<PAGE>
Form 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(MARK ONE)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 1997
---------------------------------
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
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 (630) 571-1050
--------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
------- -------
Indicate number of shares outstanding of each of the issuer's classes of common
stock, as of April 30, 1997.
Class A 1,748,431
- ------------------------------- ------------------------------
CLASS NUMBER OF SHARES
Common 1,520,187
- ------------------------------- ------------------------------
CLASS NUMBER OF SHARES
<PAGE>
FIRST OAK BROOK BANCSHARES, INC. AND SUBSIDIARY
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C>
Part I. Financial Information
- ------------------------------
Item 1. Financial Statements (Unaudited)
Condensed consolidated balance sheets
March 31, 1997 and December 31, 1996 3
Condensed consolidated statements of income
Three months ended March 31, 1997 and 1996 5
Condensed consolidated statements of cash flows
Three months ended March 31, 1997 and 1996 7
Notes to condensed consolidated financial
statements -- March 31, 1997 9
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
Operations 11
Part II. Other Information
- ---------------------------
Item 1. Legal Proceedings *
Item 2. Changes in Securities *
Item 3. Defaults upon Senior Securities *
Item 4. Submission of Matters to a Vote of Security Holders *
Item 5. Other Information *
Item 6. Exhibits and Reports on Form 8-K 16
Signatures 17
- ----------
* Not applicable
</TABLE>
2
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
FIRST OAK BROOK BANCSHARES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 31, 1997 AND DECEMBER 31, 1996
(UNAUDITED)
(In Thousands)
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
--------- ------------
<S> <C> <C>
Assets
- ------
Cash and due from banks $ 54,270 $ 38,816
Federal funds sold -- 22,150
Interest-bearing deposits with banks 319 289
Securities held-to-maturity, at
amortized cost (fair value, $125,806
and $132,057 for March 31, 1997
and December 31, 1996) 125,119 130,408
Securities available-for-sale, at
fair value 135,891 135,546
Loans, net of unearned discount 422,285 420,164
Less allowance for loan losses (4,231) (4,109)
-------- --------
Net loans 418,054 416,055
-------- --------
Premises and equipment, net 18,060 17,470
Other assets 7,810 7,921
-------- --------
Total assets $759,523 $768,655
======== ========
</TABLE>
3
<PAGE>
CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)
(Unaudited)
(In Thousands Except Share Information)
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
--------- ------------
<S> <C> <C>
Liabilities
- -----------
Noninterest-bearing demand deposits $154,842 $147,497
-------- --------
Interest-bearing deposits:
Savings deposits and NOW accounts 180,308 180,083
Money market accounts 31,798 32,027
Time deposits
Under $100,000 130,925 141,291
$100,000 and over 132,545 147,405
-------- --------
Total interest-bearing deposits 475,576 500,806
-------- --------
Total deposits 630,418 648,303
-------- --------
Securities sold under agreements
to repurchase 44,177 43,205
Treasury, tax and loan demand notes 12,955 11,982
Federal Home Loan Bank advances 7,500 --
Other liabilities 6,386 5,612
-------- --------
Total liabilities 701,436 709,102
-------- --------
Shareholders' Equity
- --------------------
Class A common stock (aggregate
liquidation preference of $10,977) 3,718 3,709
Common stock 3,397 3,382
Surplus 10,598 10,472
Unrealized gain (loss) on securities
available for sale, net of taxes (333) 273
Retained earnings 44,290 42,487
Less cost of shares in treasury,
118,000 Class A common and 173,945
common shares in 1997 and 172,527
common shares in 1996 (3,583) (770)
-------- --------
Total shareholders' equity 58,087 59,553
-------- --------
Total liabilities and
shareholders' equity $759,523 $768,655
======== ========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
4
<PAGE>
FIRST OAK BROOK BANCSHARES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED MARCH 31, 1997 AND 1996
(Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
1997 1996
------- -------
<S> <C> <C>
Interest income:
Interest on loans $ 9,462 $ 8,543
Interest on securities:
U.S. Treasury and Government agencies 3,174 2,974
Obligations of states and political subdivisions 659 704
Other securities 51 91
Interest on Federal funds sold and securities repurchased
under agreements to resell 187 112
Interest on deposits with banks 4 3
------- -------
Total interest income 13,537 12,427
------- -------
Interest expense:
Interest on savings deposits and NOW accounts 1,559 1,761
Interest on money market accounts 276 209
Interest on time deposits 3,913 3,249
Interest on Federal funds purchased and securities
sold under agreements to repurchase 570 670
Interest on Treasury, tax and loan demand notes 117 90
Interest on Federal Home Loan Bank advances 46 42
------- -------
Total interest expense 6,481 6,021
------- -------
Net interest income 7,056 6,406
Provision for loan losses 375 330
------- -------
Net interest income after provision for loan losses $ 6,681 $ 6,076
------- -------
</TABLE>
5
<PAGE>
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Continued)
THREE MONTHS ENDED MARCH 31, 1997 AND 1996
(Unaudited)
(In Thousands Except Share Information)
<TABLE>
<CAPTION>
1997 1996
------ ------
<S> <C> <C>
Other income:
Service charges on deposit accounts $ 700 $ 604
Trust and investment management fees 285 168
Other operating income 445 351
Investment securities gains (losses) (9) 11
------ ------
Total other income 1,421 1,134
------ ------
Other expenses:
Salaries and employee benefits 3,120 2,963
Occupancy expense 387 342
Equipment expense 393 423
Data processing 444 379
Professional fees 104 76
Postage, stationery and supplies 176 185
Advertising and business development 385 397
FDIC premiums 19 1
Gain on other real estate owned (515) -
Other operating expenses 501 439
------ ------
Total other expenses 5,014 5,205
------ ------
Income before provision for income taxes 3,088 2,005
Provision for income taxes 875 476
------ ------
Net income $2,213 $1,529
====== ======
Earnings per common share and common
equivalent share $ .65 $ .44
====== ======
Dividends per share:
Class A Common $0.130 $0.090
Common $0.105 $0.075
Weighted average number of common shares
and common share equivalents 3,390,842 3,446,923
========= =========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
6
<PAGE>
FIRST OAK BROOK BANCSHARES, INC. AND SUBSIDIARY
CONDENSED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1997 AND 1996
(Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
1997 1996
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 2,213 $ 1,529
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation, discount accretion, premium
amortization and amortization of
intangible assets 638 943
Provision for loan losses 375 330
Investment securities (gains)losses 9 (11)
Decrease (increase) in other assets 271 (1,017)
Increase in other liabilities 915 124
-------- --------
Net cash provided by operating activities 4,421 1,898
-------- --------
Cash flows from investing activities:
Purchase of securities held-to-maturity (6,868) (14,789)
Purchase of securities available-for-sale (28,747) (45,390)
Proceeds from maturities of securities
held-to-maturity 10,157 3,498
Proceeds from sales and maturities of
securities available-for-sale 29,287 50,250
Increase in loans (2,374) (16,039)
Additions to premises and equipment (1,030) (128)
-------- --------
Net cash provided by (used in) investing
activities 425 (22,598)
-------- --------
Cash flows from financing activities:
Increase in demand deposits 7,345 2,081
Increase in savings and NOW accounts 225 2,218
Increase (decrease) in money market accounts (229) 2,080
Increase (decrease) in time deposits (25,226) 28,630
Increase in Treasury, tax and loan
demand notes 973 1,029
Proceeds from Federal Home Loan Bank
advances 7,500 -
Increase (decrease) in securities sold
under agreements to repurchase 972 (1,962)
Exercise of stock options 150 -
Purchase of treasury stock (2,813) -
Cash dividends (409) (326)
-------- --------
Net cash provided by (used in) financing
activities (11,512) 33,750
-------- --------
</TABLE>
7
<PAGE>
FIRST OAK BROOK BANCSHARES, INC. AND SUBSIDIARY
CONDENSED STATEMENTS OF CASH FLOWS (Continued)
THREE MONTHS ENDED MARCH 31, 1997 AND 1996
(Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
1997 1996
------- -------
<S> <C> <C>
Net increase (decrease) in cash and
cash equivalents (6,666) 13,050
Cash and cash equivalents at beginning
of period 61,255 37,511
------- -------
Cash and cash equivalents at end of period $54,589 $50,561
======= =======
Supplemental disclosures:
Interest paid $ 6,355 $ 6,329
Income taxes paid 115 375
======= =======
</TABLE>
8
<PAGE>
FIRST OAK BROOK BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997
(Unaudited)
1. Basis of Presentation:
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles
for interim financial information and with the rules and regulations of the
Securities and Exchange Commission. Accordingly, they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management,
all adjustments (consisting of normal recurring items) considered necessary
for a fair presentation have been included. Operating results for the three
month period ended March 31, 1997 are not necessarily indicative of the
results that may be expected for the year ended December 31, 1997. For
further information, refer to the consolidated financial statements and
footnotes thereto included in the Company's annual report on Form 10-K for
the year ended December 31, 1996.
New Accounting Pronouncements: In February 1997, the Financial Accounting
Standards Board issued Statement No. 128, "Earnings per Share," which is
required to be adopted on December 31, 1997. At that time, the Company will
be required to change the method currently used to compute earnings per
share and to restate all prior periods. Under the new requirements for
calculating primary earnings per share, the dilutive effect of stock
options will be excluded. The impact is expected to result in an increase
in primary earnings per share for the first quarter ended March 31, 1997
and March 31, 1996 of $.02 and $.01 per share, respectively. The impact of
Statement No. 128 on the calculation of fully diluted earnings per share
for these quarters is not expected to be material.
2. Commitments and Contingent Liabilities:
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
9
<PAGE>
necessarily represent future cash commitments. These commitments are subject
to the same credit policy as followed for loans recorded in the financial
statements.
The summary of these commitments to extend credit follows (in thousands):
<TABLE>
<CAPTION>
March 31, 1997 December 31, 1996
-------------- -----------------
<S> <C> <C>
Commercial $110,150 $ 89,797
Home equity 70,870 66,772
Credit card 261,478 305,061
</TABLE>
3. Shareholders' Equity:
Shares authorized, issued and outstanding are as follows:
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
--------- ------------
<S> <C> <C>
Preferred Stock, Series B,
no par value:
Authorized 100,000 100,000
Issued None None
Outstanding None None
Class A Common Stock,
$2.00 par value:
Authorized 4,000,000 4,000,000
Issued 1,859,040 1,854,482
Outstanding 1,741,040 1,854,482
Common Stock,
$2.00 par value:
Authorized 3,000,000 3,000,000
Issued 1,698,322 1,691,138
Outstanding 1,524,377 1,518,611
</TABLE>
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.
10
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Earnings Highlights
- -------------------
Net income for the first quarter of 1997 was $2,213,000 compared with $1,529,000
earned in the first quarter of 1996, an increase of 45%. Earnings per share for
the first quarter of 1997 were $.65 as compared to $.44 for 1996.
Key performance indicators for the 1997 first quarter show a return on average
assets of 1.18% compared with .88% for the 1996 first quarter. For the first
quarter of 1997, the return on average shareholders' equity was 15.36% compared
with 11.26% for the same quarter of 1996.
In February, the Company recognized a $340,000 after-tax gain on the sale of
surplus property formerly leased to a third party. First quarter income before
the gain on the sale increased 22% compared to 1996.
Net interest income is the difference between interest earned on loans and
investments and interest paid on deposits and other interest-bearing
liabilities. Net interest income, on a tax-equivalent basis, increased $626,000
or 9%. This increase is attributable to a 9% increase in average earning
assets. The net interest margin for the first quarter of 1997 was 4.30%
compared to 4.27% for the same period last year.
Average balances and effective interest yields and rates on a tax equivalent
basis for the first quarters of 1997 and 1996 were as follows (dollars in
thousands):
<TABLE>
<CAPTION>
1997 1996
-------------------- --------------------
Average Effective Average Effective
Balance Yield Balance Yield
-------- ----- -------- -----
<S> <C> <C> <C> <C>
Federal funds sold $ 14,298 5.29% $ 8,368 5.38%
Interest-bearing
deposits with banks 314 5.24 251 4.81
Investment securities 260,276 6.47 259,001 6.30
Loans 419,643 9.18 366,885 9.41
-------- ---- -------- ----
Total earning assets/
yield $694,531 8.08% $634,505 8.08%
======== ==== ======== ====
Interest-bearing
deposits $487,868 4.78% $443,088 4.74%
Short-term debt 55,292 5.04 59,586 5.13
Long-term debt 3,250 5.73 3,500 4.83
-------- ---- -------- ----
Total interest-bearing
liabilities/cost of
funds $546,410 4.81% $506,174 4.78%
======== ==== ======== ====
Net interest margin 4.30% 4.27%
==== ====
Net interest spread 3.27% 3.30%
==== ====
</TABLE>
11
<PAGE>
Average loans for the first quarter of 1997 grew 14%, or $53 million, in
comparison to the first quarter of 1996, led by indirect auto loans (up $20
million), along with commercial (up $9 million), home equity (up $8 million) and
commercial real estate loans (up $8 million). Credit card loans were down
slightly as a result of vigorous competition from companies with far greater
marketing resources.
Based on management's review of the adequacy of the loan loss reserve, the
Company recorded a provision for loan losses of $375,000 for the first quarter
of 1997 compared to $330,000 for the first quarter of 1996. This increase was
due to higher first quarter credit card charge-offs in 1997 than in 1996. Net
charge-offs for the first quarter of 1997 were $250,000 compared to $215,000 in
1996.
Total other income increased $287,000 or 25%. Service charges on deposit
accounts increased $96,000 primarily due to an increase in business account
analysis fees. Trust and investment management fee income rose $117,000
principally due to an increase in assets under investment management and a
change from annual billing in 1996 to quarterly in 1997. Discretionary assets
under investment management by the Trust department grew over $19 million, from
$73 million at March 31, 1996 to $92 million at March 31, 1997. The remaining
increase in other operating income of $94,000 was primarily due to increased
merchant credit card processing fees.
Total other expenses decreased $192,000 or 4%, for the first quarter of 1997
compared to 1996. Excluding the gain on the sale of other real estate included
in other operating expenses, other expenses increased $323,000, or 6%. Salaries
and employee benefits rose $157,000, or 5%, as a result of increased base
salaries in certain positions due to a highly competitive job market and the
hiring of experienced personnel.
Occupancy costs increased $45,000, or 13%, over 1996. In August, 1996, the
Company took over approximately 2,000 square feet of space in its Oak Brook
headquarters formerly rented by a third party, reducing rental income.
Data processing fees increased $65,000, or 17%, primarily due to increased
deposit volume and higher processing fees for credit cards, trust, compliance
and student loans.
Other operating expenses rose $62,000, or 14%, as a result of increased merchant
interchange fees.
Asset Quality
- -------------
Asset quality remains good, with nonperforming assets (nonaccrual loans,
renegotiated loans, loans past due 90 days or more and still accruing and other
real estate) totaling $1,709,000. Net charge-offs for the first quarter of 1997
totaled $253,000 or
12
<PAGE>
.24%, annualized, of average loans outstanding. The allowance for loan losses
to total loans was 1.00%.
The following table summarizes the Company's nonperforming assets (in
thousands):
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
------------ -----------
<S> <C> <C>
Nonaccrual $1,268 $1,730
Loans which are past due
90 days or more 441 349
------ ------
Total nonperforming loans 1,709 2,079
Other real estate owned 35 -
------ ------
Total nonperforming assets $1,744 $2,079
====== ======
Nonperforming loans to loans
outstanding .40% .49%
Nonperforming assets to loans
outstanding and other real
estate owned .41% .49%
Allowance for loan losses to
nonperforming loans 2.48x 1.98x
</TABLE>
At March 31, 1997, the $1.3 million in nonaccrual loans consisted of one
commercial real estate development loan originally collateralized by fourteen
condominium units and a combination of improved and unimproved land zoned for
136 multi-family housing units. The borrower expects to sell the property and
negotiate a settlement with the Company. Management is pursuing foreclosure of
the property and a personal judgment against the guarantor and has specifically
reserved $400,000 of the allowance for loan losses for this loan.
Capital
- -------
Shareholders' equity remains strong at $58.1 million. The Company and its
subsidiary bank's Tier 1, total risk-based capital and leveraged ratios are in
excess of minimum regulatory guidelines and also exceed the FDIC criteria for
"well capitalized" banks. The following table shows the capital ratios of the
Company and its subsidiary bank as of March 31, 1997 and the minimum ratios for
"well capitalized" banks. The Federal regulators exclude the after-tax
unrealized gain/loss on securities available for sale from these ratios.
13
<PAGE>
<TABLE>
<CAPTION>
Well Company Oak Brook
Capitalized Consolidated Bank
------------ ------------- ----------
<S> <C> <C> <C>
Tier 1
Risk-based >6% 12.29% 11.51%
Total Capital
Ratio >10% 13.18% 12.41%
Tier 1 Capital
leverage >5% 7.71% 7.22%
</TABLE>
On January 28, 1997, the Company's Board of Directors authorized a stock
repurchase program allowing the Company to repurchase up to 4%, or approximately
135,000 shares, of its Class A or common stock over the next 18 months.
Repurchases are being made in the open market or through negotiated transactions
from time to time depending on market conditions. As of March 31, 1997, a total
of 119,418 shares of stock have been repurchased at an average price of $23.56.
The repurchased stock is held as treasury stock to be used for general corporate
purposes.
Liquidity
- ---------
Effective management of balance sheet liquidity is necessary to fund growth in
earning assets and to pay liability maturities, depository customers' withdrawal
requirements and shareholders' dividends.
The Company has numerous sources of liquidity including a significant portfolio
of shorter term assets, readily marketable investment securities, its deposit
base, and access to borrowing arrangements. Available borrowing arrangements are
summarized as follows:
Oak Brook Bank:
. Informal Federal funds lines of $49 million with seven correspondent banks,
subject to continued good financial standing.
. Reverse repurchase agreement lines of $150 million with two brokerage firms
and three correspondent banks, subject to availability of collateral and
continued good financial standing.
. Available advances up to $11 million from the Federal Home Loan Bank of
Chicago. The $7.5 million advance outstanding at March 31, 1997 consists of
a $2.5 million borrowing at a rate of 5.85% maturing February 20, 1998 and a
$5 million, 5.48% callable borrowing maturing no later than February 22,
2000.
14
<PAGE>
Parent Company:
. Revolving credit arrangement for $5 million. The line was unused at March
31, 1997 and matures on May 1, 1998.
. The parent company also had cash, short-term investments, and other readily
marketable securities totaling $4 million at March 31, 1997.
15
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) Exhibits
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, 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)
Amendment thereto dated May 1, 1997 filed herewith.
Exhibit (10.2) 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 January 15, 1997 filed
herewith.
Exhibit (27) Financial Data Schedule
(B) Reports on Form 8-K
None
16
<PAGE>
SIGNATURES
Pursuant to the requirements 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)
Date May 5, 1997 /S/RICHARD M. RIESER, JR.
----------------- ---------------------------------
Richard M. Rieser, Jr.,
President, Assistant
Secretary, and Director
Date May 5, 1997 /S/ROSEMARIE BOUMAN
----------------- ---------------------------------
Rosemarie Bouman,
Vice President, Chief
Financial Officer and
Chief Accounting Officer
17
<PAGE>
Exhibit 10.1
FIFTH AMENDMENT TO REVOLVING CREDIT AGREEMENT
THIS FIFTH AMENDMENT TO REVOLVING CREDIT AGREEMENT (this "Amendment") dated
as of May 1, 1997, is between FIRST OAK BROOK BANCSHARES, INC. (the "Company")
and LASALLE NATIONAL BANK (the "Bank").
R E C I T A L S:
WHEREAS, the parties have previously entered into a Revolving Credit
Agreement dated as of December 1, 1991, as amended by that certain First
Amendment dated as of January 31, 1993, that certain Second Amendment dated as
of March 31, 1994, that certain Third Amendment dated as of April 1, 1995, and
that certain Fourth Amendment dated April 1, 1996 (collectively, the
"Agreement"); and
WHEREAS, at the present time the Company requests, and the Bank is
agreeable to amending the Agreement pursuant to the terms and conditions
hereinafter set forth:
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements hereinafter set forth, it is agreed by the parties hereto as follows:
1. DEFINITIONS. All capitalized terms used herein without definition
shall have the respective meanings set forth in the Agreement.
2. AMENDMENTS TO AGREEMENT.
2.1 Amendment to Section 1. Section 1 is amended by deleting the
reference to the date "May 1, 1997" and inserting a reference to the date "May
1, 1998" in substitution therefor.
2.2 Replacement of Exhibit A. Exhibit A attached to the Agreement is
hereby deleted in its entirety and Exhibit A attached hereto is hereby
substituted therefor.
3. WARRANTIES. To induce the Bank to enter into this Amendment, the
Company warrants that:
3.1 Authorization. The Company is duly authorized to execute and
deliver this Amendment and is and will continue to be duly authorized to borrow
monies under the Agreement, as amended hereby, and to perform its obligations
under the Agreement, as amended hereby.
<PAGE>
3.2 No Conflicts. The execution and delivery of this Amendment and
the performance by the Company of its obligations under the Agreement, as
amended hereby, do not and will not conflict with any provision of law or of the
charter or by-laws of the Company or of any agreement binding upon the Company.
3.3 Validity and Binding Effect. The Agreement, as amended hereby,
is a legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency or other similar laws of general application affecting
the enforcement of creditors' rights or by general principles of equity limiting
the availability of equitable remedies.
3.4 No Default. As of the closing date hereof, no Event of Default
under Section 9 of the Agreement, as amended by this Amendment, or event or
condition which, with the giving of notice or the passage of time, shall
constitute an Event of Default, has occurred or is continuing.
3.5 Warranties. As of the closing date hereof, the representations
and warranties in Section 6 of the Agreement are true and correct as though made
on such date, except for such changes as are specifically permitted under the
Agreement.
4. CONDITIONS PRECEDENT. This Amendment shall become effective as of the
date above first written after receipt by the Bank of the following documents:
(a) This Amendment duly executed by the Company; and
(b) A Replacement Promissory Note in the form of Exhibit A attached
hereto duly executed by the Company.
5. GENERAL.
5.1 Law. This Amendment shall be construed in accordance with and
governed by the laws of the State of Illinois.
5.2 Successors. This Amendment shall be binding upon the Company and
LaSalle and their respective successors and assigns, and shall inure to the
benefit of the Company and the Bank and its successors and assigns.
5.3 Confirmation of Loan Agreement. Except as amended hereby, the
Agreement shall remain in full force and effect and is hereby ratified and
confirmed in all respects.
2
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date first above written.
LASALLE NATIONAL BANK FIRST OAK BROOK BANCSHARES, INC.
By: /S/JOHN GIUFFRE By: /S/ROSEMARIE BOUMAN
------------------------- -------------------------
Its: VICE PRESIDENT Its: VICE PRESIDENT AND
------------------------- -------------------------
CHIEF FINANCIAL OFFICER
-------------------------
3
<PAGE>
EXHIBIT A
REVOLVING CREDIT NOTE
$5,000,000.00 as of May 1, 1997
FIRST OAK BROOK BANCSHARES, INC., (the "Maker"), for value received,
promises to pay to the order of LASALLE NATIONAL BANK (the "Bank") the lesser
of: the principal sum of Five Million Dollars ($5,000,000.00), or the
aggregate unpaid principal amount outstanding under that certain Revolving
Credit Agreement dated December 1, 1991 between the Maker and the Bank, as
amended by that certain First Amendment dated March 31, 1993, that certain
Second Amendment dated March 31, 1994, that certain Third Amendment dated
April 1, 1995, that certain Fourth Amendment dated April 1, 1996 and that
certain Fifth Amendment of even date herewith (the "Loan Agreement") made
available by the Bank to the Maker at the maturity or maturities and in the
amount or amounts as stated on the records of the Bank together with interest
(computed on actual days elapsed on the basis of a 360 day year) on any and
all principal amounts outstanding hereunder from time to time from the date
hereof until maturity. Interest shall be payable at the Maker's option at the
rates and times set forth in the Loan Agreement. In no event shall any
principal amount have a maturity later that May 1, 1998.
This Revolving Credit Note shall be available for direct advances and
for Bankers' Acceptances.
Principal and interest shall be paid to the Bank at its office at 135
South LaSalle Street, Chicago, Illinois, or at such other place as the holder
of this Note may designate in writing to the undersigned. This Note may be
prepaid in whole or in part as provided for in the Loan Agreement.
This Note evidences indebtedness incurred under the Loan Agreement (and
if amended, under all amendments thereto) to which reference is hereby made
for a statement of the terms and conditions under which the due date of the
Note or any payment thereon may be accelerated. The holder of this Note is
entitled to all of the benefits and security provided for in said Loan
Agreement.
The undersigned agrees that in any action or proceeding instituted to
collect or enforce collection of this Note, the amount endorsed by the Bank on
the reverse side of this Note shall be prima-facie evidence of the unpaid
principal balance of this Note.
<PAGE>
This Note is in substitution for, and not in repayment of, that certain
Revolving Credit Note, dated as of April 1, 1996, in the amount of
$5,000,000.00, executed by the Maker in favor of the Bank.
FIRST OAK BROOK BANCSHARES, INC.
By: /S/ROSEMARIE BOUMAN
-----------------------------
Its: VICE PRESIDENT AND
-----------------------------
CHIEF FINANCIAL OFFICER
-----------------------
<PAGE>
EXHIBIT 10.2
SIXTH AMENDMENT TO SERVICE AGREEMENT
This Sixth Amendment to Service Agreement made and entered into this 15 day of
January, 1997 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").
W I T N E S S E T H:
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, March 1, 1996, March 1, 1996, June 19, 1996, January 15,
1997(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. Exhibit "A", Section III of the Service Agreement is hereby amended by the
addition of the following, effective upon the Commencement Date (for purposes of
this Amendment, the Commencement Date shall be the date FDRI first notifies
Buyer that the CD-ROM Services set forth below become available to Buyer):
"CD-ROM
Services The storage, on Compact Disc-Read Only Memory ('CD-ROM'), of
any items (including but not limited to Cardholder Statements,
Merchant Statements and Reports) selected by Buyer which are
currently available on Microfiche for purposes of record
retention, accessing and archival purposes. Buyer, at its
option, may elect to utilize the CD-ROM Services, Microfiche
Services and/or On-Line Report Services for the same items.
Notwithstanding anything in this Agreement to the contrary,
Buyer is responsible for determining the acceptance of the CD-
ROM Services under state and Federal regulations, including but
not limited to obligations to retain information for a
specified period of time, signature verification and the
admissibility of documents into evidence. It is Buyer's
responsibility to keep written or microform records, if such
are required under state and Federal regulations because of the
limited acceptance or admissibility of the CD-ROM Services or
the technology to be used under this Agreement to provide the
CD-ROM Services.
1
<PAGE>
Virtual CD-ROM
Services The delivery to Buyer, via tape or transmission media other
than CD-ROM, of all information currently available from FDRI
on CD-ROM for use by Buyer in Buyer's in-house imaging system
for record retention, accessing and archival purposes. Buyer,
at its option, may elect to utilize the Virtual CD-ROM Services
for its imaging system, CD-ROM Services, Microfiche Services
and/or On-Line Report Services for the same items. Buyer
understands and agrees that the Virtual CD-ROM Services are an
information delivery system only and that FDRI shall not be
responsible for the long-term integrity of any data delivered
to Buyer by FDRI via Virtual CD-ROM Services. Buyer shall be
responsible for (i) assessing the compatibility of the Virtual
CD-ROM Services to Buyer's imaging system and (ii) determining
the acceptance of Buyer's imaging system under state and
Federal regulations, including but not limited to obligations
to retain information for a specified period of time, signature
verification and the admissibility of documents into evidence."
2. Exhibit "B", Section II-c of the Service Agreement is hereby amended by
the addition of the following, effective on the Commencement Date:
"CD-ROM Service Fees:
Cardholder Statements (Including Enterprise Presentation Cardholder
Statements) (Production and mailing of the items four (4) Business Days
after daily cycle completion)
<TABLE>
<CAPTION>
Per Page Monthly
Delivery Options Charge Minimum
---------------- -------- -------
<S> <C> <C>
(i) 500,001 or more statement
data pages per month; unlimited
CD-ROM Bundles per month $.0129 None
(ii) 100,001 - 500,000 statement
data pages per month; not more
than 5 CD-ROM Bundles per month $.0129 None
(iii) 100,000 or less statement
data pages per month; not more
than 3 CD-ROM Bundles per month $.0129 $575.00
</TABLE>
If, during any calendar month, Buyer requests that FDRI provide either
(a) CD-ROM Bundles in excess of the quantities provided for in the
applicable subparagraph set forth above or (b) Summary CD-ROM Bundles,
then
2
<PAGE>
Buyer shall pay FDRI $475.00 for each such additional or Summary CD-ROM
Bundle.
MERCHANT STATEMENTS (Production and mailing of the items at the following number
of Business Days after daily cycle completion)
<TABLE>
<CAPTION>
Per Page Monthly
Delivery Options Charge Minimum
---------------- -------- -------
<S> <C> <C>
(i) 4 Business Day turnaround;
unlimited CD-ROM Bundles per
month $.0129 $325.00
(ii) 5 Business Day turnaround;
unlimited CD-ROM Bundles per
month $.0129 $225.00
(iii) 6 Business Day turnaround;
unlimited CD-ROM Bundles per
month $.0129 $150.00
</TABLE>
REPORTS (Production and mailing of the items at the following number of Business
Days after daily cycle completion)
<TABLE>
<CAPTION>
Per Page Monthly
Delivery Options (Stand-alone) Charge Minimum
- ------------------------------ -------- ---------
<S> <C> <C>
(i) 4 Business Day turnaround;
unlimited CD-ROM Bundles per
month $.0129 $1,950.00
(ii) 4 Business Day turnaround;
not more than 5 CD-ROM Bundles
per month $.0129 $ 750.00
(iii) 4 Business Day turnaround;
not more than 3 CD-ROM Bundles
per month $.0129 $ 575.00
</TABLE>
If, during any calendar month, Buyer requests that FDRI provide CD-ROM Bundles
in excess of the quantities provided for in the applicable subparagraph set
forth above, then Buyer shall pay FDRI $475.00 for each such additional CD-ROM
Bundle.
3
<PAGE>
<TABLE>
<CAPTION>
Delivery Options (In Combina- Per Page Monthly
tion With OARS Services) Charge Minimum
------------------------ -------- -------
<S> <C> <C>
(i) Day 61 turnaround (following
OARS); unlimited CD-ROM Bundles
per month $.0129 $1,950.00
(ii) Day 61 turnaround (following
OARS); not more than 5 CD-ROM
Bundles per month $.0129 $ 750.00
(iii) Day 61 turnaround
(following OARS); not more than
3 CD-ROM Bundles per month $.0129 $ 575.00
</TABLE>
If, during any calendar month, Buyer requests that FDRI provide CD-ROM
Bundles in excess of the quantities provided for in the applicable
subparagraph set forth above, then Buyer shall pay FDRI $475.00 for
each such additional CD-ROM Bundle.
Other Items
For any other items which Buyer desires to store on CD-ROM and for which FDRI
agrees to provide CD-ROM Services, Buyer and FDRI shall, prior to the
commencement of such services, mutually agree upon the terms and conditions
(including pricing, frequency and any volume limitations) for such CD-ROM
Services.
For each duplicate copy of a CD-ROM Bundle, Buyer shall pay FDRI $75.00.
For each original or revised Cardholder Statement form overlay, Buyer shall pay
FDRI a one-time charge of $250.00.
For any computer programming or other technical services performed by FDRI on
behalf of Buyer in connection with the CD-ROM Services performed by FDRI on
behalf of Buyer, Buyer shall pay FDRI at FDRI's then current standard rates for
such services. Such rates shall be provided to Buyer by FDRI upon request.
A CD-ROM Bundle, for purposes of the Cardholder Statements on CD-ROM and
Merchant Statements on CD-ROM Services, consists of three (3) copies, one for
Buyer, one for archive and one for Buyer's customer service representative. A
CD-ROM Bundle, for purposes of the Reports on CD-ROM Services, consists of two
(2) copies, one for Buyer, and one for archive. A Summary CD-ROM Bundle
summarizes previously produced CD-ROM Bundles.
4
<PAGE>
Buyer shall provide at its expense the minimum personal computer configuration
set forth below:
386/486 Processor with Hard Drive (486 preferred)
8 MB RAM (12 MB preferred)
3.1 Windows
Mouse
14" VGA Color Monitor (SVGA preferred)
CD-ROM Drive (double speed)
Laser Printer
Virtual CD-ROM Service Fees
(produced 4 Business days following
cycle completion) $.0097/data page
The price above for Virtual CD-ROM Services does not include and Buyer shall pay
FDRI at the rates set forth in this Exhibit 'B' for any applicable interface
services performed in connection with the Virtual CD-ROM Services including but
not limited to magnetic tape or transmission services. The price above for
Virtual CD-ROM Services does include the production and storage by FDRI of any
archival CD-ROM disc(s) containing the Virtual CD-ROM delivered to Buyer."
3. 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/ ERIC HUFF By: /s/ DEBRA L. MARKS
----------------------------- ---------------------------
Title: Executive Vice President Title: ASSISTANT VICE PRESIDENT
-------------------------- ------------------------
By: /s/ DARIN CAMPBELL
---------------------------
Title: SENIOR VICE PRESIDENT
------------------------
5
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<LEGEND> This schedule contains summary financial information extracted from
SEC Form 10-Q and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 54,270
<INT-BEARING-DEPOSITS> 319
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 135,891
<INVESTMENTS-CARRYING> 125,119
<INVESTMENTS-MARKET> 125,806
<LOANS> 422,285
<ALLOWANCE> 4,231
<TOTAL-ASSETS> 759,523
<DEPOSITS> 630,418
<SHORT-TERM> 64,632
<LIABILITIES-OTHER> 6,386
<LONG-TERM> 0
<COMMON> 7,115
0
0
<OTHER-SE> 50,972
<TOTAL-LIABILITIES-AND-EQUITY> 759,523
<INTEREST-LOAN> 9,462
<INTEREST-INVEST> 3,884
<INTEREST-OTHER> 191
<INTEREST-TOTAL> 13,537
<INTEREST-DEPOSIT> 5,748
<INTEREST-EXPENSE> 6,481
<INTEREST-INCOME-NET> 7,056
<LOAN-LOSSES> 375
<SECURITIES-GAINS> 9
<EXPENSE-OTHER> 5,013
<INCOME-PRETAX> 3,088
<INCOME-PRE-EXTRAORDINARY> 3,088
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,213
<EPS-PRIMARY> .65
<EPS-DILUTED> .65
<YIELD-ACTUAL> 4.30
<LOANS-NON> 1,268
<LOANS-PAST> 441
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 4,109
<CHARGE-OFFS> 302
<RECOVERIES> 49
<ALLOWANCE-CLOSE> 4,231
<ALLOWANCE-DOMESTIC> 4,231
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
