<PAGE>
================================================================================
UNITED STATES SECURITIES
AND
EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act to 1934
For the quarterly period ended: March 31, 2000
Commission file number 0-14468
____________________
FIRST OAK BROOK BANCSHARES, INC.
DELAWARE 36-3220778
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1400 Sixteenth Street, Oak Brook, IL 60523 - Telephone Number (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 May 1, 2000, 6,464,030 shares of common stock were outstanding.
================================================================================
1
<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, 2000 and December 31, 1999 3
Condensed consolidated statements of income
Three months ended March 31, 2000 and 1999 5
Condensed consolidated statements of cash flows
Three months ended March 31, 2000 and 1999 7
Notes to condensed consolidated financial
statements -- March 31, 2000 8
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 17
Signatures 18
- ----------
</TABLE>
* Not applicable
2
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
FIRST OAK BROOK BANCSHARES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
---------- ------------
<S> <C> <C>
Assets
------
Cash and due from banks $ 44,886 $ 47,080
Federal funds sold 21,700 -
Interest-bearing deposits with banks 519 488
Securities held-to-maturity, at
amortized cost (fair value, $121,197
and $93,202 at March 31, 2000
and December 31, 1999, respectively) 122,376 94,425
Securities available-for-sale, at
fair value 241,679 254,182
Loans, net of unearned discount 744,042 719,969
Less allowance for loan losses (5,027) (4,828)
---------- ----------
Net loans 739,015 715,141
---------- ----------
Premises and equipment, net 21,806 21,809
Other assets 13,212 13,231
---------- ----------
Total assets $1,205,193 $1,146,356
========== ==========
</TABLE>
3
<PAGE>
CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)
(Unaudited)
(In Thousands Except Share Information)
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
---------- ------------
<S> <C> <C>
Liabilities
- -----------
Noninterest-bearing demand deposits $ 191,841 $ 196,243
Interest-bearing deposits:
Savings deposits and NOW accounts 145,578 171,135
Money market accounts 69,530 57,186
Time deposits
Under $100,000 253,277 236,108
$100,000 and over 266,667 233,400
---------- ----------
Total interest-bearing deposits 735,052 697,829
---------- ----------
Total deposits 926,893 894,072
Federal funds purchased and securities sold under
agreements to repurchase and other short term debt 87,308 78,008
Treasury, tax and loan demand notes 28,088 20,000
Federal Home Loan Bank borrowings 73,000 63,000
Other liabilities 10,591 11,277
---------- ----------
Total liabilities 1,125,880 1,066,357
---------- ----------
Shareholders' Equity
- --------------------
Preferred stock, series B, no par value, authorized--
100,000 shares, issued--none - -
Common stock, $2 par value, authorized--16,000,000
shares at March 31, 2000 and December 31, 1999,
issued--7,283,256 shares at March 31, 2000 and
December 31, 1999, outstanding--6,439,782
shares at March 31, 2000 and 6,531,314 shares
at December 31, 1999. 14,567 14,567
Surplus 11,976 11,985
Accumulated other comprehensive loss (2,232) (1,245)
Retained earnings 64,189 62,356
Less cost of shares in treasury, 843,474 and
751,942 common shares at March 31, 2000 and
December 31, 1999, respectively. (9,187) (7,664)
---------- ----------
Total shareholders' equity 79,313 79,999
---------- ----------
Total liabilities and shareholders' equity $1,205,193 $1,146,356
========== ==========
</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
ended March 31,
----------------------
2000 1999
------- -------
<S> <C> <C>
Interest income:
Interest and fees on loans $13,544 $11,909
Interest on securities:
U.S. Treasury and Government agencies 4,659 2,937
Obligations of states and political subdivisions 735 665
Other securities 217 371
Interest on Federal funds sold and securities
purchased under agreements to resell 142 171
Interest on deposits with banks 6 196
------- -------
Total interest income 19,303 16,249
------- -------
Interest expense:
Interest on savings deposits and NOW accounts 1,109 1,219
Interest on money market accounts 648 318
Interest on time deposits 6,839 5,199
Interest on Federal funds purchased and securities
sold under agreements to repurchase 1,393 586
Interest on treasury, tax and loan demand notes 138 69
Interest on Federal Home Loan Bank borrowings 935 939
------- -------
Total interest expense 11,062 8,330
------- -------
Net interest income 8,241 7,919
Provision for loan losses 225 210
------- -------
Net interest income after provision for loan losses $ 8,016 $ 7,709
------- -------
</TABLE>
5
<PAGE>
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Continued)
(Unaudited)
(In Thousands Except Share Information)
<TABLE>
<CAPTION>
Three months
ended March 31,
----------------------------
2000 1999
------ ------
<S> <C> <C>
Other income:
Service charges on deposit accounts $1,051 $ 822
Investment management and trust fees 267 247
Merchant card processing fees 558 380
Fees on mortgages sold 29 129
Income from revenue sharing agreement 225 225
Investment securities gains, net 38 -
Other operating income 226 253
------ ------
Total other income 2,394 2,056
------ ------
Other expenses:
Salaries and employee benefits 4,211 3,933
Occupancy expense 451 428
Equipment expense 478 438
Data processing 234 240
Postage, stationery and supplies 192 203
Advertising and business development 368 305
Merchant interchange expense 437 294
Other operating expenses 457 439
------ ------
Total other expenses 6,828 6,280
------ ------
Income before income taxes 3,582 3,485
Income tax expense 1,038 992
------ ------
Net income $2,544 $2,493
====== ======
Basic earnings per share $ .39 $ .38
====== ======
Diluted earnings per share $ .39 $ .37
====== ======
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
6
<PAGE>
FIRST OAK BROOK BANCSHARES, INC. AND SUBSIDIARY
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited) (In Thousands)
<TABLE>
<CAPTION>
Three months
ended March 31,
----------------------
2000 1999
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 2,544 $ 2,493
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation, accretion and amortization 648 425
Provision for loan losses 225 210
Investment securities gains, net (38) -
Revenue sharing agreement 96 112
Origination of real estate loans for sale (2,282) (12,610)
Proceeds from sale of real estate loans originated for sale 2,227 14,398
Increase in other assets (77) (300)
Increase (decrease) in other liabilities (176) 53
-------- --------
Net cash provided by operating activities 3,167 4,781
-------- --------
Cash flows from investing activities:
Securities held-to-maturity:
Purchases (31,149) (10,557)
Proceeds from maturities, call and paydowns 3,213 46,642
Securities available-for-sale:
Purchases (5,622) (45,251)
Proceeds from maturities, calls and paydowns 13,670 21,691
Proceeds from sales 2,858 29,657
Increase in loans (24,044) (30,869)
Purchases of premises and equipment (522) (376)
-------- --------
Net cash provided by (used in) investing activities (41,596) 10,937
-------- --------
Cash flows from financing activities:
Decrease in noninterest-bearing demand deposits (4,402) (4,615)
Increase in interest-bearing deposit accounts 37,223 40,901
Increase in treasury, tax and loan demand notes 8,088 2,581
Proceeds from Federal Home Loan Bank borrowings 15,000 10,500
Repayment of Federal Home Loan Bank borrowings (5,000) -
Increase (decrease) in Federal funds purchased and
securities sold under agreements to repurchase 8,400 (35,436)
Proceeds from draw on revolving credit line 900 -
Purchase of treasury stock (1,573) -
Exercise of stock options 41 246
Cash dividends (711) (605)
-------- --------
Net cash provided by financing activities 57,966 13,572
-------- --------
Net increase in cash and cash equivalents 19,537 29,290
Cash and cash equivalents at beginning of period 47,568 42,432
-------- --------
Cash and cash equivalents at end of period $ 67,105 $ 71,722
======== ========
Supplemental disclosures:
Interest paid $ 11,662 $ 7,966
Income taxes paid 350 500
======== ========
</TABLE>
7
<PAGE>
FIRST OAK BROOK BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000
(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, 2000 are not necessarily indicative of
the results that may be expected for the year ended December 31, 2000. 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, 1999.
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. 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>
March 31, December 31,
2000 1999
---------------------------
<S> <C> <C>
Commercial $ 56,760 $ 59,984
Commercial mortgage 24,591 24,389
Home equity 112,646 110,699
Check credit 837 834
</TABLE>
8
<PAGE>
3. Shareholders' Equity:
Shares authorized, issued and outstanding are as follows:
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
---------------------------
<S> <C> <C>
Preferred Stock, Series B, no par value:
Authorized 100,000 100,000
Issued - -
Outstanding - -
Common Stock, $2.00 par value:
Authorized 16,000,000 16,000,000
Issued 7,283,256 7,283,256
Outstanding 6,439,782 6,531,314
</TABLE>
4. Earnings per Share:
Basic earnings per share (EPS) is computed by dividing net income by the
weighted average number of common shares outstanding for the period.
Diluted EPS is computed by dividing net income by the weighted average
number of common shares adjusted for the diluted effect of outstanding stock
options.
The following table sets forth the denominator used for basic and diluted
earnings per share for the three month periods ended March 31, 2000 and
1999:
<TABLE>
<CAPTION>
March 31, March 31,
2000 1999
-----------------------------
<S> <C> <C>
Denominator for basic earnings
per share - weighted average
shares 6,493,699 6,587,459
Effect of diluted securities:
Stock options issued to
employees and directors 94,984 136,866
--------- ---------
Denominator for diluted
earnings per share 6,588,683 6,724,325
========= =========
</TABLE>
9
<PAGE>
5. Loans
The following table provides the book value, by major classification, as of
the dates indicated:
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
---------- -------------
<S> <C> <C>
Commercial $109,566 $107,557
Real estate loans:
Construction loans 31,621 22,566
Commercial mortgage 159,039 158,008
Residential mortgage 124,744 120,191
Home equity loans 89,532 85,343
Indirect automobile loans 218,199 215,364
Consumer loans 11,631 11,274
-------- --------
Total loans 744,332 720,303
Less unearned discount (290) (334)
-------- --------
Loans, net of unearned discount $744,042 $719,969
======== ========
</TABLE>
6. Comprehensive Income
The Company's comprehensive income consists of net income and unrealized
gains or losses on securities available-for-sale, net of tax, and is
presented as a separate component of Shareholders' Equity. Comprehensive
income for the periods ended March 31, 2000 and 1999 is as follows:
<TABLE>
<CAPTION>
March 31, March 31,
2000 1999
---------- ----------
<S> <C> <C>
Net income $ 2,544 $2,493
Other comprehensive income, net of tax:
Unrealized holding loss on
securities during the period (1,012) (12)
Reclassification adjustment
of realized gain on investment
sales included in net income 25 -
------- ------
Total comprehensive income $ 1,557 $2,481
======= ======
</TABLE>
7. Restatement and Reclassification:
Certain amounts in the March 31, 1999 interim condensed consolidated
financial statements have been reclassified to conform to their 2000
presentation.
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 2000 was $2,544,000 compared with $2,493,000
earned in the first quarter of 1999, an increase of 2%. Basic earnings per
share for the first quarter of 2000 were $.39 as compared to $.38 for 1999,
while diluted earnings per share were $.39 for 2000 compared with $.37 for 1999,
an increase of 5%.
Key performance indicators for the 2000 first quarter show a return on average
assets of .87% compared with 1.01% for the 1999 first quarter. For the first
quarter of 2000, the return on average shareholders' equity was 12.86% compared
with 12.99% for the same quarter of 1999.
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, on a tax-equivalent basis,
increased $343,000 or 4% from the first quarter of 1999. This increase is
attributable to an 18% increase in average interest earning assets offset by a
44 basis point decrease in the net interest margin to 3.13% from 3.57% for the
same period last year.
The net interest margin narrowed due to the yield on average earning assets
decreasing slightly to 7.17% while the cost of deposits and other borrowed funds
rose 40 basis points to 5.02% for the first quarter of 2000.
11
<PAGE>
Average balances and effective interest yields and rates on a tax equivalent
basis for the first quarters of 2000 and 1999 were as follows (dollars in
thousands):
<TABLE>
<CAPTION>
2000 1999
------------------------------ ---------------------------
Interest Interest
Average Income/ Yield/ Average Income/ Yield/
Balance Expense Rate Balance Expense Rate
---------- ------- ---- -------- ------- ----
<S> <S> <C> <C> <C> <C> <C>
Federal funds sold $ 11,352 $ 142 5.05% $ 14,699 $ 171 4.73%
Interest-bearing deposits
with banks 392 6 6.24 11,518 196 6.88
Securities/1/ 361,015 5,899 6.57 260,541 4,243 6.61
Loans/1/ 728,057 13,589 7.51 648,317 11,951 7.48
---------- ------- ---- -------- ------- ----
Total earning assets/
interest income $1,100,816 $19,636 7.17% $935,075 $16,561 7.18%
Cash and due from banks 42,907 39,461
Other assets 33,871 29,705
Allowance for loan losses (4,939) (4,521)
---------- --------
Total average assets $1,172,655 $999,720
========== ========
Interest-bearing deposits $ 707,849 $ 8,596 4.88% $604,679 $ 6,736 4.52%
Short-term debt 114,269 1,531 5.39 60,057 655 4.43
FHLB borrowings 64,319 935 5.85 65,850 939 5.78
---------- ------- ---- -------- ------- ----
Total interest-bearing liabilities/
interest expense $ 886,437 $11,062 5.02% $730,586 $ 8,330 4.62%
Demand deposits 196,613 181,783
Other liabilities 10,048 9,509
---------- --------
Total liabilities $1,093,098 $921,878
Shareholders' equity 79,557 77,842
---------- --------
Total liabilities and shareholders'
equity $1,172,655 $999,720
========== ========
Net interest income/1//spread $ 8,574 2.15% $ 8,231 2.56%
======= ==== ======= ====
Net interest margin 3.13% 3.57%
==== ====
</TABLE>
Average loans for the first quarter of 2000 grew $80 million or 12%, in
comparison to the first quarter of 1999. As shown in the following table, the
increase is primarily attributable to indirect auto loans, commercial real
estate loans and home equity loans. See Note 5 for loan growth since year end.
<TABLE>
<CAPTION>
Average Loans by type and yield as of March 31, 2000 1999
---------------------------------
(Dollars in thousands) Amount Yield Amount Yield
-------- ----- -------- -----
<S> <C> <C> <C> <C>
Commercial $106,088 8.10% $110,060 7.68%
Real estate loans:
Construction 34,542 8.78% 45,401 8.24%
Commercial mortgage 151,868 7.88% 120,779 8.05%
Residential mortgage 122,232 7.06% 119,083 7.10%
Home equity loans 87,316 7.76% 73,313 7.24%
Indirect automobile loans 214,372 6.86% 167,844 7.03%
Consumer loans 11,639 8.17% 11,837 8.38%
-------- ---- -------- ----
Total Loans/1/ $728,057 7.51% $648,317 7.48%
======== ==== ======== ====
</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%.
12
<PAGE>
In addition to loan growth, the average balance of securities increased $100
million due primarily to an increase in U.S. Government Agency Securities.
Average interest-bearing liabilities increased $156 million or 21% since the
first quarter of 1999. Average deposits increased $103 million due to the
opening of the LaGrange office in 1999 and successful retail deposit promotions.
Average short-term debt has also increased $54 million. Since December 31,
1999, time deposits increased $50 million and money market accounts increased
$12 million primarily due to increased municipal deposits and in response to
successful retail deposit promotions.
Based on management's review of the adequacy of the loan loss reserve, the
Company recorded a provision for loan losses of $225,000 for the first quarter
of 2000 compared to $210,000 for the first quarter of 1999. This increase was
due to the continued growth of the loan portfolio. However, despite average
growth in the loan portfolio of 12%, the Company has continued to experience low
levels of nonperforming loans and net charge-offs.
Total other income increased $338,000 or 16%. Service charges on deposit
accounts increased $229,000 primarily due to an increase in service fees earned
in the Company's cash management business.
Merchant card processing fees increased $178,000 primarily due to new merchant
accounts and rate increases to offset higher interchange fees. The number of
merchant outlets at March 31, 2000 increased to 237 as compared to 207 at March
31, 1999. Merchant interchange expense (in other operating expenses) rose
$143,000 as compared to the first quarter of 1999.
Fees on mortgages sold, servicing released, decreased $100,000 as compared to
the first quarter of 1999. During the first quarter of 1999, the mortgage
market was strong; however, due to higher interest rates in 2000, mortgage loan
refinance activity has slowed. Fee income is shown net of commissions paid to
the mortgage originators.
Total other expenses increased $548,000 or 9%. Annualized operating expenses as
a percentage of average assets decreased slightly to 2.3% for 2000 compared with
2.6% for 1999. Annualized net overhead expenses as a percentage of average
assets decreased to 1.6% for 2000 compared to 1.8% for 1999. The efficiency
ratio (other expenses divided by net interest income and other income) was 64.2%
in 2000 as compared to 63.0% in 1999. The increase in operating expenses was
primarily due to higher compensation costs and higher infrastructure costs and
related expenses to support the LaGrange branch that opened in September 1999.
Asset Quality
- -------------
Asset quality remains strong, with nonperforming assets (nonaccrual loans,
renegotiated loans, loans past due 90 days or more and still accruing and other
real estate owned) totaling $1,675,000 at March 31, 2000. Included in this
total is one commercial loan with a balance of $1,036,000 that matured and has
since been renewed and two other loans totaling $200,000 that have been paid in
full. Net charge-offs for the first quarter of 2000 totaled $26,000 compared to
$276,000 in 1999. Management believes the allowance is at an adequate level
commensurate with the risks inherent in the loan portfolio.
13
<PAGE>
The following table summarizes the Company's nonperforming assets (in
thousands):
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
----------------------------
<S> <C> <C>
Nonaccrual $ 90 $ 90
Loans which are past due 90 days or
more and still accruing 1,585 282
------ -----
Total nonperforming loans 1,675 372
Other real estate owned - -
------ -----
Total nonperforming assets $1,675 $ 372
====== =====
Nonperforming loans to loans outstanding .23% .05%
Nonperforming assets to loans outstanding
and other real estate owned .23% .05%
Allowance for loan losses to nonperforming loans 3.0x 12.98x
Allowance for loan losses to loans outstanding .68% .67%
Net charge offs to average loans
outstanding (annualized) .01% .07%
</TABLE>
Capital
- -------
Shareholders' equity totals $79.3 million. The Company and its subsidiary
bank's Tier 1, total risk-based capital and leverage 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, 2000 and the minimum ratios for "well
capitalized" banks.
<TABLE>
<CAPTION>
Well Company Oak Brook
Capitalized Consolidated Bank
---------------------------------------
<S> <C> <C> <C>
Tier 1 Risk-based *6% 9.74% 9.91%
Total Capital Ratio *10% 10.34% 10.51%
Tier 1 Capital leverage *5% 6.90% 7.02%
</TABLE>
* Greater than or equal to
On January 27, 1998, the Board of Directors authorized a stock repurchase
program allowing the Company to repurchase up to 200,000 shares of its common
stock. This plan was completed in February 2000.
On January 25, 2000, the Board of Directors authorized another stock repurchase
program which allows the Company to repurchase 200,000 shares (or approximately
3% of outstanding shares) of common stock through mid 2001. Repurchases can be
made in the open market or through negotiated transactions from time to time
depending on market conditions. The repurchased stock is held as treasury stock
to be used for general corporate purposes.
14
<PAGE>
During the first quarter, the Company repurchased 96,500 shares of its common
stock pursuant to the repurchase programs. As of March 31, 2000, approximately
112,000 shares are remaining to be purchased.
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, the ability to
attract consumer time deposits and access to various borrowing arrangements.
Available borrowing arrangements are summarized as follows:
Oak Brook Bank:
. Federal funds lines aggregating $113 million with 5 correspondent
banks, subject to continued good financial standing. As of March 31,
2000, all $113 million was available for use under these lines.
. Reverse repurchase agreement lines totaling $350 million with four
brokerage firms, subject to the availability of collateral and
continued good financial standing of the Bank. As of March 31, 2000,
$245 million was available to the Bank under these lines.
. Additional advances from the Federal Home Loan Bank of Chicago are
available based on the pledge of specific collateral and FHLB stock
ownership. As of March 31, 2000, approximately $14.5 million remains
available to the Bank under the FHLB agreements.
. The Bank has a borrowing line of approximately $132 million at the
discount window of the Federal Reserve Bank, subject to the
availability of collateral.
Parent Company:
. The Company has a revolving credit arrangement for $15 million. The
line had a balance of $900,000 at March 31, 2000. The line matured on
April 1, 2000 and was renewed through April 1, 2001 and is anticipated
to be renewed annually.
15
<PAGE>
Branch Expansion
- ----------------
The Company's strategy is to invest in future growth through branch expansion in
the Chicago metropolitan area. This form of growth requires a significant
investment in nonearning assets during the construction phase. Upon completion,
for a time, expenses exceed the income of the branch. While new branches retard
short-term earnings, we believe our market warrants judicious office additions.
In January, 2000, the Bank signed a lease for the rental of property at Huron
and Dearborn Streets in Chicago, Illinois. This branch is expected to open
during the third quarter of 2000. Costs incurred for the Chicago branch have
been capitalized. The Company will begin to incur expenses, including
depreciation, when the branch is put into service.
In April, 2000, the Bank entered into a contract for the purchase of property in
the Chicago suburb of Bolingbrook, Illinois. The closing date is scheduled for
January 2001 and the branch is anticipated to open during 2001.
Qualitative and Quantitative Disclosures about Market Risk
- ----------------------------------------------------------
As described in the 1999 Annual Report to shareholders, the Company manages its
interest rate risk through measurement techniques which include a simulation
model and gap analysis. As part of the risk management process, asset liability
management policies are established and monitored by management. The policy
objective is to limit the change in annual net interest income to 10% from an
immediate and sustained parallel change in interest rates of 200 basis points.
Based on the Company's most recent evaluation, management does not believe the
Company's risk position at March 31, 2000 has changed materially from that at
December 31, 1999.
Forward Looking
- ---------------
This quarterly report contains certain forward looking statements consisting of
estimates with respect to the financial condition, results of operations and
business of the Company that are subject to various factors which could cause
actual results to differ from these estimates. These factors include, but are
not limited to, changes in: general economic conditions, interest rates,
legislative or regulatory changes, loan demand, depositor preferences and the
ability to attract and retain experienced senior management. Therefore, there
can be no assurances that future actual results will correspond to these
forward-looking statements.
16
<PAGE>
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
17
<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 11, 2000 /S/ RICHARD M. RIESER, JR.
---------------- --------------------------------
Richard M. Rieser, Jr.,
President, Assistant
Secretary, and Director
Date May 11, 2000 /S/ ROSEMARIE BOUMAN
---------------- --------------------------------
Rosemarie Bouman,
Vice President, Chief
Financial Officer and
Chief Accounting Officer
18
<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> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> DEC-31-2000 DEC-31-1999
<PERIOD-START> JAN-01-2000 JAN-01-1999
<PERIOD-END> MAR-31-2000 MAR-31-1999
<CASH> 44,886 40,927
<INT-BEARING-DEPOSITS> 519 11,606
<FED-FUNDS-SOLD> 21,700 30,472
<TRADING-ASSETS> 0 0
<INVESTMENTS-HELD-FOR-SALE> 241,679 150,154
<INVESTMENTS-CARRYING> 122,376 105,389
<INVESTMENTS-MARKET> 121,197 107,436
<LOANS> 744,042 660,792
<ALLOWANCE> 5,027 4,379
<TOTAL-ASSETS> 1,205,193 1,025,375
<DEPOSITS> 926,893 814,088
<SHORT-TERM> 115,396 54,413
<LIABILITIES-OTHER> 10,591 9,691
<LONG-TERM> 73,000 68,000
0 0
0 0
<COMMON> 14,567 14,567
<OTHER-SE> 64,746 64,616
<TOTAL-LIABILITIES-AND-EQUITY> 1,205,193 1,025,375
<INTEREST-LOAN> 13,544 11,909
<INTEREST-INVEST> 5,611 3,973
<INTEREST-OTHER> 148 367
<INTEREST-TOTAL> 19,303 16,249
<INTEREST-DEPOSIT> 8,596 6,736
<INTEREST-EXPENSE> 11,062 8,330
<INTEREST-INCOME-NET> 8,241 7,919
<LOAN-LOSSES> 225 210
<SECURITIES-GAINS> 38 0
<EXPENSE-OTHER> 6,828 6,280
<INCOME-PRETAX> 3,582 3,485
<INCOME-PRE-EXTRAORDINARY> 3,582 3,485
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 2,544 2,493
<EPS-BASIC> .39 .38
<EPS-DILUTED> .39 .37
<YIELD-ACTUAL> 3.13 3.57
<LOANS-NON> 90 229
<LOANS-PAST> 1,585 119
<LOANS-TROUBLED> 0 0
<LOANS-PROBLEM> 0 0
<ALLOWANCE-OPEN> 4,828 4,445
<CHARGE-OFFS> 46 302
<RECOVERIES> 20 26
<ALLOWANCE-CLOSE> 5,027 4,379
<ALLOWANCE-DOMESTIC> 5,027 4,379
<ALLOWANCE-FOREIGN> 0 0
<ALLOWANCE-UNALLOCATED> 0 0
</TABLE>
