical Manufactures Association v. Environmental Protection Agency, 15 F. 3d
1100 (D.C. Cir. 1994) ("Kelley") invalidated the secured lender exemption, and
the U.S. Supreme Court denied the appeal.

At this time Congress has not altered the Kelley decision and secured lenders
continue to be exposed to potential liability for clean-up of hazardous waste
material on real property subject to their security interests. The Bank
continues to require environmental assessments on commercial real property prior
to approval and funding. This policy reduces the Bank's potential liability for
hazardous waste clean-up by identifying the risks present on the property.

The state of Illinois amended its Innocent Landowner Law to protect lenders and
purchasers from environmental clean up liabilities. The law provides "innocent
landowner" protection for lenders and purchasers who perform Phase I and Phase
II environmental assessments or audits meeting the statutory requirements. This
law will protect the banks from prosecution by the Illinois Environmental
Protection Agency; however, it does not protect them against CERCLA liability.

The Federal Deposit Insurance Corporation Improvement Act of 1991 "FDICIA"
- --------------------------------------------------------------------------

The FDICIA significantly expanded the regulatory and enforcement powers of
federal banking regulators. FDICIA gives federal banking regulators
comprehensive directions to promptly direct or require the correction of
problems of inadequately capitalized banks in a manner that is least costly to
the Federal Deposit Insurance Fund. The degree of corrective regulatory
involvement in the operations and management of banks and their holding
companies will be largely determined by the actual or anticipated capital
position of the institution. See the Company's Annual Report page 34 detailing
the Company's capital position.

FDICIA also directs federal banking regulatory agencies to issue new safety and
soundness standards governing operational and managerial activities of banks and
their holding companies

10
<PAGE>

particularly in regard to internal controls, loan documentation, credit
underwriting, interest rate exposure, asset growth and executive compensation.
The following regulations were passed to implement some of the above objectives:

. The Bank is subject to and has complied with the Annual Independent Audits
and Reporting Requirements' regulations. The regulations subject financial
institutions with total assets of $500 million or greater to new stringent
annual audit and reporting requirements including: (1) an audit committee
comprised solely of outside directors; (2) submission of audited financial
statements; and, (3) a report by management regarding compliance with
designated laws and regulations and internal controls over financial
reporting.

. In August 1995, the Federal Banking Agencies jointly issued a final ruling
which stated that the agencies will include in their evaluation of capital
adequacy the exposure to declines in economic value of the bank's capital
due to changes in interest rates. The implementation of the proposed process
for measuring interest rate risk exposure has been delayed pending further
review by the Federal Banking Agencies. If the regulators determine a bank
is in a high risk position, additional capital may be required. The Company
and its subsidiary bank, on a regular basis, monitor and establish policy
limits on the sensitivity of net interest income to changes in interest
rates.

Other Laws and Regulations
- --------------------------

Proposals that change the laws and regulations governing banks, bank holding
companies and other financial institutions are discussed in congress, the state
legislatures and before the various bank regulatory agencies. Banks are subject
to a number of federal and state laws and regulations which have a material
impact on their business. These include, among others, state usury laws,
consumer protection laws and regulations, (e.g., the Truth in Lending Act, the
Equal Credit Opportunity Act, the Expedited Funds Availability Act, the
Community Reinvestment Act, the Truth in Savings Act), as well as the electronic
funds transfer laws, Bank Secrecy Act, environmental laws and privacy laws.

Statistical Disclosure by Bank Holding Companies
- ------------------------------------------------

See "Financial Review" on pages 22 through 34, inclusive, of the Company's 1995
Annual Report to Shareholders, which is incorporated herein by reference for the
statistical disclosure by bank holding companies.

11
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ITEM 2. PROPERTIES

The Company's offices are located in Oak Brook, Illinois. The subsidiary bank
and its branches conduct business in both owned and leased premises. The
Company believes its facilities are suitable and adequate to operate its banking
business. For information concerning lease obligations, see Note 6 of the Notes
to Consolidated Financial Statements and lease exhibits previously filed and
incorporated by reference.

The Company and Oak Brook Bank occupy space in a four-year old, three-story,
100,000 square foot, modern office building located at 1400 Sixteenth Street,
Oak Brook, Illinois, which is owned and operated by Oak Brook Bank. The first
and second floors and portions of the third floor and lower level are occupied
by Oak Brook Bank. The Company leases a small portion (1,700 square feet) from
Oak Brook Bank. The majority of the third floor is rented to third parties.

In addition, Oak Brook Bank operates the following branches:

Addison - A 24 year old, 14,500 square foot, two-story brick, colonial
building including a full basement and attached drive-up facility in
Addison, Illinois. The second floor is rented to third parties. This
facility and real estate are owned by Oak Brook Bank and was formerly the
Heritage Bank of Addison, acquired September, 1974.

Bensenville - Approximately 2,000 square feet of leased space in a modern,
two-story glass building in Bensenville, Illinois. Opened in May, 1986.

Broadview - A 42 year old, 6,955 square foot, one-story brick building in
Broadview, Illinois. This facility and real estate are owned by Oak Brook
Bank. Formerly Liberty Bank acquired March, 1991.

Broadview Drive-up - Oak Brook Bank also owns a detached one-story drive-up
facility across the street from the Broadview location.

Burr Ridge - Approximately 6,600 square feet of leased space in a one-story
contemporary building located in Burr Ridge, Illinois. A portion of this
space is used for record storage. Opened in October, 1988.

Glenview - Approximately 1,800 square feet of leased space in a strip
shopping center in Glenview, Illinois. Opened in March, 1990.

Lisle - Approximately 1,300 square feet of leased space in a neighborhood
shopping center in a primarily residential

12
<PAGE>

section of Lisle, Illinois. A detached drive-up automated teller machine is
also operated at this location. Opened in October, 1985.

Naperville - A 2,600 square foot, two-story contemporary Palladian-style
building with a full basement and attached drive-up facility in Naperville,
Illinois. This facility is owned by Oak Brook Bank. Opened in June, 1988.

Warrenville - Approximately 4,400 square feet of leased space on the first
floor of a two-story tudor-style building with a full basement and attached
drive-up facility in Warrenville, Illinois. Formerly Warrenville Bank &
Trust acquired April, 1983.

13
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ITEM 3. LEGAL PROCEEDINGS

Various actions and proceedings arising in the ordinary course of business are
presently pending to which the Company or the subsidiary bank is a party.
Management, after consulting with legal counsel, believes that the aggregate
liabilities, if any, arising from such actions would not have a materially
adverse effect on the financial position of the Company.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There were no matters submitted to a vote of shareholders during the fourth
quarter of this year.

14
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PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

See page 48 and Notes 9 and 11 of the Notes to Consolidated Financial Statements
on pages 45 and 46 of the Company's 1995 Annual Report to Shareholders which is
incorporated herein by reference.

ITEM 6. SELECTED FINANCIAL DATA

See "Earnings Summary and Selected Consolidated Financial Data" on page 22 of
the Company's 1995 Annual Report to Shareholders, which is incorporated herein
by reference.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION

See "Financial Review" on pages 22 through 34, inclusive, of the Company's 1995
Annual Report to Shareholders, which is incorporated herein by reference.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The Consolidated Financial Statements and related notes are on pages 35 through
47, inclusive, of the Company's 1995 Annual Report to Shareholders, which is
incorporated herein by reference.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None.

15
<PAGE>

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

See "Directors and Executive Officers" on page 6 of the Company's Proxy
Statement to be filed on or before April 5, 1996, which is incorporated herein
by reference.

ITEM 11. EXECUTIVE COMPENSATION

See "Summary Compensation Table" and footnotes, "Five Year Performance
Comparison" and "Aggregated Option Exercises and Year-End Option Values Table"
and "Option Grants Table" on pages 10 through 14, inclusive, of the Company's
Proxy Statement to be filed on or before April 5, 1996, which is incorporated
herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

See "Information Concerning Security Ownership of Certain Beneficial Owners and
Management" on pages 2 and 3 of the Company's Proxy Statement to be filed on or
before April 5, 1996, which is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

See "Certain Transactions" on page 11 of the Company's Proxy Statement to be
filed on or before April 5, 1996, which is incorporated herein by reference.

16
<PAGE>

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

ANNUAL REPORT
PAGE
----
(a) 1. The following financial statements are
filed as part of this report:

Annual Report to Shareholders -
Report of Independent Auditors 35
Consolidated Balance Sheets - December 31, 1995
and 1994 36
Consolidated Statements of Income for the Three
Years Ended December 31, 1995 37
Consolidated Statements of Changes in
Shareholders' Equity for The Three Years Ended
December 31, 1995 38
Consolidated Statements of Cash Flows for the
Three Years Ended December 31, 1995 39
Notes to Consolidated Financial Statements 40-47

2. Financial statement schedules: All schedules are omitted as they are
not applicable or information is included in the consolidated financial
statements or the notes thereto.

(b) The following Reports on Form 8-K were filed during the last quarter of the
period covered by this report: None

Exhibit (3) Articles of Incorporation including Amendments thereto
and By Laws of First Oak Brook Bancshares, Inc. (Exhibit
3 to the Company's Form 10-K Annual Report for the year
ended December 31, 1994, incorporated herein by
reference).

Exhibit (10.1) Loan Agreement between First Oak Brook Bancshares, Inc.
and LaSalle National Bank dated December 1, 1991 and
amendments dated January 31, 1993 and March 31, 1994.
(Exhibit 10.1 to the Company's Form 10-K Annual Report
for the year ended December 31, 1994, incorporated
herein by reference).

17
<PAGE>

Exhibit (10.2) Lease Agreement between First Oak Brook Bancshares, Inc.
and Oak Brook Bank dated November 8, 1991. (Exhibit 10.2
to the Company's Form 10-K Annual Report for the year
ended December 31, 1994, incorporated herein by
reference).

Exhibit (10.3) Data Processing Agreement between First Data Resources
Inc. and Oak Brook Bank dated November 22, 1991.
(Exhibit 10.3 to the Company's Form 10-K Annual Report
for the year ended December 31, 1994, incorporated
herein by reference.) Amendment thereto dated March 1,
1996 filed herewith.

Exhibit (10.4) First Oak Brook Bancshares, Inc. Employees' Stock Bonus
Plan as amended and restated effective July 19, 1994.
(Exhibit 10.4 to the Company's Form 10-K Annual Report
for the year ended December 31, 1994, incorporated
herein by reference).

Exhibit (10.5) First Oak Brook Bancshares, Inc. Amended and Restated
1987 Stock Option Plan effective September 21, 1987.
(Exhibit 10.5 to the Company's Form 10-K Annual Report
for the year ended December 31, 1994, incorporated
herein by reference).

Exhibit (10.6) Lease Agreement between Oak Brook Bank, not personally,
but solely as Trustee under Trust Agreement dated August
1, 1989 and known as Trust Number 2200 and Life
Investors Insurance Co. of America, an Iowa Corporation,
for Suite 300 of the Oak Brook Bank Building. (Exhibit
10.6 to the Company's Form 10-K Annual Report for the
year ended December 31, 1994, incorporated herein by
reference).

18
<PAGE>

Exhibit (10.7) Lease Agreement between Oak Brook Bank, not personally,
but solely as Trustee under Trust Agreement dated August
1, 1989 and known as Trust Number 2200 and CB Commercial
Real Estate Group, Inc., a Delaware Corporation, for
Suite 301 of the Oak Brook Bank Building. (Exhibit 10.7
to the Company's Form 10-K Annual Report for the year
ended December 31, 1994, incorporated herein by
reference).

Exhibit (10.8) License Agreement, between Jack Henry & Associates, Inc.
and First Oak Brook Bancshares, Inc. dated March 10,
1993. (Exhibit 10.8 to the Company's Form 10-K Annual
Report for the year ended December 31, 1994,
incorporated herein by reference).

Exhibit (10.9) Form of Transitional Employment Agreement for Eugene P.
Heytow, Richard M. Rieser, Jr. and Frank M. Paris.
(Exhibit 10.9 to the Company's Form 10-K Annual Report
for the year ended December 31, 1994, incorporated
herein by reference).

Exhibit (10.10) Form of Transitional Employment Agreement for Senior
Officers. (Exhibit 10.10 to the Company's Form 10-K
Annual Report for the year ended December 31, 1994,
incorporated herein by reference).

Exhibit (10.11) Form of Agreement Regarding Post-Employment Restrictive
Covenants for Eugene P. Heytow, Richard M. Rieser, Jr.
and Frank M. Paris. (Exhibit 10.11 to the Company's Form
10-K Annual Report for the year ended December 31, 1994,
incorporated herein by reference).

Exhibit (10.12) Form of Supplemental Pension Benefit Agreement for
Eugene P. Heytow. (Exhibit 10.12 to the Company's Form
10-K Annual Report for the year ended December 31, 1994,
incorporated herein by reference).

19
<PAGE>

Exhibit (10.13) Form of Supplemental Pension Benefit Agreement for
Richard M. Rieser, Jr. (Exhibit 10.13 to the Company's
Form 10-K Annual Report for the year ended December 31,
1994, incorporated herein by reference).

Exhibit (10.14) Senior Executive Insurance Plan.

Exhibit (13) Annual Report to Shareholders.

Exhibit (21) Subsidiary of the Registrant.

Exhibit (23) Consent of Ernst & Young LLP.

Exhibit (27) Financial Data Schedule.

Exhibits 10.9 through 10.14 are management contracts or compensatory plans or
arrangements required to be filed as an Exhibit to this Form 10-K pursuant to
Item 14(c) hereof.

20
<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.

FIRST OAK BROOK BANCSHARES, INC.
--------------------------------
(Registrant)

BY: /S/EUGENE P. HEYTOW
------------------------------
(Eugene P. Heytow,
Chairman of the Board and
Chief Executive Officer)

DATE: March 21, 1996
------------------------------

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.

Signature Title Date
- --------- ----- ----

/S/EUGENE P. HEYTOW Chairman of the Board March 21, 1996
- --------------------------- and Chief Executive
Eugene P. Heytow Officer

/S/FRANK M. PARIS Vice Chairman of March 21, 1996
- --------------------------- the Board
Frank M. Paris

/S/RICHARD M. RIESER, JR. President, March 21, 1996
- --------------------------- Assistant Secretary,
Richard M. Rieser, Jr. and Director

/S/ALTON WITHERS Director March 21, 1996
- ---------------------------
Alton Withers

/S/MIRIAM LUTWAK FITZGERALD Director March 21, 1996
- ---------------------------
Miriam Lutwak Fitzgerald

/S/GEOFFREY R. STONE Director March 21, 1996
- ---------------------------
Geoffrey R. Stone

/S/ROBERT WROBEL Director March 21, 1996
- ---------------------------
Robert Wrobel

/S/ROSEMARIE BOUMAN Vice President, Chief March 21, 1996
- --------------------------- Financial Officer,
Rosemarie Bouman Treasurer (Principal
Accounting Officer)

<PAGE>

EXHIBIT (10.3)

SECOND AMENDMENT TO SERVICE AGREEMENT

This Second Amendment to Service Agreement made and entered into this 1st day of
March, 1996 by and between Oak Brook Bank, 1400 Sixteenth Street, Oak Brook,
Illinois 60521 ("Buyer") and First Data Resources, Inc., 7301 Pacific Street,
Omaha, Nebraska 68114 ("FDRI").

WITNESSETH:

WHEREAS, Buyer and FDRI heretofore entered into a Service Agreement dated as of
November 22, 1991 as amended by Amendments to Service Agreement dated September
2, 1994, the "Service Agreement"); and

WHEREAS, Buyer and FDRI now desire to amend the Service Agreement as hereinafter
more particularly set forth;

NOW THEREFORE, Buyer and FDRI hereby agree as follows:

1. Section 6.1 of the Service Agreement is hereby amended by the addition
of the following, effective March 1, 1996:

"Anything in this Agreement to the contrary notwithstanding, this
Agreement shall continue in effect for an additional period of one (1)
month commencing on March 1, 1996 and ending on March 31, 1996 (the
"Extension Period"). During the Extension Period, Buyer shall continue
to pay FDRI for the services hereunder at the rates paid to FDRI by
Buyer for such services during the previous twelve (12) month period."

2. As hereby amended and supplemented, the Service Agreement shall remain
in full force and effect.

IN WITNESS WHEREOF, the parties hereto have executed this Amendment to Service
Agreement the day and year first above written.

FIRST DATA RESOURCES INC. OAK BROOK BANK

By: /S/ROBIN SGROI By: /S/ROSEMARIE BOUMAN
---------------------- ------------------------
Title: Senior Vice President Title: Executive Vice
President and Chief Financial
Officer

<PAGE>

EXHIBIT (10.14)

FIRST OAK BROOK BANCSHARES, INC.

SENIOR EXECUTIVE INSURANCE PLAN
-------------------------------

The First Oak Brook Bancshares, Inc. Senior Executive Insurance Plan (the
Plan) is established this 11th day of March, 1996, pursuant to the unanimous
review and approval of the Stock Option Advisory Committee consisting of
independent directors, Miriam Lutwak Fitzgerald, Chairman, Alton M. Withers and
Geoffrey R. Stone.

1. The Board of Directors of First Oak Brook Bancshares, Inc. (the "Company")
by its Stock Option Advisory Committee acting independently, has determined
that it is in the best interest of the Company to terminate the current term
insurance policies being maintained on senior executives, Eugene P. Heytow,
Frank M. Paris and Richard M. Rieser, Jr. (Senior Executive(s)); it being
determined that the escalating expense of these policies should be
eliminated and replaced by this Plan created to provide alternative
insurance benefits for said Senior Executives at a fixed cost to the
Company.

2. The Plan establishes a fixed annual payment (less applicable withholding
taxes) to the Senior Executives to be used by them to pay the costs of
insurance premiums on specified insurance policies. The payments shall be
made upon inception of the policies and on each anniversary thereof,
provided the Company's obligations hereunder have not terminated pursuant to
paragraph 5 below.

3. The schedule of insurance coverage and annual payments for each Senior
Executive is as follows:

Eugene P. Heytow
Company: Federal Kemper Life Assurance Company Policy #FK5154589
Amount of Death Benefits: $1,500,000.00
Annual Payment: $ 44,840.00

Frank M. Paris
Company: The Northwestern Mutual Life Insurance Company Policy
#13517090
Amount of Death Benefits: $1,000,000.00
Annual Payment: $ 28,320.00

Richard M. Rieser, Jr.
Company: The Northwestern Mutual Life Insurance Company Policy
#13575688
Amount of Death Benefits: $1,510,000.00
Annual Payment: $ 44,840.00
<PAGE>

4. The Company will have no ownership interest in any of the insurance
policies, nor any residual or collateral interest in any premiums paid or
cash surrender value. The Senior Executives or their designees will have all
rights of ownership of said policies and can exercise said rights without
qualification or restriction by the Company.

5. The Company's obligation to pay the annual payments set forth above is
irrevocable and can not be altered or amended by further action of the Board
of Directors, Stock Option Advisory Committee or any other committee of the
Company without the consent of the affected Senior Executive. The Company's
obligation will cease as to a Senior Executive only upon, (a) the
termination of the Senior Executive's employment with the Company, whether
voluntary or involuntary, subject to the Company's continuing obligations
under any employment or other agreement, (b) the cancellation of the
insurance policy on the Senior Executive's life, (c) the death of the Senior
Executive, or (d) at such time as the annual payments have resulted in a
fully paid-up policy (or would have resulted in a fully-paid up policy based
on the assumptions in effect at the inception of the policy and assuming no
withdrawals or loans were taken therefrom).

FIRST OAK BROOK BANCSHARES, INC.
STOCK OPTION ADVISORY COMMITTEE

MARCH 11, 1996

<PAGE>
Exhibit (13)

<TABLE>
<S> <C>
First Oak Brook Bancshares, Inc. Annual Report 1995. A quest for that one special bank.

</TABLE>
[Art]
<PAGE>

First Oak Brook Bancshares, Inc., In Brief
- ----------------------------------------------------

Our Business
First Oak Brook Bancshares, Inc. is the 11th largest, independent publicly-held
bank holding company headquartered in Illinois. Organized in 1983 and publicly-
traded since 1985, its primary business is the ownership and control of Oak
Brook Bank, an Illinois-chartered commercial bank. The Company employees 264
full-time equivalent employees.
Oak Brook Bank offers full-service banking, trust and related financial
services through a network of nine offices in suburban Chicagoland.

Our Markets
The Company is headquartered and its largest banking office is located in Oak
Brook, Illinois, twenty miles west of downtown Chicago. Eight of its offices are
located in the western suburbs of Chicago, seven of which are in DuPage County.
DuPage, the second largest county in Illinois, has a population of approximately
850,000 and enjoys the highest median household income in the state. Its other
office is located on Chicago's affluent North Shore. In addition, the Company
markets its products and services through local advertising and, in the case of
its credit card programs, also through national advertising and promotional
activities.
- --------------------------------------------------------------------------------

Our Vision
To excel as a leading provider of banking and related financial services in the
communities we serve, we must...
1. Build close relationships with customers and the communities.
2. Exceed customer expectations by offering quality products and services and by
building on historic strengths.
3. Out-execute competitors through clear banking focus, efficient operations,
and superior pricing.
4. Exercise prudent risk management, seeking better than average returns while
taking below-average risk, so as to build capital for growth and to minimize
regulatory intervention.
5. Share the resulting benefits among loyal customers, a challenged and
experienced staff, and deserving shareholders.

- -----------------------------------------------------------------------------

Table of Contents
1 Financial Highlights
2 Message to Shareholders
21 Performance Graphs
22 Financial Review
35 Report of Independent Auditors
36 Consolidated Financial Statements
40 Notes to Consolidated Financial Statements
48 Corporate and Shareholder Information
<PAGE>

Financial Highlights
First Oak Brook Bancshares, Inc. and Subsidiary
<TABLE>
<CAPTION>

(Dollars in thousands except per share amounts) 1995 1994 1993
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Earnings
Net income................................................................... $ 6,692 $ 6,194 $ 5,533

Per Share
Net income................................................................... $ 1.95 $ 1.81 $ 1.62
Book value at year-end....................................................... 15.64 13.17 13.25
Market price at year-end..................................................... 20.63 17.25 14.33
Cash dividends paid
Class A common............................................................. .315 .276 .236
Common..................................................................... .263 .222 .192

Selected Financial Ratios
Return on average assets..................................................... 1.03% 1.01% .95%
Return on average shareholders' equity....................................... 14.00% 14.54% 13.85%

Year-End Balances
Total assets................................................................. $678,102 $634,705 $613,574
Loans, net of unearned discount.............................................. 362,728 309,681 278,177
Demand deposits.............................................................. 128,236 109,237 113,780
Total deposits............................................................... 555,086 513,623 508,173
Shareholders' equity......................................................... 53,762 42,909 44,118

Asset Quality
Nonperforming assets to total loans outstanding and other real estate owned.. .03% .21% .46%
Allowance for loan losses to total loans..................................... 1.08% 1.25% 1.16%
- --------------------------------------------------------------------------------------------------------------
</TABLE>

1
<PAGE>

Letter to Shareholders For the fifth consecutive year, First Oak Brook
Bancshares achieved record earnings. Net income for 1995 climbed to $6.7
million, compared with $6.2 million for 1994, an increase of 8%. Total assets
kept pace, growing to $678 million in 1995 from $635 million in 1994, up 7%. Our
shareholders received a 20% higher quarterly dividend and saw a 20% increase in
stock price by year end.

The Company also achieved record shareholders' equity of $53.8 million
through earnings retention of $5.8 million and the restoration of $5.1 million
to capital--the result of applying required "mark to market" rules to our
securities portfolio. Asset quality remains excellent.

Certainly the greatest payoff for us in 1995 came from the realization that
our solid financial results evolved from our strategic vision. And that vision,
in turn, flowed from our early identification and analysis of five long-term
industry trends. First, banking is becoming less capital-intensive and more
service-driven. Second, banking profitability is now less determined by interest
income and more by fee income--a corollary of moving to a service industry.
Third, banking technology has been transformed from an expensive, monolithic
tool driven by volume to a cheap, distributed, and accessible means of
customization. And the life cycle of today's technology is becoming shorter and
shorter. Fourth, the value of smart, educated, trained, dedicated employees to
advise and consult with customers and manage technology has never been higher.
And, fifth, despite the creation of mega-banks through mergers and
consolidations, banks are recognizing they no longer can be all things to all
people.

These trends are visible in virtually every aspect of our business, as
illustrated by the following: Our residential mortgage business exemplifies the
shift from a capital-dependent industry to a service business. Superficially,
the retail mortgage business may look like traditional lending, and, in fact, we
kept a significant share of the home mortgages we originated last year. But this
was an internal asset allocation decision, since we could well have chosen to
sell all the mortgages we originated into the secondary market. Our success
turns on our prowess in attracting, underwriting, documenting, and servicing
home loans--largely skills associated with high levels of personal service
provided by trained professionals--rather than simply on our capacity to fund
mortgages.

The shift to fee-based compensation is evident in many areas. Our Trust
Department's growth in investment management revenue, our Investment Center's
success in selling mutual funds, and our Cash Management Department's
willingness to accept payment in either compensating deposit balances or fees
point to that direction.

With respect to banking technology, some historical perspective is helpful.
Back in 1978, we financed a lease for Chrysler Corporation on a mainframe
computer--an IBM 370-159. It cost about $3 million, ran the length of a large
room, stood as high as a six-foot man, required a special, chilled computer room
and raised floor, and cost about $18,000 a month to operate. Today, many of our
office PCs can do as much computing, as fast, for a few thousand dollars.

2
<PAGE>

We'll tell you the story of hardworking Hank
And we think that you'll find it rings true;
He embarked on a quest for that one special bank
(A search that you may have made, too).

Well, what our Hank found as he wandered around
(Not knowing quite where to place blame),
Were banks on each corner like weeds in the ground,
And all just exactly the same.

"Yes, dollars are dollars; a loan is a loan;
Each bank sells identical stuff.
My ear is now sore from comparing by phone
And I'm close to announcing--Enough."
<PAGE>

[PHOTO APPEARS HERE]

Through an ocean of banks poor Hank charted his course
'til he felt like a rust-bucket tanker;
then a thought flashed in Hank with electrical force--
"hey, I don't need a bank--just a banker!"
<PAGE>

[PHOTO APPEARS HERE]

<PAGE>

Through an ocean of banks poor Hank charted his course
'Til he felt like a rust-bucket tanker;
Then a thought flashed in Hank with electrical force--
"Hey, I don't need a bank--just a banker!"

"But I don't want some prim, pompous buttoned-down bore,
Who only knows how to say `No'--
Who will hand me my briefcase and point to the door
Shrugging, `Take it or leave it--then go!' "
<PAGE>

No longer a slave to expensive technology best utilized for volume
production, we are now a master of cheap technology good for individualized
applications. How surprised we were to read that a prime motivation in NBD's
merger with First Chicago was to obtain First's technological preeminence.
Technology is just too affordable, accessible, and evolutionary to be a prime
attraction. Consider a few recent technological accomplishments our modest
institution has done inexpensively and largely on our own. In 1993, we went "in
house" for our main data processing and also developed--with our software
provider--a user-friendly cash management module. In 1994, we brought out our
own enhanced, combined debit/ATM "PlasticCash(R)" card, usable at Cash
Stations(R) in Chicago, Cirrus(R) locations nationally, and 12 million
MasterCard(R) merchants worldwide. Also in 1994, we introduced our 24-Hour
Account Connection, a phone banking system, which now handles over 10,000
inquiries and transactions a month. In 1995, we developed an automated
application processing system to handle dealer-generated auto loans, similar to
the system we developed for approving credit card requests. And we engineered a
remote transmission method that allows us to print out, at any of our branches,
loan documents originated in our centralized consumer loan processing
department.

By the time you read this letter, we expect to be on the Internet (find us
at http://www.obb.com). At our Web site you will find directions to our offices,
lists of services, rate charts, credit card applications, a job board,
shareholder information, and electronic mail boxes. All this for less than
$20,000.

Before the end of 1996, we should also have a Loan-by-Phone system to take
most consumer credit applications, with turnarounds in a matter of hours. A new
Teller Operating system will speed transactions at every branch. A new Trust
system will improve our research capabilities, decision-making, trade execution
and recordkeeping. And a database marketing system will allow us to track our
sales efforts with greater speed and accuracy.

The problem, we believe, is not technology or its price tag. The challenge
is managing it, and that is the human side of the equation. Our staff has not
changed significantly in numbers over recent years. We had 264 full-time
equivalent employees in 1995, compared to 277 in 1994 and 270 in 1993. What has
changed are the skills we demand of our personnel. For instance, we employ just
nine full-time secretaries and administrative assistants; almost everyone does
his or her own PC-based word processing. In this new world of banking,
processing is not less important; but it is much easier for us and far less
noticeable to our customers.

As many customers have come to prefer "push-button" banking for day-to-day
transactions, our staff has been relieved of mundane clerical duties and now can
focus on the special personal and professional financial needs of our customers.
At Oak Brook Bank, it's become almost routine to find a lender who'll log in
hours at the library to research the viability of an emerging technology for a
loan customer, a teller who'll brave a blizzard to deliver documents to a
snowbound customer, a staffer who'll turn around a home equity request in a
matter of days to meet a customer's tax deadline, and a trust officer who'll
make sure the air conditioning is fixed for a elderly client. Exceptional
people? Yes, but at Oak Brook Bank their efforts are not extraordinary.

7
<PAGE>

To build on this competitive advantage, we've worked throughout 1995 to
strengthen backroom support, upgrade technological tools, and develop staff.
We've intensified training programs to broaden customer service skills and
streamline operational tasks. Department by department, the Bank has reorganized
to allow customer contact staff to focus on the people at their desks or on the
phone. Gone are the days when a customer's question was an interruption in
paperwork, instead of an exciting opportunity to generate a direct sale or
referral. Similarly, our processing staff is allowed to concentrate on the
documentation, balancing, computing and calculating that keep the Company
operating efficiently.

Throughout the organization, there is a renewed sense of team spirit as
well as individual responsibility: personal bankers referring customers to the
Investment Center, trust officers introducing clients to commercial bankers,
cash management specialists recommending retail services to their corporate
clients' employees. This energy, enthusiasm and action serves to increase
customer satisfaction, strengthen ties to the Bank, and ultimately increase our
fee income and asset base.

Despite the creation of mega-banks through mergers and consolidations,
bankers no longer believe they can do all things for all people. We would agree.
But to many banks, this means doing just some things for all people. Certain
banks are choosing between "high-tech" and "high-touch" banking. Consequently,
on the one hand, we're seeing giant banks produce unmanned branches that look
like StarTrek sets and charge substantial fees for ordinary teller transactions.
And, on the other hand, we're finding small community banks offering just a
friendly hand, instead of a helpful product or service.

The Company believes, in contrast, we can do most things for some people.
We don't believe we have to choose between technology and personal service, but
that our success depends on seamlessly weaving the two threads together. Of
course, we aren't pursuing the whole Chicago market--just the part we know
best--primarily the western suburbs of Chicago.

That we offer the best of both the "high-touch" and "high-tech" banking
worlds is indisputable. Our talented, "roll-up-the-sleeves" bankers serve our
customers in a much more personal fashion than the mega-banks, many of which are
internally focused on the fallout from multiple mergers and continuous
consolidations. And we offer a wider array of products and services than the
smaller banks. Oak Brook Bank is both a community bank that is quickly
approaching the billion dollar mark and a downtown bank that happens to be
located in the Chicago suburbs. Independent management decisions continue to be
made here, not across the country or on another continent. We remain close to
our communities, their businesses, schools, residents, and leaders.

Against this backdrop, we'll review some of 1995's most important business
initiatives and explore the opportunities that lie ahead.

Our Investment Center opened in late 1994 to tap into the market for
alternative investment products such as mutual funds and annuities. (In 1994,
for the first time, Americans had more money in mutual funds than in banks.) In
1995, its first full

8
<PAGE>

"My banker should be as hardworking as I,
A person who gets the job done,
A person on whom I can truly rely,
With customer service 'job one.' "

At Oak Brook Hank saw that good bankers abound
Two hundred plus ninety and eight;
In ev'ry department our happy Hank found
A team that seemed really first-rate.

Once Hank lost his wallet and sank in despair
(He was booked on a late evening flight);
But bankers from Oak Brook rushed off to O'Hare
With new credit cards that very same night.

<PAGE>

[PHOTO APPEARS HERE]

Another time when Hank's CDS had come due
(and he'd slipped a disc in his spine),
Hank's banker at Oak Brook appeared from the blue
with a heat-pad and papers to sign.

<PAGE>

[PHOTO APPEARS HERE]

<PAGE>

Another time when Hank's CDs had come due
(And he'd slipped a disc in his spine),
Hank's banker at Oak Brook appeared from the blue
With a heat-pad and papers to sign.

Hank opened a business, small when he began,
His cash flow was hardly a trickle;
But his banker worked out a cash management plan
To earn interest on ev'ry last nickel.
<PAGE>

year in operation, the Center generated impressive results, nearly $5.2 million
in sales, $4.5 million of which was new money to the Bank.

The Investment Center meets the financial needs of a number of customers--
those with smaller sums to invest, first-time investors, and those for whom the
bank environment offers convenience and access.

We expect further profitable growth from this activity as we add investment
representatives, reach out to market our services to companies whose employees
mirror our target customer profile, and expand our product mix to meet the needs
of current and potential clients. Beyond intrinsic profitability, the presence
of the Investment Center allows us more latitude in helping customers allocate
assets consistent with their risk tolerance and investment goals.

While the Investment Center sells specific investments, the Trust
Department's mission is selling investment services, typically packaging
investment advice with administration, custody, collection, recordkeeping, and
reporting. Once again in 1995, our Trust Department succeeded brilliantly.
Income from asset management and trust operations totaled $592,000 in 1995, a
33% increase over 1994. By year-end, discretionary assets under management had
grown to $67.5 million from $47 million the previous year.

What distinguishes Oak Brook Bank's investment management from its
competitors is its capacity to offer a full range of cost-effective services to
smaller accounts. In fact, the Trust Department has fashioned a new advisory
product, the Actively Managed Mutual Fund Program, which is affordable for
accounts over $150,000. Our analysts identify the best mutual funds; our clients
select their objectives. Then, our portfolio managers select the mix of funds,
determine percentage weightings, and seek appropriate buy and sell
opportunities. As a result of such innovative products and a clear strategy to
grow the advisory business, 1995 results were outstanding and 1996 looks
promising.

During 1995, we established a Professional and Executive Banking Center to
meet the specialized banking and borrowing needs of high income and high net
worth individuals. Headed by a "beeper banker," an experienced officer who is
always on call, this Center has attracted $3.8 million in new deposits and
nearly $6.4 million in loans. In one case, we took a loan request on a 54-foot
Viking yacht and closed the loan in under a week. While the focus in 1995 was on
medical practices and physicians, in 1996 we are broadening our scope to reach
CPAs, attorneys, and top executives in the western suburbs. Our targets are
those whose busy careers create time constraints in addressing their own
personal financial affairs. Cross-selling opportunities are abundant.

1995 also marked the year we established a separate Public Funds and
Finance Division under the province of an experienced senior officer. This
market was the source of over $15 million in deposits and $1.3 million in loans.
Given our unique position--a community bank with the resources to offer
sophisticated, well-priced commercial services--we are an attractive

13
<PAGE>

choice for state, county, and municipal bodies, as well as school, park, fire,
and library accounts. We expect the Public Funds and Finance Division to attract
a wide array of new business in 1996, especially in the areas of cash management
and electronic banking, credit card processing, and pension and investment
funds.

Our Indirect Auto Loan Department continued to produce excellent results,
growing to $38.4 million in 1995 from $22.2 in 1994. Indeed, over 1995, our
staff extended $30.0 million in new credit in 1,960 separate loans--with losses
under $1,000. These accomplishments are all the more impressive because auto
dealers are, rightfully, demanding customers. We must price our loans
competitively, make our credit decisions quickly, and apply credit criteria
consistently. To provide such service requires a true team effort. The
department manager surveys loan pricing and sets credit standards, consumer loan
officers ensure fast turnarounds, and a calling officer builds trust and
communication between the dealer and bank. Over 1995, the addition of a full-
time marketing officer helped smooth time-sensitive workflows.

Our Residential Mortgage growth can be attributed to two factors: Our
proactive sales culture and low interest rates. The Mortgage Department
originated 206 loans equating to $42 million in 1995, compared to $24 million in
1994. We attracted business through rate-line advertising in the Chicago Tribune
and regional radio, direct marketing to realtors and builders, and the referral
network developed by our originators. But without doubt the key to this highly
competitive business is the talent and effort of our originators. It is common
for them to work evenings and weekends, driving to prospects' homes and
businesses to take applications. What looks simple to the mortgage applicant is,
in fact, a complex mixture of pricing, advertising, originating, underwriting,
documenting, selling, and servicing home loans--all adding up to outstanding
service.

In 1996, we plan to increase momentum and market share by providing
extended interest rate locks to homebuilders, offering 48-hour approvals, and an
even wider assortment of mortgage products. (Today we offer 13 kinds of
mortgages.)

Our Commercial Real Estate Department has shown dramatic growth.
Disbursements in 1995 were $36.2 million, of which over 70% came from local
homebuilders. Again, this is an area where customer needs intersect with our
competitive strengths. It is a market that demands quick decisions and quality
attention. Builders, in particular, appreciate dealing with the same high
caliber people on every aspect of their business.

Our approval process also sets us apart from the competition. Financing is
structured from the start between the lending officer and borrower, with
simultaneous input from senior management, thus avoiding surprises and delays.
An aggressive calling program, led by experienced lenders--and the addition of a
new credit officer to assist with underwriting--promises to increase our
commercial real estate portfolio.

14
<PAGE>

Hank asked for a loan as his company grew
To make items complex and high-tech;
His banker did research and very soon knew
The amount to fill out on Hank's check.

The bank even helped Hank's community thrive
Loaning money to buy books and pools;
The firemen all got new engines to drive
And the kids went to spanking-new schools.

When Hank's children left home to start lives of their own
And his wife said, "Let's call it a day";
Their banker informed them their savings had grown
To amounts that would free them to play.
<PAGE>

[PHOTO APPEARS HERE]

So with solid investments and heart full of pride
his business assured for posterity;
Hank boarded his yacht with his wife at his side,
and thanked Oak Brook for so much prosperity.

<PAGE>

[PHOTO APPEARS HERE]

<PAGE>

So with solid investments and heart full of pride
His business assured for posterity;
Hank boarded his yacht with his wife at his side,
And thanked Oak Brook for so much prosperity.

This tale about Hank was not meant to amuse;
Its point you won't find in a joke book;
If success is your aim, then like Hank you should choose
To do all your banking at Oak Brook.
<PAGE>

Perhaps 1995's most impressive accomplishments were the Cash Management
sales efforts of all our calling officers. For over two decades, the Company has
maintained a leadership role in providing cash management to corporations. These
services afford us the opportunity to attract low-cost deposits and earn
significant fee income.

In 1995, we continued to build on our competitive strengths in this area--
user-friendly and secure technology, customization of products, and personal
attention from staff and key decision-makers alike.

What made the difference in 1995 was the new commitment throughout the Bank
to market these services aggressively. This resulted from a significant cultural
change in our Company. Management now recognizes and rewards successful selling,
a shift that's evident both in our emphasis on better sales and product training
and on hiring bankers with a sales and service focus.

No year-end review would be complete without mention of disappointments.
Our Home Equity Line business was adversely affected by two factors: low
mortgage interest rates which encouraged refinancing, and the maturity of the
product itself which drove competitors to introduce a confusing array of
promotional and low teaser rates. Although our outstandings stayed even, new
credit lines booked dropped to $23.2 million in 1995 compared to $27 million in
1994. To address this decline, the department is offering, on larger lines, a
rate below prime for the life of the loan.

From Money magazine to Consumer Reports, Oak Brook Bank's credit cards
still rank high on the "best deals" charts. Nonetheless, the market appears to
be nearly saturated, dominated by an endless stream of direct mail pieces from
huge competitors trumpeting 5.9% introductory rates, no annual fees, and
rebates. Consequently, we've struggled just to maintain our average outstandings
at $57 million.

Although our fraud losses improved in 1995, a rise in credit card loan
losses and delinquencies followed general industry trends. Despite the fact our
credit loss ratio of 1.78% was half the industry average of 3.63%, we're still
feeling the effects of excessive consumer debt and the rise in consumer
bankruptcies.

To stay healthy in this highly profitable but fiercely competitive
business, we are concentrating on retaining current cardholders, encouraging
responsible card usage, actively seeking new student accounts, and continuing
our search for suitable co-branding partners. We also plan to enhance the
collection process by screening more frequently for early signs of debt
problems, by earlier personal intervention when accounts become past due, by
challenging dubious bankruptcy claims, and through extra attention to post
charge-off recovery possibilities.

As we look forward in 1996, the Company's unmatchable advantage continues
to be our ability to anticipate, understand, and deliver the services our
customers demand. To stay on this profitable strategic course, it is paramount
that we retain ex-

19
<PAGE>

isting business. We'll use technology to identify our best customers, lavish
them with personal attention, craft our products and prices to fit their needs,
and use technology to help us monitor the results.

While the Company has achieved strong, steady growth throughout our
history, we realize our asset mix could improve. More so than our peers, we have
relied on investments rather than loan income. And within our loan mix, we have
relatively less money in commercial and industrial loans. Opportunities to grow
in the coming years, particularly with the wave of bank mergers and
consolidations, will come through greater emphasis on commercial and industrial
lending. We intend to make this change, of course, without reducing our
historical selectivity in choosing customers or softening our rigorous approach
to analyzing risk.

To achieve this ambitious directive, the Company will call upon the
powerful skills of our most customer-centered bankers: our calling officers and
branch managers. By last count, over fifty officers and senior staff manage
commercial relationships. As we tap into their expertise, we'll be providing the
tools to handle commercial credit quickly and efficiently. To that end, first,
we have established a separate commercial lending group with the time and
expertise to respond to loan requests. Freed from detailed numbers crunching and
loan processing, calling officers will be able to put their considerable energy
and creativity into building and maintaining profitable relationships. Second,
we're adding to the training curriculum courses in business development,
relationship selling, and negotiating skills. Third, we'll use below prime
pricing and introductory rates to attract desirable prospects. And, fourth,
we'll seek somewhat more sizable targets while still attending to all local
credit demands.

We'll also work to eliminate the obstacles that can block even the most
dedicated and well-schooled sales force. We are establishing universal and
individual sales goals, refining our incentive programs, addressing legal and
loan processing complexities, making our loan committee more user-friendly, and
improving interdepartmental cooperation.

The trust, allegiance, and mutual respect that exists among Oak Brook
Bankers and their customers is the key to our future. We are confident about our
ability to capitalize on this characteristic Oak Brook Bank advantage. What
differentiates us from the competition--and promises our success--is superior,
individualized customer service. What we do best.

/s/ Eugene P. Heytow /s/ Richard M. Rieser, Jr. /s/ Frank M. Paris
Eugene P. Heytow Richard M. Rieser, Jr. Frank M. Paris
Chairman of the Board President Vice Chairman

20
<PAGE>

First Oak Brook Bancshares, Inc. 5-Year Performance at a Glance

Earnings Per Share

- -------------------------------------------------
(dollars)

1991 92 93 94 95
$1.01 $1.27 $1.62 $1.81 $1.95

Total Assets

- ------------------------------------------------
(in thousands)

1991 92 93 94 95
$460,183 $514,913 $613,574 $634,705 $678,102

Return on Assets

- --------------------------------------------------
(percent)

1991 92 93 94 95
0.74% 0.84% 0.95% 1.01% 1.03%

Stock Price

- -------------------------------------------------
(dollars per share)

1991 92 93 94 95
$9.33 $10.40 $14.33 $17.25 $20.63

Return on Equity

- --------------------------------------------------
(percent)

1991 92 93 94 95
10.46% 12.00% 13.85% 14.54% 14.00%

Bar graphs

21
<PAGE>

Financial Review
First Oak Brook Bancshares, Inc. and Subsidiary

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
At and for the Year Ended December 31,
Earnings Summary and Selected Consolidated Financial Data --------------------------------------------------------
(Dollars in thousands except per share data) 1995 1994 1993 1992 1991
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Statement of Income Data
Net Interest Income..................................... $ 25,476 $ 24,296 $ 21,315 $ 18,156 $ 17,291
Provision for Loan Losses............................... 1,050 1,200 960 870 550
Net Interest Income After
Provision for Loan Losses.............................. 24,426 23,096 20,355 17,286 16,741
Other Income............................................ 4,256 4,217 5,195 4,977 3,123
Other Expenses.......................................... 19,994 19,292 18,462 16,806 15,701
Income Before Provision for Income Taxes................ 8,688 8,021 7,088 5,457 4,163
Provision for Income Taxes.............................. 1,996 1,827 1,555 1,144 738
Net Income.............................................. $ 6,692 $ 6,194 $ 5,533 $ 4,313 $ 3,425
Per Share Data
Earnings Per Common Share and
Common Equivalent Share................................ $ 1.95 $ 1.81 $ 1.62 $ 1.27 $ 1.01
Cash Dividends Paid Per Share:
Class A Common......................................... .315 .276 .236 .220 .213
Common................................................. .263 .222 .192 .180 .173
Book Value Per Common Share and
Common Equivalent Share................................ 15.64 13.17 13.25 11.15 10.05
Market Price Per Share.................................. 20.63 17.25 14.33 10.40 9.33
Year-End Balance Sheet Data
Total Assets............................................ $678,102 $634,705 $613,574 $514,913 $460,183
Loans, Net of Unearned Discount......................... 362,728 309,681 278,177 265,538 202,928
Allowance for Loan Losses............................... 3,932 3,859 3,231 2,890 2,514
Investment Securities................................... 256,192 263,943 223,988 180,108 170,048
Demand Deposits......................................... 128,236 109,237 113,780 94,222 82,724
Total Deposits.......................................... 555,086 513,623 508,173 436,599 401,990
Long-term Debt/1/....................................... 3,500 6,000 6,000 - -
Shareholders' Equity.................................... 53,762 42,909 44,118 37,764 34,223
Financial Ratios
Return on Average Assets................................ 1.03% 1.01% .95% .84% .74%
Return on Average Equity................................ 14.00 14.54 13.85 12.00 10.46
Net Interest Margin..................................... 4.54 4.61 4.44 4.33 4.50
Net Interest Spread..................................... 3.57 3.87 3.75 3.47 3.25
Dividend Payout Ratio................................... 14.63 14.13 16.75 15.63 19.33
Capital Ratios
Average Equity to Average Total Assets.................. 7.39% 6.95% 6.89% 6.98% 7.03%
Tier 1 Capital Ratio/2/................................. 13.33 13.37 11.88 12.30 13.05
Total Capital Ratio/2/.................................. 14.32 14.46 12.83 13.24 14.03
Capital Leverage Ratio/2/............................... 7.94 7.50 6.56 7.27 7.24
Asset Quality Ratios
Nonperforming Loans to Total Loans...................... .03% .21% .11% .17% .26%
Nonperforming Assets to Total Loans Outstanding and
Other Real Estate Owned................................ .03 .21 .46 .54 .26
Nonperforming Assets to Total Capital................... .19 1.49 2.92 3.80 1.57
Allowance for Loan Losses to Total Loans................ 1.08 1.25 1.16 1.09 1.24
Net Charge-offs to Average Loans........................ .30 .20 .23 .22 .22
Allowance for Loan Losses to Nonperforming Loans........ 37.81x 6.05x 10.99x 6.54x 4.68x
</TABLE>

- --------------------------------------------------------------------------------
/1/The long-term debt consists of Federal Home Loan Bank advances at the
subsidiary bank. /2/Regulatory capital ratios exclude the impact of Statement of
Financial Accounting Standards No. 115, "Accounting for Certain Investments in
Debt and Equity Securities."

22
<PAGE>

Financial Review
First Oak Brook Bancshares, Inc. and Subsidiary

- --------------------------------------------------------------------------------
Results of Operations

Earnings

First Oak Brook Bancshares, Inc. consolidated net income and earnings per share
for 1995, 1994 and 1993 were as follows:
<TABLE>
<CAPTION>
1995 1994 1993
- --------------------------------------------------------
<S> <C> <C> <C>
Net income.......... $6,692,000 $6,194,000 $5,533,000
Earnings per share.. $1.95 $1.81 $1.62
</TABLE>

1995 versus 1994

The 1995 results compared to 1994 include the following significant pre-tax
components:

. Net interest income rose $1,180,000 due to a 7% increase in average earning
assets offset by a 2% decrease in the net interest margin.

. Based on management's review of the adequacy of the loan loss reserve, the
provision for loan losses was decreased $150,000.

. Included in other income was a decrease in business account analysis fees of
$278,000 offset by an increase in trust fees of $148,000 and an increase in
investment securities gains of $90,000.

. Salaries and employee benefits increased $752,000 due to upgrading of staff to
enhance customer service and expand business development opportunities, raises,
and increased benefit payments.

. Advertising and business development cost increased $192,000 primarily for
retail product advertising and increased business development expenses.

. FDIC premiums decreased $501,000 as a result of lower FDIC premiums for "well-
capitalized" banks which became effective June 1, 1995.

. Other operating expenses increased $132,000. Excluding the gain on the sale of
other real estate owned of $328,000 in 1994, the other operating expenses
decreased $196,000, primarily due to reduction in credit card fraud.

1994 Versus 1993

The 1994 results compared to 1993 include the following significant pre-tax
components:

. Net interest income rose $2,981,000 due to a 9% increase in average earning
assets and a 4% increase in the net interest margin.

. Investment securities gains included in other income decreased $1,072,000.

. Provision for loan losses increased $240,000 to provide for the growth in the
loan portfolio.

. Salaries and employee benefits increased $935,000 due to staff additions,
raises, and increased benefit payments.

. Equipment expense increased $283,000 due to the conversion in 1993 to an in-
house data processing system which reduced outside service bureau data
processing fees by $380,000 in 1994.

. Other operating expenses decreased $395,000 as a result of a $328,000 gain on
the sale of other real estate owned.

- --------------------------------------------------------------------------------

NET INTEREST INCOME

Net interest income is the difference between interest earned on loans,
investments and other earning assets and interest paid on deposits and other
interest-bearing liabilities. Net interest income is the principal source of the
Company's revenues.

1995 versus 1994

On a tax-equivalent basis, net interest income for 1995 totaled $26,887,000, an
increase of $1,323,000 or 5% over 1994. This increase is attributable to a 7%
increase in average earning assets offset by a 2% decrease in the net interest
margin to 4.54% in 1995 from 4.61% in 1994. The compression of the net interest
margin was a result of the following:

. During 1994 the prime rate was adjusted upwards from 6.00% to 8.50%, while in
1995 after a 50 basis point increase to 9.00% in the first quarter, the prime
rate declined to 8.50% during the remainder of the year. In a rising interest
rate environment, such as we experienced in 1994, the Company enjoyed temporary
margin improvement due to the difference in timing of the repricing of assets
and deposit liabilities. Conversely, in a declining interest rate environment,
as in 1995, the Company experienced margin compression.

. The cost of interest bearing deposits increased in excess of 100 basis points
from 1994 to 1995. Retail consumers showed continued strong preference for
higher yielding CD's over shorter-term, lower yielding savings and money market
accounts--in essence, locking in higher yields. The 1995 average balance for
savings and money market accounts declined $33 million compared to 1994, while
the 1995 average balance for time deposits increased $53 million compared to
1994. Competitive pressure among Chicago area banks kept CD rates relatively
high in comparison to U.S. Treasury yields.

. During 1995 long term rates fell more rapidly than short term rates resulting
in a "flattening of the yield curve." The Company's subsidiary bank borrows
money in the form of deposits on the short end of the yield curve and invests
some of these funds on the intermediate to long end of the yield curve. With the
flattening of the yield curve, the spread between short and long term rates has
compressed which negatively impacted the Company's net interest margin.

. Further compression of the net interest margin in 1995 was offset by the 14%
growth in average loans. The $41 million increase in average loans was primarily
in real estate (commercial and residential) and indirect auto loans. Credit card
growth was constrained as a result of vigorous competition.

1994 versus 1993

On a tax-equivalent basis, net interest income for 1994 totaled $25,564,000, an
increase of $3,008,000 or 13% over 1993. This increase is attributable to a 9%
increase in average earning assets and a 4% increase in the net interest margin
to 4.61% in

23
<PAGE>

Financial Review
First Oak Brook Bancshares, Inc. and Subsidiary

- --------------------------------------------------------------------------------

1994 from 4.44% in 1993. The net interest margin improved because of the
following:

. The growth in average assets was invested in higher yielding earning assets.
- -- Average loans increased $14.9 million or 6%. Average credit card loans
increased $11.1 million and had an effective yield of 15.6%.
- -- Average investment securities increased $41.7 million or 20%, while average
Federal funds sold decreased $8.9 million.
. Average earning assets grew to 91% of average assets in 1994 up from 88% in
1993, due to average nonearning assets decreasing $14 million.
. Net interest income increased due to the positive impact of the rising prime
rate. During 1994, the prime rate adjusted upwards from 6.00% to 8.50%. In a
rising rate environment, the Company temporarily enjoyed improved net
interest income due to the difference in the timing of the repricing of
assets and deposit liabilities.

The following table presents the average interest rate on each major
category of interest-earning assets and interest-bearing liabilities for 1995,
1994 and 1993.

<TABLE>
<CAPTION>
1995 1994 1993
Average Balances and Effective --------------------------- ------------------------------ --------------------------
Interest Rates

Interest Interest Interest
Average Income/ Yield/ Average Income/ Yield/ Average Income/ Yield/
(Dollars in thousands) Balance Expense Rates Balance Expense Rates Balance Expense Rates
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Assets
Earning assets:
Federal funds sold.................. $ 17,375 $ 1,024 5.89% $ 24,567 $ 963 3.92% $ 33,488 $ 1,031 3.08%
Interest-bearing deposits with banks 128 8 6.25 173 7 4.05 975 32 3.28
Taxable securities.................. 195,080 11,869 6.08 197,025 11,188 5.68 162,427 9,633 5.93
Tax exempt securities/1/............ 54,907 4,355 7.93 49,007 3,890 7.94 41,910 3,554 8.48
Loans, net of unearned discount/1/.. 325,228 32,427 9.97 284,286 26,308 9.25 269,397 23,797 8.83
----------------------------- ----------------------------- --------------------------
Total earning assets/interest income.. $592,718 $49,683 8.38% $555,058 $ 42,356 7.63% $508,197 $38,047 7.49%
------- -------- -------- ---- ------- ----
Cash and due from banks............... 31,868 34,102 48,179
Other assets.......................... 26,389 27,268 26,584
Allowance for loan losses............. (4,045) (3,638) (3,045)
-------- --------- ---------
$646,930 $612,790 $579,915
-------- --------- ---------
Liabilities
Interest-bearing liabilities:
Savings and NOW accounts............ $199,523 $ 7,785 3.90% $226,513 $ 7,744 3.42% $220,094 $ 7,879 3.58%
Money market accounts............... 27,205 835 3.07 32,984 802 2.43 32,089 779 2.43
Other time deposits................. 187,281 10,989 5.87 133,999 6,156 4.59 119,799 5,534 4.62
Short-term debt..................... 56,245 2,993 5.32 46,612 1,814 3.89 38,144 1,083 2.84
Long-term debt...................... 4,103 194 4.73 6,000 276 4.60 4,553 216 4.74
----------------------------- ----------------------------- --------------------------
Total interest-bearing liabilities/
interest expense................... $474,357 $22,796 4.81% $446,108 $ 16,792 3.76% $414,679 $15,491 3.74%
------- -------- -------- ---- ------- ----
Demand deposits....................... 119,812 119,978 121,504
Other liabilities..................... 4,967 4,098 3,768
-------- -------- --------
Total liabilities..................... $599,136 $570,184 $539,951
Shareholders' equity.................. 47,794 42,606 39,964
-------- -------- --------
$646,930 $612,790 $579,915
-------- -------- --------
Net interest income/net interest
margin/2/.............................. $26,887 4.54% $ 25,564 4.61% $ 22,556 4.44%
Net interest spread/3/.................. 3.57% 3.87% 3.75%
</TABLE>
- --------------------------------------------------------------------------------
/1/ Tax equivalent basis. Interest income and average yield on tax exempt loans
and investment securities include the effects of tax equivalent adjustments
using a tax rate of 34%.
/2/ Total interest income, tax equivalent basis, less total interest expense,
divided by average earning assets.
/3/ Total yield on average earning assets, less total rate paid on average
interest-bearing liabilities.

24
<PAGE>

Financial Review
First Oak Brook Bancshares, Inc. and Subsidiary

- ------------------------------------------------------------------------------

The following table presents a summary analysis of changes in interest income
and interest expense for 1995 as compared to 1994 and 1994 as compared to 1993.
Interest income rose in 1995 due to higher yields on earning assets and an
increase in the volume of loans. Interest expense rose in 1995 due to higher
rates being paid for interest-bearing liabilities, a shift in volume from
savings and NOW accounts to other time deposits and an increase in volume of
repurchase agreements. The increase in net interest income in 1994 was due to
the increased volume of earning assets coupled with an increase in overall
interest rates.

<TABLE>
<CAPTION>
Analysis of Net Interest Income Changes 1995 Over 1994 1994 Over 1993
--------------------------------- ---------------------------------
(Dollars in thousands) Changes due to: Volume/1/ Rate/1/ Total Volume/1/ Rate/1/ Total
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in interest income:
Federal funds sold.......................... $ (334) $ 395 $ 61 $ (312) $ 244 $ (68)
Interest-bearing deposits with banks........ (2) 3 1 (31) 6 (25)
Taxable securities.......................... (111) 792 681 1,979 (424) 1,555
Tax exempt securities/2/.................... 468 (3) 465 574 (238) 336
Loans, net of unearned discount/2/.......... 3,980 2,139 6,119 1,349 1,162 2,511
--------------------------------- ---------------------------------
Total Interest Income....................... $4,001 $3,326 $7,327 $3,559 $ 750 $4,309
--------------------------------- ---------------------------------
Increase (decrease) in interest expense:
Savings & NOW accounts...................... $ (983) $1,024 $ 41 $ 226 $ (361) $ (135)
Money market accounts....................... (156) 189 33 23 -- 23
Other time deposits......................... 2,848 1,985 4,833 653 (31) 622
Short-term debt............................. 425 754 1,179 274 457 731
Long-term debt.............................. (89) 7 (82) 66 (6) 60
--------------------------------- ---------------------------------
Total Interest Expense...................... $2,045 $3,959 $6,004 $1,242 $ 59 $1,301
--------------------------------- ---------------------------------
Increase (decrease) in net interest income.. $1,956 $ (633) $1,323 $2,317 $ 691 $3,008
================================= =================================
- ------------------------------------------------------------------------------------------------------------------------------
/1/The change in interest due to both rate and volume has been allocated proportionately.
/2/Tax equivalent basis. Tax exempt loans and investment securities include the effects of tax equivalent adjustments using a
tax rate of 34%.
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>

ALLOWANCE AND PROVISION FOR LOAN LOSSES

The allowance for loan losses represents the allowance of the Company's bank
subsidiary. Loans which are determined to be uncollectible are charged against
the allowance and recoveries of loans that were previously charged off are
credited to the allowance.

The charge-off policy of the Company's bank subsidiary varies with respect to
the category of and specific circumstances surrounding each loan under
consideration. The Company's policy with respect to credit card and consumer
installment loans is to charge-off all such loans when they are deemed to be
uncollectible or when 180 days past due, whichever comes first. With respect to
commercial, real estate and other loans, charge-offs are made on the basis of
management's ongoing evaluation of collectibility. In addition, any loans which
are classified as "loss" in regulatory examinations are charged off.

25
<PAGE>

Financial Review
First Oak Brook Bancshares, Inc. and Subsidiary
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
The following table summarizes the loan loss experience
for each of the last five years.

Summary of Loan Loss Experience
(Dollars in thousands) 1995 1994 1993 1992 1991
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Average loans for the period, net of unearned discount
and allowance for loan losses.......................... $321,183 $280,648 $266,352 $226,265 $198,349
----------------------------------------------------
Allowance for loan losses, beginning of period.......... $ 3,859 $ 3,231 $ 2,890 $ 2,514 $ 2,401
Charge-offs for period:
Real estate mortgage and home equity loans............. - - - (54) (27)
Commercial loans....................................... - (25) (125) (105) (282)
Credit card and consumer installment loans............. (1,112) (710) (619) (524) (514)
----------------------------------------------------
Total charge-offs.................................... (1,112) (735) (744) (683) (823)
----------------------------------------------------
Recoveries for period:
Real estate mortgage and home equity loans............. - 35 6 6 36
Commercial loans....................................... 41 52 16 115 306
Credit card and consumer installment loans............. 94 76 103 68 44
----------------------------------------------------
Total recoveries..................................... 135 163 125 189 386
----------------------------------------------------
Net charge-offs for the period.......................... (977) (572) (619) (494) (437)
Provision for loan losses............................... 1,050 1,200 960 870 550
----------------------------------------------------
Allowance for loan losses, end of period................ $ 3,932 $ 3,859 $ 3,231 $ 2,890 $ 2,514
====================================================

Ratio of net charge-offs to average loans outstanding... .30% .20% .23% .22% .22%
Allowance for loan losses as a percent of loans
outstanding, net of unearned discount at end of
period................................................ 1.08% 1.25% 1.16% 1.09% 1.24%
Allowance for loan losses to nonperforming loans........ 37.81x 6.05x 10.99x 6.54x 4.68x
</TABLE>

The Company's allowance for loan losses as a percent of loans outstanding was
1.08% at December 31, 1995 as compared to 1.25% in 1994 and 1.16% in 1993. The
1995 industry peer group ratio was 1.59%/1/. While the allowance as a percent of
loans is less than peers, the coverage of nonperforming loans is greater. The
Company's ratio of the allowance to nonperforming loans was 37.81x compared to
the industry peer group of 2.58x/1/. The volatility of this ratio over the last
five years is due to the insignificance of the amount of nonperforming loans and
one parcel of other real estate owned in 1992 and 1993.

Although the allowance for loan losses exceeds nonperforming loans by a
substantial amount, the allowance is warranted as most of the Company's net
charge-offs relate to the credit card portfolio (approximately $1 million in
1995). It is the Company's policy and industry practice to charge off credit
card loans when they are deemed to be uncollectible or 180 days past due,
whichever comes first; hence, at December 31 there is only a small amount of
nonperforming credit card loans. Current economic trends of higher consumer debt
and a rise in consumer bankruptcies contributed to the increase in the percent
of net credit card charge-offs to average credit card outstandings of 1.78% in
1995 as compared to 1.13% in 1994 and 1.21% in 1993. (The 1995 industry average
for net credit card charge-offs was approximately 3.63%/2/.) Projecting that
these trends may continue in 1996 and the growth in the overall loan portfolio,
management believes the allowance for loan losses is at a prudent level.

The provision for loan losses is sufficient to provide for current loan losses
and maintain the allowance at an adequate level commensurate with management's
evaluation of the risks inherent in the loan portfolio. In order to identify
potential risks in the loan portfolio of the Company's bank subsidiary and
determine the necessary provision for loan losses, detailed information is
obtained from the following sources:

. Regular reports prepared by the bank's management which contain information on
the overall characteristics of the loan portfolio, including delinquencies and
nonaccruals, and specific analysis of loans requiring special attention (i.e.
"watch lists");

. Examinations of the loan portfolio of the subsidiary bank by Federal and State
regulatory agencies; and

. Examinations and reviews by the Company's independent auditors and internal
credit and audit staffs.

Management of the subsidiary bank prepares a detailed analysis, at least
quarterly, reviewing the adequacy of its allowance and, when appropriate,
recommending an increase or decrease in its provision for loan losses. This
analysis is divided into two parts--one for allocated and the other for
unallocated reserves. The allocated segment involves primarily an estimated
calculation of losses on specific problem and management watch list loans and on
delinquent consumer credit card and
- --------------------------------------------------------------------------------

/1/Source: Seventh Federal Reserve District Bank Holding Company Performance
Report as of September, 1995, pages 1,13, Peer Group 04, Consolidated assets
between $500 million and $1 billion.

/2/Source: MasterCard International, Inc. data as reported as of September 30,
1995 in its Statistical Information on all credit card products. (Annualized
third quarter net credit losses as a percent of average outstandings.)

26
<PAGE>

Financial Review
First Oak Brook Bancshares, Inc. and Subsidiary

- ------------------------------------------------------------------------------

installment loans. The unallocated segment involves primarily a calculation of
the bank's actual net charge-off history averaged with industry net charge-off
history by major loan categories. In addition, the bank considers its loan
growth, management capabilities, economic trends, credit concentrations,
industry risks, underlying collateral values and the opinions of bank
management. Accordingly, because each of these criteria is subject to change,
the allocation of the allowance below is made for analytical purposes and is not
necessarily indicative of the trend of future loan losses in any particular loan
category. The total allowance is available to absorb losses from any segment of
the portfolio.

The following table presents the allocation of the allowance for loan losses
for each of the last five years.

<TABLE>
<CAPTION>
Allocation of Allowance for Loan Losses December 31,
----------------------------------------------------------------
(Dollars in thousands) 1995 1994 1993 1992 1991
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Analysis of allowance for loan losses:
Real estate-land acquisition and construction loans... $ 126 $ 144 $ -- $ -- $ --
Real estate mortgage and home equity loans............ 7 11 31 37 177
Commercial loans...................................... -- 30 118 119 98
Credit card........................................... 208 88 169 164 320
Consumer installment loans............................ 72 26 24 41 45
Unallocated........................................... 3,519 3,560 2,889 2,529 1,874
----------------------------------------------------------------
Total allowance..................................... $3,932 $3,859 $3,231 $2,890 $2,514
================================================================
Percentage of loans to gross loans:
Real estate-land acquisition and construction loans... 7.9% 4.8% 4.3% 4.3% 2.6%
Real estate mortgage and home equity loans............ 50.6 53.3 57.3 64.8 61.2
Commercial loans...................................... 10.5 10.7 10.4 10.5 13.7
Credit card........................................... 16.1 19.3 20.1 16.5 17.2
Consumer installment loans............................ 14.9 11.9 7.9 3.9 5.3
----------------------------------------------------------------
100.0% 100.0% 100.0% 100.0% 100.0%
================================================================
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>

NONPERFORMING ASSETS

The Company, in accordance with Statement 114, follows the policy of
discontinuing the accrual of interest on loans, excluding credit card loans,
when the continuity of the contractual principal or interest is deemed doubtful
by management or when 90 days past due or more and the loan is not well secured
or in the process of collection. Interest income is recorded on these loans only
as it is collected. Interest payments on nonaccrual loans which contain unusual
risk features or marginal collateral values may be applied directly to loan
principal for accounting purposes. Renegotiated loans are loans on which
interest is being accrued at less than the original contractual or existing
market rate of interest because of the inability of the borrower to service the
obligation under the original terms of the agreement. There are no renegotiated
loans.

The following table highlights the Company's nonperforming assets.

<TABLE>
<CAPTION>
Nonperforming Assets December 31,
---------------------------------------------------------------
(Dollars in thousands) 1995 1994 1993 1992 1991
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Nonaccruing...................................... $ 0 $ 70 $ 36 $ 280 $ 37
Loans which are past due 90 days or more......... 104 568 258 162 500
---------------------------------------------------------------
Total nonperforming loans...................... 104 638 294 442 537
Other real estate owned.......................... - - 994 994 -
---------------------------------------------------------------
Total nonperforming assets..................... $ 104 $ 638 $1,288 $1,436 $ 537
---------------------------------------------------------------
Nonperforming loans to total loans outstanding... .03% .21% .11% .17% .26%
Nonperforming assets to total loans outstanding
and other real estate owned.................... .03% .21% .46% .54% .26%
Nonperforming assets to total assets............. .02% .10% .21% .28% .12%
Nonperforming assets to total capital............ .19% 1.49% 2.92% 3.80% 1.57%
---------------------------------------------------------------
</TABLE>

The Company's ratio of nonperforming assets to total loans outstanding and other
real estate owned of .03% was below the industry peer group ratio of 1.05%/1/.

- ------------------------------------------------------------------------------
/1/Source: Seventh Federal Reserve District Bank Holding Company Performance
Report as of September, 1995, page 1, Peer Group 04, Consolidated assets
between $500 million and $1 billion.

27
<PAGE>

Financial Review
First Oak Brook Bancshares, Inc. and Subsidiary

- --------------------------------------------------------------------------------
The Company also holds, in other assets, surplus property which was formerly
used as its subsidiary bank's drive-up facility. The property was leased in May,
1992 for $64,000 net per year for five years to McDonald's Corporation. At any
time until May 31, 1997, the subsidiary bank shall have the option to require
the lessee to purchase the property, which has a book value of $283,000, for the
price of $800,000.

- --------------------------------------------------------------------------------
SUMMARY OF OTHER INCOME

The following table summarizes significant components of other income and
percentage changes from year to year:

<TABLE>
<CAPTION>
% Change
---------------------
(Dollars in thousands) 1995 1994 1993 '95-'94 '94-'93
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Service charges................. $2,333 $2,611 $2,794 (11)% (7)%
Trust fees...................... 592 444 366 33 % 21
Other operating income.......... 1,204 1,125 926 7 % 21
Investment securities gains..... 127 37 1,109 243 % (97)
---------------------------------------------
Total.......................... $4,256 $4,217 $5,195 1 % (19)%
=============================================
</TABLE>

1995 Versus 1994

Service charges on deposit accounts decreased $278,000 primarily due to a
decrease in business account analysis fees. With the increase in the earnings
credit, commercial customers chose to maintain account balances to offset
service charges. This was partially offset by service charges on personal
accounts which increased $63,000.

Trust income increased $148,000, or 33%, primarily due to an increase in
assets under management and other new trust business. The discretionary assets
under management by the Trust department has grown $20 million since December
31, 1994 to $67.5 million as of December 31, 1995.

The increase in other operating income of $79,000, or 7%, was principally
attributable to increased fee income from the sale, through a third party, of
mutual funds and annuities offset by a decrease in gains on mortgages sold. The
Investment Center, a new business initiative selling mutual funds and annuities
through a third party, was launched late 1994 and contributed additional fee
income in 1995. The decrease in fee income from gains on mortgages sold was due
to retaining a greater portion of mortgage originations for the Company's loan
portfolio during 1995 compared to 1994.

Investment securities gains increased $90,000 due to the Company's
restructuring of the held-to-maturity and available-for-sale portfolios. As a
result of the restructuring, the two portfolios now more closely mirror each
other in both security composition and maturity distribution. The securities
gains were from sale of longer maturity securities in the available-for-sale
portfolio.

1994 Versus 1993

Service charges on deposit accounts decreased $183,000 due to a decrease in
business account analysis fees. With the increase in the earnings credit,
commercial customers chose to maintain account balances to offset service
charges. This was partially offset by service charges on personal accounts which
increased $66,000.

In 1994, trust fees increased $78,000 or 21%, primarily due to an increase of
nearly $10 million in assets under management and other new trust business.

Other operating income increased $199,000. The increase was primarily due to
gains on mortgages sold which increased $132,000 and merchant credit card
processing fees which increased $72,000.

Investment securities gains decreased $1,072,000. In 1993 as part of a
portfolio restructuring, the Company took significant gains.

- --------------------------------------------------------------------------------
SUMMARY OF OTHER EXPENSES

The following table summarizes significant components of other expenses and
percentage changes from year to year:

<TABLE>
<CAPTION>
% Change
--------------------------------------------
(Dollars in thousands) 1995 1994 1993 '95-'94 '94-'93
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Salaries and employee benefits......... $10,921 $10,169 $ 9,234 7% 10%
Occupancy expense...................... 1,315 1,306 1,288 1 1
Equipment expense...................... 1,702 1,664 1,381 2 20
Data processing fees................... 1,473 1,314 1,513 12 (13)
Professional fees...................... 259 290 284 (11) 2
Postage, stationery and supplies....... 815 863 842 (6) 2
Advertising and business development... 1,394 1,202 1,138 16 6
FDIC premiums.......................... 592 1,093 996 (46) 10
Other operating expenses.............. 1,523 1,391 1,786 9 (22)
--------------------------------------------
Total................................. $19,994 $19,292 $18,462 4% 4%
============================================
</TABLE>

28
<PAGE>

Financial Review
First Oak Brook Bancshares, Inc. and Subsidiary

- --------------------------------------------------------------------------------
1995 Versus 1994

Other expenses rose $702,000 in 1995 over 1994. Salaries and employee benefits
rose $752,000 or 7%. The increase is due to upgrading of staff, normal salary
increases and higher benefit payments. The Company invested in these positions
to enhance customer service and expand business development opportunities.

Data processing increased $159,000, primarily due to higher credit card
processing fees and messenger service. The increase in credit card processing is
due to system enhancements and price increases. Messenger service, an internal
function in 1994, was outsourced in the first quarter of 1995. While messenger
service increased data processing fees in 1995, there are offsetting cost
savings included in salaries and employee benefits for 1995.

Advertising and business development costs increased $192,000, primarily due
to the advertising of retail products and increased business development
expenses.

FDIC premiums decreased $501,000 due to lower assessment premiums. The FDIC
premium was lowered, effective June 1, 1995, for banks categorized as "well-
capitalized" from $.23 per $100 deposit to $.04 per $100 deposit.

Other operating expenses increased $132,000. Excluding the gain on the sale of
other real estate owned of $328,000 in 1994, the other operating expenses
decreased $196,000 in 1995. This decrease in 1995 was primarily due to a
reduction in credit card fraud.

1994 Versus 1993

Other expenses rose $830,000 in 1994 over 1993. Salaries and employee benefits
increased $935,000. This increase was due to staff additions, normal salary
increases and related payroll taxes and benefits.

Equipment expense increased $283,000. This increase was primarily due to
increased depreciation associated with the in-house data processing system
acquired in 1993.

Data processing fees decreased $199,000. This decrease was primarily due to
the reduction of $567,000 ($380,000 in on-going fees and $187,000 of one-time
conversion fees) in outside service bureau fees resulting from the 1993
conversion to an in-house data processing system. These savings were offset by a
$205,000 increase in credit card processing fees due to system enhancements and
volume and price increases. Also, check processing fees increased $94,000 due to
the Company's subsidiary bank paying for its correspondent bank services in fees
rather than in balances.

Other operating expenses decreased $395,000. The decrease is the result of a
one-time gain of $328,000 realized on the sale in 1994 of other real estate
owned.

- --------------------------------------------------------------------------------
INCOME TAX EXPENSE

Income taxes for 1995 totaled $1,996,000 as compared to $1,827,000 for 1994 and
$1,555,000 in 1993. When measured as a percentage of income before income
taxes, the Company's effective tax rate was 23% for 1995 compared to 23% and 22%
in 1994 and 1993, respectively. The increase in the provision for income taxes
in 1995 and 1994 is due to higher pre-tax earnings. The slight increase in the
effective tax rate in 1995 and 1994 was due to a decrease in tax exempt income
as a percentage of pre-tax income.

- --------------------------------------------------------------------------------
Financial Condition

LIQUIDITY AND INTEREST RATE SENSITIVITY

Effective management of balance sheet liquidity is necessary to fund growth in
earning assets and to pay liability maturities, depositors' withdrawal
requirements and shareholders' dividends.

The Company has numerous sources of liquidity including a significant
portfolio of shorter term assets, readily marketable investment securities, a
growing deposit base, and access to borrowing arrangements.

During 1995, a significant portion of the Company's liquidity was provided
from increased time deposits and repurchase agreements as well as sales and
maturities of investment securities.

Available borrowing arrangements are summarized as follows:

Subsidiary Bank:

. Informal Federal funds lines of $49,500,000 with seven correspondent banks.

. Reverse repurchase agreement lines of $50,000,000 with two brokerage firms.

. Advances up to $20,146,000 from the Federal Home Loan Bank of Chicago. Oak

Brook Bank currently has outstanding $3,500,000 of advances with Federal Home
Loan Bank.

Parent Company:

. Revolving credit arrangement for $5,000,000. The line is currently unused and
matures on April 1, 1996. It is anticipated to be renewed annually.
. The parent company also had cash, short-term investments and other readily
marketable securities totaling $6,995,000 at December 31, 1995.

29
<PAGE>
Financial Review
First Oak Brook Bancshares, Inc. and Subsidiary

- --------------------------------------------------------------------------------
Interest rate risk arises when the maturity or repricing of assets differs
significantly from the maturity or repricing of liabilities. The following table
details the Company's interest rate sensitive position at December 31, 1995:

<TABLE>
<CAPTION>
Interest Rate Sensitive Position
1-90 91-180 181-365 Over 1
(Dollars in thousands) days days days year Total
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Rate sensitive assets:
Interest-bearing deposits with banks................................ $ 105 $ -- $ -- $ -- $ 105
Taxable securities.................................................. 20,854 13,258 29,188 141,299 204,599
Tax-exempt securities............................................... 1,030 300 3,120 47,143 51,593
Loans, net of unearned discount..................................... 181,452 20,163 40,252 120,861 362,728
---------------------------------------------------
Total............................................................. $203,441 $ 33,721 $ 72,560 $309,303 $619,025
---------------------------------------------------
Cumulative total.................................................. $203,441 $237,162 $309,722 $619,025
---------------------------------------------------
Rate sensitive liabilities:
Savings and NOW accounts/1/........................................ $116,881 $ 1,635 $ 5,910 $ 67,537 $191,963
Money market accounts.............................................. 26,594 -- -- -- 26,594
Other time deposits................................................ 77,403 25,698 49,951 55,241 208,293
Short-term debt.................................................... 60,702 -- -- -- 60,702
Long-term debt..................................................... 3,500 -- -- -- 3,500
---------------------------------------------------
Total............................................................. $285,080 $ 27,333 $ 55,861 $122,778 $491,052
---------------------------------------------------
Cumulative total.................................................. $285,080 $312,413 $368,274 $491,052
---------------------------------------------------
Cumulative gap........................................................ $(81,639) $(75,251) $(58,552) $127,973
---------------------------------------------------
Cumulative gap to total assets ratio.................................. (12.04)% (11.10)% (8.63)%
---------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
/1/The decay assumption on savings and NOW accounts is based on historical analysis and experience.
</TABLE>

The previous table presents a static gap analysis which does not fully capture
the true dynamics of interest rate changes including the timing and/or degree of
interest rate changes. While most of the asset categories' rates change when
certain independent indices (such as the prime rate) change, the liability
categories are repriced at the Company's discretion. The Company utilizes a
simulation model to analyze its interest rate risk. The analysis incorporates
changes in net interest income and duration of shareholders' equity under
various interest rate scenarios. Management recognizes differences between rate
changes beyond its control and rate changes within its control and incorporates
other factors such as balance sheet growth to better measure interest rate risk.

The Company conducts its analysis on a regular basis and has established
guidelines for the results. In management's opinion, the Company's interest rate
risk position is within an acceptable range in light of current economic
conditions.

- --------------------------------------------------------------------------------
INVESTMENT SECURITIES

In 1995, the Company's investment portfolio decreased slightly to $256 million,
a decrease of $7.8 million or 3%. The slight decline in the Company's investment
portfolio resulted from an increase in loan demand and decrease in short-term
(i.e. 90 days or less) investment securities. The following strategies in 1995
were implemented in the management of the Company's investment portfolio: (1)
shifting short term investment securities into Federal funds sold where the
yields were more attractive in comparison to 90 day U.S. Treasury rates, (2)
sheltering current and future income from state income taxation primarily by
investing in state tax-exempt U.S. Treasury and U.S. Government Agency
securities-a strategy commenced in 1994, (3) enhancing the Company's investment
securities portfolio yield by increasing investment in U.S. Government Agency
notes and bonds, and (4) reducing the average maturity of the Company's
investment portfolio by selling some of its longest maturity securities.

U.S. Treasury Securities. The Company reduced by $23.8 million its holdings of
U.S. Treasuries. The reduction resulted from discontinuing the 90 day U.S.
Treasury investment strategy employed in 1994 and redeploying those funds into
Federal funds sold where the returns were higher. The maturing U.S. Treasury
holdings were also reinvested in liquid, intermediate maturity U.S. Government
Agency notes and bonds, because of attractive relative returns. Overall, the
average maturity of this portfolio segment in both 1995 and 1994 was 2.3 years.

U.S. Government Agency Notes, Bonds, and Mortgage Backed Securities. The U.S.
Government Agency securities (including U.S. Government Agency Mortgage Backed
Securities) increased $21.8 million in 1995. The growth was the result of a
$28.3 million increase in U.S. Government Agency notes and bonds and a $6.5
million decline in U.S. Government Agency Mortgage Backed Securities. The U.S.
Government Agency notes and bonds purchased in 1995 were predominantly short

30
<PAGE>

Financial Review
First Oak Brook Bancshares, Inc. and Subsidiary
- --------------------------------------------------------------------------------

to intermediate term securities and are exempt from state income taxation. The
decrease in U.S. Government Agency Mortgage Backed Securities resulted primarily
from anticipated repayments (prepayments from home mortgage refinancing were at
expected levels). Overall, the average maturity of this portfolio segment
lengthened in 1995 to 3.1 years from 2.3 in 1994.

Municipal Securities. The Company's Municipal securities decreased $3.6 million.
The decline was primarily due to the sale of $6 million of Municipal securities
in the fourth quarter of 1995. The sales of these municipal securities,
primarily longer term (maturities in excess of 10 years) and "non-rated"
municipals, was done to reduce the overall interest rate risk and credit risk
inherent in the portfolio. The proceeds from these sales were invested in
intermediate maturity U.S. Government Agencies securities. The Company will
continue to implement the strategy of building a "laddered" maturity for the
Municipal securities portfolio. The average maturity of this portfolio segment
declined to 6.0 years in 1995 from 6.9 years in 1994.

Corporate and Other Securities. These securities consist primarily of preferred
stocks held by the parent company, Federal Home Loan Bank stock and private-
issue, U.S. Government Agency guaranteed collateralized mortgage obligations
(CMOs). Because of the 100% risk-based capital weighting for corporate debt
securities (excluding CMOs which are 20% risk-weighted), the Company does not
emphasize corporate debt securities.

Statement of Financial Accounting Standards No. 115 "Accounting for Certain
Investment in Debt and Equity Securities." See note 4 of the Consolidated
Financial Statements for further discussion. When Statement 115 was originally
adopted, on December 31, 1993, the only securities categorized as held to
maturity was the municipal segment of the investment portfolio. During the third
quarter of 1994, as a result of the merger of the Company's two subsidiary
banks, additional securities (U.S. Treasuries, U.S. Government Agencies and
Mortgage Backed securities) were transferred to held-to-maturity as a result of
lower liquidity demands of the combined bank. In accordance with the provisions
of the "Special Report--A Guide to Implementation of Statement 115 on Accounting
for Certain Investment in Debt and Equity Securities" issued on November 15,
1995 by the FASB staff, the Company restructured the held-to-maturity (HTM) and
available-for-sale (AFS) portfolios to more closely mirror each other in both
security composition and maturity distribution. The objectives of this
restructuring were to (1) better "balance" the HTM and AFS portfolios while
managing the investment portfolio on a "total return" basis, (2) provide
sufficient flexibility in meeting liquidity demands, (3) manage interest rate
risk and (4) minimize unnecessary capital fluctuations. As a result of this
analysis, the following transfers were made:

. $33 million of securities, including nearly $20 million in Municipal
securities, were transferred from held-to-maturity to available-for-sale. At
date of transfer, the securities transferred had an aggregate unrealized gain
of $1,377,000.

. $28 million of securities, primarily U.S. Government Agency Securities
maturing in the next six months to four years, were transferred from available-
for-sale to held-to-maturity. At the date of transfer, the aggregate fair market
value approximated the amortized cost of the securities transferred. The
unrealized gains and losses, net of taxes, included in shareholders' equity will
be amortized over the remaining lives of the transferred securities.

In 1994, the Company increased its investment portfolio to $264 million, an
increase of $40 million or 18%. The growth was primarily in U.S. Treasuries and
Municipal securities.

The following table sets forth the book values of investment securities held
on the dates indicated:

Investments by Type (at book value) December 31,
----------------------------
(Dollars in thousands) 1995 1994 1993
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. Treasury................................. $105,167 $129,034 $ 71,943
U.S. Government agencies...................... 33,825 5,562 5,958
Mortgage-backed agency securities............. 61,683 68,184 97,810
State and municipal........................... 51,593 55,226 41,643
Corporates and other.......................... 3,924 5,937 6,634
----------------------------
Total investment portfolio.................. $256,192 $263,943 $223,988
============================
</TABLE>

At December 31, 1995 there are no investment securities of any one issuer in
excess of 10% of shareholders' equity other than securities of the U.S.
Government and its agencies.

<PAGE>

Financial Review
First OakBrook Bancshares, Inc. and Subsidiary
- --------------------------------------------------------------------------------

The maturity distribution and weighted average yield of investment securities at
December 31, 1995 are presented in the following table:

Analysis of Investment Portfolio
State
U.S. Treasury U.S. Government & Municipal Corporate and
Securities Agencies/1/ Securities Other Securities
---------------- --------------- --------------- ----------------
(Dollars in thousands) Amount Yield Amount Yield Amount Yield/2/ Amount Yield
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Maturities:
Within 1 year............... $ 23,190 5.45% $ 6,060 5.94% $ 4,450 8.27% $ 1,153 7.98%
1-5 years................... 81,977 6.15 78,194 6.38 16,726 8.75 25 7.50
5-10 years.................. -- -- 8,644 4.49 22,449 8.25 -- --
After 10 years.............. -- -- 2,610 6.70 7,968 8.66 2,746/3/ 7.75
--------------------------------------------------------------------------
$105,167 6.00% $95,508 6.45% $51,593 8.48% $ 3,924 7.82%
==========================================================================
Average months to maturity.. 27 37 72 5

- ----------------------------------------------------------------------------------------------------------
/1/Included in U.S. Government Agencies are U.S. Government Agency notes and bonds as well as U.S.
Government Agency mortgage-backed securities (USMBS). Given the amortizing nature of USMBSs, their
maturities presented in the table are based on their estimated average lives at December 31, 1995. The
estimated average lives may differ from actual principal cash flows. Principal cash flows include
prepayments and scheduled principal amortization.

/2/Yields on state and municipal securities are calculated on a tax-equivalent basis using a tax rate of 34%.

/3/Included in this amount are preferred stocks and Federal Home Loan Bank of Chicago stock, which have no
maturity date and are not included in the average months to maturity. Yields on the stocks are calculated
on a tax-equivalent basis using a tax rate of 34% and the 70% dividend received deduction.
- ----------------------------------------------------------------------------------------------------------
</TABLE>

LOANS
At year-end 1995, loans outstanding, net of unearned discount, increased $53
million or 17% compared to 1994. The majority of the 1995 growth was in consumer
loans, real estate (residential and commercial) and commercial loans. The growth
in credit card loans was constrained as a result of vigorous competition.

Consumer installment loans increased $17.4 million or 47% primarily due to
increases in indirect automobile loans. Indirect automobile loans increased
$16.2 million or 73% to $38.4 million in 1995.

Real estate construction loans increased $14 million or 95%. The increase was
primarily due to lending to Chicago area homebuilders.

Residential real estate increased $18.7 million or 30% due to increased
mortgage originations and retaining the majority of these originations for the
Company's loan portfolio.

Commercial loans increased $4.8 million or 14% primarily due to lines of
credit and tax-exempt leases.

At year-end 1994, loans outstanding, net of unearned discount, increased $31.5
million or 11% compared to 1993. The majority of the 1994 growth was in indirect
auto loans, commercial real estate, commercial loans and credit card loans.

There are no concentrations of loans exceeding 10% of total loans at December
31, 1995, which are not otherwise disclosed below. The Company has no foreign
loans; therefore, no loans to Less Developed Countries (LDCs). The Company has
no agricultural loans.

The following table sets forth the loans by type at the dates indicated:

Loans by Type

December 31,
----------------------------------------------------
(Dollars in thousands) 1995 1994 1993 1992 1991
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Commercial loans.......................... $ 38,171 $ 33,351 $ 29,035 $ 27,838 $ 28,020
Real estate loans
Land acquisition and construction loans.. 28,770 14,789 12,098 11,404 5,279
Commercial mortgage loans................ 55,437 56,149 44,977 37,377 28,636
Residential mortgage loans............... 81,226 62,557 66,972 84,176 48,860
Home equity loans........................ 47,357 47,192 47,463 50,690 47,129
Credit card loans......................... 58,592 59,984 56,003 43,793 35,114
Consumer installment loans................ 54,420 37,067 21,950 10,616 10,653
----------------------------------------------------
363,973 311,089 278,498 265,894 203,691
Less:
Unearned discount........................ 1,245 1,408 321 356 763
Allowance for loan losses................ 3,932 3,859 3,231 2,890 2,514
----------------------------------------------------
Loans, net................................ $358,796 $305,822 $274,946 $262,648 $200,414
====================================================
</TABLE>

As evidenced by the table, loans secured by real estate comprise the greatest
percentage of total loans. Most of the Company's residential real estate loans
are secured by first or second mortgages on one-to-four family residences in the
Chicago Metropolitan area. The Company generally limits total advances to a loan
to value ratio of eighty percent or less. Commercial mortgages are secured by
properties in the Chicago Metropolitan area.

<PAGE>

Financial Review
First Oak Brook Bancshares, Inc. and Subsidiary
- --------------------------------------------------------------------------------

The following table indicates the maturity distribution of selected loans at
December 31, 1995:

Maturity Distribution of Selected Loans
One One to Over
year or five five
(Dollars in thousands) less/1/ years years Total
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Commercial loans........................................ $15,072 $ 18,104 $ 4,995 $ 38,171
Real estate-land acquisition and construction loans..... 28,770 - - 28,770
Commercial and residential mortgage loans............... 2,596 65,151 68,916 136,663
Home equity loans....................................... 3,176 44,181 - 47,357
------------------------------------------
$49,614 $127,436 $73,911 $250,961
==========================================
- ----------------------------------------------------------------------------------------------------
</TABLE>

/1/Includes demand loans.

The following table indicates, for the loans in the Maturity Distribution table,
the amounts due after one year which have fixed and variable interest rates at
December 31, 1995:

<TABLE>
<CAPTION>
Fixed Variable
(Dollars in thousands) Rate Rate Total
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Commercial loans.............................. $16,242 $ 6,857 $ 23,099
Commercial and residential mortgage loans..... 78,339 55,728 134,067
Home equity loans............................. 2,560 41,621 44,181
-------------------------------
$97,141 $104,206 $201,347
===============================
</TABLE>

Variable rate loans are those on which the interest rate can be adjusted for
changes in the Company's index rate (similar to prime rate), the Wall Street
Journal's published prime rate, U.S. Treasury securities or the brokers' call
money rate. Included in the variable rate loans are residential real estate
loans tied to the prime rate, which make up $13.6 million of the real estate
loan volume. These mortgages have a ceiling on the interest rate ranging from
9.5% to 19.9%. Home equity loans have a ceiling on the interest rate of 19.9%.
Fixed rate loans are those on which the interest rate cannot be changed during
the term of the loan.
- --------------------------------------------------------------------------------

DEPOSITS

Average deposits for 1995 increased $20.3 million or 4%. The increase in average
deposits is primarily related to a $53.3 million increase in time deposits
offset by a $27 million decrease in savings deposits and NOW accounts and a $5.8
million decrease in money market accounts. The increase in average time deposits
came from customers shifting to higher yielding time deposits from lower
yielding savings deposits and NOW accounts and money market accounts, regular CD
promotions and increased public funds. While average noninterest-bearing demand
deposits remained level in 1995 compared to 1994, the average for the fourth
quarter of 1995 increased to $122 million. At December 31, 1995 there are no
brokered deposits.

Average deposits for 1994 increased $20 million or 4%. The increase in average
deposits is primarily related to a $14.2 million increase in time deposits and a
$6.4 million increase in savings and NOW deposits.

Average Deposits and Rate by Type

1995 1994 1993
--------------- --------------- ---------------
(Dollars in thousands) Amount Rate Amount Rate Amount Rate
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Noninterest-bearing demand deposits......... $119,812 -% $119,978 -% $121,504 -%
Savings deposits and NOW accounts........... 199,523 3.90 226,513 3.42 220,094 3.58
Money market accounts....................... 27,205 3.07 32,984 2.43 32,089 2.43
Other time deposits......................... 187,281 5.87 133,999 4.59 119,799 4.62
-----------------------------------------------------
Total....................................... $533,821 4.74% $513,474 2.86% $493,486 2.88%
=====================================================
</TABLE>

Time deposits over $100,000 are deposits generally obtained from commercial and
governmental customers at negotiated rates and terms. As of December 31, 1995,
the scheduled maturities of these time deposits are as follows:

Maturity Distribution of Time Deposits Over $100,000

(Dollars in thousands)
- --------------------------------------------------------------------------------
<S> <C>
3 months or less...................................................... $57,273
Over 3 through 6 months............................................... 8,746
Over 6 through 12 months.............................................. 11,101
Over 12 months........................................................ 11,798
-------
Total................................................................. $88,918
=======

</TABLE>

33
<PAGE>

Financial Review
First Oak Brook Bancshares, Inc. and Subsidiary

- -------------------------------------------------------------------------------
SHORT-TERM BORROWINGS

Federal funds purchased, securities sold under agreements to repurchase
("repos") and Treasury, tax and loan demand notes constitute all of the
Company's short-term borrowings. These short-term borrowings are not subject to
FDIC deposit insurance premiums or reserve requirements. The Treasury, tax and
loan demand notes can be called by the Federal Reserve Bank at any time. The
repos generally mature within one to ninety days from the various dates of sale
and have the characteristics of secured borrowings. The Company attracts repos
primarily from businesses and local governmental units.

Average short-term borrowings increased $9.6 million or 21% in 1995 as
compared to 1994. Average short-term borrowings increased $8.4 million or 22% in
1994 as compared to 1993. The 1995 and 1994 increases in average short-term
borrowings were due to an increase in repurchase agreements with governmental
units.

<TABLE>
<CAPTION>
Short-Term Borrowings
(Dollars in thousands) 1995 1994 1993
- --------------------------------------------------------------
<S> <C> <C> <C>
Amount outstanding:
At year-end..................... $60,702 $68,577 $50,503
Average during year............. 56,245 46,612 38,144
Maximum month-end............... 69,490 68,577 50,503
Average interest rate:
At year-end..................... 5.05% 5.02% 3.03%
During the year................. 5.32% 3.89% 2.84%
---------------------------
- --------------------------------------------------------------
</TABLE>

CAPITAL RESOURCES

One of the Company's primary objectives is to maintain strong capital to warrant
the confidence of our customers, shareholders and bank regulatory agencies. A
strong capital base is needed to take advantage of profitable growth
opportunities that arise and to provide assurance to depositors and creditors.
Banking is inherently a risk-taking activity requiring a sufficient level of
capital to effectively and efficiently manage this business risk. The Company's
capital objectives are to:

- -- maintain sufficient capital to support the risk characteristics of the
Company and the Company's subsidiary bank;

- -- maintain capital ratios which meet and exceed the "well-capitalized"
regulatory capital ratio guidelines for the Company and the Company's subsidiary
bank, thereby minimizing regulatory intervention and lowering FDIC assessments;
and

- -- enhance shareholder value through strong earnings and dividend distributions.

At December 31, 1995, the Company achieved record shareholders' equity of
$53.8 million through earnings retention of $5.8 million and the restoration of
$5.1 million to capital as a result of applying required "mark to market" rules
to the Company's securities portfolio. The Company's and its subsidiary bank's
capital ratios not only exceeded the minimum regulatory guidelines but also the
FDIC criteria for "well-capitalized" banks.

The following table shows the Company's and its subsidiary bank's regulatory
capital ratios, risk-based capital and risk-weighted assets as of December 31,
1995 and 1994.

<TABLE>
<CAPTION>
Regulatory Capital
Company Consolidated Oak Brook Bank
-------------------- -------------------------
Well-Capitalized 1995 1994 1995 1994
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Tier 1 Capital Ratio......... greater or equal 6% 13.33% 13.37% 11.54% 12.18%
Total Capital Ratio.......... greater or equal 10% 14.32% 14.46% 12.53% 13.27%
Capital Leverage Ratio....... greater or equal 5% 7.94% 7.50% 6.88% 6.89%

Tier 1 Capital............... $ 53,318 $ 47,571 $ 46,057 $ 42,780
Total Risk-based Capital..... $ 57,250 $ 51,430 $ 49,989 $ 46,639
Total risk-weighted assets... $399,920 $354,471 $399,074 $353,270
---------------------------------------------------
</TABLE>

The subsidiary bank is subject to the FDIC Risk-based Assessment System, the
purpose of which is to assess FDIC insurance premiums. The FDIC insurance
premiums, which are dependent upon the bank's capital position and regulatory
rating, are the lowest assessed. The FDIC premiums for "well-capitalized" banks
have moved steadily downward, from $.23 per $100 of deposits at January 1, 1995
to $.04 per $100 of deposits at June 1, 1995 to finally $.00 per $100 of
deposits effective January 1, 1996.

The subsidiary bank is not restricted by the limitations on Brokered Deposits
and can pass-through the $100,000 FDIC insurance coverage to each participant in
or beneficiary of a qualified employee benefit plan.

In August 1995, the Federal Banking Agencies jointly issued a final ruling
which stated that the agencies will include in their evaluation of capital
adequacy the exposure to declines in economic value of the bank's capital due to
changes in interest rates. The implementation of the proposed process for
measuring interest rate risk exposure has been delayed pending further review by
the Federal Banking Agencies. If the regulators determine a bank is in a high
risk position, additional capital may be required. The Company believes it would
remain "well capitalized" despite an interest rate change of 200 basis points.

In 1995, cash dividends paid totaled $979,000, a 12% increase from 1994.
Quarterly cash dividends in 1995 were increased by the Board in October as a
result of strong earnings and capital. Annualized, the current dividend on the
Class A common and common is $.36 per share and $.30 per share, respectively. In
1994, cash dividends paid totaled $875,000, a 21% increase from 1993.

34
<PAGE>

Report of Independent Auditors

- --------------------------------------------------------------------------------
BOARD OF DIRECTORS AND SHAREHOLDERS
FIRST OAK BROOK BANCSHARES, INC.

We have audited the accompanying consolidated balance sheets of First Oak Brook
Bancshares, Inc. and subsidiary as of December 31, 1995 and 1994, and the
related consolidated statements of income, changes in shareholders' equity, and
cash flows for each of the three years in the period ended December 31, 1995.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of First Oak Brook
Bancshares, Inc. and subsidiary at December 31, 1995 and 1994, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 1995, in conformity with generally
accepted accounting principles.

/s/ Ernst & Young LLP

Chicago, Illinois
January 17, 1996

<PAGE>

Consolidated Balance Sheets
First Oak Brook Bancshares, Inc. and Subsidiary

December 31,
-------------------
(Dollars in thousands) 1995 1994
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Cash and due from banks........................................................... $ 37,406 $ 33,710
Federal funds sold................................................................ - 2,500
Interest-bearing deposits with banks.............................................. 105 91
Investment securities:
Securities held to maturity, at amortized cost
(fair value, $130,214 and $140,216 for 1995 and 1994)........................... 128,020 143,604
Securities available for sale, at fair value..................................... 128,172 120,339
Loans, net of unearned discount................................................... 362,728 309,681
Less-Allowance for loan losses.................................................... (3,932) (3,859)
-------------------
Net loans........................................................................ 358,796 305,822
Premises and equipment, net....................................................... 17,899 18,989
Other assets...................................................................... 7,704 9,650
-------------------
Total Assets....................................................................... $678,102 $634,705
===================

Liabilities and Shareholders' Equity
Noninterest-bearing demand deposits............................................... $128,236 $109,237
Interest-bearing deposits:
Savings deposits and NOW accounts................................................ 191,963 223,354
Money market accounts............................................................ 26,594 26,602
Other time deposits
Under $100,000.................................................................. 119,375 89,077
$100,000 and over............................................................... 88,918 65,353
-------------------
Total interest-bearing deposits.................................................. 426,850 404,386
-------------------
Total deposits................................................................... 555,086 513,623
Federal funds purchased and securities sold under agreements to repurchase........ 54,657 61,988
Treasury, tax and loan demand notes............................................... 6,045 6,589
Federal Home Loan Bank advances................................................... 3,500 6,000
Other liabilities................................................................. 5,052 3,596
-------------------
Total Liabilities.................................................................. 624,340 591,796
-------------------
Shareholders' Equity:
Preferred stock, series B, no par value, authorized--100,000 shares, issued--none. - -
Class A common stock, $2 par value, (aggregate liquidation preference of $11,602
or $6.31 per share) authorized--4,000,000 shares, issued and outstanding--
1,838,682 shares in 1995 and 1,835,666 shares in 1994............................ 3,677 3,671
Common stock, $2 par value, authorized--3,000,000 shares, issued--1,695,187 shares
in 1995 and 1,697,903 shares in 1994, outstanding--1,524,160 shares in 1995
and 1,526,876 shares in 1994..................................................... 3,390 3,396
Surplus........................................................................... 10,368 10,364
Unrealized gain (loss) on securities available for sale, net of taxes............. 356 (4,780)
Retained earnings................................................................. 36,704 30,991
Less cost of shares in Treasury, 171,027 common shares in 1995 and 1994........... (733) (733)
-------------------
Total Shareholders' Equity......................................................... 53,762 42,909
-------------------
Total Liabilities and Shareholders' Equity......................................... $678,102 $634,705
===================
- --------------------------------------------------------------------------------------------------------

</TABLE>

See notes to consolidated financial statements.

<PAGE>

Consolidated Statements of Income
First Oak Brook Bancshares, Inc. and Subsidiary
Year Ended December 31,
-------------------------------
(Dollars in thousands except per share amounts) 1995 1994 1993
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Interest income:
Interest on loans................................................................... $32,287 $26,175 $23,627
Interest on securities:
U.S. Treasury and Government agencies.............................................. 11,529 10,816 9,425
Obligations of states and political subdivisions................................... 3,098 2,755 2,483
Other securities................................................................... 326 372 208
Interest on Federal funds sold and securities purchased under agreements to resell.. 1,024 963 1,031
Interest on deposits with banks..................................................... 8 7 32
----------------------------------
Total interest income................................................................ 48,272 41,088 36,806
Interest expense:
Interest on savings deposits and NOW accounts....................................... 7,785 7,744 7,879
Interest on money market accounts................................................... 835 802 779
Interest on other time deposits..................................................... 10,989 6,156 5,534
Interest on Federal funds purchased and securities sold
under agreements to repurchase..................................................... 2,805 1,535 869
Interest on Treasury, tax and loan demand notes..................................... 188 279 213
Interest on Federal Home Loan Bank advances......................................... 194 276 217
----------------------------------
Total interest expense............................................................... 22,796 16,792 15,491
----------------------------------
Net interest income.................................................................. 25,476 24,296 21,315
Provision for loan losses............................................................ 1,050 1,200 960
----------------------------------
Net interest income after provision for loan losses.................................. 24,426 23,096 20,355
----------------------------------
Other income:
Service charges on deposit accounts................................................. 2,333 2,611 2,794
Trust fees.......................................................................... 592 444 366
Other operating income.............................................................. 1,204 1,125 926
Investment securities gains......................................................... 127 37 1,109
----------------------------------
Total other income................................................................... 4,256 4,217 5,195
----------------------------------
Other expenses:
Salaries and employee benefits...................................................... 10,921 10,169 9,234
Occupancy expense................................................................... 1,315 1,306 1,288
Equipment expense................................................................... 1,702 1,664 1,381
Data processing..................................................................... 1,473 1,314 1,513
Professional fees................................................................... 259 290 284
Postage, stationery and supplies.................................................... 815 863 842
Advertising and business development................................................ 1,394 1,202 1,138
FDIC premiums....................................................................... 592 1,093 996
Other operating expenses............................................................ 1,523 1,391 1,786
----------------------------------
Total other expenses.................................................................. 19,994 19,292 18,462
----------------------------------
Income before provision for income taxes............................................. 8,688 8,021 7,088
Provision for income taxes........................................................... 1,996 1,827 1,555
----------------------------------
Net income........................................................................... $ 6,692 $ 6,194 $ 5,533
==================================
Earnings per common share and common equivalent share................................ $ 1.95 $ 1.81 $ 1.62
==================================
Weighted average number of common shares and common share equivalents................ 3,432,164 3,421,203 3,417,777
==================================
- -------------------------------------------------------------------------------------------------------------------------

</TABLE>

See notes to consolidated financial statements.

37
<PAGE>

Consolidated Statements of Changes in Shareholders' Equity
First Oak Brook Bancshares, Inc. and Subsidiary

<TABLE>
<CAPTION>
Unrealized
Class A Gain (Loss) on
Common Stock Common Stock Securities Total
(Dollars in thousands except Par Par Available Retained Treasury Shareholders'
shares and per share amounts) Shares Value Shares Value Surplus For Sale Earnings Stock Equity
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1992............ 1,715,403 $3,431 1,817,737 $3,636 $10,364 $ - $21,066 $(733) $37,764
- -----------------------------------------------------------------------------------------------------------------------------------
Net income.............................. 5,533 5,533
Conversion of common stock
into Class A common stock............. 73,020 146 (73,020) (146)
Dividends declared,
$.246 per share common and
$.303 per share Class A common........ (927) (927)
Unrealized gain on securities
available for sale.................... 1,748 1,748
- -----------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1993............ 1,788,423 $3,577 1,744,717 $3,490 $10,364 $ 1,748 $25,672 $(733) $44,118
- -----------------------------------------------------------------------------------------------------------------------------------
Net income.............................. 6,194 6,194
Conversion of common stock
into Class A common stock............. 47,468 95 (47,468) (95)
Dividends declared,
$.232 per share common and
$.283 per share Class A common........ (875) (875)
Exercise of stock options............... (225) (1) 654 1
Unrealized loss on securities
available for sale.................... (6,528) (6,528)
- -----------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1994............ 1,835,666 $3,671 1,697,903 $3,396 $10,364 $(4,780) $30,991 $(733) $42,909
- -----------------------------------------------------------------------------------------------------------------------------------
Net income.............................. 6,692 6,692
Conversion of common stock
into Class A common stock............. 3,016 6 (3,016) (6)
Dividends declared,
$.275 per share common and
$.330 per share Class A common........ (979) (979)
Exercise of stock options............... 300 4 4
Unrealized gain on securities
available for sale.................... 5,136 5,136
- -----------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1995............ 1,838,682 $3,677 1,695,187 $3,390 $10,368 $ 356 $36,704 $(733) $53,762
===================================================================================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

See notes to consolidated financial statements.

38
<PAGE>

<TABLE>
<CAPTION>
Consolidated Statements of Cash Flows
First Oak Brook Bancshares, Inc. and Subsidiary
Year Ended December 31,
-------------------------------
(Dollars in thousands) 1995 1994 1993
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income........................................................................... $ 6,692 $ 6,194 $ 5,533
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation........................................................................ 1,915 1,949 1,755
Discount accretion.................................................................. (388) (212) (138)
Premium amortization................................................................ 1,916 2,324 1,703
Provision for loan losses........................................................... 1,050 1,200 960
Investment securities gains......................................................... (127) (37) (1,109)
Decrease (increase) in other assets................................................. (721) (1,163) 522
Increase (decrease) in other liabilities............................................ 1,273 (284) 987
Amortization of intangibles......................................................... 204 265 247
-------------------------------
Net cash provided by operating activities............................................. 11,814 10,236 10,460
-------------------------------
Cash flows from investing activities:
Decrease in interest-bearing deposits with banks..................................... - - 500
Purchase of securities held to maturity.............................................. (57,458) (75,873) -
Purchase of securities available for sale............................................ (26,447) (65,563) -
Purchase of investment securities.................................................... - - (139,424)
Proceeds from maturities of securities held to maturity.............................. 70,240 20,160 -
Proceeds from sales and maturities of securities available for sale.................. 27,797 69,356 -
Proceeds from sales and maturities of investment securities.......................... - - 97,737
Increase in loans.................................................................... (54,024) (32,076) (13,258)
Additions to premises and equipment.................................................. (825) (442) (2,479)
-------------------------------
Net cash used in investing activities................................................. (40,717) (84,438) (56,924)
-------------------------------
Cash flows from financing activities:
Increase (decrease) in demand deposits............................................... 18,999 (4,543) 19,558
Increase (decrease) in savings and NOW accounts...................................... (31,391) (8,668) 33,472
Increase (decrease) in money market accounts......................................... (8) (6,532) 1,271
Increase in time deposits............................................................ 53,863 25,193 17,273
Proceeds from Federal Home Loan Bank advances........................................ - - 6,000
Repayment of Federal Home Loan Bank advances......................................... (2,500) - -
Increase (decrease) in Treasury, tax and loan demand notes........................... (544) (5,265) 4,788
Increase (decrease) in Federal funds purchased and securities sold under agreements
to repurchase....................................................................... (7,331) 23,339 7,854
Exercise of stock options............................................................ 4 1 -
Cash dividends....................................................................... (979) (875) (724)
-------------------------------
Net cash provided by financing activities............................................. 30,113 22,650 89,492
-------------------------------
Net increase (decrease) in cash and cash equivalents.................................. 1,210 (51,552) 43,028
Cash and cash equivalents at beginning of year........................................ 36,301 87,853 44,825
-------------------------------
Cash and cash equivalents at end of year.............................................. $ 37,511 $ 36,301 $ 87,853
===============================
Supplemental disclosures:
Interest paid........................................................................ $ 22,121 $ 16,415 $ 15,495
Income taxes paid.................................................................... 1,926 1,929 1,660
===============================
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>

See notes to consolidated financial statements.

39
<PAGE>

Notes to Consolidated Financial Statements
First Oak Brook Bancshares, Inc. and Subsidiary
- -------------------------------------------------------------------------------

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The consolidated financial statements include the accounts of First Oak Brook
Bancshares, Inc. (the Company) and its wholly-owned subsidiary, Oak Brook Bank.
The accounting and reporting policies of the Company and its subsidiary conform
to generally accepted accounting principles and to general practice within the
banking industry.

The Company, through its subsidiary bank, is engaged in the general retail and
commercial banking business, primarily in the Chicago metropolitan area. The
services offered include demand, savings and time deposits, corporate cash
management services, commercial lending products such as commercial loans,
mortgages and letters of credit, and personal lending products such as
residential mortgages, home equity lines, auto loans and credit card products.
In addition, related products and services are offered including discount
brokerage, mutual funds and annuity sales, and foreign currency and precious
metal sales. The subsidiary bank has a full service trust and land trust
department.

Use of Estimates: The consolidated financial statements and accompanying
footnotes of the Company inherently involve significant estimates made by
management; these assumptions and estimates used in the preparation of the
consolidated financial statements and accompanying footnotes are subjective in
nature and involve uncertainties and significant judgment. Changes in these
assumptions and estimates could significantly affect reported amounts in the
consolidated financial statements and accompanying footnotes.

Investment Securities: In May, 1993, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 115, "Accounting for
Certain Investments in Debt and Equity Securities." The Company adopted the
provisions of Statement No. 115 as of December 31, 1993.

Management determines the appropriate classification of securities at the time
of purchase. Securities are classified as held-to-maturity when the Company has
the positive intent and ability to hold the securities to maturity. Held-to-
maturity securities are stated at amortized cost.

Securities not classified as held-to-maturity or trading and marketable equity
securities are classified as available-for-sale. Available-for-sale securities
are stated at fair value, with the unrealized gains and losses, net of tax,
reported in a separate component of shareholders' equity. The Company does not
carry any securities for trading purposes.

The amortized cost of securities classified as held-to-maturity or available-
for-sale is adjusted for amortization of premiums and accretion of discounts to
maturity, or in the case of mortgage-backed securities, over the estimated life
of the security. The cost of securities sold is based on the specific
identification method.

Loan Fees and Related Costs: Loan origination and commitment fees and certain
direct loan origination costs are deferred and amortized as an adjustment of the
related loan's yield over the contractual life of the loan using the level-yield
method.

Allowance for Loan Losses: The allowance for loan losses is comprised of both
specific and general valuation allowances. The Company accounts for specific
valuation allowances on commercial, commercial mortgage and construction loans
in accordance with Statement of Financial Accounting Standards No. 114,
"Accounting by Creditors for Impairment of a Loan." In accordance with Statement
114, the Company considers a loan to be impaired when, based on an evaluation of
current information and events, it is probable that the Company's subsidiary
bank will not be able to collect all amounts (principal and interest) due
pursuant to the original contractual terms. The Company measures impairment
based upon the present value of expected future cash flows discounted at the
loan's original effective interest rate or the fair value of the collateral if
the loan is collateral dependent. Interest income on impaired loans is
recognized using either the cash basis method or a cost recovery method
depending upon the circumstances. Valuation allowances on residential mortgage,
home equity, credit card and consumer installment loans and general valuation
allowances on commercial, commercial mortgage and construction loans are
determined by management based on factors such as past loan loss experience,
evaluation of potential losses in the loan portfolio, prevailing economic
conditions and other factors and estimates which are subject to change over
time. Management adjusts the allowance for loan losses by recording a provision
for loan losses in an amount sufficient to maintain the allowance at an adequate
level. The Company adopted Statement 114 as of January 1, 1995. The adoption of
this Statement had no material effect on the Company's financial statements as
the Company had no impaired loans, as defined, through December 31, 1995.

Loans, excluding credit card loans, are placed on non-accrual status when the
continuity of the contractual principal or interest is deemed doubtful by
management or becomes 90 days or more past due and the loan is not well secured
or in the process of collection.

Premises and Equipment: Premises, leasehold improvements and equipment are
stated at cost less accumulated depreciation and amortization. For financial
reporting purposes, depreciation is charged to expense by the straight-line
method over the estimated useful life of the asset. Leasehold improvements are
amortized over a period not exceeding the term of the lease, including renewal
option periods.

Income Taxes: The Company and its subsidiary file consolidated income tax
returns. The subsidiary provides for income taxes on a separate return basis and
remits to the Company amounts determined to be currently payable. Under this
method, deferred tax assets and liabilities are determined based on differences
between financial reporting and tax bases of assets and liabilities and are
measured using the enacted tax rates and laws that will be in effect when the
differences are expected to reverse.

<PAGE>

Notes to Consolidated Financial Statements
First Oak Brook Bancshares, Inc. and Subsidiary
- -------------------------------------------------------------------------------

Earnings Per Common Share and Common Equivalent Share: Earnings per common share
and common equivalent share are computed by dividing net income by the weighted
average number of common shares and common share equivalents outstanding during
the year. Stock options are included in common share equivalents based on the
treasury stock method.

Stock Options: The Company accounts for stock options in accordance with
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees" (APB 25). Under APB 25, because the exercise price of the Company's
employee stock options equals the market price of the underlying stock on the
date of grant, no compensation expense is recorded.

Cash and Cash Equivalents: For purposes of the Consolidated Statements of Cash
Flows, cash and cash equivalents include cash and due from banks, Federal funds
sold, securities purchased under agreements to resell and interest bearing
deposits with banks with original maturities of 90 days or less.

Reclassification: Certain amounts in the 1994 and 1993 consolidated financial
statements have been reclassified to conform to their 1995 presentation.
- -------------------------------------------------------------------------------

NOTE 2. FAIR VALUE OF FINANCIAL INSTRUMENTS

Statement of Financial Accounting Standards No. 107 "Disclosures about Fair
Value of Financial Instruments" requires the disclosure of the fair value of
certain financial instruments. Fair value of a financial instrument is defined
as the amount at which the instrument could be exchanged in a current
transaction between willing parties other than in a forced or liquidation sale.
The following methods and assumptions were used by the Company in estimating its
fair value disclosures for financial instruments:

Cash and cash equivalents: The carrying amounts reported in the balance sheet
for cash and short-term instruments approximate those assets' fair values.

Investment securities: Fair values for investment securities are based on quoted
market prices.

Loans: For variable rate loans that reprice frequently and with no significant
change in credit risk, fair values are based on carrying amounts. The fair value
for all other loans is estimated using discounted cash flow analyses, which use
interest rates currently being offered for similar loans of similar credit
quality. The fair value of the credit card loan portfolio is based on the value
of existing loans at year-end and does not include the value related to
estimated cash flows from new loans generated from existing cardholders. The
carrying amount of accrued interest approximates its fair value.

Off-balance sheet instruments: Fair values for the Company's off-balance sheet
instruments (letters of credit and lending commitments) are generally based on
fees currently charged to enter into similar agreements.

Deposit liabilities: The fair values for certain deposits (e.g., interest and
noninterest-bearing demand deposits, savings deposits and NOW accounts) are, by
definition, equal to the amount payable on demand. The fair value estimates do
not include the intangible value of the existing customer base. The carrying
amounts for variable rate money market accounts approximate their fair values.
Fair values for certificates of deposit are estimated using a discounted cash
flow calculation that applies interest rates currently being offered on
certificates to a schedule of aggregated expected monthly maturities.

Short-term debt: The carrying amounts of Federal funds purchased, repurchase
agreements and Treasury, tax and loan demand notes approximate their fair
values.

Long-term debt: The fair value of the Federal Home Loan Bank advances is
estimated using a discounted cash flow calculation that utilizes interest rates
currently being offered for similar maturities.

The assumptions and estimates used in the fair value determination process are
subjective in nature and involve uncertainties and significant judgment and,
therefore, fair values cannot be determined with precision. Changes in
assumptions could significantly affect these estimated values.

The estimated fair values of the Company's significant financial instruments
as of December 31, 1995 and 1994 are as follows:

<TABLE>
<CAPTION>
1995 1994
------------------ ------------------
Carrying Fair Carrying Fair
(in thousands) Amount Value Amount Value
- -----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Financial Assets
Cash and cash equivalents..... $ 37,511 $ 37,511 $ 36,301 $ 36,301
Investment securities......... 256,192 258,386 263,943 260,555
Loans......................... 362,728 362,740 309,681 306,504
Financial Liabilities
Time deposits................. 208,293 211,334 154,430 153,477
Other deposits................ 346,793 346,793 359,193 359,193
Short-term debt............... 60,702 60,702 68,577 68,577
Long-term debt................ 3,500 3,486 6,000 5,888
Off-Balance Sheet Commitments
Commercial.................... - 68 - 53
Home equity................... - 92 - 85
Credit card................... - 200 - 260
</TABLE>

<PAGE>

Notes to Consolidated Financial Statements
First Oak Brook Bancshares, Inc. and Subsidiary

- --------------------------------------------------------------------------------
NOTE 3. CASH AND DUE FROM BANKS

Cash and due from banks include reserve balances that the Company's subsidiary
bank is required to maintain with the Federal Reserve Bank of Chicago. These
required reserves are based principally on deposits outstanding. The average
reserves required for the year ended December 31, 1995 and 1994, were $8,688,000
and $6,340,000, respectively.

- --------------------------------------------------------------------------------
NOTE 4. INVESTMENT SECURITIES

The aggregate amortized cost and fair values of securities, and gross unrealized
gains and unrealized losses at December 31 follow:

<TABLE>
<CAPTION>
1995 1994
------------------------------------------ ------------------------------------------
Amortized Unrealized Unrealized Fair Amortized Unrealized Unrealized Fair
(in thousands) Cost Gains Losses Value Cost Gains Losses Value
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Securities available for sale:
U.S. Treasury......................... $ 56,192 $ 475 $231 $ 56,436 $ 62,418 $ 25 $2,609 $ 59,834
U.S. Government agencies.............. 13,565 25 - 13,590 2,563 - 1 2,562
Mortgage-backed agency securities..... 26,185 68 263 25,990 55,939 4 3,212 52,731
Collateralized mortgage obligations... 1,000 13 - 1,013 2,529 - 95 2,434
Obligations of states and political
subdivisions......................... 27,140 1,265 9 28,396 - - - -
Other securities...................... 2,734 18 5 2,747 2,796 - 18 2,778
--------------------------------------------------------------------------------------
Total securities available for sale.. $126,816 $1,864 $508 $128,172 $126,245 $ 29 $5,935 $120,339
======================================================================================
Securities held to maturity:
U.S. Treasury......................... $ 48,731 $ 973 $ - $ 49,704 $ 69,200 $ - $1,101 $ 68,099
U.S. Government agencies.............. 20,235 172 51 20,356 3,000 - 130 2,870
Mortgage-backed agency securities..... 35,693 375 97 35,971 15,453 2 558 14,897
Obligations of states and political
subdivisions......................... 23,197 835 13 24,019 55,226 378 1,979 53,625
Other securities...................... 164 - - 164 725 - - 725
--------------------------------------------------------------------------------------
Total securities held to maturity.... $128,020 $2,355 $161 $130,214 $143,604 $380 $3,768 $140,216
======================================================================================
</TABLE>

The amortized cost and fair values of investment securities at December 31,
1995, by contractual maturity, are shown below. Mortgage-backed agencies and
collateralized mortgage obligations are presented in the tables based on their
estimated average lives, which will differ from contractual maturities due to
principal prepayments. Other securities include preferred stock and Federal Home
Loan Bank of Chicago stock which have no stated maturity date.

<TABLE>
<CAPTION>
1995
------------------------
Amortized Fair
(in thousands) Cost Value
- ----------------------------------------------------------------------------------
<S> <C> <C>
Securities available for sale:
Due in one year or less................................. $ 16,024 $ 16,069
Due after one year through five years................... 84,029 84,496
Due after five years through ten years.................. 15,731 16,241
Over ten years.......................................... 8,298 8,619
-----------------------
124,082 125,425
Other securities........................................ 2,734 2,747
-----------------------
$126,816 $128,172
=======================

Securities held to maturity:
Due in one year or less................................. $ 18,784 $ 18,861
Due after one year through five years................... 94,903 96,469
Due after five years through ten years.................. 12,374 12,788
Over ten years.......................................... 1,959 2,096
-----------------------
$128,020 $130,214
=======================
</TABLE>

42
<PAGE>

Notes to Consolidated Financial Statements
First Oak Brook Bancshares, Inc. and Subsidiary

- --------------------------------------------------------------------------------
On November 15, 1995, the Financial Accounting Standards Board staff issued a
Special Report, "A Guide to Implementation of Statement 115 on Accounting for
Certain Investments in Debt and Equity Securities." In accordance with the
provisions in that Special Report, in December 1995, the Company reclassified
certain securities from held-to-maturity to available-for-sale. At the date of
transfer, the amortized cost of those securities was $33,425,000 and the
unrealized gain on those securities was $1,377,000. In December, 1995, the
Company also reclassified certain securities from available-for-sale to held-to-
maturity. At the date of transfer, the aggregate fair market value of those
securities was $28,375,000, which approximated amortized cost.

At December 31, 1995, investment securities with book value of $196,708,000
were pledged as collateral to secure certain deposits and for other purposes as
required by law.

Proceeds from sales of investments in debt and equity securities during 1995,
1994 and 1993 were $8,967,000, $27,068,000, and $43,841,000, respectively. Gross
gains of $138,000 and gross losses of $11,000 were realized on those sales in
1995. Gross gains of $238,000 and gross losses of $201,000 were realized on
those sales in 1994. Gross gains of $1,141,000 and gross losses of $32,000 were
realized on those sales in 1993.

- --------------------------------------------------------------------------------
NOTE 5. LOANS

Loans outstanding at December 31 follow:

1995 1994
------------------- -------------------
Book Fair Book Fair
(in thousands) Value Value Value Value
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Commercial................................ $ 38,171 $ 37,637 $ 33,351 $ 33,025
Real estate-
Construction............................. 28,770 28,770 14,789 14,784
Residential mortgage..................... 81,226 81,545 62,557 60,605
Commercial mortgage...................... 55,437 55,779 56,149 55,251
Home equity loans........................ 47,357 47,318 47,192 47,153
Credit card loans......................... 58,592 58,487 59,984 59,959
Consumer installment loans................ 54,420 53,204 37,067 35,727
----------------------------------------
Total loans.............................. 363,973 362,740 311,089 306,504
Less unearned discount.................... (1,245) - (1,408) -
----------------------------------------
Loans, net of unearned discount.......... $362,728 $362,740 $309,681 $306,504
========================================

</TABLE>

The Company grants real estate, commercial and consumer installment loans
primarily within the Chicago Metropolitan area. Credit cards are issued
throughout the country, although approximately 33% are issued to customers in
Illinois. No other state contains a significant concentration of credit card
customers. Generally, real estate and consumer installment loans are secured by
various items of property such as first and second mortgages, automobiles and
cash collateral. The majority of the commercial portfolio is secured by business
assets. The credit card portfolio is unsecured.

Loans secured by real estate are expected to be paid by the borrowers' cash
flows or proceeds from the sale or refinancing of the underlying real estate.
Almost all of these loans are secured by real estate within the Chicago
Metropolitan area. Performance of these loans may be affected by conditions
influencing the local economy and real estate market. However, the Company's
loan policy addresses this issue, as funds loaned for portfolio loans generally
may not exceed eighty percent of the appraised value of the real estate.
Secondary market real estate loans can be funded at higher loan to value ratios.
If real estate loans sold in the secondary market become delinquent within the
first six months from the date of sale, the investor may require the Company to
repurchase the loan.

The credit card portfolio is expected to be repaid from customers' cash flows.
The Company's approval policies for issuing a credit card require an analysis of
applications and credit reports to ensure sufficient income and/or assets,
satisfactory debt to income ratios, and satisfactory past credit history. A
general downturn in the economy may increase credit card losses.

In the normal course of business, there are various outstanding commitments
and contingent liabilities, including commitments to extend credit, which are
not reflected in the financial statements. The Company's exposure to credit loss
in the event of nonperformance by the other party to the commitments and lines
of credit is limited to their contractual amount. Many commitments to extend
credit expire without being used, or, in the case of credit cards, the Company,
at its discretion, may cancel any credit card line. Additionally, some credit
card lines are drawn down and paid off monthly. Therefore, the amounts stated
below do not necessarily represent future cash commitments. These commitments
(including letters of credit) and credit lines are subject to the same credit
policies followed for loans recorded in the financial statements.

<PAGE>

Notes to Consolidated Financial Statements
First Oak Brook Bancshares, Inc. and Subsidiary

- --------------------------------------------------------------------------------
A summary of these commitments to extend credit at December 31 follows:

(in thousands) 1995 1994
- -------------------------------------------------------------
<S> <C> <C>
Commercial............................... $ 62,225 $ 38,205
Home equity.............................. 59,536 54,732
Credit card.............................. 313,523 292,135

</TABLE>

An analysis of the allowance for loan losses follows:

(in thousands) 1995 1994 1993
- -------------------------------------------------------------
<S> <C> <C> <C>
Balance at beginning of year.... $ 3,859 $3,231 $2,890
Provision for loan losses....... 3,050 1,200 960
Recoveries...................... 135 163 125
Charge-offs..................... (1,112) (735) (744)
----------------------------
Balance at end of year.......... $ 3,932 $3,859 $3,231
============================

</TABLE>

The Company's bank subsidiary has granted loans to its officers and directors,
as well as to the officers and directors of the Company and to their associates.
Related-party loans are made on substantially the same terms, including interest
rates and collateral, as those prevailing at the time for comparable
transactions with unrelated parties and do not involve more than normal risk of
collectibility. The aggregate amount of these loans was $5,463,000 and
$5,272,000 at December 31, 1995 and 1994, respectively. During 1995, new loans
totaled $667,000 and repayments totaled $476,000.

Certain principal shareholders of the Company are also principal shareholders
of Amalgamated Investments Company, parent of Amalgamated Bank of Chicago. The
Company's subsidiary bank has purchased from or sold participations in loans to
Amalgamated Bank of Chicago. At December 31, 1995, the Company had outstanding
loan participations sold of $2,107,000 and no outstanding loan participations
purchased with Amalgamated Bank of Chicago. There were no outstanding loan
participations sold or purchased with Amalgamated Bank of Chicago at December
31, 1994.

- --------------------------------------------------------------------------------
Note 6. PREMISES AND EQUIPMENT

A summary of premises and equipment at December 31 follows:

(in thousands) 1995 1994
- -------------------------------------------------------------
<S> <C> <C>
Land...................................... $ 2,621 $ 2,621
Buildings and improvements................ 15,141 14,997
Leasehold improvements.................... 975 957
Data processing equipment, office
equipment and furniture.................. 9,006 8,517
------------------
27,743 27,092
Less accumulated depreciation
and amortization......................... (9,844) (8,103)
------------------
Premises and equipment, net............... $17,899 $18,989
==================
</TABLE>

The Company has entered into a number of noncancellable operating lease
agreements for certain of its subsidiary bank's office premises. The minimum
annual net rental commitments under these leases at December 31, 1995, are as
follows:

(in thousands)
- -----------------------------
<S> <C>
1996................. $159
1997................. 148
1998................. 113
1999................. 84
2000................. 75
2001 and thereafter.. 97
----
$676
====

</TABLE>

Total rental expense for 1995, 1994 and 1993 was approximately $188,000,
$189,000 and $186,000, respectively, which included payment of certain occupancy
expenses as defined in the lease agreements.

The Company's aggregate future minimum net rentals to be received under
noncancellable leases from third party tenants are as follows:

(in thousands)
- -----------------------------
<S> <C>
1996................. $ 423
1997................. 396
1998................. 355
1999................. 356
2000................. 366
2001 and thereafter.. 338
------
$2,234
======

</TABLE>

The Company also receives reimbursement from its tenants for certain occupancy
expenses including taxes, insurance and operational expenses, as defined in the
lease agreements.

- --------------------------------------------------------------------------------
NOTE 7. BORROWINGS

The variable rate Treasury, tax and loan notes are due on demand. The weighted
average rate at December 31, 1995 and 1994 was 5.16% and 3.92%, respectively.
The Company maintains qualifying collateral, including U.S. Treasuries and
municipal securities.

The Federal Home Loan Bank advances outstanding at December 31, 1995 bear
interest of 4.73% and mature on March 30, 1996. The Company maintains qualifying
collateral, including its Federal Home Loan Bank Stock and 1-4 family
residential mortgages.

<PAGE>

Notes to Consolidated Financial Statements
First Oak Brook Bancshares, Inc. and Subsidiary

- -------------------------------------------------------------------------------
NOTE 8. INCOME TAXES

The components of the provision for income taxes for the three years in the
period ended December 31 follow:

(in thousands) 1995 1994 1993
- ------------------------------------------------------------
<S> <C> <C> <C>
Current provision................. $2,375 $1,874 $1,818
Deferred benefit.................. (379) (47) (263)
------------------------
Total provision for income taxes.. $1,996 $1,827 $1,555
========================
</TABLE>

The tax expense related to investment securities gains for 1995, 1994 and 1993
totaled $43,000, $13,000, and $377,000, respectively.

The net deferred tax asset at December 31 consists of the following:

(in thousands) 1995 1994
- ------------------------------------------------------
<S> <C> <C>
Gross deferred tax liabilities:
Unrealized gain on securities
available for sale.................. $ 184 $ -
Accretion of discount on securities.. 229 200
Tax over book depreciation........... 450 415
Purchase accounting adjustments...... 39 154
Other, net........................... 166 219
--------------
Total deferred tax liabilities...... 1,068 988

Gross deferred tax assets:
Unrealized loss on securities
available for sale.................. - 2,462
Book over tax loan loss reserve...... 1,269 1,037
Deferred expenses.................... 143 100
--------------
Total deferred tax assets........... 1,412 3,599
--------------

Net deferred tax asset.............. $ 344 $2,611
==============
</TABLE>

The effects of significant temporary differences on the deferred tax benefit for
the three years in the period ended December 31 follow:

(in thousands) 1995 1994 1993
- --------------------------------------------------------
<S> <C> <C> <C>
Deferred expenses................ $ (43) $ 31 $(106)
Accretion of discount on
securities...................... 29 20 66
Tax over book depreciation
expense......................... 35 140 117
Book over tax loan loss reserve.. (232) (359) (174)
Purchase accounting adjustments.. (115) (68) (53)
Other, net....................... (53) 189 (113)
---------------------
Deferred benefit................ $(379) $ (47) $(263)
=====================
</TABLE>

The effective tax rates for 1995, 1994 and 1993 were 23%, 23% and 22%,
respectively. Income tax expense was less than the amounts computed by applying
the Federal statutory rate of 34% (for companies with taxable income less than
$10 million) for all years because of the following:

(in thousands) 1995 1994 1993
- ------------------------------------------------------------
<S> <C> <C> <C>
Tax expense at statutory rate..... $ 2,954 $2,727 $2,410
Increase (decrease) in taxes
resulting from:
Income from obligations of
states and political
subdivisions and certain
loans not subject to
Federal income taxes........... (1,007) (938) (878)
Other, net...................... 49 38 23
-------------------------
Total provision for income taxes.. $ 1,996 $1,827 $1,555
=========================
</TABLE>

- -------------------------------------------------------------------------------
NOTE 9. SHAREHOLDERS' EQUITY

Each share of Class A common stock is entitled to one-twentieth of one vote and
a cash dividend of at least 120% of the dividend declared on the common stock.
Holders of the Class A common stock, upon liquidation of the Company, are
entitled to receive an aggregate amount per share equal to the $6.31 offering
price of the Class A common stock before any amount is paid to holders of the
common stock.

The common stock is convertible into Class A common stock on a one-for-one
basis at any time.

On July 19, 1994, the Company declared a 50% stock dividend on common and
Class A common which was distributed September 8, 1994. On November 15, 1993,
the Company declared a 25% stock dividend on common and Class A common which was
distributed December 23, 1993.

At December 31, 1995, the Company has reserved for issuance 339,546 shares of
common stock and 2,034,733 shares of Class A common stock.

The Company and its subsidiary bank are subject to certain minimum regulatory
capital and leverage requirements. At December 31, 1995, the Company and its
subsidiary bank were in excess of the minimum requirements.

Payment of dividends by the Company's subsidiary bank is subject to both
Federal and state banking laws and regulations that limit the amount of
dividends that can be paid by the bank without prior regulatory approval. At
December 31, 1995, $7,154,000 of undistributed earnings was available for the
payment of dividends by the subsidiary bank without prior regulatory approval.

<PAGE>

Notes to Consolidated Financial Statements
First Oak Brook Bancshares, Inc. and Subsidiary
- --------------------------------------------------------------------------------

NOTE 10. CONTINGENT LIABILITIES

The Company and its subsidiary bank are subject to pending and threatened legal
actions that arise in the normal course of business. In the opinion of
management, based upon the opinions of legal counsel, the disposition of all
these outstanding matters will not have a material adverse effect on the
Company.

- --------------------------------------------------------------------------------

NOTE 11. EMPLOYEE BENEFIT PLANS

The Company has a 401(k) savings plan that allows eligible employees to defer a
percentage of their salary, not to exceed 10%, which will be matched by the
Company based on a formula tied to Company profits. The maximum Company
liability is 4% of aggregate eligible salaries. For 1995, 1994 and 1993, the
Company's contributions to the plan were $205,000, $190,000 and $190,000
respectively.

The Company also has an integrated stock bonus plan, under which the Company,
at its discretion, could contribute up to the maximum amount deductible for the
year. The Company contributed $130,000 in 1995 and $121,000 in 1994 and $123,000
in 1993.

Effective September 21, 1987, the Company adopted a nonqualified stock option
plan, under which 339,546 shares of common stock of the Company were reserved
for issuance to officers. Options may be granted at a price not less than the
market value on the date of the grant, and are subject to a five year vesting
schedule and are exercisable, in part, beginning at least one year following the
date of the grant and no later than ten years from the date of grant.

Information regarding stock options is summarized below (adjusted for stock
dividends):

Shares
- --------------------------------------------------------------------------------
<S> <C>
Outstanding at December 31, 1992...................................... 132,836
Granted.............................................................. 31,687
-------
Outstanding at December 31, 1993...................................... 164,523
Exercised............................................................ (654)
Cancelled............................................................ (9,000)
Granted.............................................................. 54,500
-------
Outstanding at December 31, 1994...................................... 209,369
Exercised............................................................ (300)
Cancelled............................................................ (1,700)
Granted.............................................................. 64,500
-------
Outstanding at December 31, 1995...................................... 271,869
=======
</TABLE>

At December 31, 1995, 150,969 options were exercisable at prices ranging from
$5.24 to $19.66 per share. At December 31, 1994, 124,382 options were
exercisable at prices ranging from $5.24 to $14.93 per share. At December 31,
1993, 108,653 options were exercisable at prices ranging from $5.24 to $9.24 per
share.

- --------------------------------------------------------------------------------

NOTE 12. PARENT COMPANY ONLY FINANCIAL INFORMATION

The following are the condensed balance sheets, statements of income and cash
flows for First Oak Brook Bancshares, Inc.:

Balance Sheets (Parent Company Only)
December 31,
------------------
(in thousands) 1995 1994
- --------------------------------------------------------------------------------
<S> <C> <C>
Assets
Cash.................................................... $ 156 $ 35
Interest-bearing deposits with banks.................... 10 71
Securities purchased under agreements to resell from
subsidiary............................................ 5,148 --
Investment in subsidiary (including intangibles of
$155 in 1995 and $377 in 1994)........................ 46,560 38,411
Investment securities................................... 1,680 4,290
Due from subsidiary..................................... 810 550
Equipment, net.......................................... 146 157
Other assets............................................ 44 70
------------------
Total assets.......................................... $54,554 $43,584
==================
Liabilities and Shareholders' Equity
Other liabilities....................................... $ 792 $ 675
------------------
Total liabilities..................................... 792 675
Shareholders' equity.................................... 53,762 42,909
------------------
Total liabilities and shareholders' equity............ $54,554 $43,584
==================
</TABLE>

<PAGE>
Notes to Consolidated Financial Statements
First Oak Brook Bancshares, Inc. and Subsidiary
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------

Statements of Income (Parent Company Only) Year Ended December 31,
----------------------
(in thousands) 1995 1994 1993
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Income:
Dividends from subsidiary....................................................... $3,967 $3,725 $1,253
Other income.................................................................... 1,887 1,670 1,625
----------------------
Total income................................................................... 5,854 5,395 2,878
----------------------
Expenses:
Other expenses.................................................................. 2,629 2,470 2,214
----------------------
Total expenses................................................................. 2,629 2,470 2,214
----------------------
Income before income taxes and equity in undistributed net income of subsidiary.. 3,225 2,925 664
Income tax benefit.............................................................. 190 193 138
----------------------
Income before equity in undistributed net income of subsidiary................... 3,415 3,118 802
Equity in undistributed net income of subsidiary................................ 3,277 3,076 4,731
----------------------
Net income....................................................................... $6,692 $6,194 $5,533
======================
</TABLE>

Statements of Cash Flows (Parent Company Only) Year Ended December 31,
-----------------------
(in thousands) 1995 1994 1993
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income....................................................................... $ 6,692 $ 6,194 $ 5,533
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation.................................................................... 39 28 27
Investment securities (gains) losses............................................ 6 - (34)
Decrease (increase) in other assets............................................. 37 (22) 4
Increase in other liabilities................................................... 117 209 121
Increase in due from subsidiary................................................. (260) (281) (69)
Equity in undistributed net income of subsidiary................................ (3,277) (3,076) (4,731)
Amortization of intangibles..................................................... 204 199 247
Other........................................................................... 28 (22) (27)
-----------------------
Net cash provided by operating activities......................................... 3,586 3,229 1,071
Cash flows from investing activities:
Payment of subordinated debt from Oak Brook Bank................................. - - 1,000
Purchase of preferred stock of Oak Brook Bank.................................... - - (2,500)
Sales (purchases) of investment securities....................................... 2,625 (2,223) 680
Additions to equipment........................................................... (28) (101) (29)
-----------------------
Net cash provided by (used in) investing activities............................... 2,597 (2,324) (849)
Cash flows from financing activities:
Stock options exercised.......................................................... 4 1 -
Cash dividends................................................................... (979) (875) (724)
-----------------------
Net cash used in financing activities............................................. (975) (874) (724)
-----------------------
Net increase (decrease) in cash and cash equivalents.............................. 5,208 31 (502)
Cash and cash equivalents at beginning of year.................................... 106 75 577
-----------------------
Cash and cash equivalents at end of year.......................................... $ 5,314 $ 106 $ 75
=======================

47
</TABLE>
<PAGE>

Corporate and Shareholder Information
First Oak Brook Bancshares, Inc. and Subsidiary

- -------------------------------------------------------------------------------
DIRECTORS AND OFFICERS

Executive Officer Directors

Eugene P. Heytow, Chairman of the Board and
Chief Executive Officer
Richard M. Rieser, Jr., President
Frank M. Paris, Vice Chairman

Non-Officer Directors

Miriam Lutwak Fitzgerald, M.D.
Geoffrey R. Stone, Provost of the University of Chicago
Alton M. Withers, Executive Vice President and
Chief Financial Officer, Spiegel, Inc. (retired)

Senior Corporate Officers

Rosemarie Bouman, Vice President, Chief Financial Officer
and Treasurer
Mary C. Carnevale, Vice President and Chief Human
Resources Officer
George C. Clam, Vice President and Chief Banking Officer
William E. Navolio, Vice President, General Counsel,
and Secretary
Susanne C. Griffith, Auditor

- -------------------------------------------------------------------------------
CORPORATE OFFICE

The Corporate Office is located at 1400 Sixteenth Street, Oak Brook, Illinois
60521. The telephone number is (708) 571-1050. The new area code as of August 3,
1996 will be (630). You can E-mail us at [email protected].

ANNUAL MEETING

The Annual Meeting of Shareholders will be held at 10 a.m. on Tuesday, May 7,
1996, in the Conference Center at 1400 Sixteenth Street, Oak Brook, Illinois
60521.

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
STOCK DATA
Per Share
-------------------------------------------------------
Dividends Paid Class A/1/
Net ----------------- Book ---------------------
Quarter Ended Income Class A Common Value Low Price High Price
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
December 31, 1995...................... $.65 $.090 $.075 $15.64 $20.25 $21.25
September 30, 1995..................... $.49 $.075 $.063 $14.70 $17.75 $21.50
June 30, 1995.......................... $.40 $.075 $.063 $14.26 $17.00 $19.50
March 31, 1995......................... $.41 $.075 $.063 $13.37 $16.50 $19.00
December 31, 1994...................... $.45 $.075 $.063 $13.17 $16.50 $20.50
September 30, 1994..................... $.39 $.067 $.053 $12.40 $18.67 $20.50
June 30, 1994.......................... $.49 $.067 $.053 $12.20 $15.33 $20.00
March 31, 1994......................... $.48 $.067 $.053 $12.62 $14.50 $16.33
- -----------------------------------------------------------------------------------------------
</TABLE>
/1/The prices shown represent the high and low closing sales price
for the quarter.

CLASS A COMMON STOCK

The Company's Class A Common Stock trades on the Nasdaq National Market tier of
The Nasdaq Stock Market/SM/. As of January 10, 1996, there were approximately
185 holders of record of Class A Common Stock; however, the Company believes the
number of beneficial owners is substantially greater. Current market makers in
the Class A Common Stock are The Chicago Corporation; Keefe Bruyette & Woods,
Inc.; Robert W. Baird & Co., Inc.; Everen Securities, Inc.; Herzog, Heine,
Geduld, Inc. and Howe Barnes Investments, Inc.

COMMON STOCK

The Company's Common Stock is traded in the over-the-counter market through
market makers, primarily The Chicago Corporation. As of January 10, 1996, there
were approximately 224 holders of record of Common Stock.

Since the offering of the Class A Common Stock there has been limited trading
of the Common Stock; therefore, prices of the Common Stock are not shown. The
Common Stock is, however, convertible on a one-for-one basis into the Class A
Common Stock. As of January 31, 1996, a total of 920,849 shares of Common Stock
have been converted into Class A Common Stock.

- -------------------------------------------------------------------------------
NASDAQ SYMBOL FOR CLASS A COMMON STOCK

FOBBA

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar is Oak Brook Bank,
1400 Sixteenth Street, Oak Brook, Illinois 60521.

FORM 10-K

Any individual requesting a copy of the Company's 1995 Form 10-K Annual Report
filed with the Securities and Exchange Commission may obtain it without charge
by writing to Rosemarie Bouman, Vice President and Chief Financial Officer, at
the Corporate Office.

48
<PAGE>

<PAGE>

FIRST OAK BROOK BANCSHARES, INC.
1400 Sixteenth Street
Oak Brook, Illinois 60521

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EXHIBIT (21)

SUBSIDIARIES OF THE REGISTRANT

The Company's subsidiary is incorporated in the State of Illinois and does
business under its own name.

OAK BROOK BANK (100%)

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EXHIBIT (23)

CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in this Annual Report (Form 10-K)
of First Oak Brook Bancshares, Inc. of our report dated January 17, 1996,
included in the 1995 Annual Report to Shareholders of First Oak Brook
Bancshares, Inc.

We also consent to the incorporation by reference in the Registration Statement
(Form S-8 No. 33-24145) pertaining to First Oak Brook Bancshares, Inc.
Employees' Savings and Stock Ownership Plan and the Registration Statement (Form
S-8 No. 33-82800) pertaining to First Oak Brook Bancshares, Inc. 1987 Stock
Option Plan of our report dated January 17, 1996, with respect to the
consolidated financial statements of First Oak Brook Bancshares, Inc.
incorporated by reference in the Annual Report (Form 10-K) for the year ended
December 31, 1995.

ERNST & YOUNG LLP

Chicago, Illinois
March 20, 1996

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<LEGEND> This schedule contains summary financial information extracted from
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