<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period ended September 30, 1996
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For transition period from to
---------- ----------
Commission File Number 0 -17609
WEST SUBURBAN BANCORP, INC.
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
ILLINOIS 36-3452469
- --------------------------------- ---------------------------------------
(State or other jurisdiction (I.R.S. Employer Identification Number)
of incorporation or organization)
711 SOUTH MEYERS ROAD, LOMBARD, ILLINOIS 60148
- ---------------------------------------- -------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (630) 629-4200
- -------------------------------------------------------------------
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 the number of shares outstanding of each of the Issuer's classes
of common stock as of the latest practicable date.
1,000,000 shares of Common Stock, Class A, no par value, were authorized and
347,015 shares were issued and outstanding as of September 30, 1996.
1,000,000 shares of Common Stock, Class B, no par value, were authorized and
85,480 shares were issued and outstanding as of September 30, 1996.
Page 1 of 23 pages;
Exhibit Index appears at page 21.
<PAGE>
WEST SUBURBAN BANCORP, INC.
Form 10-Q Quarterly Report
Table of Contents
PART I
Page Number
Item 1. Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . 3
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations . . . . . . . . . . . . . . . . . . . . .10
PART II
Item 1. Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . .19
Item 2. Changes in Securities. . . . . . . . . . . . . . . . . . . . . . . .19
Item 3. Defaults Upon Senior Securities. . . . . . . . . . . . . . . . . . .19
Item 4. Submission of Matters to a Vote of Security Holders. . . . . . . . .19
Item 5. Other Information. . . . . . . . . . . . . . . . . . . . . . . . . .19
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . .19
Form 10-Q Signature Page . . . . . . . . . . . . . . . . . . . . . . . . . . .20
2
<PAGE>
PART I
ITEM 1. FINANCIAL STATEMENTS
WEST SUBURBAN BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(UNAUDITED)
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
-------------- --------------
<S> <C> <C>
ASSETS
Cash and due from banks $36,014 $50,094
Interest-bearing deposits in financial institutions 231 141
Federal funds sold 36,880 38,110
-------------- --------------
Total cash and cash equivalents 73,125 88,345
Investment securities:
Available for sale (amortized cost of $132,532 in
1996; $134,139 in 1995) 130,540 134,519
Held to maturity (fair value of $128,351 in
1996; $116,199 in 1995) 129,397 116,037
Loans, less allowance for loan losses of $9,688 in 1996;
$8,900 in 1995 784,126 760,687
Premises and equipment, net 30,376 29,206
Other real estate 1,805 8,317
Accrued interest and other assets 20,292 17,238
-------------- --------------
TOTAL ASSETS $1,169,661 $1,154,349
-------------- --------------
-------------- --------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Noninterest-bearing $98,498 $104,821
Interest-bearing 942,000 924,968
-------------- --------------
Total deposits 1,040,498 1,029,789
Accrued interest and other liabilities 14,117 14,392
-------------- --------------
TOTAL LIABILITIES 1,054,615 1,044,181
-------------- --------------
Shareholders' equity
Common Stock, Class A, no par value; 1,000,000 shares
authorized; 347,015 shares issued and outstanding 2,774 2,774
Common Stock, Class B, no par value; 1,000,000 shares
authorized; 85,480 shares issued and outstanding 683 683
Surplus 38,066 38,066
Retained earnings 74,724 68,416
Unrealized (loss) gain on securities available for sale, net of taxes (1,201) 229
-------------- --------------
TOTAL SHAREHOLDERS' EQUITY 115,046 110,168
-------------- --------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,169,661 $1,154,349
-------------- --------------
-------------- --------------
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements
3
<PAGE>
WEST SUBURBAN BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(Dollars in thousands, except per share data)
(UNAUDITED)
<TABLE>
<CAPTION>
1996 1995
-------------- --------------
<S> <C> <C>
INTEREST INCOME
Loans, including fees $52,629 $49,999
------- -------
Investment securities:
Taxable 9,914 9,487
Nontaxable 1,474 953
-------------- --------------
Total investment securities 11,388 10,440
Deposits in financial institutions 53 44
Federal funds sold 1,110 1,105
-------------- --------------
Total interest income 65,180 61,588
-------------- --------------
INTEREST EXPENSE
Deposits 27,294 27,193
Other 441 362
-------------- --------------
Total interest expense 27,735 27,555
-------------- --------------
Net interest income 37,445 34,033
PROVISION FOR LOAN LOSSES 1,183 1,388
-------------- --------------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 36,262 32,645
-------------- --------------
OTHER OPERATING INCOME
Service fees 2,756 2,653
Net realized gain on sales of securities available for sale 369 35
Trust fees 145 222
Net gain on sale of loans originated for sale 123 47
Loan servicing 680 702
Other 3,545 1,925
-------------- --------------
Total other operating income 7,618 5,584
-------------- --------------
OTHER OPERATING EXPENSE
Salaries and employee benefits 10,812 9,767
Occupancy 2,026 1,856
Furniture and equipment 1,986 1,772
FDIC insurance premiums 226 1,060
SAIF special assessment 816 ---
Professional fees 810 985
Other real estate 5,278 3,249
Other 4,317 3,937
-------------- --------------
Total other operating expense 26,271 22,626
-------------- --------------
INCOME BEFORE INCOME TAXES 17,609 15,603
Income taxes 6,112 5,971
-------------- --------------
NET INCOME $11,497 $9,632
-------------- --------------
-------------- --------------
NET INCOME PER SHARE $26.58 $22.27
-------------- --------------
-------------- --------------
CASH DIVIDENDS DECLARED PER SHARE $12.00 $11.25
-------------- --------------
-------------- --------------
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements
4
<PAGE>
WEST SUBURBAN BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(Dollars in thousands)
(UNAUDITED)
<TABLE>
<CAPTION>
1996 1995
-------------- --------------
<S> <C> <C>
INTEREST INCOME
Loans, including fees $17,448 $17,249
-------------- --------------
Investment securities:
Taxable 3,386 2,974
Nontaxable 518 331
-------------- --------------
Total investment securities 3,904 3,305
Deposits in financial institutions 15 16
Federal funds sold 415 806
-------------- --------------
Total interest income 21,782 21,376
-------------- --------------
INTEREST EXPENSE
Deposits 9,396 9,730
Other 193 48
-------------- --------------
Total interest expense 9,589 9,778
-------------- --------------
Net interest income 12,193 11,598
PROVISION FOR LOAN LOSSES 388 463
-------------- --------------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 11,805 11,135
-------------- --------------
OTHER OPERATING INCOME
Service fees 971 877
Net realized loss on sales of securities available for sale --- (44)
Trust fees 17 28
Net gain on sale of loans originated for sale 52 23
Loan servicing 215 230
Other 900 697
-------------- --------------
Total other operating income 2,155 1,811
-------------- --------------
OTHER OPERATING EXPENSE
Salaries and employee benefits 3,619 3,311
Occupancy 678 657
Furniture and equipment 651 582
FDIC insurance premiums 75 25
SAIF special assessment 816 ---
Professional fees 301 282
Other real estate 4,035 1,916
Other 1,441 1,349
-------------- --------------
Total other operating expense 11,616 8,122
-------------- --------------
INCOME BEFORE INCOME TAXES 2,344 4,824
Income taxes 704 1,586
-------------- --------------
NET INCOME $1,640 $3,238
-------------- --------------
-------------- --------------
NET INCOME PER SHARE $3.79 $7.49
-------------- --------------
-------------- --------------
CASH DIVIDENDS DECLARED PER SHARE $4.00 $3.75
-------------- --------------
-------------- --------------
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements
5
<PAGE>
WEST SUBURBAN BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(Dollars in thousands)
(UNAUDITED)
<TABLE>
<CAPTION>
1996 1995
-------------- --------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $11,497 $9,632
-------------- --------------
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 2,207 1,975
Provision for loan losses 1,183 1,388
Provision for deferred income taxes 3,051 1,746
Provision for loss on other real estate 5,460 1,544
Net premium amortization and discount accretion of investment
securities 361 387
Net realized gain on sales of investment securities available
for sale (369) (35)
Gain on sale of loans held for sale (123) (47)
Sale of loans held for sale 552 2,303
Origination of loans held for sale (475) (2,910)
Loss (gain) on sale of premises and equipment 38 (29)
Gain on sale of other real estate (119) (18)
(Increase) decrease in accrued interest and other assets (5,982) 2,609
(Decrease) increase in accrued interest and other liabilities (505) 4,820
-------------- --------------
Total adjustments 5,279 13,733
-------------- --------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 16,776 23,365
-------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES
Investment securities available for sale:
Proceeds from sales 20,649 9,087
Proceeds from maturities 12,486 24,726
Purchases (30,700) (9,963)
Investment securities held to maturity:
Proceeds from maturities 36,894 6,981
Purchases (50,131) (20,928)
Net increase in loans (25,244) (44,772)
Purchases of premises and equipment (3,427) (3,399)
Proceeds from sale of premises and equipment 11 29
Proceeds from sale of other real estate 1,839 1,821
-------------- --------------
NET CASH USED IN INVESTING ACTIVITIES ($37,623) ($36,418)
-------------- --------------
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements
6
<PAGE>
WEST SUBURBAN BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995 (CONTINUED)
(Dollars in thousands)
(UNAUDITED)
<TABLE>
<CAPTION>
1996 1995
-------------- --------------
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES
Net (decrease) increase in demand deposits, NOW accounts
and savings accounts ($8,290) $34,492
Net increase in certificates of deposit 18,999 41,215
Decrease in FHLB advances --- (9,940)
Cash dividends paid (5,082) (4,757)
-------------- --------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 5,627 61,010
-------------- --------------
Net (decrease) increase in cash and cash equivalents (15,220) 47,957
Cash and cash equivalents at beginning of period 88,345 50,043
-------------- --------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $73,125 $98,000
-------------- --------------
-------------- --------------
Supplemental cash flow information:
Cash paid during the period for:
Interest on deposits and other borrowings $28,474 $26,400
Income taxes $8,063 $5,806
Transfer to other real estate $668 $796
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements
7
<PAGE>
WEST SUBURBAN BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
The consolidated financial statements include the accounts of West Suburban
Bancorp, Inc. (the "Parent") and its subsidiaries (collectively, the
"Subsidiaries" and together with the Parent, the "Company"): West Suburban Bank;
West Suburban Bank of Downers Grove/Lombard; West Suburban Bank of Darien; West
Suburban Bank of Carol Stream/Stratford Square; and West Suburban Bank of
Aurora, F.S.B. ("WSB Aurora"). Significant intercompany accounts and
transactions have been eliminated. The unaudited interim consolidated financial
statements include the accounts of the Company and are prepared pursuant to the
rules and regulations for reporting on Form 10-Q. Accordingly, certain
information and footnote disclosures normally accompanying the annual financial
statements have been omitted. The interim financial statements and notes should
be read in conjunction with the consolidated financial statements and notes
thereto included in the latest Annual Report on Form 10-K filed by the Company.
The consolidated financial statements include all adjustments (none of which
were other than normal recurring adjustments) necessary for a fair statement of
the results for the interim periods. The results for the interim periods are not
necessarily indicative of the results to be expected for the entire fiscal year.
Certain amounts reported in prior periods have been reclassified to conform to
the 1996 presentation.
NOTE 2 - SECURITIES
The Company does not invest in trading securities. Securities held to maturity
are classified as such only when the Company determines it has both the ability
and positive intent to hold these securities to maturity. All other securities
are classified as available for sale. Held to maturity securities are carried at
amortized cost while available for sale securities are carried at fair value
with net unrealized gains and losses (net of taxes) reported as a separate
component of equity. Gains or losses on disposition are based on the net
proceeds and the adjusted carrying amount of the securities sold, using the
specific identification method.
During the first nine months of 1996, the Company's unrealized loss, net of
taxes, on securities available for sale increased $1.4 million to a loss of $1.2
million at September 30, 1996 from a gain of ($.2) million at December 31, 1995.
NOTE 3 - OUTSTANDING LINES OF CREDIT AVAILABLE - (Dollars in thousands)
SEPTEMBER 30, 1996 December 31, 1995
------------------- -----------------
Home equity lines $53,392 $88,804
Commercial loans in process 169,702 187,181
Visa credit lines 48,645 49,074
------------------- -----------------
Total commitments $271,739 $325,059
------------------- -----------------
------------------- -----------------
The Company had $3.8 million and $4.4 million of commitments to originate
residential mortgage loans as of September 30, 1996 and December 31, 1995,
respectively.
NOTE 4 - OTHER REAL ESTATE
Other real estate includes properties acquired in partial or total settlement of
problem loans. The properties are recorded at the lower of cost or fair value
less estimated selling costs at the date acquired. Losses arising at the time of
acquisition of such properties are charged to the allowance for loan losses. Any
subsequent decline in value is charged to current operations. The revenue
received from, and expenses incurred in, maintaining such properties are also
included in current operations. The amounts the Company ultimately recovers from
the sale of other real estate could differ materially from the amounts used in
determining the net carrying value of the assets because the amounts ultimately
recovered are affected by market factors beyond
8
<PAGE>
the Company's control or changes in the Company's strategy for marketing the
assets. During the third quarter of 1996, the Company recognized a $3.8 million
writedown of a property classified as Other Real Estate Owned to reflect current
market conditions. The Company continues its efforts to sell this property.
NOTE 5 - ADOPTION OF NEW ACCOUNTING STANDARDS
In March 1995, Financial Accounting Standards Board ("FASB") issued Statement of
Financial Accounting Standards ("SFAS") 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of", which requires
that long-lived assets and certain identifiable intangibles that are used in
operations be reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of assets might not be
recoverable. SFAS 121 is effective for financial statements issued for fiscal
years beginning after December 15, 1995. The Company adopted SFAS 121 on January
1, 1996. The adoption of SFAS 121 has not had a material impact on the Company's
financial condition or its results of operations.
In May 1995, FASB issued SFAS 122, "Accounting for Mortgage Servicing Rights",
which requires certain accounting for mortgage servicing rights and the
valuation and recognition of impairment of mortgage servicing rights. SFAS 122
is effective for fiscal years beginning after December 15, 1995. The Company
adopted SFAS 122 on January 1, 1996. The adoption of SFAS 122 has not had a
material impact on the Company's financial condition or its results of
operations.
9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
BALANCE SHEET ANALYSIS
ASSET DISTRIBUTION. Total assets at September 30, 1996 remained nearly unchanged
from total assets at December 31, 1995. Total cash and cash equivalents
decreased approximately $15.2 million (17.2%) to $73.1 million at September 30,
1996 from $88.3 million at December 31, 1995. This was principally due to the
decrease in cash and due from banks of approximately $14.1 million to $36.0
million at September 30, 1996 from $50.1 million at December 31, 1995. Aggregate
holdings in investment securities increased $9.3 million (3.7%) to $259.9
million at September 30, 1996 from $250.6 million at December 31, 1995. The
Company's objectives in managing its securities portfolio are driven by the
dynamics of the entire balance sheet which includes monitoring the maturity
structure of its portfolio, along with general economic conditions including the
interest rate environment. In managing its portfolio, the Company seeks to
provide liquidity, minimize exposure to interest rate risk and achieve an
acceptable rate of return.
Total loans increased $24.2 million (3.1%) to $793.8 million at September 30,
1996 from $769.6 million at December 31, 1995. The Company benefitted from
continued growth in the commercial and home equity sector arising from the
strength of the economy, along with successful marketing of its products. The
Company will attempt to remain competitive in its market by offering competitive
rates on its loan products while not compromising its credit evaluation
standards or net interest margins to attract new business.
ALLOWANCE FOR LOAN LOSSES AND ASSET QUALITY. The allowance is an amount that
management believes will be adequate to absorb losses on existing loans that may
become uncollectible, based on evaluations of the collectibility of loans along
with current and prior loan loss experience. In determining the proper level for
the allowance, management evaluates the adequacy of the allowance based on
current and past loan loss experience, known and inherent risks in the loan
portfolio, adverse situations that may affect the borrowers' ability to repay,
estimated value of any underlying collateral and current and prospective
economic conditions. The allowance for loan losses increased $.8 million to $9.7
million at September 30, 1996 from $8.9 million at December 31, 1995. The ratio
of the allowance for loan losses to total loans outstanding increased at
September 30, 1996 to 1.22% compared to 1.16% at December 31, 1995.
Nonperforming loans increased $.7 million (6.2%) to $12.6 million at September
30, 1996 from $11.9 million at December 31, 1995. This was primarily due to two
real estate loan accounts. Management is monitoring these accounts and will
adjust the allowance for loan losses should conditions warrant. As of September
30, 1996 and December 31, 1995, total nonperforming loans to net loans were
1.6%.
The following table presents an analysis of the Company's nonperforming loans
for the periods stated (dollars in thousands):
<TABLE>
<CAPTION>
SEPTEMBER 30, 1996 December 31, 1995 Dollar Change
------------------- ----------------- -----------------
<S> <C> <C> <C>
Nonaccrual loans $147 $488 ($341)
Accruing loans 90 days past due 12,485 11,405 1,080
------------------- ----------------- -----------------
Total nonperforming loans $12,632 $11,893 $739
------------------- ----------------- -----------------
------------------- ----------------- -----------------
Nonperforming loans as a percent
of net loans 1.6% 1.6% ---
Other real estate $1,805 $8,317 ($6,512)
------------------- ----------------- -----------------
------------------- ----------------- -----------------
</TABLE>
10
<PAGE>
The following table presents an analysis of the Company's Provision for Loan
Losses for the periods stated (dollars in thousands):
<TABLE>
<CAPTION>
1996 1995
---------------------------- ------------------
3rd Qtr. 2nd Qtr. 1st Qtr. 4th Qtr. 3rd Qtr.
---------------------------- ------------------
<S> <C> <C> <C> <C> <C>
Provision-quarter $387 $338 $458 $462 $463
Provision-year 1,183 796 458 1,850 1,388
Net chargeoffs-quarter 189 118 88 316 832
Net chargeoffs-year to date 395 206 88 1,395 1,079
Allowance at period end 9,688 9,490 9,270 8,900 8,754
Allowance to period end total loans 1.22% 1.20% 1.21% 1.16% 1.15%
</TABLE>
LIABILITY DISTRIBUTION. Total liabilities increased $10.4 million (1.0%) to
$1,054.6 million at September 30, 1996 from $1,044.2 million at December 31,
1995. This increase was primarily due to increases in deposits which were
partially offset by a decrease in accrued interest and other liabilities.
Balances in the Company's major categories of deposits are summarized in the
following table (dollars in thousands):
<TABLE>
<CAPTION>
Dollar Percent
September 30, 1996 December 31, 1995 Change Change
------------------ ------------------ ---------- ----------
<S> <C> <C> <C> <C>
Demand and other noninterest-bearing $98,498 $104,821 ($6,323) (6.0)%
NOW accounts 173,886 191,626 (17,740) (9.3)%
Money market savings 356,487 340,714 15,773 4.6%
Time, $100,000 and over 67,370 68,063 (693) (1.0)%
Time, other 344,257 324,565 19,692 6.1%
------------------ ------------------ ---------- ----------
Total $1,040,498 $1,029,789 $10,709 1.0%
------------------ ------------------ ---------- ----------
------------------ ------------------ ---------- ----------
</TABLE>
The Company attempts to remain highly competitive in its market by offering
competitive rates on its savings and certificate of deposit products. Although
the Company promotes its savings products when appropriate, management does not
intend to compromise its net interest margin to attract deposits.
SHAREHOLDERS' EQUITY. Shareholders' equity increased $4.8 million (4.4%) to
$115.0 million at September 30, 1996 from $110.2 million at December 31, 1995.
This increase was the result of the net retention of 1996 earnings of $6.2
million offset by the increase in unrealized loss on securities available for
sale of $1.4 million (net of taxes) from a gain of ($.2) million at December 31,
1995 to a loss of $1.2 million at September 30, 1996.
CAPITAL RESOURCES
The Company's capital ratios as well as those of its subsidiaries as of
September 30, 1996 are presented below. All such ratios are in excess of the
regulatory capital requirements which call for a minimum total risk-based
capital ratio of 8% for the Company and each of its subsidiaries (at least one
half of the minimum total risk-based capital must consist of tier 1 capital), a
minimum leverage ratio (3% for the most highly rated banks that do not expect
significant growth; all other institutions are required to maintain a minimum
leverage capital ratio of 4% to 5% depending on their particular circumstances
and risk profiles) for the Company and its bank subsidiaries and a minimum
tangible capital ratio and core capital ratio of 1.5% and 3%, respectively, for
the Company's thrift subsidiary. Bank holding companies and their subsidiaries
are generally expected to operate at or above the minimum capital requirements
and the ratios shown below are in excess of regulatory minimums and should allow
the Company and its subsidiaries to operate without capital adequacy concerns.
The following table sets forth selected regulatory capital ratios of the Company
and the bank subsidiaries at September 30, 1996:
11
<PAGE>
<TABLE>
<CAPTION>
Tier 1 Total
Risk-Based Risk-Based Leverage
Institution Capital Capital Capital
- ----------- ------- ------- --------
<S> <C> <C> <C>
West Suburban Bancorp, Inc. 12.20% 13.24% 9.99%
West Suburban Bank 10.02% 11.01% 8.07%
West Suburban Bank of Downers Grove/Lombard 15.06% 16.31% 10.42%
West Suburban Bank of Darien 12.13% 13.34% 8.93%
West Suburban Bank of Carol Stream/Stratford Square 11.08% 11.90% 7.85%
</TABLE>
At September 30, 1996, WSB Aurora maintained a core capital ratio of 11.14%, a
tangible capital ratio of 13.21% and a total risk-based capital ratio of 14.35%.
The Federal Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA")
provided the federal banking regulators with broad power to take prompt
corrective action to resolve the problems of undercapitalized institutions. The
extent of the regulators' powers depends on whether the institution in question
is "well capitalized," "adequately capitalized," "undercapitalized,"
"significantly undercapitalized" or "critically undercapitalized." Depending
upon the capital category to which an institution is assigned, the regulators'
corrective powers include: requiring the submission of a capital restoration
plan; placing limits on asset growth and restrictions on activities; requiring
the institution to issue additional capital stock (including additional voting
stock) or to be acquired; restricting transactions with affiliates; restricting
the interest rate the institution may pay on deposits; ordering a new election
of directors of the institution; requiring that senior executive officers or
directors be dismissed; prohibiting the institution from accepting deposits from
correspondent banks; requiring the institution to divest certain subsidiaries;
prohibiting the payment of principal or interest on subordinated debt; and
ultimately, appointing a receiver for the institution. Management has been
advised that as of September 30, 1996 and December 31, 1995, each of the
subsidiaries qualified as a "well-capitalized" institution.
LIQUIDITY
Effective liquidity management allows a banking institution to ensure the
availability of sufficient funds to accommodate the needs of borrowers and
depositors. The Company manages its liquidity position through continuous
monitoring of profitability trends, asset quality, interest rate sensitivity and
maturity schedules of earning assets and supporting liabilities.
Generally, the Company uses cash and cash equivalents to meet its liquidity
needs. Additional liquidity is provided by maintaining assets which mature
within a short time-frame or which may be quickly converted to cash without
significant costs. These assets include interest-bearing deposits in financial
institutions, federal funds sold and investment securities available for sale.
As of September 30, 1996 and December 31, 1995, liquid assets represented 17.4%
and 19.3% of total assets, respectively. A more detailed discussion concerning
these assets is presented under the Asset Distribution section of this report.
RATE SENSITIVITY GAPS
The Company attempts to maintain a conservative posture with regard to interest
rate risk, actively managing its asset/liability gap positions and constantly
monitoring the direction and magnitude of gaps and risk. The Company attempts to
moderate the effects of changes in interest rates by adjusting its asset and
liability mix to achieve desired relationships between rate sensitive assets and
rate sensitive liabilities. Rate sensitive assets and liabilities are those
instruments that reprice within a given time period. An asset or liability
reprices when it is subject to change or upon its maturity.
Movements in general market interest rates are a key element in changes in the
net interest margin. The Company's policy is to manage its balance sheet so that
fluctuations in net interest margins are minimized regardless of the level of
interest rates, although the net interest margin does vary somewhat due to
management's response to increasing competition from other financial
institutions.
12
<PAGE>
Listed below are the balances in the major categories of the rate sensitive
assets and liabilities that are subject to repricing as of September 30, 1996
(dollars in thousands):
<TABLE>
<CAPTION>
Over three
Three months to Over one
months twelve year to Over
or less months five years five years Total
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Rate sensitive assets:
Interest-bearing deposits in financial
institutions $231 $--- $--- $--- $231
Federal funds sold 36,880 --- --- --- 36,880
Investment securities 15,236 54,787 155,518 34,396 259,937
Loans 285,425 360,903 468 146,871 793,667
----------------------------------------------------------------------------------
Total interest-earning assets $337,772 $415,690 $155,986 $181,267 $1,090,715
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
Rate sensitive liabilities:
Money market savings $356,487 $--- $--- $--- $356,487
NOW accounts 173,886 --- --- --- 173,886
Time deposits:
Less than $100,000 96,462 154,219 93,576 --- 344,257
$100,000 and over 30,896 23,458 6,421 6,595 67,370
----------------------------------------------------------------------------------
Total interest-bearing liabilities $657,731 $177,677 $99,997 $6,595 $942,000
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
Interest sensitivity gap ($319,959) $238,013 $55,989 $174,672 $---
Cumulative interest sensitivity gap ($319,959) ($81,946) ($25,957) $148,715 $148,715
Cumulative interest-earning assets as a
percentage of cumulative
interest-bearing liabilities 51.4% 90.2% 97.2% 115.8%
Cumulative interest sensitivity gap as a
percentage of total assets (27.4)% (7.0)% (2.2)% 12.7%
</TABLE>
The above table does not necessarily indicate the future impact of general
interest rate movements on the Company's net interest income because the
repricing of certain assets and liabilities is discretionary and is subject to
competitive and other pressures. As a result, assets and liabilities indicated
as repricing within the same period may, in fact, reprice at different times and
at different rate levels. Assets and liabilities are reported in the earliest
time frame in which maturity or repricing may occur. The consolidated interest
rate sensitivity position of the Company within the one year window at September
30, 1996 reflects cumulative net interest-earning assets compared to cumulative
net interest-bearing liabilities of 90.2% and cumulative net interest-earning
assets that reprice or mature within one year compared to total assets of
negative 7.0%. The percentage indicated for the cumulative net interest-earning
assets as a percentage of net interest-bearing liabilities are well within the
Company's target range of acceptable gap values for the three month to twelve
month time frames.
RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
NET INCOME. The Company's net income for the nine months ended September 30,
1996 and 1995 was approximately $11.5 million and $9.6 million, respectively.
This represents an increase of $1.9 million (19.4%) for the 1996 period when
compared to the same period in 1995. The Company's net interest income increased
$3.4 million (10.0%) to $37.4 million for the nine months ended September 30,
1996 from $34.0 million for the same period ended in 1995. This increase was
primarily due to increases in the loan portfolio. Additionally, other operating
income increased by $2.0 million (36.4%) from $5.6 million to $7.6 million.
Partially offsetting the increased income were increases to other operating
expenses of $3.7 million (16.1%) from $22.6 million
13
<PAGE>
for the nine months ended September 30, 1995 to $26.3 million compared to the
same period ended September 30, 1996. Additionally, income tax expense increased
by $.1 million.
INTEREST INCOME. Total interest income, on a tax equivalent basis, increased
$3.9 million for the nine months ended September 30, 1996 compared to the same
period in 1995. This increase resulted from increases of $5.0 million from
volume increases offset by ($1.1) million from rate changes. The principal
component of this increase was interest on loans which rose by $2.7 million. Of
this increase, $3.1 million was attributable to higher volume and ($.4) million
was due to changes in interest rates.
INTEREST EXPENSE. Total interest expense increased $.2 million for the nine
months ended September 30, 1996 compared to the same period during 1995.
Interest on deposits increased $.1 million during the 1996 period. Of this
increase $2.0 million was due to higher average balances which was offset by
($1.9) million due to changes in interest rates.
The following table reflects the extent to which changes in the volume of
interest-earning assets and interest-bearing liabilities and changes in interest
rates have affected net interest income on a tax equivalent basis for the period
ended September 30, 1996 as compared to the same period in 1995 (dollars in
thousands):
<TABLE>
<CAPTION>
CHANGE IN:
INTEREST INCOME VOLUME RATE TOTAL
---------- ---------- ----------
<S> <C> <C> <C>
Interest-bearing deposits in financial institutions $3 $6 $9
Federal funds sold 53 (48) 5
Investment securities 1,819 (624) 1,195
Loans 3,138 (463) 2,675
---------- ---------- ----------
Total interest income 5,013 (1,129) 3,884
---------- ---------- ----------
INTEREST EXPENSE
Interest-bearing deposits 1,952 (1,851) 101
Borrowed funds 147 (68) 79
---------- ---------- ----------
Total interest expense 2,099 (1,919) 180
---------- ---------- ----------
Net interest income $2,914 $790 $3,704
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
The following table presents an analysis of the Company's interest-earning
assets and interest-bearing liabilities volumes for the periods stated on a
cumulative basis as of the date indicated (dollars in thousands):
<TABLE>
<CAPTION>
1996 1995
---------------------------------------- -------------------------
Sept. 30 June 30 March 31 Dec. 31 Sept. 30
---------------------------------------- -------------------------
<S> <C> <C> <C> <C> <C>
Average loans $776,621 $771,189 $773,446 $736,397 $730,563
Average interest-earning assets 1,060,434 1,050,375 1,050,595 993,596 976,971
Average noninterest-bearing deposits 102,655 102,670 101,799 100,269 99,250
Average interest-bearing deposits 903,344 894,214 898,298 855,657 842,041
Average deposits 1,005,999 996,884 1,000,097 955,926 941,291
Average interest-bearing liabilities 914,467 904,326 905,176 862,262 849,448
</TABLE>
PROVISION FOR LOAN LOSSES. The Company's provision for loan losses decreased $.2
million (14.8%) for the nine months ended September 30, 1996 as compared to the
same period in 1995. The provision for loan losses is based on management's
determination that the allowance for loan losses (after giving effect to the
provision) was adequate. A more detailed discussion concerning the allowance for
loan losses is presented in the Allowance for Loan Losses and Asset Quality
section of this report.
OTHER OPERATING INCOME. Total other operating income increased $2.0 million
(36.4%) for the nine months ended September 30, 1996 compared to the same
period in 1995. This increase was primarily due to the recording of $1.1 million
of income from a refund of the over funding of a terminated benefits plan of WSB
14
<PAGE>
Aurora. The Company also experienced a gain on investment securities available
for sale of $.3 million during this period.
OTHER OPERATING EXPENSE. Total other operating expense increased $3.6 million
(16.1%) for the nine months ended September 30, 1996 compared to the same period
in 1995. Salary and employee benefits increased $1.0 million due to increased
salaries and additional salary expense from new facilities. Other real estate
increased $2.0 million for the nine months ended September 30, 1996 compared to
the same period in 1995. This was primarily due to the Company recognizing a
$3.8 million write down of a property classified as other real estate. In 1995,
the Company wrotedown $1.5 million of the same property. Other operating
expenses increased $.4 million during this same period. Professional fees
declined $.2 million during this same period. Occupancy expense and furniture
and equipment expense increased $.2 million for the nine months ended September
30, 1996 due to the costs of the additional new facilities operating for the
full nine months during the 1996 period.
INCOME TAXES. Income tax expense increased $.1 million (2.4%) for the nine
months ended September 30, 1996 to $6.1 million from $6.0 million compared to
the same period in 1995. The increase was principally due to higher taxable
income and was offset by provisions made during the first six months of 1995 for
potential adjustments to prior years' income tax returns.
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
NET INCOME. The Company's net income for the three months ended September 30,
1996 and 1995 was approximately $1.6 million and $3.2 million, respectively,
which represents a decrease of $1.6 million (49.4%) for the 1996 period when
compared to the same period in 1995. The Company's net interest income increased
$.6 million (5.1%) to $12.2 million for the three months ended September 30,
1996 from $11.6 million for the same period ended in 1995. This increase was
primarily due to increases in investment securities income. These increases to
income were offset by an increase to total other operating expense of $3.5
million (43.0%).
INTEREST INCOME. Total interest income increased $.4 million for the three
months ended September 30, 1996 compared to the same period in 1995 and resulted
from increased volume in the loan and securities portfolio which was partially
offset by decreased income from federal funds sold.
INTEREST EXPENSE. Total interest expense decreased $.2 million for the three
months ended September 30, 1996 compared to the same period during 1995 and was
the result of lower NOW account balances.
PROVISION FOR LOAN LOSSES. The Company's provision for loan losses decreased $.1
million (16.2%) for the three months ended September 30, 1996 compared to the
same period in 1995. The provision for loan losses is based on management's
determination that the allowance for loan losses (after giving effect to the
provision) was adequate.
OTHER OPERATING INCOME. Total other operating income increased $.3 million
(19.0%) for the three months ended September 30, 1996 compared to the same
period in 1995. This increase was primarily due to increased services fees along
with increased interchange income brought about from the Company's Check Card
which was introduced during 1995.
OTHER OPERATING EXPENSE. Total other operating expense increased $3.5 million
(43.0%) for the three months ended September 30, 1996 compared to the same
period in 1995. Salary and employee benefits increased $.3 million due primarily
to increased salaries associated with the opening of new facilities. FDIC
insurance premiums increased $.9 million as the Company accrued a special FDIC
assessment of $.8 million payable during the fourth quarter by WSB Aurora as a
result of the legislation discussed in more detail below. Furniture and
equipment expense increased $.1 million for the three months ended September 30,
1996. This increase was primarily due to expenses incurred with the opening and
operation of new facilities. Other real estate expense increased $2.1 million
during this period as the Company recognized a $3.8 million writedown of a
15
<PAGE>
property classified as other real estate. During the third quarter of 1995, the
Company wrotedown this same property $1.5 million. Other operating expenses
increased $.1 million during this period.
INCOME TAXES. Income tax expense decreased $.9 million for the three months
ended September 30, 1996 to $.7 million from $1.6 million compared to the same
period in 1995. This decrease was principally due to lower taxable income.
OTHER CONSIDERATIONS
Earnings of bank and thrift holding companies and their subsidiaries are
affected by general economic conditions and also by the fiscal and monetary
policies of federal regulatory agencies, including the Board of Governors of the
Federal Reserve System. Such policies have affected the operating results of all
commercial banks and thrifts in the past and are expected to do so in the
future. The Company cannot accurately predict the nature or the extent of any
effects which fiscal or monetary policies may have on its subsidiaries' business
and earnings.
RECENT REGULATORY DEVELOPMENTS
On September 30, 1996, President Clinton signed into law the "Economic
Growth and Regulatory Paperwork Reduction Act of 1996" (the "Regulatory
Reduction Act"). Subtitle G of the Regulatory Reduction Act consists of the
"Deposit Insurance Funds Act of 1996" (the "DIFA"). The DIFA provides for a
one-time special assessment on each depository institution holding deposits
subject to assessment by the FDIC for the Savings Association Insurance Fund
(the "SAIF") in an amount which, in the aggregate, will increase the designated
reserve ratio of the SAIF (i.e., the ratio of the insurance reserves of the SAIF
to total SAIF-insured deposits) to 1.25% on October 1, 1996. Subject to certain
exceptions, the special assessment is payable in full on November 27, 1996.
None of the bank subsidiaries holds any SAIF-assessable deposits and, therefore,
none of the bank subsidiaries is subject to the special assessment. WSB/Aurora,
however, is a SAIF member subject to the special assessment.
Under the DIFA, the amount of the special assessment payable by an
institution is to be determined on the basis of the amount of SAIF-assessable
deposits held by the institution on March 31, 1995, or acquired by the
institution after March 31, 1995 from another institution which held the
deposits as of that date but is no longer in existence on November 27, 1996.
The DIFA provides for a 20% discount in calculating the SAIF-assessable deposits
of certain "Oakar" banks (i.e., Bank Insurance Fund ("BIF") member banks that
hold deposits acquired from a SAIF member that are deemed to remain SAIF
insured) and certain "Sasser" banks (i.e., banks that converted from thrift to
bank charters but remain SAIF members). The DIFA also exempts certain
institutions from payment of the special assessment (including institutions that
are undercapitalized or that would become undercapitalized as a result of
payment of the special assessment), and allows an institution to pay the special
assessment in two installments if there is a significant risk that by paying the
special assessment in a lump sum, the institution or its holding company would
be in default under or in violation of terms or conditions of debt obligations
or preferred stock issued by the institution or its holding company and
outstanding on September 13, 1995.
On October 8, 1996, the FDIC adopted a final regulation implementing the
SAIF special assessment. In that regulation, the FDIC set the special
assessment rate at 0.657% of SAIF-assessable deposits held on March 31, 1995.
The FDIC has notified WSB/Aurora that the dollar amount of the special
assessment payable by WSB/Aurora is estimated to be $.8 million. As a result of
the special assessment, WSB/Aurora has taken a charge against earnings for the
quarter ended September 30, 1996, in the amount of $.8 million. As discussed
below, however, the recapitalization of the SAIF resulting from the special
assessment should significantly reduce WSB/Aurora's ongoing deposit insurance
expense.
In light of the recapitalization of the SAIF pursuant to the special
assessment authorized by the DIFA, the FDIC, on October 8, 1996, issued a
proposed rule that would reduce regular semi-annual SAIF
16
<PAGE>
assessments from the current range of 0.23% - 0.31% of deposits to a range of 0%
- - 0.27% of deposits. Under the proposal, the new rates would be effective
October 1, 1996 for Oakar and Sasser banks, but would not take affect for other
SAIF-assessable institutions until January 1, 1997. From October 1, 1996
through December 31, 1996, SAIF-assessable institutions other than Oakar and
Sasser banks would, under the proposal, be assessed at rates ranging from 0.18%
to 0.27% of deposits, which represents the amount the FDIC calculates as
necessary to cover the interest due for that period on outstanding obligations
of the Financing Corporation (the "FICO"), discussed below. Because SAIF-
assessable institutions have already been assessed at current rates (I.E., 0.23%
- - 0.31% of deposits) for the semi-annual period ending December 31, 1996, the
proposal contemplates that the FDIC will refund the amount collected from such
institutions for the period from October 1, 1996 through December 31, 1996 which
exceeds the amount due for that period under the reduced assessment schedule.
Assuming the proposal is adopted as proposed, and assuming WSB/Aurora retains
its current risk classification under the FDIC's risk-based assessment system,
the deposit insurance assessments payable by WSB/Aurora will be reduced
significantly effective January 1, 1997, to the same level currently paid by
WSB/Aurora's BIF-member competitors and the bank subsidiaries.
Prior to the enactment of the DIFA, a substantial amount of the SAIF
assessment revenue was used to pay the interest due on bonds issued by the FICO,
the entity created in 1987 to finance the recapitalization of the Federal
Savings and Loan Insurance Corporation, the SAIF's predecessor insurance fund.
Pursuant to the DIFA, the interest due on outstanding FICO bonds will be covered
by assessments against both SAIF and BIF member institutions beginning January
1, 1997. Between January 1, 1997 and December 31, 1999, FICO assessments
against BIF-member institutions cannot exceed 20% of the FICO assessments
charged SAIF-member institutions. From January 1, 2000 until the FICO bonds
mature in 2019, FICO assessments will be shared by all FDIC-insured institutions
on a pro rata basis. The FDIC estimates that the FICO assessments for the
period January 1, 1997 through December 31, 1999 will be approximately 0.013% of
deposits for BIF members versus approximately 0.064% of deposits for SAIF
members, and will be less than 0.025% of deposits thereafter.
The DIFA also provides for a merger of the BIF and the SAIF on January 1,
1999, provided there are no state or federally chartered, FDIC-insured savings
associations existing on that date. To facilitate the merger of the BIF and the
SAIF, the DIFA directs the Treasury Department to conduct a study on the
development of a common charter and to submit a report, along with appropriate
legislative recommendations, to the Congress by March 31, 1997.
In addition to the DIFA, the Regulatory Reduction Act includes a number of
statutory changes designed to eliminate duplicative, redundant or unnecessary
regulatory requirements. Among other things, the Regulatory Reduction Act
establishes streamlined notice procedures for the commencement of new nonbanking
activities by bank holding companies, and generally exempts bank holding
companies that own one or more savings associations (such as the Company) from
regulation by the OTS as savings and loan holding companies; establishes time
frames within which the FDIC must act on applications by state banks to engage
in activities which, although permitted for the state bank under applicable
state law, are not permissible activities for national banks, and excludes ATM
closures and certain branch office relocations from the prior notice
requirements applicable to branch closings. Further, the Regulatory Reduction
Act removes the percentage of assets limitations on the aggregate amount of
credit card and education loans that may be made by a savings association, such
as WSB/Aurora; increases from 10% to 20% of total assets the aggregate amount of
commercial loans that a savings association may make, provided that any amount
in excess of 10% of total assets represents small business loans; allows
education, small business and credit card loans to be counted in full in
determining a savings association's compliance with the qualified thrift lender
("QTL") test; and provides that a savings association may be deemed to meet the
QTL test if it qualifies as a domestic building and loan association under the
Internal Revenue Code. The Regulatory Reduction Act also clarifies the
liability of a financial institution, when acting as a lender or in a fiduciary
capacity, under the federal environmental clean-up laws. Although the full
impact of the Regulatory Reduction Act on the operations of the Company and its
subsidiaries cannot be determined at this time, management believes that the
legislation will reduce
17
<PAGE>
compliance costs to some extent and allow the Company and its subsidiaries
somewhat greater operating flexibility.
On August 10, 1996, President Clinton signed into law the Small Business
Job Protection Act of 1996 (the "Job Protection Act"). Among other things, the
Job Protection Act eliminates the percent-of-taxable-income ("PTI") method for
computing additions to a savings association's tax bad debt reserves for tax
years beginning after December 31, 1995, and requires all savings associations
that have used the PTI method to recapture, over a six year period, all or a
portion of their tax bad debt reserves added since the last taxable year
beginning before January 1, 1988. The Job Protection Act allows a savings
association to postpone the recapture of bad debt reserves for up to two years
if the institution meets a minimum level of mortgage lending activity during
those years. WSB/Aurora believes that it will engage in sufficient mortgage
lending activity during 1996 and 1997 to be able to postpone any recapture of
its bad debt reserves until 1998. As a result of these provisions of the Job
Protection Act, WSB/Aurora will determine additions to its tax bad debt reserves
using the same method as a commercial bank of comparable size, and, if
WSB/Aurora were to decide to convert to a commercial bank charter, the changes
in the tax bad debt recapture rules enacted in the Job Protection Act should
make such conversion less costly.
18
<PAGE>
PART II
ITEM 1. LEGAL PROCEEDINGS
There are no material pending legal proceedings to which the Company or any of
its subsidiaries are a party other than ordinary routine litigation incidental
to their respective businesses.
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
A. Exhibits
27 Financial Data Schedule
B. Reports on Form 8-K -- The Company did not file a report on Form 8-K during
the three months ended September 30, 1996.
19
<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.
WEST SUBURBAN BANCORP, INC.
(Registrant)
Date: November 14, 1996
/s/ Kevin J. Acker
-----------------------------------
KEVIN J. ACKER
CHAIRMAN OF THE BOARD
/s/ Duane G. Debs
-----------------------------------
DUANE G. DEBS
CHIEF ACCOUNTING OFFICER AND
CHIEF FINANCIAL OFFICER
20
<PAGE>
INDEX OF EXHIBITS
Sequential
Page No.
27. Financial Data Schedule 19
21
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 36,014
<INT-BEARING-DEPOSITS> 942,000
<FED-FUNDS-SOLD> 36,880
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 130,540
<INVESTMENTS-CARRYING> 129,397
<INVESTMENTS-MARKET> 128,351
<LOANS> 793,814
<ALLOWANCE> 9,688
<TOTAL-ASSETS> 1,169,661
<DEPOSITS> 1,040,498
<SHORT-TERM> 0
<LIABILITIES-OTHER> 14,117
<LONG-TERM> 0
0
0
<COMMON> 3,457
<OTHER-SE> 111,589
<TOTAL-LIABILITIES-AND-EQUITY> 1,169,661
<INTEREST-LOAN> 52,629
<INTEREST-INVEST> 11,388
<INTEREST-OTHER> 1,163
<INTEREST-TOTAL> 65,180
<INTEREST-DEPOSIT> 27,294
<INTEREST-EXPENSE> 27,735
<INTEREST-INCOME-NET> 37,445
<LOAN-LOSSES> 1,183
<SECURITIES-GAINS> 369
<EXPENSE-OTHER> 26,271
<INCOME-PRETAX> 17,609
<INCOME-PRE-EXTRAORDINARY> 17,609
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,497
<EPS-PRIMARY> 26.58
<EPS-DILUTED> 26.58
<YIELD-ACTUAL> 8.3
<LOANS-NON> 147
<LOANS-PAST> 12,485
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 8,900
<CHARGE-OFFS> 557
<RECOVERIES> 162
<ALLOWANCE-CLOSE> 9,688
<ALLOWANCE-DOMESTIC> 7,469
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 2,219
</TABLE>
