<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [NO FEE REQUIRED, EFFECTIVE OCTOBER 7, 1996].
For the fiscal year ended December 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED].
For the transition period from_________________ to_________________
Commission file number 0-13551
-------
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
Western Bancorp 401(k) Plan
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
Western Bancorp
4100 Newport Place, Suite 900
Newport Beach, California 92660
(949) 863-2444
<PAGE>
REQUIRED INFORMATION
The Western Bancorp 401(k) Plan (the "Plan") is subject to the Employee
Retirement Income Security Act of 1974 ("ERISA"). Therefore, in lieu of the
requirements of Items 1 - 3 of Form 11-K, the financial statements and
supplemental schedules of the Plan for the fiscal year ended December 31,
1998, which has been prepared in accordance with the financial reporting
requirements of ERISA, are attached hereto as Exhibit 99.1 and incorporated
herein in their entirety by this reference. The Plan was adopted to be
effective as of January 1, 1998; consequently, financial statements for the
year ended December 31, 1997 do not exist.
EXHIBITS
EXHIBIT DESCRIPTION
- ------- -----------
Exhibit 23.1 Consent of KPMG LLP
Exhibit 99.1 Financial Statements and Supplemental Schedules of the Plan
for the fiscal year ended December 31, 1998
<PAGE>
SIGNATURES
THE PLAN. Pursuant to the requirements of the Securities Exchange Act of
1934, as amended, the trustees (or other persons who administer the employee
benefit plan) have duly caused this annual report to be signed on its behalf by
the undersigned hereunto duly authorized.
Date: June 29, 1999 By: /s/ Arnold C. Hahn
------------------------------
Name: Arnold C. Hahn
Title: Executive Vice President/Chief
Financial Officer
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Western Bancorp:
We consent to the incorporation by reference in Western Bancorp's
registration statements on Form S-3 (No. 333-53635) and Form S-8 (No.
333-28633, No. 333-44609, No. 333-70495, No. 333-70497, No. 333-70441) of our
report dated June 25, 1999, relating to the statement of net assets available
for plan benefits of Western Bancorp 401(k) Plan as of December 31, 1998 and
the related statement of changes in net assets available for plan benefits
for the year then ended and all related schedules, which report appears in
the December 31, 1998, annual report on Form 11-K of Western Bancorp.
KPMG LLP
Los Angeles, California
June 28, 1999
<PAGE>
Exhibit 99.1
WESTERN BANCORP 401(K) PLAN
Financial Statements and Supplemental Schedules
December 31, 1998
(With Independent Auditors' Report Thereon)
<PAGE>
WESTERN BANCORP 401(K) PLAN
TABLE OF CONTENTS
PAGE
Independent Auditors' Report 1
Statement of Net Assets Available for Plan Benefits -
December 31, 1998 2
Statement of Changes in Net Assets Available for Plan Benefits -
Year ended December 31, 1998 3
Notes to Financial Statements 4
SCHEDULES
1 Line 27a - Schedule of Assets Held for Investment Purposes -
December 31, 1998 8
2 Line 27d - Schedule of Reportable Transactions -
Year ended December 31, 1998 9
All other schedules are omitted because they are not required or are not
applicable based on disclosure requirements of the Department of Labor's Rules
and Regulations for Reporting and Disclosure under the Employee Retirement
Income Security Act of 1974.
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Administrative Committee and Participants
Western Bancorp 401(k) Plan:
We have audited the accompanying statement of net assets available for Plan
benefits of the Western Bancorp 401(k) Plan (the Plan) as of December 31,
1998 and the related statement of changes in net assets available for Plan
benefits for the year then ended. These financial statements are the
responsibility of the Plans' management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for Plan benefits of the Plan as
of December 31, 1998 and the changes in net assets available for Plan benefits
for the year then ended in conformity with generally accepted accounting
principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental schedule of assets held for
investment purposes as of December 31, 1998 and the schedule of reportable
transactions for the year then ended are presented for purposes of additional
analysis and are not a required part of the basic financial statements, but are
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. These supplemental schedules are the responsibility of
the Plan's management. The supplemental schedules have been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, are fairly stated, in all material respects, in relation to the
basic financial statements taken as a whole.
June 25, 1999 KPMG LLP
Los Angeles, California
1
<PAGE>
WESTERN BANCORP 401(K) PLAN
Statement of Net Assets Available for Plan Benefits
December 31, 1998
<TABLE>
<CAPTION>
1998
-----------
<S> <C>
Cash $ 242
Investments, at fair value (note 3) 9,621,816
Employee contribution receivable 51,292
Employer matching contribution receivable 439,676
-----------
Net assets available for Plan benefits $10,113,026
===========
</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
WESTERN BANCORP 401(K) PLAN
Statement of Changes in Net Assets Available for Plan Benefits
Year ended December 31, 1998
<TABLE>
<CAPTION>
FIRST AMERICAN FIRST AMERICAN FIRST AMERICAN
PRIME OBLIGATION FIXED INCOME LARGE CAP VALUE
FUND FUND FUND
---------------- -------------- --------------
<S> <C> <C> <C>
Investment income:
Net realized and unrealized (depreciation)
appreciation in fair value of investments $ (7,172) (6,504) (209,313)
Interest and dividends 64,430 27,097 216,320
---------- ------- ---------
Net investment income 57,258 20,593 7,007
Employee contributions 224,445 103,184 289,375
Employer matching contributions -- -- --
---------- ------- ---------
224,445 103,184 289,375
Transfers from prior funds/interfund transfers (note 1) 1,934,093 453,051 1,145,921
Loan transactions -- -- --
Rollovers 99,714 3,496 14,134
---------- ------- ---------
2,033,807 456,547 1,160,055
Benefits paid to employees 483,448 4,324 61,796
---------- ------- ---------
483,448 4,324 61,796
Net increase in Plan assets 1,832,062 576,000 1,394,641
Net assets at beginning of year -- -- --
---------- ------- ---------
Net assets at end of year $1,832,062 576,000 1,394,641
========== ======= =========
<CAPTION>
FIRST AMERICAN
MID CAP VALUE JANUS MERCURY JANUS WORLDWIDE
FUND FUND FUND
-------------- ------------- ---------------
<S> <C> <C> <C>
Investment income:
Net realized and unrealized (depreciation)
appreciation in fair value of investments $(366,060) 151,777 11,857
Interest and dividends 165,740 102,631 8,887
--------- --------- -------
Net investment income (200,320) 254,408 20,744
Employee contributions 246,772 183,008 134,885
Employer matching contributions -- -- --
--------- --------- -------
246,772 183,008 134,885
Transfers from prior funds/interfund transfers (note 1) 805,287 836,967 611,610
Loan transactions -- -- --
Rollovers 13,924 7,017 13,949
--------- --------- -------
819,211 843,984 625,559
Benefits paid to employees 59,641 77,612 18,486
--------- --------- -------
59,641 77,612 18,486
Net increase in Plan assets 806,022 1,203,788 762,702
Net assets at beginning of year -- -- --
--------- --------- -------
Net assets at end of year $ 806,022 1,203,788 762,702
========= ========= =======
<CAPTION>
WESTERN BANCORP PARTICIPANT
STOCK FUND LOANS CASH
--------------- ----------- ------
<S> <C> <C> <C>
Investment income:
Net realized and unrealized (depreciation)
appreciation in fair value of investments (826,558) -- --
Interest and dividends 17,046 31,269 3
--------- ------- ---
Net investment income (809,512) 31,269 3
Employee contributions 225,748 -- --
Employer matching contributions -- -- --
--------- ------- ---
225,748 -- --
Transfers from prior funds/interfund transfers (note 1) 3,350,261 278,314 242
Loan transactions -- 199,666
Rollovers 7,078 --
--------- ------- ---
3,357,339 477,980 242
Benefits paid to employees 236,223 -- 3
--------- ------- ---
236,223 -- 3
Net increase in Plan assets 2,537,352 509,249 242
Net assets at beginning of year -- -- --
--------- ------- ---
Net assets at end of year 2,537,352 509,249 242
========= ======= ===
<CAPTION>
CONVERSION CONTRIBUTION
FUND RECEIVABLE TOTAL
------------- ------------ -----------
<S> <C> <C> <C>
Investment income:
Net realized and unrealized (depreciation)
appreciation in fair value of investments $ -- -- (1,251,973)
Interest and dividends 121,518 754,941
---------- ------- ----------
Net investment income 121,518 -- (497,032)
Employee contributions -- 51,292 1,458,709
Employer matching contributions -- 439,676 439,676
---------- ------- ----------
-- 490,968 1,898,385
Transfers from prior funds/interfund transfers (note 1) (88,518) -- 9,327,228
Loan transactions -- -- 199,666
Rollovers -- -- 159,312
---------- ------- ----------
(88,518) -- 9,686,206
Benefits paid to employees 33,000 -- 974,533
---------- ------- ----------
33,000 -- 974,533
Net increase in Plan assets -- 490,968 10,113,026
Net assets at beginning of year -- -- --
---------- ------- ----------
Net assets at end of year $ -- 490,968 10,113,026
========== ======= ==========
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
(1) DESCRIPTION OF THE PLAN
Western Bank, Southern California Bank, National Bank of Southern
California, and Santa Monica Bank were acquired by Western Bancorp
(the Company) on various dates. Western Bancorp's Board of Directors
approved the merger of the Western Bank 401(k) Profit Sharing Plan, the
Southern California Bank Employee Retirement Plan, and the National Bank
of Southern California 401(k) Plan into a single plan, effective as of
December 31, 1997, to be known as the Western Bancorp 401(k) plan (the
"Plan"). The Santa Monica Bank 401(k) Plan and Santa Monica Bank Profit
Sharing Plan merged into the Plan effective May 1, 1998. The following
description of the Plan is provided for general information purposes only.
Participants should refer to the Plan agreement for a more complete
description of the Plan's provisions.
(a) GENERAL
The Plan, as amended, is a single-employer defined contribution
plan covering all employees of Western Bancorp. The Plan is subject
to the provisions of the Employee Retirement Income Security Act of
1974 (ERISA).
(b) CONTRIBUTIONS
Participants are entitled to contribute, on a
tax-deferred-salary-reduction basis, from 1% to 20% of their annual
compensation (limited to $10,000 in 1998). Discretionary matching
contributions may be made by the Company at the option of the
Company's Board of Directors. For the 1998 Plan year, the Company
matched 50% of the first 6% of participant contributions on the last
day of the Plan year. In addition to the discretionary matching
contributions, the Company may make discretionary profit sharing
contributions. The Company made no discretionary profit sharing
contributions in 1998.
(c) PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's
contribution, the Company's discretionary matching and profit
sharing contributions, if any, and allocation of Plan earnings. The
benefit to which a participant is entitled is the benefit that can be
provided from the participant's account.
Participants currently direct the investments of their accounts among
the following investment options:
- First American Prime Obligation Fund - This fund is invested in
very short-term debt issued by the U.S. government, banks, and
corporations.
- First American Fixed Income Fund - This fund is invested in high
quality investment grade debt securities including government,
corporate, mortgage-backed, and asset-backed securities.
- First American Large Cap Value Fund - This fund is invested in a
broadly diversified portfolio of equities of companies with
market capitalization of at least $500 million.
- First American Mid Cap Value Fund - This fund is invested in
securities believed to be undervalued and/or temporarily
unpopular, which offer the potential for capital appreciation
because of factors such as changes in the company or industry in
which the company operates, changes in management or management
goals, or possible mergers or acquisitions.
- Janus Mercury Fund - This fund is invested in primarily common
stocks of companies of any size, which may include larger
well-established issuers and smaller emerging growth companies.
- Janus Worldwide Fund - This fund is invested in companies on a
worldwide basis, regardless of country of organization or place
of principal business activity.
4
<PAGE>
- Western Bancorp Stock Fund - This fund is invested in primarily
stock of Western Bancorp. At least 80% of the fund is typically
invested in stock with the remaining approximately 20% in a cash
equivalent investment vehicle.
(d) PARTICIPANT LOANS
Participants may receive loans from their accounts up to a maximum of
the lesser of (a) 50% of the individual participant's vested account
balance or (b) $50,000 reduced by the highest outstanding loan
balance during the 12 months. The minimum loan amount is set at
$1,000. The terms of the loans cannot exceed five years and are
repayable by payroll deduction.
(e) VESTING
Participants are 100% vested in their own employee contributions plus
the actual earnings thereon. Vesting in the Company discretionary
matching or profit sharing contributions is determined by the length
of employee service as follows:
YEARS OF SERVICE VESTED PERCENTAGE
---------------- -----------------
Less than 2 years 0%
2 25%
3 50%
4 75%
5 or more 100%
In the event of attainment of the normal retirement date, upon
disability or death, a participant is entitled (or the beneficiary
shall be entitled in the event of death) to receive 100% of the
amount contributed by the Company.
(f) FORFEITURES
Upon termination of a participant's employment, the nonvested
portions of Company discretionary matching and profit sharing
contributions (if any) and earnings thereon are forfeited. Such
forfeitures are first used to reduce Plan expenses. Any excess is
used to reduce future Company discretionary or profit sharing
contributions.
(g) PAYMENT OF BENEFITS
On termination of service due to death, disability or retirement,
the entire balance in a participant's deferral account and the vested
balance in the Company discretionary matching and profit sharing
contributions may be distributed to the participant, rolled over into
another qualified plan, or left in the Plan.
In-service distributions are allowed upon experiencing a financial
hardship as defined by the Internal Revenue Code or after attainment
of age 59-1/2. Such withdrawals are subject to applicable excise and
income taxes, and may only be made with the approval of the Plan
Administrator.
(h) ADMINISTRATIVE EXPENSES
All Plan administrative expenses are paid by the Company.
(i) TERMINATION
The Company may at any time discontinue contributions under the Plan,
terminate the Plan, or merge it or consolidate it with another plan.
Upon such discontinuance or termination, participants would become
100% vested.
5
<PAGE>
(j) SUBSEQUENT EVENT
On May 19, 1999, Western Bancorp signed a definitive agreement to be
acquired by U.S. Bancorp. Management intends to merge the Plan into
the U.S. Bancorp 401(k) Savings Plan. The participant current
balance will automatically roll into the U.S. Bancorp 401(k) Savings
Plan.
(k) USE OF ESTIMATES
Management has made certain estimates and assumptions relating to the
reporting of assets and liabilities and the disclosure of contingent
assets and liabilities to prepare these financial statements in
accordance with generally accepted accounting principles. Actual
results could differ from these estimates.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) BASIS OF ACCOUNTING
The financial statements of the Plan have been prepared on the accrual
basis of accounting.
(b) LOANS
Loans are carried at their outstanding balance amount, which
approximates fair market value.
(c) INVESTMENTS
Investments held in money market accounts are stated at cost, which
approximates fair value. Investments in mutual funds and common
stock are stated at fair value as determined by quoted market prices.
Investment transactions are recognized and recorded on the trade date
(the date the order to buy or sell is executed). Interest income is
recorded as earned and dividend income is recorded on the ex-dividend
date.
Net appreciation (depreciation) in the fair value of investments
includes both realized and unrealized gains and losses in addition to
dividends paid on investments in mutual funds which are reinvested in
the form of additional mutual fund shares.
(3) INVESTMENTS
Investments at fair value all of which exceed 5% consist of the following
at December 31, 1998:
<TABLE>
<CAPTION>
1998
----------
<S> <C>
Mutual funds: $
First American Prime Obligation Fund 832,062
First American Fixed Income Fund 576,000
First American Large Cap Value Fund 1,394,641
First American Mid Cap Value Fund 806,022
Janus Mercury Fund 1,203,788
Janus Worldwide Fund 762,702
Western Bancorp Stock Fund 2,537,352
Participant loans 509,249
----------
$9,621,816
==========
</TABLE>
6
<PAGE>
(4) INCOME TAXES
Western Bancorp has not submitted a request for a determination letter
on the qualified status of the Plan. The Company is awaiting an opinion
letter from the Internal Revenue Service regarding its prototype
nonstandardized plan. The Company believes that the Plan meets the
applicable requirements of the Internal Revenue Code.
7
<PAGE>
SCHEDULE 1
WESTERN BANCORP 401(k) PLAN
Line 27a - Schedule of Assets Held for Investment Purposes
December 31, 1998
<TABLE>
<CAPTION>
DESCRIPTION OF INVESTMENT,
INCLUDING MATURITY DATE,
IDENTITY OF ISSUER, BORROWER, LESSOR, RATE OF INTEREST, COLLATERAL, PAR
OR SIMILAR PARTY OR MATURITY VALUE COST CURRENT VALUE
- ----------------------------------------------- ----------------------------------------- -------------- ---------------
<S> <C> <C> <C>
First American Prime Obligations Fund Mutual fund $ 1,832,062 1,832,062
First American Fixed Income Fund Mutual fund 571,148 576,000
First American Large Cap Value Fund Mutual fund 1,588,594 1,394,641
First American Mid Cap Value Fund Mutual fund 1,139,599 806,022
Janus Mercury Fund Mutual fund 1,050,245 1,203,788
Janus Worldwide Fund Mutual fund 729,599 762,702
Western Bancorp Stock Fund Common stock 3,138,461 2,537,352
Loans to participants* Interest rates range from 7.75%
to 11.50% -- 509,249
============== ===============
</TABLE>
*Party in interest.
8
<PAGE>
SCHEDULE 2
WESTERN BANCORP 401(k) PLAN
Line 27d - Schedule of Reportable Transactions
Year ended December 31, 1998
<TABLE>
<CAPTION>
CURRENT VALUE
EXPENSES OF ASSET ON
DESCRIPTION PURCHASE SELLING INCURRED WITH COST OF TRANSACTION NET
IDENTITY OF PARTY INVOLVED OF ASSET PRICE PRICE TRANSACTION ASSET DATE GAIN/(LOSS)
- --------------------------------- -------------- ---------- --------- ------------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
First American Prime Obligation Mutual fund $ -- 1,312,830 -- 1,312,830 1,312,830 --
First American Prime Obligation Mutual fund 3,144,892 -- -- 3,144,892 3,144,892 --
First American Fixed Income Fund Mutual fund -- 191,936 -- 191,304 191,936 632
First American Fixed Income Fund Mutual fund 762,452 -- -- 762,452 762,452 --
First American Large Cap Value Fund Mutual fund -- 329,843 -- 359,584 329,843 (29,741)
First American Large Cap Value Fund Mutual fund 1,948,178 -- -- 1,948,178 1,948,178 --
First American Mid Cap Value Fund Mutual fund -- 343,429 -- 383,583 343,429 (40,154)
First American Mid Cap Value Fund Mutual fund 1,523,182 -- -- 1,523,182 1,523,182 --
Janus Mercury Fund Mutual fund -- 312,107 -- 317,189 312,107 (5,082)
Janus Mercury Fund Mutual fund 1,367,433 -- -- 1,367,433 1,367,433 --
Janus Worldwide Fund Mutual fund -- 105,870 -- 113,384 105,870 (7,514)
Janus Worldwide Fund Mutual fund 842,984 -- -- 842,984 842,984 --
Western Bancorp Stock Fund Common stock -- 1,408,237 -- 1,428,614 1,408,237 (20,377)
Western Bancorp Stock Fund Common stock 3,522,844 -- -- 3,522,844 3,522,844 --
========== ========== ============= =========== ============= ==========
</TABLE>
See accompanying independent auditors' report.
9
