<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 SEPTEMBER 30, 1997
---------------------------------------
OR
( ) TRANSITIONS 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 60523
- ----------------------------------------------------- --------
(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 files 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 pass 90 days.
Yes X No ________
--------
Indicate number of shares outstanding of each of the issuer's classes of common
stock, as of October 31, 1997.
Class A 1,800,972
- ---------------------------------- ---------------------------
CLASS NUMBER OF SHARES
Common 1,490,128
- ---------------------------------- ---------------------------
CLASS NUMBER OF SHARES
<PAGE>
FIRST OAK BROOK BANCSHARES, INC. AND SUBSIDIARY
INDEX
Page
----
Part I. Financial Information
- -----------------------------
Item 1. Financial Statements (Unaudited)
Condensed consolidated balance sheets
September 30, 1997 and December 31, 1996 3
Condensed consolidated statements of income
Three months ended September 30, 1997 and 1996 and
Nine months ended September 30, 1997 and 1996 5
Condensed consolidated statements or cash flows
Nine months ended September 30, 1997 and 1996 7
Notes to condensed consolidated financial
statements -- September 30, 1997 9
Items 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 18
Signatures 19
- ----------
* Not applicable
-2-
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
FIRST OAK BROOK BANCSHARES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
(Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
---- ----
Assets
- ------
<S> <C> <C>
Cash and due from banks $ 33,494 $ 38,816
Federal funds sold 17,000 22,150
Interest-bearing deposits
with banks 10,072 289
Securities held-to-maturity, at
amortized cost (fair value $155,166
and $132,057 for September 30, 1997
and December 31, 1996) 152,945 130,408
Securities available-for-sale, at
fair value 167,919 135,546
Loans, net of unearned discount 413,444 420,164
Less allowance for loan losses (4,533) (4,109)
-------- --------
Net loans 408,911 416,055
-------- --------
Premises and equipment, net 17,898 17,470
Other assets 8,582 7,921
-------- --------
Total assets $816,821 $768.655
======== ========
</TABLE>
-3-
<PAGE>
FIRST OAK BROOK BANCSHARES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS (CONT.)
(Unaudited)
(In Thousands Except Share Information)
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
---- ----
<S> <C> <C>
Liabilities
- -----------
Noninterest-bearing demand deposits $146,809 $147,497
-------- --------
Interest-bearing deposits:
Savings deposits and interest
bearing checking accounts 168,530 180,083
Money market accounts 32,514 32,027
Time deposits
Under $100,000 117,416 141,291
$100,000 and over 183,486 147,405
-------- --------
Total interest-bearing deposits 501,946 500,806
-------- --------
Total deposits 648,755 648,303
-------- --------
Securities sold under agreements
to repurchase 48,892 43,205
Treasury, tax and loan demand notes 18,705 11,982
Federal Home Loan Bank advances 17,500 -
Other liabilities 14,353 5,612
-------- --------
Total liabilities 748,205 709,102
-------- --------
Shareholders' Equity
- --------------------
Class A Common Stock (aggregate
liquidation preference of $11,327) 3,826 3,709
Common stock 3,337 3,382
Surplus 10,871 10,472
Unrealized gain on securities
available-for-sale, net of taxes 1,362 273
Retained earnings 52,805 42,487
Less cost of shares in treasury,
118,000 Class A and 174,023 common
shares in 1997 and 172,527 common
shares in 1996 (3,585) (770)
-------- --------
Total shareholders' equity 68,616 59,553
-------- --------
Total liabilities and
shareholders' equity $816,821 $768,655
-------- --------
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
-4-
<PAGE>
FIRST OAK BROOK BANCSHARES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30 Ended September 30
1997 1996 1997 1996
---------------- ----------------
<S> <C> <C>
Interest income:
Interest on loans $ 8,156 $ 9,187 $27,478 $26,718
Interest on securities:
U.S. Treasury and Government
agencies 4,145 2,998 10,604 8,926
Obligations of states and
political subdivisions 626 717 1,886 2,136
Other securities 252 109 355 317
Interest on Federal funds sold and
securities purchased under
agreements to resell 119 321 418 612
Interest on deposits with banks 175 3 182 9
------- ------- ------- -------
Total interest income 13,473 13,335 40,923 38,718
------- ------- ------- -------
Interest expense:
Interest on savings deposits and
interest bearing checking accounts 1,534 1,690 4,650 5,174
Interest on money market accounts 273 233 806 654
Interest on time deposits 4,358 3,849 11,989 10,551
Interest on Federal funds purchased
and securities sold under
agreements to repurchase 619 717 1,851 2,086
Interest on Treasury, tax and loan
demand notes 113 107 401 286
Interest on Federal Home Loan Bank
advances 186 - 348 42
------- ------- ------- -------
Total interest expense 7,083 6,596 20,045 18,793
------- ------- ------- -------
Net interest income 6,390 6,739 20,878 19,925
Provision for loan losses - 375 1,550 1,035
Net interest income after provision
------- ------- ------- -------
for loan losses $ 6,390 $ 6,364 $19,328 $18,890
------- ------- ------- -------
</TABLE>
-5-
<PAGE>
FIRST OAK BROOK BANCSHARES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (CONT.)
(Unaudited)
(In Thousands Except Share Information)
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30 Ended September 30
1997 1996 1997 1996
----------------- ------------------
<S> <C> <C> <C> <C>
Other income:
Service charges on deposit accounts $ 739 $ 623 $ 2,139 $ 1,824
Trust and investment management fees 245 160 742 497
Other operating income 795 462 1,751 1,208
Investment securities gains (losses) - 8 (9) 11
Gain on sale of credit card portfolio - - 9,117 -
------ ------ ------- -------
Total other income 1,779 1,253 13,740 3,540
------ ------ ------- -------
Other expenses:
Salaries and employee benefits 3,003 3,026 9,241 9,014
Occupancy expense 359 365 1,099 1,063
Equipment expense 380 451 1,161 1,307
Data processing 181 433 1,054 1,194
Professional fees 90 81 306 244
Postage, stationery and supplies 194 174 561 552
Advertising and business development 292 392 1,045 1,186
FDIC premiums 19 1 59 2
Gain on other real estate owned - - (515) -
Other operating expenses 475 415 1,494 1,251
------ ------ ------- -------
Total other expenses 4,993 5,338 15,505 15,813
------ ------ ------- -------
Income before provision for income
taxes 3,176 2,279 17,563 6,617
Provision for income taxes 946 557 5,994 1,627
------ ------ ------- -------
Net income $2,230 $1,722 $11,569 $ 4,990
====== ====== ======= =======
Earnings per common share and common
equivalent share $ .66 $ .50 $ 3.42 $ 1.45
====== ====== ======= =======
Dividends per share:
Class A Common $ .130 $ .090 $ .390 $ .270
Common .105 .075 .315 .225
====== ====== ======= =======
Weighted average number of common
shares and common share
equivalents 3,380,968 3,443,876 3,381,076 3,447,971
========= ========= ========= =========
</TABLE>
See notes to Condensed Consolidated Financial Statements.
-6-
<PAGE>
FIRST OAK BROOK BANCSHARES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(In Thousands)
<TABLE>
<CAPTION>
1997 1996
-------- --------
(Unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net income $ 11,569 $ 4,990
Adjustments to reconcile net income to net
cash provided by operating activities:
Gain on credit card portfolio sale (9,117) -
Depreciation, discount accretion, premium
amortization and amortization of intangibles 1,857 2,529
Provision for loan losses 1,550 1,035
Investment securities (gains) losses 9 (11)
Increase in other assets (694) (576)
Increase in other liabilities 8,146 988
-------- --------
Net cash provided by operating activities 13,320 8,955
-------- --------
Cash flows from investing activities:
Purchase of interest bearing deposits
with banks (10,000) -
Purchase of securities held-to-maturity (79,147) (41,033)
Purchase of securities available-for-sale (83,939) (70,905)
Proceeds from maturities of securities
held-to-maturity 51,709 36,034
Proceeds from sales and maturities of
securities available-for-sale 57,636 68,531
Proceeds from credit card portfolio sale 64,000 -
Increase in loans (49,289) (50,507)
Additions to premises and equipment (1,746) (690)
-------- --------
Net cash used in investing activities (50,776) (58,570)
-------- --------
Cash flows from financing activities:
Increase (decrease) in demand deposits (688) 10,141
Decrease in savings and interest bearing
checking accounts (11,554) (7,173)
Increase in money market accounts 487 2,826
Increase in time deposits 12,207 78,502
Increase in Treasury, tax and
loan demand notes 6,723 14,233
Proceeds from Federal Home Loan Bank advances 17,500 -
Repayment of Federal Home Loan Bank advances - (3,500)
Increase (decrease) in securities sold under
agreements to repurchase 5,687 (2,819)
Exercise of stock options 471 61
Purchase of treasury stock (2,815) (37)
Cash dividends (1,251) (946)
-------- --------
Net cash provided by financing activities 26,767 91,288
-------- --------
</TABLE>
-7-
<PAGE>
FIRST OAK BROOK BANCSHARES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(Unaudited)
(Continued)
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Net increase (decrease) in cash and
cash equivalents (10,689) 41,673
Cash and cash equivalents at beginning
of period 61,255 37,511
------ ------
Cash and cash equivalents at end of
period $50,566 $79,184
====== ======
Supplemental disclosures:
Interest paid $20,157 $18,185
Income taxes paid 4,643 1,855
====== ======
</TABLE>
-8-
<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 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 and nine months period ended September 30, 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 three months ended September 30, 1997
and September 30, 1996 of $.02 and $.01 per share, respectively. For the
nine months ended September 30, 1997 and September 30, 1996, primary
earnings per share would increase $.11 and $.03 per share, respectively.
The impact of Statement No. 128 on the calculation of fully diluted earning
per share for these quarters and the year to data 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
-9-
<PAGE>
FIRST OAK BROOK BANCSHARES, INC. SUBSIDIARY
without being used; therefore, the amounts stated below do not 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>
September 30, 1997 December 31, 1996
------------------ -----------------
<S> <C> <C>
Commercial $121,339 $ 89,797
Home equity 77,083 66,772
Credit card and
check credit 950 305,061
</TABLE>
3. Shareholders' Equity:
Shares authorized, issued and outstanding are as follows:
<TABLE>
<CAPTION>
September 30, 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 1,913,094 1,854,482
Outstanding 1,795,094 1,854,482
Common Stock
$2.00 par value
Authorized 3,000,000 3,000,000
Issued 1,668,629 1,691,138
Outstanding 1,494,606 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.
The October cash dividend increased 15% on the Class A Common and 19% on
the Common stock. The new Class A Common quarterly dividend was $.15 per
share, up from the July dividend of $.13 per share. The new Common
quarterly dividend was $.125 per share, up from the July quarterly dividend
of $.105. The dividend were both paid on October 22, 1997 to shareholders
of record on October 10, 1997.
-10-
<PAGE>
FIRST OAK BROOK BANCSHARES, INC. AND SUBSIDIARY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Earnings Highlights - Third Quarter Results
- -------------------
Net income for the third quarter of 1997 was $2,230,000 compared with $1,722,000
earned in the third quarter of 1996, an increase of $508,000 or 30%. Earnings
per share for the third quarter of 1997 were $.66 as compared to $.50 for 1996.
Key performance indicators for the 1997 third quarter show a return on average
assets of 1.11% compared with 0.92% for the third quarter of 1996. For the third
quarter of 1997, the return on average shareholders' equity was 13.36% compared
with 12.34% for the same quarter of 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, decreased $399,000
or 6%. The net interest margin for the third quarter of 1997 was 3.57% compared
to 4.12% for the same period last year. These decreases are attributable to the
sale of the credit card portfolio in the second quarter of 1997.
Average balances and effective interest yields and rates on a tax equivalent
basis for the third 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 $ 7,917 5.57% $ 24,268 5.28%
Interest-bearing
deposits with banks 10,174 7.16 248 5.31
Securities 332,721 6.29 256,713 6.38
Loans 392,081 8.29 401,565 9.15
------- ---- ------- ----
Total earning assets/
yield $742,893 7.35% $682,794 7.97%
======= ==== ======= ====
Interest-bearing
deposits $501,398 4.88% $479,507 4.79%
Short-term debt 55,814 5.20 65,838 4.99
Long-term debt 12,826 5.76 - -
------- ---- ------- ----
Total interest-bearing
liabilities/cost of
funds $570,038 4.93% $545,345 4.81%
======= ==== ======= ====
Net interest margin 3.57% 4.12%
==== ====
Net interest spread 2.42% 3.16%
==== ====
</TABLE>
-11-
<PAGE>
FIRST OAK BROOK BANCSHARES, INC. AND SUBSIDIARY
Based on management's review of the adequacy of the loan loss reserve, there was
no provision for loan losses for the third quarter of 1997.
Total other income increased $526,000 or 42%. Service charges on deposit
accounts increased $116,000 primarily due to an increase in business account
analysis fees. Trust and investment management fee income rose $85,000
principally due to an increase in assets under investment management.
Discretionary assets under investment management totaled $130 million at
September 30, 1997 compared to $85 million at September 30, 1996. The $333,000
increase in other operating income was principally attributable to the revenue
sharing on the sold credit card portfolio of $225,000, the introduction of an
ATM surcharge fee and increased merchant credit card processing fees.
Other expenses for the third quarter decreased $345,000, or 6%, compared to 1996
primarily due to the disposition of the credit card portfolio and the Company's
cost savings initiatives. Salaries and benefits decreased $23,000 as a result of
the sale of the credit card portfolio. The elimination of credit card department
salaries was offset by the redeployment of certain talented credit card
personnel to growing areas of the bank including indirect auto and merchant card
processing. Also normal raises, higher compensation due to competitive market
conditions and additional upgrades made to strengthen the commercial areas of
the bank minimized the decrease in salaries.
Data processing fees decreased $252,000 and advertising decreased $100,000
primarily due to the sale of the credit card business.
Other operating expenses increased $60,000 primarily as the result of increased
merchant interchange fees.
Earnings Highlights - Nine Month Results
- -------------------
Net income for the nine months ended September 30, 1997 was $11,569,000,
compared with $4,990,000 earned in 1996, an increase of $6,579,000. Earnings per
share for the first nine months of 1997 were $3.42 as compared to $1.45 earned
in 1996.
Year to date results include the sale of Oak Brook Bank's credit card portfolio
on June 30, 1997 and the sale of surplus property formerly leased to a third
party in February, 1997. The credit card portfolio sale resulted in a net gain
of $5 million, and the company reorganized an after-tax gain of $340,000 on the
property sale. Excluding these nonrecurring items, net income for the year to
date increased $1,243,000, or 25%, over 1996.
-12-
<PAGE>
FIRST OAK BROOK BANCSHARES, INC. AND SUBSIDIARY
Key performance indicators for the first nine months of 1997 and 1996 compare as
follows (amounts in thousands except earnings per share:
<TABLE>
<CAPTION>
1997
(excluding
nonrecurring
1997 items) 1996
---- ----- ----
<S> <C> <C> <C>
Net income $11,569 $6,233 $4,990
Earnings per share $ 3.42 $ 1.84 $ 1.45
Return on average assets 2.01% 1.08% .93%
Return on average shareholders'
equity 25.26% 13.61% 12.13%
</TABLE>
Key indicators have increased due to improved earnings and nonrecurring items.
Earnings per share and return on average shareholders' equity also reflect the
positive impact of the stock buyback program initiated in the first quarter of
1997. See Capital discussion for details about the stock buyback.
On a tax equivalent basis, net interest income for the first nine months of 1997
totaled $21,745,000 as compared to $20,917,000 in 1996, a 4% increase. This
increase is due to an 8% increase in average earning assets offset by a 4%
decrease in the net interest margin.
-13-
<PAGE>
FIRST OAK BROOK BANCSHARES, INC. AND SUBSIDIARY
Average balances and effective interest yields and rates on a tax equivalent
basis for the first nine months 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 $ 10,086 5.40% $ 15,432 5.30%
Interest-bearing
deposits with banks 3,639 7.11 238 5.25
Securities 283,920 6.41 257,579 6.35
Loans 411,799 8.96 384,999 9.31
-------- ---- -------- ----
Total earning assets/
yield $709,444 7.88 $658,248 8.06%
======== ==== ======== ====
Interest-bearing
deposits $484,603 4.81 $461,104 4.75%
Short-term debt 58,528 5.14 63,074 5.02
Long-term debt 8,132 5.72 1,162 4.83
-------- ---- -------- ----
Total interest-bearing
liabilities/cost of
funds $551,263 4.86% $525,340 4.78%
======== ==== ======== ====
Net interest margin 4.10% 4.24%
==== ====
Net interest spread 3.01% 3.28%
==== ====
</TABLE>
Total other income rose $10,200,000 over 1996. Excluding the gain on the sale of
the credit card portfolio, other income increased $1,083,000, or 31%. Service
charges on deposit accounts increased $315,000, or 17%, as a result of higher
business account analysis fees. Trust and investment management fees increased
49%, or $245,000, over 1996 due to increased discretionary assets under
investment management. The remaining increase in other operating income of
$543,000 was attributable to the revenue sharing on the sold credit card
portfolio of $225,000, the introduction of an ATM surcharge fee and increased
merchant credit card processing fees.
Total other expenses decreased $308,000 over 1996. Excluding the gain on the
property sale in February, 1997, other expenses increased $207,000, or 1%.
Salaries and employee benefits increased $227,000 as a result of normal raises,
higher compensation due to competitive market conditions, additional upgrades
and increased staff in the growing areas of the bank including indirect auto,
merchant card processing and commercial departments. This increase was offset by
the elimination of salaries due to the sale of the credit card department.
-14-
<PAGE>
FIRST OAK BROOK BRANCSHARES, INC. AND SUBSIDIARY
Data processing fees decreased $140,000 and advertising and business development
costs decreased $141,000, primarily due to the sale of the credit card
portfolio.
Other operating expense increased $243,000. This increase was primarily due to
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 owned) totaling $456,000 at September 30, 1997. Net chargeoffs for
the first nine months of 1997 totaled $1,126,000 or .36% (annualized) of
average loans outstanding. The allowance for loan losses to total loans was
1.10% at September 30, 1997.
The following table summarizes the Company's nonperfoming assets (in thousands):
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
---- ----
<S> <C> <C>
Nonaccrual $ 0 $1,730
Loans which are past due
90 days or more 308 349
--- -----
Total nonperforming loans 308 2,079
Other real estate owned 148 -
--- -----
Total nonperforming assets $ 456 $2,079
=== =====
Nonperforming loans to loans
outstanding .07% .49%
Nonperforming assets to loans
outstanding and other real
estate owned .11% .49%
Allowance for loan losses to
nonperforming loans 14.72% 1.98%
</TABLE>
Capital
- -------
Shareholders' equity grew to $68.6 million at September 30, 1997. The after-tax
unrealized gain on securities available for sale at September 30, 1997 is $1.4
million compared to a $273,000 gain at December 31, 1996.
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 September 30, 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.
-15-
<PAGE>
FIRST OAK BROOK BANCSHARES, INC. AND SUBSIDIARY
<TABLE>
<CAPTION>
Well Company Oak Brook
Capitalized Consolidated Bank
----------- ------------ ----
<S> <C> <C> <C>
Tier 1
Risk-based (Greater than
or equal to) 6% 14.07% 12.95%
Total Capital
Ratio (Greater than
or equal to) 10% 15.02% 13.90%
Tier 1 Capital
leverage (Greater than
or equal to) 5% 8.34% 7.68%
</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 can be made in the open market or through negotiated transactions
depending on market conditions. As of September 30, 1997, a total of 119,496
shares of stock have been repurchased at an average price of $23.56. No shares
have been repurchased since April, 1997. 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 $54 million with six 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 the availability of
collateral and continued good financial standing.
. Advances up to $25.5 million from the Federal Home Loan Bank of
Chicago. The $17.5 million advance outstanding at September 30, 1997,
consists of:
-16-
<PAGE>
FIRST OAK BROOK BANCSHARES, INC. AND SUBSIDIARY
<TABLE>
<CAPTION>
Borrowing Rate Maturity
--------- ---- --------
<S> <C> <C>
$ 2,500 5.85% 2/20/1998
5,000 5.48% 2/22/2000 (callable
after 2/21/1998)
5,000 5.71% 6/18/2002 (callable
after 6/18/1998)
5,000 6.41% 9/25/2002
-------
$17,500
=======
</TABLE>
Parent Company:
. Revolving credit arrangement for $5 million. The line is currently unused and
matures on May 1, 1998. It is anticipated to be renewed annually.
. The parent company also had cash, short-term investments, and other readily
marketable securities totaling $6,339,000 at September 30, 1997.
-17-
<PAGE>
FIRST OAK BROOK BANCSHARES, INC. AND SUBSIDIARY
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
A. Exhibits
Exhibit (27) Financial Data Schedule
B. Reports on Form 8-K
None
-18-
<PAGE>
FIRST OAK BROOK BANCSHARES, INC, AND SUBSIDIARY
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 November 7, 1997 /S/ RICHARD M. RIESER, JR.
-------------------- ----------------------------------
Richard M. Rieser, Jr.,
President, Assistant
Secretary, and Director
Date November 7, 1997 /S/ ROSEMARIE BOUMAN
-------------------- ----------------------------------
Rosemarie Bouman
Vice President, Chief
Financial Officer and
Chief Accounting Officer
-19-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<LEGEND>
This schedule contains summary financial information extracted from SEC Form
10-Q and is qualify in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 33,494
<INT-BEARING-DEPOSITS> 10,072
<FED-FUNDS-SOLD> 17,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 179,783
<INVESTMENTS-CARRYING> 141,081
<INVESTMENTS-MARKET> 155,166
<LOANS> 413,444
<ALLOWANCE> 4,533
<TOTAL-ASSETS> 816,821
<DEPOSITS> 648,755
<SHORT-TERM> 70,097
<LIABILITIES-OTHER> 14,353
<LONG-TERM> 15,000
0
0
<COMMON> 7,163
<OTHER-SE> 61,453
<TOTAL-LIABILITIES-AND-EQUITY> 816,821
<INTEREST-LOAN> 27,478
<INTEREST-INVEST> 12,845
<INTEREST-OTHER> 600
<INTEREST-TOTAL> 40,923
<INTEREST-DEPOSIT> 17,445
<INTEREST-EXPENSE> 20,045
<INTEREST-INCOME-NET> 20,878
<LOAN-LOSSES> 1,550
<SECURITIES-GAINS> (9)
<EXPENSE-OTHER> 15,505
<INCOME-PRETAX> 17,563
<INCOME-PRE-EXTRAORDINARY> 17,563
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,569
<EPS-PRIMARY> 3.42
<EPS-DILUTED> 3.42
<YIELD-ACTUAL> 3.01
<LOANS-NON> 0
<LOANS-PAST> 308
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 4,109
<CHARGE-OFFS> 1,261
<RECOVERIES> 135
<ALLOWANCE-CLOSE> 4,533
<ALLOWANCE-DOMESTIC> 4,533
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
