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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
/x/ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Quarterly Period ended September 30, 1999 |
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OR | |
/ / |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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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 | |
of incorporation or organization) | Identification Number) | |
711 South Meyers Road, Lombard, Illinois |
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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 class of common stock as of the latest practicable date.
15,000,000 shares of Common Stock, no par value, were authorized and 432,495 shares of Common Stock were issued and outstanding as of November 12, 1999.
WEST SUBURBAN BANCORP, INC.
Form 10-Q Quarterly Report
Table of Contents
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Page Number |
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PART I | ||||
Item 1. | Financial Statements | 3 | ||
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 8 | ||
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 15 | ||
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PART II |
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Item 1. | Legal Proceedings | 18 | ||
Item 2. | Changes in Securities and Use of Proceeds | 18 | ||
Item 3. | Defaults Upon Senior Securities | 18 | ||
Item 4. | Submission of Matters to a Vote of Security Holders | 18 | ||
Item 5. | Other Information | 18 | ||
Item 6. | Exhibits and Reports on Form 8-K | 18 | ||
Form 10-Q Signature Page |
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19 |
This report contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. West Suburban Bancorp, Inc. (together with West Suburban Bank, the "Company") intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Reform Act of 1995, as amended, and is including this statement for purposes of indicating such intent. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies and expectations of the Company, are generally identifiable by use of the words "believe," "expect," "intend," "anticipate," "estimate," "project" or similar expressions. The Company's ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse affect on the operations and future prospects of West Suburban Bancorp, Inc. ("West Suburban") and West Suburban Bank (the "Bank") include, but are not limited to, changes in interest rates, general economic conditions, legislative/regulatory changes, monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board, the quality, performance and composition of the Bank's loan or securities portfolios, demand for loan and deposit products, deposit flows, competition, demand for financial services in the Company's market area and accounting principles, policies and guidelines. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Additional information concerning the Company and its business, including additional factors that could materially affect the Company's financial results, is included in the Company's filings with the Securities and Exchange Commission.
WEST SUBURBAN BANCORP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(UNAUDITED)
|
September 30, 1999 |
December 31, 1998 |
||||
---|---|---|---|---|---|---|
Assets | ||||||
Cash and due from banks | $ | 31,040 | $ | 41,549 | ||
Federal funds sold | 9,000 | 64,590 | ||||
Interest-earning deposits in financial institutions | 890 | 724 | ||||
Total cash and cash equivalents | 40,930 | 106,863 | ||||
Securities: | ||||||
Available for sale (amortized cost of $188,237 in 1999; $204,947 in 1998) | 185,750 | 205,624 | ||||
Held to maturity (fair value of $175,324 in 1999; $172,590 in 1998) | 177,893 | 171,679 | ||||
Total securities | 363,643 | 377,303 | ||||
Loans, less allowance for loan losses of $10,469 in 1999; $9,998 in 1998 | 829,182 | 771,148 | ||||
Premises and equipment, net | 34,894 | 33,393 | ||||
Other real estate | 1,540 | 1,742 | ||||
Accrued interest and other assets | 21,444 | 18,504 | ||||
Total Assets | $ | 1,291,633 | $ | 1,308,953 | ||
Liabilities and Shareholders' Equity | ||||||
Deposits: | ||||||
Noninterest-bearing | $ | 119,710 | $ | 112,464 | ||
Interest-bearing | 1,019,152 | 1,043,488 | ||||
Total deposits | 1,138,862 | 1,155,952 | ||||
Accrued interest and other liabilities | 12,951 | 18,608 | ||||
Total Liabilities | 1,151,813 | 1,174,560 | ||||
Shareholders' equity: | ||||||
Common Stock, no par value; 15,000,000 shares authorized; 432,495 shares issued and outstanding |
3,457 | 3,457 | ||||
Surplus | 38,066 | 38,066 | ||||
Retained earnings | 99,796 | 92,461 | ||||
Accumulated other comprehensive (loss) income | (1,499 | ) | 409 | |||
Total Shareholders' Equity | 139,820 | 134,393 | ||||
Total Liabilities and Shareholders' Equity | $ | 1,291,633 | $ | 1,308,953 | ||
The accompanying notes are an integral part of the condensed consolidated financial statements.
3
WEST SUBURBAN BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Dollars in thousands, except per share data)
(UNAUDITED)
|
1999 |
1998 |
|||||
---|---|---|---|---|---|---|---|
Interest Income | |||||||
Loans, including fees | $ | 48,337 | $ | 49,061 | |||
Securities: | |||||||
Taxable | 15,874 | 16,851 | |||||
Exempt from federal income tax | 1,193 | 1,462 | |||||
Total securities income | 17,067 | 18,313 | |||||
Federal funds sold | 1,052 | 2,210 | |||||
Deposits in financial institutions | 30 | 19 | |||||
Total interest income | 66,486 | 69,603 | |||||
Interest Expense | |||||||
Deposits | 27,272 | 32,211 | |||||
Other | 112 | 129 | |||||
Total interest expense | 27,384 | 32,340 | |||||
Net Interest Income | 39,102 | 37,263 | |||||
Provision for Loan Losses | 1,589 | 1,675 | |||||
Net Interest Income after Provision for Loan Losses | 37,513 | 35,588 | |||||
Noninterest Income | |||||||
Service fees on deposit accounts | 2,545 | 2,359 | |||||
Trust fees | 141 | 146 | |||||
Net gain on sales of loans held for sale | 352 | 539 | |||||
Loan servicing fees | 212 | 314 | |||||
Net realized gain on sales of securities available for sale | 89 | 541 | |||||
Write-down of carrying value of securities available for sale | (3,200 | ) | |||||
Net gain on sales of other real estate | 23 | 89 | |||||
Litigation settlement | 3,555 | ||||||
Other | 3,230 | 3,526 | |||||
Total noninterest income | 10,147 | 4,314 | |||||
Noninterest Expense | |||||||
Salaries and employee benefits | 12,731 | 11,707 | |||||
Occupancy | 2,533 | 2,470 | |||||
Furniture and equipment | 2,475 | 2,326 | |||||
FDIC insurance premiums | 150 | 175 | |||||
Professional fees | 769 | 494 | |||||
Data processing | 658 | 859 | |||||
Other real estate | 57 | 243 | |||||
Other | 4,676 | 4,651 | |||||
Total noninterest expense | 24,049 | 22,925 | |||||
Income before Income Tax Expense | 23,611 | 16,977 | |||||
Income Tax Expense | 7,410 | 4,986 | |||||
Net Income | 16,201 | 11,991 | |||||
Other Comprehensive (Loss) Income | (1,908 | ) | 729 | ||||
Comprehensive Income | $ | 14,293 | $ | 12,720 | |||
Earnings Per ShareBasic |
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$ |
37.46 |
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$ |
27.72 |
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Cash Dividends Declared Per Share | $ | 20.50 | $ | 17.50 | |||
The accompanying notes are an integral part of the condensed consolidated financial statements.
4
WEST SUBURBAN BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Dollars in thousands, except per share data)
(UNAUDITED)
|
1999 |
1998 |
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---|---|---|---|---|---|---|---|
Interest Income | |||||||
Loans, including fees | $ | 16,523 | $ | 16,208 | |||
Securities: | |||||||
Taxable | 5,083 | 5,922 | |||||
Exempt from federal income tax | 362 | 488 | |||||
Total securities income | 5,445 | 6,410 | |||||
Federal funds sold | 244 | 453 | |||||
Deposits in financial institutions | 11 | 9 | |||||
Total interest income | 22,223 | 23,080 | |||||
Interest Expense | |||||||
Deposits | 9,106 | 10,763 | |||||
Other | 37 | 44 | |||||
Total interest expense | 9,143 | 10,807 | |||||
Net Interest Income | 13,080 | 12,273 | |||||
Provision for Loan Losses | 550 | 1,187 | |||||
Net Interest Income after Provision for Loan Losses | 12,530 | 11,086 | |||||
Noninterest Income | |||||||
Service fees on deposit accounts | 885 | 788 | |||||
Trust fees | 13 | 16 | |||||
Net gain on sales of loans held for sale | 54 | 218 | |||||
Loan servicing fees | 64 | 99 | |||||
Net realized gain on sales of securities available for sale | 218 | ||||||
Write-down of carrying value of securities available for sale | (3,200 | ) | |||||
Net gain on sales of other real estate | 9 | 59 | |||||
Other | 1,091 | 1,192 | |||||
Total noninterest income (loss) | 2,116 | (610 | ) | ||||
Noninterest Expense | |||||||
Salaries and employee benefits | 4,262 | 3,943 | |||||
Occupancy | 863 | 884 | |||||
Furniture and equipment | 823 | 673 | |||||
FDIC insurance premiums | 49 | 51 | |||||
Professional fees | 278 | 175 | |||||
Data processing | 271 | 346 | |||||
Other real estate | 18 | 138 | |||||
Other | 1,409 | 1,583 | |||||
Total noninterest expense | 7,973 | 7,793 | |||||
Income before Income Tax Expense | 6,673 | 2,683 | |||||
Income Tax Expense | 2,040 | 331 | |||||
Net Income | 4,633 | 2,352 | |||||
Other Comprehensive (Loss) Income | (392 | ) | 649 | ||||
Comprehensive Income | $ | 4,241 | $ | 3,001 | |||
Earnings Per ShareBasic |
|
$ |
10.71 |
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$ |
5.44 |
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Cash Dividends Declared Per Share | $ | 7.00 | $ | 6.50 | |||
The accompanying notes are an integral part of the condensed consolidated financial statements.
5
WEST SUBURBAN BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Dollars in thousands)
(UNAUDITED)
|
1999 |
1998 |
|||||
---|---|---|---|---|---|---|---|
Cash flows from operating activities | |||||||
Net income | $ | 16,201 | $ | 11,991 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 2,807 | 2,514 | |||||
Provision for loan losses | 1,589 | 1,675 | |||||
Benefit for deferred income taxes | (274 | ) | (1,331 | ) | |||
Net premium amortization and discount accretion of securities | 566 | 475 | |||||
Net realized gain on sales of securities available for sale | (89 | ) | (541 | ) | |||
Write-down of carrying value of securities available for sale | 3,200 | ||||||
Net gain on sales of loans held for sale | (352 | ) | (539 | ) | |||
Proceeds from sales of loans held for sale | 28,339 | 45,586 | |||||
Origination of loans held for sale | (27,987 | ) | (45,047 | ) | |||
(Gain) loss on sales of premises and equipment | (23 | ) | 49 | ||||
Net gain on sales of other real estate | (23 | ) | (89 | ) | |||
Increase in accrued interest and other assets | (1,407 | ) | (668 | ) | |||
Decrease in accrued interest and other liabilities | (1,549 | ) | (2,682 | ) | |||
Total adjustments | 1,597 | 2,602 | |||||
Net cash provided by operating activities | 17,798 | 14,593 | |||||
Cash flows from investing activities |
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Securities available for sale: | |||||||
Proceeds from sales | 21,534 | 52,281 | |||||
Proceeds from maturities | 65,917 | 126,575 | |||||
Purchases | (71,492 | ) | (152,002 | ) | |||
Securities held to maturity: | |||||||
Proceeds from maturities | 63,631 | 170,104 | |||||
Purchases | (69,574 | ) | (164,312 | ) | |||
Purchase of minority interest in subsidiaries | (26 | ) | |||||
Net (increase) decrease in loans | (60,330 | ) | 25,551 | ||||
Purchases of premises and equipment | (4,386 | ) | (4,039 | ) | |||
Proceeds from sales of premises and equipment | 101 | 18 | |||||
Proceeds from sales of other real estate | 933 | 2,015 | |||||
Net cash (used in) provided by investing activities | (53,666 | ) | 56,165 | ||||
Cash flows from financing activities |
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Net decrease in total deposits | (17,090 | ) | (33,340 | ) | |||
Cash dividends paid | (12,975 | ) | (7,569 | ) | |||
Net cash used in financing activities | (30,065 | ) | (40,909 | ) | |||
Net (decrease) increase in cash and cash equivalents |
|
|
(65,933 |
) |
|
29,849 |
|
Cash and cash equivalents at beginning of period | 106,863 | 60,334 | |||||
Cash and cash equivalents at end of period | $ | 40,930 | $ | 90,183 | |||
Supplemental cash flow information: | |||||||
Cash paid during the period for: | |||||||
Interest on deposits and other borrowings | $ | 28,064 | $ | 35,524 | |||
Income taxes | 7,089 | 6,022 | |||||
Transfers from loans to other real estate | 707 | 2,427 |
The accompanying notes are an integral part of the condensed consolidated financial statements.
6
WEST SUBURBAN BANCORP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1BASIS OF PRESENTATION
The condensed consolidated financial statements include the accounts of West Suburban Bancorp, Inc. ("West Suburban") and West Suburban Bank (the "Bank" and collectively with West Suburban, the "Company"). Significant intercompany accounts and transactions have been eliminated. The unaudited interim consolidated financial statements 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 1999 presentation.
NOTE 2SECURITIES
Debt and marketable equity securities are classified into one of two categories, "held to maturity" or "available for sale." Held to maturity securities include those debt securities where the Company has both the ability and positive intent to hold them to maturity. Securities not meeting these criteria are classified as available for sale. Held to maturity securities are carried at amortized historical cost while available for sale securities are carried at fair value with net unrealized gains and losses (net of tax) reported in accumulated other comprehensive (loss) income as a separate component of shareholders' equity. Gains or losses on disposition are based on the net proceeds and the amortized historical cost of the securities sold, using the specific identification method. The Company does not engage in trading activities. The Company has not utilized futures, forwards, swaps or option contracts to manage interest rate risk or otherwise.
During the first nine months of 1999, the Company's unrealized gain on securities available for sale, net of taxes, decreased $1.9 million to a loss of $1.5 million at September 30, 1999 from a $.4 million gain at December 31, 1998, net of taxes.
NOTE 3OUTSTANDING LINES OF CREDIT AVAILABLE(Dollars in thousands)
|
September 30, 1999 |
December 31, 1998 |
||||
---|---|---|---|---|---|---|
Home equity lines | $ | 157,357 | $ | 163,359 | ||
Commercial credit lines | 121,367 | 129,996 | ||||
Letters of credit | 8,671 | 14,423 | ||||
Visa credit card lines | 53,957 | 39,062 | ||||
Total commitments | $ | 341,352 | $ | 346,840 | ||
The Company had $6.4 million and $14.7 million of commitments to originate residential mortgage loans as of September 30, 1999 and December 31, 1998, respectively.
NOTE 4NEW ACCOUNTING STANDARDS
In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") 133, "Accounting for Derivative Instruments and Hedging Activities," which requires all derivatives to be recorded on the balance sheet at fair value and establishes "special accounting" for hedges. SFAS 133 is effective for 2001. The Company presently believes that the adoption of SFAS 133 will not have a material impact on the Company's financial condition or results of operations.
7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CONDENSED CONSOLIDATED BALANCE SHEET ANALYSIS
Asset Distribution. Total consolidated assets at September 30, 1999 decreased approximately $17.4 million (1.3%) to $1,291.6 million from $1,309.0 million at December 31, 1998. Total cash and cash equivalents decreased $66.0 million (61.7%) to $40.9 million at September 30, 1999 from $106.9 million at December 31, 1998. Aggregate holdings in federal funds sold decreased $55.6 million to $9.0 million at September 30, 1999 from $64.6 million at December 31, 1998. Aggregate holdings in securities declined $13.7 million (3.6%) to $363.6 million at September 30, 1999 from $377.3 million at December 31, 1998. The decrease in securities were primarily due to growth in the loan portfolio and decreases in deposits. The Company's objectives in managing the securities portfolio are driven by the dynamics of its entire balance sheet which includes managing the portfolio to maximize yield over an entire interest rate cycle while providing liquidity and minimizing market risk.
Total loans increased $58.6 million (7.5%) to $839.7 million at September 30, 1999 from $781.1 million at December 31, 1998. Real estate loans increased $18.3 million to $324.7 million at September 30, 1999 from $306.4 million at December 31, 1998. Indirect auto loans increased $42.5 million to $72.9 million at September 30, 1999 from $30.4 million at December 31, 1998. These increases were partially offset by decreases in commercial loans. The Company has developed an indirect auto loan department to enhance loan volume. The Company presently intends to continue to grow its indirect auto loan portfolio and has experienced favorable results with low levels of past due indirect auto loans and increased level of loans. The Company attempts to remain competitive in its market by offering competitive rates and loan products. The Company presently intends to continue to maintain its current credit evaluation standards while evaluating prospective new product and business lines.
Allowance for Loan Losses and Asset Quality. The Company maintains an allowance for loan losses to absorb anticipated losses in the loan portfolio. The allowance for loan losses is established after a determination of the potential credit risk of the loans held by the Company. Management evaluates the adequacy of the allowance based on past loan loss experience by reviewing historical loan loss/recovery data, expected future net credit losses, adverse situations that may affect borrowers' ability to repay, estimated value of any underlying collateral, and current and prospective business and economic conditions. The allowance for loan losses increased $.5 million (4.7%) to $10.5 million at September 30, 1999 from $10.0 million at December 31, 1998. This increase in the allowance for loan losses was primarily due to an increase in loans outstanding. The ratio of the allowance for loan losses to total loans outstanding decreased at September 30, 1999 to 1.25% compared to 1.28% at December 31, 1998. Nonperforming loans decreased $9.1 million (48.8%) to $9.5 million at September 30, 1999 from $18.6 million at December 31, 1998. The majority of this decrease was due to the reduction in exposure with respect to the warehouse line of credit discussed in the following paragraph. As of September 30, 1999 and December 31, 1998, total nonperforming loans to total loans were 1.1% and 2.4%, respectively. The allowance for loan losses was approximately 110% and 54% of nonperforming loans at September 30, 1999 and December 31, 1998, respectively.
As
of September 30, 1999, the Company had $3.8 million in credit exposure to a leasing company consisting of a warehouse line of credit with an unpaid principal balance
of $3.8 million. The Company has exercised certain of its rights under the loan documents that govern the warehouse line of credit and, as a result, the Company acquired certain of the leases
that secure the warehouse line of credit. The warehouse line of credit is also secured by various other assets. The leasing company was engaged in the business of originating and servicing small
equipment leases until May 1998 when it sold substantially all its assets. Subsequently, various irregularities in the leasing company's operations were discovered. In August 1998, the
leasing company made an assignment for the benefit of creditors. Although the Company has reduced its exposure under the warehouse line of credit with proceeds of acquired leases and collateral and
through 8
The following table presents an analysis of the Company's nonperforming loans and other real estate as of the dates indicated (dollars in thousands):
|
September 30, 1999 |
December 31, 1998 |
Dollar Change |
|||||||
---|---|---|---|---|---|---|---|---|---|---|
Nonaccrual loans | $ | 6,285 | $ | 14,979 | $ | (8,694 | ) | |||
Accruing loans 90 days past due | 3,241 | 3,621 | (380 | ) | ||||||
Total nonperforming loans | $ | 9,526 | $ | 18,600 | $ | (9,074 | ) | |||
Nonperforming loans as a percent of total loans | 1.1 | % | 2.4 | % | ||||||
Other real estate | $ | 1,540 | $ | 1,742 | $ | (202 | ) |
The following table presents an analysis of the Company's provision for loan losses for the periods stated (dollars in thousands):
|
1999 |
1998 |
||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
3rd Qtr |
2nd Qtr |
1st Qtr |
4th Qtr |
3rd Qtr |
|||||||||||
Provisionquarter | $ | 550 | $ | 491 | $ | 548 | $ | 888 | $ | 1,187 | ||||||
Provisionyear to date | 1,589 | 1,039 | 548 | 2,563 | 1,675 | |||||||||||
Net chargeoffsquarter | 981 | 24 | 116 | 512 | 1,158 | |||||||||||
Net chargeoffsyear to date | 1,121 | 140 | 116 | 2,337 | 1,825 | |||||||||||
Allowance at period end | 10,469 | 10,897 | 10,430 | 9,998 | 9,621 | |||||||||||
Allowance to period end total loans | 1.25 | % | 1.33 | % | 1.30 | % | 1.28 | % | 1.30 | % |
Liability Distribution. Total liabilities decreased $22.8 million (1.9%) to $1,151.8 million at September 30, 1999 from $1,174.6 million at December 31, 1998. The decrease in total liabilities was primarily due to decreases in deposits. Management believes the decreases in deposits were primarily due to customers enhancing their liquidity positions. In order to retain current and attract new deposits, the Company opened additional branches and engaged in promotions from time to time during 1999. The decrease in savings and certificates of deposit was partially offset by continued growth in money market checking deposits as customers took advantage of this product which provides a higher interest rate compared to regular savings. Management's goal is to promote its deposit products when feasible while preserving the Company's net interest margin. The Company attempts to remain well-positioned in its market by offering competitive rates on its savings and certificate of deposit products.
Balances in the Company's major categories of deposits are summarized in the following table (dollars in thousands):
|
September 30, 1999 |
December 31, 1998 |
Dollar Change |
Percent Change |
||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Demand and other noninterest-bearing | $ | 119,710 | $ | 112,464 | $ | 7,246 | 6.4 | % | ||||
NOW accounts | 26,468 | 34,712 | (8,244 | ) | (23.7 | ) | ||||||
Money market checking | 118,765 | 99,304 | 19,461 | 19.6 | ||||||||
Money market savings | 470,949 | 501,128 | (30,179 | ) | (6.0 | ) | ||||||
Time, $100,000 and over | 86,111 | 81,041 | 5,070 | 6.3 | ||||||||
Time, other | 316,859 | 327,303 | (10,444 | ) | (3.2 | ) | ||||||
Total | $ | 1,138,862 | $ | 1,155,952 | $ | (17,090 | ) | (1.5 | )% | |||
9
CAPITAL RESOURCES
Total shareholders' equity increased $5.4 million during the nine months ended September 30, 1999. This increase was a result of net income of $16.2 million for the first nine months of 1999 reduced by dividends declared of $8.9 million and a decline in the market value of securities available for sale of $1.9 million, net of deferred taxes.
The Company's capital ratios as well as those of the Bank as of September 30, 1999 are presented below. All capital 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 the Bank, a minimum Tier 1 risk-based capital ratio of 4% and 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 the Bank. Bank holding companies and their subsidiaries are generally expected to operate at or above the minimum capital requirements. The ratios shown below are in excess of regulatory minimums and should allow the Company and the Bank to operate without significant capital adequacy concerns.
The following table sets forth selected regulatory capital ratios of the Company and the Bank at September 30, 1999:
|
Tier 1 Risk-Based Capital |
Total Risk-Based Capital |
Leverage Capital |
||||
---|---|---|---|---|---|---|---|
West Suburban | 12.75 | % | 13.70 | % | 10.79 | % | |
West Suburban Bank | 11.44 | % | 12.40 | % | 9.61 | % |
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 rates 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, 1999 and December 31, 1998, the Bank qualified as a "well-capitalized" institution.
LIQUIDITY
Effective liquidity management ensures there is sufficient cash flow to satisfy demand for credit and deposit withdrawals. The Company's large, stable, core
deposit base and strong capital position are the solid foundation for the Company's liquidity position. In addition, liquidity is enhanced by a securities portfolio structured to provide liquidity as
needed. 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. As part of its plan to address Year 2000 issues, the Company will continue to closely monitor its liquidity levels during late 1999 and early 2000. The Company maintains
lines of credit in the amount of $60.0 million at other financial institutions as well as an additional line of credit in the amount of approximately $40.0 million at the Federal Home
Loan Bank. 10
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 securities available for sale. As of September 30, 1999 and December 31, 1998, these liquid assets represented 17.5% and 23.9% of total assets, respectively. A more detailed discussion concerning these assets is presented in the Asset Distribution section of this report.
RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
Net Income. The Company's net income for the nine months ended September 30, 1999 and 1998 was approximately $16.2 million and $12.0 million, respectively. This represents an increase of $4.2 million (35.1%) for the 1999 period when compared to the same period in 1998. This was primarily due to the increase in noninterest income in 1999 when compared to the same period in 1998. During the first quarter of 1999, the Company recorded non-recurring other income of $3.6 million representing the settlement of a lawsuit brought by the Company in connection with an investment that it made in the late 1980's. Additionally, during the third quarter of 1998, the Company recognized a loss of $3.2 million representing the other-than-temporary impairment of the entire carrying value of an investment in subordinated debt securities, which were classified as available for sale investment securities.
Net interest income increased $1.8 million during the first nine months of 1999 compared to the same period in 1998. Offsetting these increases were increases to other noninterest expense of $1.1 million and income tax expense of $2.4 million.
Interest Income. Total interest income, on a tax equivalent basis, decreased $3.3 million for the nine months ended September 30, 1999 compared to the same period in 1998. This decrease was primarily due to decreased yields on the Company's loan portfolio and lower yields and balances on U.S. government agency securities. Yields on total average loans decreased primarily due to decreases in interest rates that have been necessary to attract loans in the competitive market place. Yields on the Company's securities portfolio declined as new purchases were invested in lower yielding securities resulting from a declining interest rate environment at the time the securities were purchased.
Interest Expense. Total interest expense decreased $5.0 million for the nine months ended September 30, 1999 compared to the same period during 1998. Interest on deposits, which accounted for substantially all of this decrease, declined due to decreases in average rates notwithstanding an increase of $10.0 million in average balances of interest-bearing deposits during the nine months ended September 30, 1999.
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 11
|
CHANGE DUE TO: |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|
|
Volume |
Rate |
Total |
|||||||
Interest Income | ||||||||||
Interest-bearing deposits in financial institutions | $ | 13 | $ | (2 | ) | $ | 11 | |||
Federal funds sold | (873 | ) | (285 | ) | (1,158 | ) | ||||
Securities | (354 | ) | (966 | ) | (1,320 | ) | ||||
Loans | 2,851 | (3,637 | ) | (786 | ) | |||||
Total interest income | 1,637 | (4,890 | ) | (3,253 | ) | |||||
Interest Expense | ||||||||||
Interest-bearing deposits | 265 | (5,221 | ) | (4,956 | ) | |||||
Total interest expense | 265 | (5,221 | ) | (4,956 | ) | |||||
Net interest income | $ | 1,372 | $ | 331 | $ | 1,703 | ||||
The following table presents an analysis of the Company's year to date average interest-earning assets, interest-bearing liabilities, and non-interest-bearing deposits, as of the date indicated (dollars in thousands):
|
1999 |
1998 |
|||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
September 30 |
June 30 |
March 31 |
December 31 |
September 30 |
||||||||||
Securities | $ | 385,270 | $ | 393,896 | $ | 393,398 | $ | 387,635 | $ | 393,778 | |||||
Total loans | 794,179 | 783,685 | 771,624 | 748,181 | 747,424 | ||||||||||
Interest-earning assets | 1,209,780 | 1,213,259 | 1,209,778 | 1,194,502 | 1,195,606 | ||||||||||
Noninterest-bearing deposits | 115,937 | 114,575 | 112,101 | 107,984 | 106,664 | ||||||||||
Interest-bearing deposits | 1,034,093 | 1,037,284 | 1,034,106 | 1,024,523 | 1,024,082 | ||||||||||
Total deposits | 1,150,030 | 1,151,859 | 1,146,207 | 1,132,507 | 1,130,746 | ||||||||||
Interest-bearing liabilities | 1,038,280 | 1,041,899 | 1,039,969 | 1,027,888 | 1,027,471 |
Provision for Loan Losses. The Company's provision for loan losses decreased $.1 million (5.1%) for the nine months ended September 30, 1999 compared to the same period in 1998. Net chargeoffs for the first nine months of 1999 also decreased $.7 million when compared to the same period in 1998. Management monitors its nonperforming loans closely and will initiate further increases or decreases to the provision for loan losses as warranted. See the section entitled "Allowance for Loan Losses and Asset Quality."
Noninterest Income. Total noninterest income increased $5.8 million (135.2%) for the nine months ended September 30, 1999
compared to the same period in 1998. This was primarily due to the Company recording non-recurring other income in the first quarter of $3.6 million representing the settlement of a lawsuit
brought by the Company in connection with an investment that it made in the late 1980's. Additionally, during the third quarter of 1998, the Company recognized a loss of $3.2 million
representing the other-than temporary impairment of the entire carrying value of an investment in subordinated debt securities, which were classified as available for sale investment securities. These
increases were partially offset by decreases in gains on sale of securities available for sale of $.4 million and other income of $.3 million. 12
Noninterest Expense. Total noninterest expense increased $1.1 million (4.9%) for the nine months ended September 30, 1999 compared to the same period in 1998. This increase was primarily the result of salary and employee benefits increasing $1.0 million due to the addition of the indirect automobile lending department, the opening of the Eola Road branch in Aurora, Illinois and enhanced staffing in the collection and loan review functions.
Income Taxes. Income tax expense increased $2.4 million (48.6%) for the nine months ended September 30, 1999 compared to the same period in 1998. The increase was principally due to higher pre-tax income and less nontaxable interest income on securities. The effective tax rates for the nine months ended September 30, 1999 and 1998 were 31.4% and 29.4%, respectively.
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
Net Income. The Company's net income for the three months ended September 30, 1999 and 1998 was approximately $4.6 million and $2.4 million, respectively. This represents an increase of $2.2 million (97.0%) for the 1999 period when compared to the same period in 1998. This was primarily due to an increase in noninterest income of $2.7 million during the 1999 period. Additionally, during the third quarter of 1998, the Company recognized a loss of $3.2 million representing the other-than temporary impairment of the entire carrying value of an investment in subordinated debt securities, which were classified as available for sale investment securities. Net interest income increased $.8 million during this period while the provision for loan loss decreased $.6 million. These increases to income and decreases to expense were partially offset by an increase to noninterest expense of $.2 million and income tax expense of $1.7 million.
Interest Income. Total interest income decreased $.9 million (3.7%) for the three months ended September 30, 1999 compared to the same period in 1998. This decrease was primarily due to decreased yields on the Company's loan portfolio and lower yields and balances on U.S. government agency securities.
Interest Expense. Total interest expense decreased $1.7 million (15.4%) for the three months ended September 30, 1999 compared to the same period during 1998. This was due to lower costs and balances associated with certificates of deposit.
Provision for Loan Losses. The Company's provision for loan losses decreased $.6 million (53.7%) for the three months ended September 30, 1999 compared to the same period in 1998.
Noninterest Income. Total noninterest income increased $2.7 million (446.9%) for the three months ended September 30, 1999 compared to the same period in 1998. This increase was primarily due to the Company recognizing a loss in the third quarter of 1998 of $3.2 million representing the other-than temporary impairment of the entire carrying value of an investment in subordinated debt securities, which were classified as available for sale investment securities.
Noninterest Expense. Total noninterest expense increased $.2 million (2.3%) for the three months ended September 30, 1999 compared to the same period in 1998. This increase was primarily the result of salary and employee benefits increasing $.3 million due to the addition of the indirect automobile lending department and the opening of the Eola Road branch in Aurora, Illinois.
Income Taxes. Income tax expense increased $1.7 million (516.3%) for the three months ended September 30, 1999 compared to the same period in 1998. The increase was primarily due to higher pre-tax income. The effective tax rates for the three months ended September 30, 1999 and 1998 were 30.6% and 12.3%, respectively.
13
OTHER CONSIDERATIONS
General. Earnings of bank 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 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 subsidiary's business and earnings.
Year 2000. The federal banking regulators issued guidelines establishing minimum safety and soundness standards for achieving Year 2000 compliance. The guidelines, which took effect October 15, 1998 and apply to all FDIC-insured depository institutions, establish standards for developing and managing Year 2000 project plans, testing remediation efforts and planning for contingencies. The guidelines are based upon guidance previously issued by the agencies under the auspices of the Federal Financial Institutions Examination Council (the "FFIEC"), but are not intended to replace or supplant the FFIEC guidance which will continue to apply to all federally insured depository institutions.
The guidelines were issued under Section 39 of the Federal Deposit Insurance Act, as amended (the "FDIA"), which requires the federal banking regulators to establish standards for the safe and sound operation of federally insured depository institutions. Under Section 39 of the FDIA, if an institution fails to meet any of the standards established in the guidelines, the institution's primary federal regulator may require the institution to submit a plan for achieving compliance. If an institution fails to submit an acceptable compliance plan, or fails in any material respect to implement a compliance plan that has been accepted by its primary federal regulator, the regulator is required to issue an order directing the institution to cure the deficiency. Such an order is enforceable in court in the same manner as a cease and desist order. Until the deficiency cited in the regulator's order is cured, the regulator may restrict the institution's rate of growth, require the institution to increase its capital, restrict the rates the institution pays on deposits or require the institution to take any action the regulator deems appropriate under the circumstances. In addition to the enforcement procedures established in Section 39 of the FDIA, noncompliance with the standards established by the guidelines may also be grounds for other enforcement action by the federal banking regulators, including cease and desist orders and civil money penalty assessments.
During 1996, West Suburban initiated the process of preparing its computer systems and applications for the Year 2000. This process involved updating or replacing certain of the Company's computer hardware components and software applications and communicating with vendors and external service providers to confirm that their applications are Year 2000 compliant. The Company has tested and replaced, as necessary, its critical computer hardware components and software applications and intends to continue its testing procedures in order to ensure that its computer hardware components and software applications are Year 2000 compliant and that the operations of the Company will not be adversely effected. The Company has completed its testing of all critical computer hardware components and software applications.
The Company has received acknowledgment from its external service providers for its critical computer hardware components and software applications that these systems are Year 2000 compliant. Along with these acknowledgments, the Company has utilized an external agency for an independent review of the Company's Year 2000 status.
The Company has invested approximately $2.2 million to replace hardware components and software applications. These investments were not directly related to Year 2000 but were more directly related to enhancing technology and the discontinuation of vendor service and support for certain hardware components and software applications.
The Company estimates that its Year 2000 expenses will not exceed $.1 million. Costs related to Year 2000 are expensed as incurred.
14
The Company identifies, measures and monitors the risks involved in its banking activities and related operations. The Company has recognized many risks and uncertainties and given the unique circumstance of the Year 2000 issue, the Company is unable to determine the ultimate effect that the risks will have on the Company. The Company believes that its significant testing, planning, communication and coordination will mitigate potential material disruption. While the effort is wide ranging and intended to fully address all Year 2000 issues, nevertheless, the Company believes that it is important to be prepared should something occur which destroys data bases or systems due to Year 2000 programming errors. The Company's Year 2000 Coordinator and the Disaster Recovery Coordinator have carefully analyzed related disaster recovery and contingency planning requirements to help ensure support exists, should a Year 2000 problem arise.
Recent Regulatory Developments. On November 2, 1999, the Conference Committee on financial services reform approved legislation that would allow bank holding companies to engage in a wider range of nonbanking activities, including greater authority to engage in securities and insurance activities. Under the Gramm-Leach-Bliley Act (the "Act"), a bank holding company that elects to become a financial holding company may engage in any activity that the Board of Governors of the Federal Reserve System (the "Federal Reserve"), in consultation with the Secretary of the Treasury, determines by regulation or order is (i) financial in nature, (ii) incidental to any such financial activity, or (iii) complementary to any such financial activity and does not pose a substantial risk to the safety or soundness of depository institutions or the financial system generally. The Act specifies certain activities that are deemed to be financial in nature, including lending, exchanging, transferring, investing for others, or safeguarding money or securities; underwriting and selling insurance; providing financial, investment, or economic advisory services; underwriting, dealing in or making a market in, securities; and any activity currently permitted for bank holding companies by the Federal Reserve under section 4(c)(8) of the Bank Holding Company Act. A bank holding company may elect to be treated as a financial holding company only if all depository institution subsidiaries of the holding company are well-capitalized, well-managed and have at least a satisfactory rating under the Community Reinvestment Act.
National banks are also authorized by the Act to engage, through "financial subsidiaries," in any activity that is permissible for a financial holding company (as described above) and any activity that the Secretary of the Treasury, in consultation with the Federal Reserve, determines is financial in nature or incidental to any such financial activity, except (i) insurance underwriting, (ii) real estate development or real estate investment activities (unless otherwise permitted by law), (iii) insurance company portfolio investments, and (iv) merchant banking. The authority of a national bank to invest in a financial subsidiary is subject to a number of conditions, including, among other things, requirements that the bank must be well-managed and well-capitalized (after deducting from capital the bank's outstanding investments in financial subsidiaries). The Act provides that state banks may invest in financial subsidiaries (assuming they have the requisite investment authority under applicable state law) subject to the same conditions that apply to national bank investments in financial subsidiaries.
The Act must be approved by the House of Representatives and the Senate, and signed by the President, before it will take effect. At this time, the Company is unable to predict the impact the Act may have on the Company and its subsidiaries.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company attempts to maintain a conservative position with regard to interest rate risk by 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 its interest rate is subject to change or upon maturity.
15
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. However, the net interest margin does vary due to management's response to increasing competition from other financial institutions.
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, 1999 (dollars in thousands):
|
Three months or less |
Over three months to six months |
Six months to one year |
One year to five years |
Over five years |
Total |
||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Rate sensitive assets: | ||||||||||||||||||
Interest-bearing deposits in financial institutions | $ | 890 | $ | 890 | ||||||||||||||
Federal funds sold | 9,000 | 9,000 | ||||||||||||||||
Securities | 26,109 | $ | 9,991 | $ | 17,985 | $ | 262,237 | $ | 47,321 | 363,643 | ||||||||
Loans | 348,807 | 36,342 | 54,553 | 330,049 | 69,900 | 839,651 | ||||||||||||
Total | $ | 384,806 | $ | 46,333 | $ | 72,538 | $ | 592,286 | $ | 117,221 | $ | 1,213,184 | ||||||
Rate sensitive liabilities: | ||||||||||||||||||
Money market savings | $ | 470,949 | $ | 470,949 | ||||||||||||||
Money market checking | 118,765 | 118,765 | ||||||||||||||||
NOW accounts | 26,468 | 26,468 | ||||||||||||||||
Time deposits | ||||||||||||||||||
Less than $100,000 | 54,067 | $ | 92,581 | $ | 67,042 | $ | 103,078 | $ | 91 | 316,859 | ||||||||
$100,000 and over | 30,314 | 21,407 | 12,572 | 21,818 | 86,111 | |||||||||||||
Total | $ | 700,563 | $ | 113,988 | $ | 79,614 | $ | 124,896 | $ | 91 | $ | 1,019,152 | ||||||
Interest sensitivity gap | $ | (315,757 | ) | $ | (67,655 | ) | $ | (7,076 | ) | $ | 467,390 | $ | 117,130 | |||||
Cumulative interest sensitivity gap | (315,757 | ) | (383,412 | ) | (390,488 | ) | 76,902 | 194,032 | $ | 194,032 | ||||||||
Cumulative net interest-earning assets to cumulative net interest-bearing liabilities | 54.9 | % | 52.9 | % | 56.3 | % | 107.5 | % | 119.0 | % | ||||||||
Cumulative interest sensitivity gap to total assets | (24.4 | )% | (29.7 | )% | (30.2 | )% | 6.0 | % | 15.0 | % |
The above tables may 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.
In addition to the gap analysis above, the Company also measures rate sensitivity through a net interest income analysis. The net interest income analysis measures the change in net interest income in the event of hypothetical changes in interest rates. This analysis assesses the risk of changes in net interest income in the event of a sudden and sustained 1.0% to 2.0% increase or decrease in market interest rates. This analysis is subject to the assumptions made by the Company. These assumptions include the following:
16
Listed below are the Company's projected changes in net interest income over a twelve month horizon for the various rate shock levels as of September 30, 1999 and December 31, 1998 (dollars in thousands):
|
Net Interest Income |
||||||||
---|---|---|---|---|---|---|---|---|---|
September 30 |
Amount |
Dollar Change |
Percent Change |
||||||
+200 bp | $ | 45,371 | $ | (8,750 | ) | (16.2 | )% | ||
+100 bp | 49,864 | (4,257 | ) | (7.9 | ) | ||||
Base | 54,121 | ||||||||
-100 bp | 58,112 | 3,991 | 7.4 | ||||||
-200 bp | 60,320 | 6,199 | 11.5 |
|
Net Interest Income |
||||||||
---|---|---|---|---|---|---|---|---|---|
December 31 |
Amount |
Dollar Change |
Percent Change |
||||||
+200 bp | $ | 41,437 | $ | (6,730 | ) | (14.0 | )% | ||
+100 bp | 44,952 | (3,215 | ) | (6.7 | ) | ||||
Base | 48,167 | ||||||||
-100 bp | 51,206 | 3,039 | 6.3 | ||||||
-200 bp | 52,318 | 4,151 | 8.6 |
17
There are no material pending legal proceedings to which the Company or the Bank are a party other than ordinary course, routine litigation incidental to their respective businesses.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
A. Exhibits
27 Financial Data Schedule
18
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 12, 1999 | |||
|
|
By: |
/s/ KEVIN J. ACKER Kevin J. Acker Chairman of the Board |
|
|
By: |
/s/ DUANE G. DEBS Duane G. Debs President and Chief Financial Officer |
19
|
|
Sequential Page No. |
||
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27. | Financial Data Schedule | 21 |
20
PART I
ITEM 1. FINANCIAL STATEMENTS
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
PART II
ITEM 1. LEGAL PROCEEDINGS
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
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
|