<PAGE>


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549
                                    FORM 10-K

 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
                                    OF 1934.
                  For the fiscal year ended December 31, 1999.

                         Commission file number 0-12292

                                 UPBANCORP, INC.
             (Exact name of registrant as specified in its charter)

          DELAWARE                                            36-3207297
 (State or other jurisdiction of                           (I.R.S.Employer
  incorporation or organization)                          Identification No.)

4753 N. BROADWAY, CHICAGO, ILLINOIS                              60640
(Address of principal executive offices)                       (Zip Code)
Registrant's telephone number, including
area code (773) 878-2000

Securities registered pursuant to Section 12(b) of the Act:   NONE
Securities registered pursuant to Section 12(g) of the Act:   COMMON STOCK-$1
                                                              PAR VALUE

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 for the
past 90 days. Yes X No

Indicate by check mark if the disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ X ]

The aggregate market value of the voting stock held by non-affiliates of the
registrant as of March 10, 2000 (based upon the closing price as of such date),
was approximately $16,382,049.

The number of shares outstanding of the registrant's common stock, $1.00 par
value, as of March 10, 2000 is 837,308.

                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of the proxy statement for the annual shareholders meeting to be held
April 18, 2000, are incorporated by reference into Part III of this Form 10-K.


<PAGE>

<TABLE>

<CAPTION>

UPBANCORP, INC.
-------------------------------------------------------------------------------------------------------------------

                                TABLE OF CONTENTS

                                                                                                               PAGE
<S>         <C>                                                                                                 <C>
PART I............................................................................................................3

   Item 1:  Business..............................................................................................3
   Item 2:  Properties............................................................................................7
   Item 3:  Legal Proceedings.....................................................................................8
   Item 4:  Submission Of Matters To A Vote Of Security Holders...................................................8

P A R T  II.......................................................................................................8

   Item 5:  Market For The Registrant's Common Equity And Related Stockholder Matters.............................8
   Item 6:  Selected Financial Data...............................................................................9
   Item 7:  Management's Discussion And Analysis Of Financial Condition And Results Of Operations................10
   Item 7a: Quantitative And Qualitative Disclosures On Market Risk..............................................21
   Item 8:  Financial Statements And Supplementary Data..........................................................22
   Item 9:  Changes In And Disagreements With Accountants On Accounting And Financial Disclosures................43

PART III.........................................................................................................43

   Item 10: Directors And Executive Officers Of The Registrant...................................................43
   Item 11: Executive Compensation...............................................................................43
   Item 12: Security Ownership Of Certain Beneficial Owners And Management.......................................43
   Item 13: Certain Relationships And Related Transactions.......................................................43

PART IV..........................................................................................................44

   Item 14: Exhibits, Financial Statement Schedules And Reports On Form 8-K......................................44

</TABLE>


2

<PAGE>

                                     PART I

                                ITEM 1: BUSINESS

UPBANCORP, INC.

     Upbancorp, Inc. ("Upbancorp" or the "Company"), is a multi-bank holding
company organized in 1983 under the laws of the State of Delaware. Upbancorp
owns all of the outstanding common stock of Uptown National Bank of Chicago
("Uptown"), organized in 1929 and located in Chicago, Illinois, and Heritage
Bank ("Heritage"), organized in 1977 and located in Phoenix, Arizona. (Uptown
and Heritage are referred to as the "Subsidiary Banks".) Upbancorp does not
engage in any activities other than providing administrative services and acting
as a holding company for its Subsidiary Banks.

     The Company is a publicly traded banking company with total assets of $325
million at year-end 1999 and its headquarters are in Chicago, Illinois. The
majority of the operational responsibilities of each of the Subsidiary Banks
rests with their respective Officers and Directors.

     The Company and its Subsidiary Banks employed approximately 149 full-time
equivalent employees at December 31, 1999.

     Based on the Company's approach to decision making, it has decided that its
business is comprised of a single segment.

SUBSIDIARY BANKS

     The Company's affiliates consist of two full-service community banks, which
operate six banking offices in northern Chicago and metropolitan Phoenix.
Approximately 77% of its banking assets are related to Uptown with the remainder
related to Heritage.

     Both Subsidiary Banks are engaged in the general commercial banking
business in addition to offering a complete range of retail banking services.
The Subsidiary Banks conduct a general banking business which embraces all of
the usual functions, both commercial and consumer, and which they may lawfully
provide, including, but not limited to: the acceptance of deposits to demand,
savings and time accounts and the servicing of such accounts; commercial,
industrial, consumer and real estate lending; safe deposit box operations; and
other banking services tailored for both commercial and retail clients.

     Uptown has one wholly-owned subsidiary, Broadway Clark Building Corporation
("BCBC"), which is an Illinois corporation. BCBC owns all of the real estate
that is used in connection with the operation of Uptown's business with the
exception of three facilities, which are leased.

     In February, 2000, Uptown applied to the Office of the Comptroller of the
Currency ("OCC") to merge Heritage with and into and under the charter of
Uptown. Following the consummation of the merger, the offices of Heritage will
operate as branches of Uptown. Heritage will retain its name in the Phoenix
area. This is in response to our ongoing effort to further enhance operational
efficiencies and improve profitability. All current locations will remain fully
operational with no resulting adverse changes to our products and services
offered.

                           SUPERVISION AND REGULATION

     The Company and its Subsidiary Banks are subject to regulation and
supervision by various governmental regulatory authorities including, but not
limited to, the Board of Governors of the Federal Reserve System (the "FRB"),
the OCC, the Federal Deposit Insurance Corporation (the "FDIC"), the Arizona
State Banking Department, the Securities and Exchange Commission (the "SEC"),
the Internal Revenue Service and state taxing authorities. Financial
institutions and their holding companies are extensively regulated under federal
and state law. The effect of such statutes, regulations and policies can be
significant and cannot be predicted with a high degree of certainty.


                                                                               3
<PAGE>

     Federal and state laws and regulations generally applicable to financial
institutions, such as the Company and the Subsidiary Banks, regulate, among
other things, the scope of business, investments, reserves against deposits,
capital levels relative to operations, the nature and amount of collateral for
loans, the establishment of branches, mergers, consolidations and dividends.
This supervision and regulation is intended primarily for the protection of the
FDIC's Bank Insurance Fund and the depositors, rather than the shareholders of
financial institutions.

     The Company is subject to supervision and regulation by the FRB, under the
Bank Holding Company Act of 1956, as amended.

     Uptown is chartered under the National Bank Act, as amended, and is subject
to the examination, supervision, reporting and enforcement requirements of the
OCC, as the chartering authority for national banks, and the FDIC as the
administrator of the Bank Insurance Fund. The Bank is a member of the Federal
Reserve System.

     Heritage is chartered under the banking laws of Arizona and is subject to
the examination, supervision, reporting and enforcement requirements of the
Arizona State Banking Commission under the banking laws of Arizona and the FDIC
under the Federal Deposit Insurance Act, as amended. Once the two subsidiary
banks are merged, all banks will be supervised by the OCC.

     The deposits of the Subsidiary Banks are insured by the Bank Insurance Fund
of the FDIC to the extent permitted by law.

     The Company's common stock is registered with the SEC under the Securities
Exchange Act of 1934, as amended. Consequently, the Company is subject to the
information, proxy solicitation, insider trading and other restrictions and
requirements of the SEC under such act.

             GOVERNMENTAL MONETARY POLICIES AND ECONOMIC CONDITIONS

     The earnings of the Company are affected in important respects by general
economic conditions and also by the fiscal and monetary policies of the federal
government and its agencies. In particular, the FRB regulates the national
supply of bank credit in order to achieve, among other things, maximum
employment and a stable price level. Among the instruments of monetary policy
used by the FRB to implement these objectives are: open market transactions in
United States government securities, changes in the discount rate on member bank
borrowings and changes in reserve requirements against member bank deposits.
These means are used in varying combinations to influence overall growth of bank
loans, investments, and deposits, and they may also affect interest rates
charged on loans or paid for deposits.

     Interest rate sensitivity has a major impact on the yields earned on assets
of the Subsidiary Banks. As market rates change, yields earned on assets may not
necessarily move to the same degree as rates paid on liabilities. For this
reason, the Subsidiary Banks attempt to minimize earnings volatility related to
fluctuations in interest rates through the use of formal asset/liability
management programs which identify imbalances between the repricing of earning
assets and funding sources, among other things.

     In addition to the policy of the FRB, the Company's earnings are also
affected by the FDIC insurance premiums and the annual fees charged by the
various regulatory authorities. The Company cannot fully predict the nature or
the extent of any effect which such fiscal and monetary policies may have on its
business and earnings.

                                   COMPETITION

     The principal methods of competition between commercial banks is generally
expressed in terms of price, including interest rates paid on deposits and
interest rates charged on borrowings, fees charged on fiduciary services,
quality of services to customers, ease of access to services, and the offering
of additional services. More recently, technological advances such as PC
banking, telebanking, point-of-sale debit cards


4

<PAGE>

and electronic data interchange have also resulted in intensified competition
with traditional banking distribution systems.

     Both Illinois and Arizona are highly competitive markets for banking and
related financial services. Since these areas are the Company's primary focus
markets, the Subsidiary Banks are exposed to varying types and levels of
competition. In general, each Subsidiary Bank competes, anticipates and responds
within each individual market area. Both Subsidiary Banks compete and rely
heavily on the high level of quality service provided to our customers. The
Company has seen the level of competition and number of competitors in its
market places increase in recent years and expects a continuation of these
competitive market conditions.

                               CAPITAL GUIDELINES

     The FRB, the OCC and the FDIC have risk-based capital guidelines which
provide a framework for assessing the adequacy of the capital of banks and bank
holding companies (collectively "banking institutions"). These guidelines apply
to all banking institutions regardless of size and are used in the examination
and supervisory process as well as in the analysis of applications to be acted
upon by the regulatory authorities. These guidelines require banking
institutions to maintain capital based on the credit risk of their operations.

     The risk-based capital guidelines are designed to require the maintenance
of capital commensurate with both on and off-balance sheet credit risks. The
minimum ratios established by the guidelines are based on both Tier 1 and total
capital to total risk-based assets. Total risk-based assets are calculated by
assigning each on-balance sheet asset and off-balance sheet item to one of four
risk categories depending on the nature of each item. The amount of the items in
each category is then multiplied by the risk-weight assigned to that category
(0%, 20%, 50% or 100%). Total risk based assets equals the sum of the resulting
amounts. Tier 1 capital is generally defined as shareholders' equity less
intangible assets and total capital is generally defined to include Tier 1
capital plus limited levels of the allowance for loan losses.

     In addition to the risk-based capital requirements, the FRB, the OCC and
the FDIC require institutions to maintain a minimum leveraged-capital ratio to
supplement the risk-based capital guidelines. The leverage ratio is intended to
ensure that adequate capital is maintained against risks other than credit risk.

     The Company and the Subsidiary Banks exceed the minimum required capital
guidelines for both risk-based capital ratios and the leverage ratio at December
31, 1999. A further discussion of the capital guidelines is in the Capital
Resources section included under Item 7 of this Form 10-K.

                                    DIVIDENDS

GENERAL

     In addition to the capital guidelines provided in the discussion above,
there are various national and state banking regulations which limit the ability
of the Subsidiary Banks to pay dividends. This limits the ability of the Company
to pay dividends. Since the Company is a legal entity, separate and distinct
from its affiliates, its dividends are not subject to such bank regulatory
guidelines. The holders of the Company's common stock are entitled to receive
such dividends as are declared by the Board of Directors. For a further
discussion of dividends, see Note 12 "Restrictions on Retained Earnings" in the
Notes to Consolidated Financial Statements included under Item 8 of this Form
10-K.

NATIONAL BANKING ASSOCIATION RESTRICTIONS

     Uptown is a national banking association and is limited with respect to the
amount of dividends which it can pay to its shareholders under Sections 56 and
60 of the National Bank Act.

     Section 56 restricts a national bank from paying dividends if it would
impair the institution's capital by barring any payments in excess of "net
profits then on hand". Section 56 further requires that banks deduct


                                                                               5
<PAGE>

losses and bad debts from "net profits then on hand". It also specifies that a
portion of a bank's capital surplus account may be included as "net profits then
on hand" to the extent that it represents earnings from prior periods.

     Section 60 requires the OCC's approval if the total of all dividends
declared in any calendar year will exceed the institution's net profits of that
year combined with its retained net profits of the preceding two years, less any
required transfers to surplus. In calculating its net profits under Section 60 a
national bank may not add back provisions made to its allowance for loan losses
nor deduct net charge-offs.

ARIZONA STATE-CHARTERED BANK RESTRICTIONS

     Under the provisions of the Arizona Bank Code, dividends may not be
declared by state-chartered banks unless they are made in compliance within the
banking laws of Arizona. Additionally, the payment of dividends by a
state-chartered bank whose deposits are insured by the Bank Insurance Fund, is
affected by the requirement to maintain minimum capital pursuant to the capital
adequacy guidelines issued by the FDIC.


6

<PAGE>

                               ITEM 2: PROPERTIES

     The following table summarizes the Company and Subsidiary Banks' properties
by location:

<TABLE>

<CAPTION>

AFFILIATE               PROPERTY TYPE/LOCATION                     OWNERSHIP         SQUARE FOOTAGE
<S>                     <C>                                        <C>               <C>
THE COMPANY             4753 N. Broadway                                  -                    -
                        Chicago, Illinois

UPTOWN                  Main Office:
                        4753 N. Broadway                                Owned             149,000 (Note 1)
                        Chicago, Illinois

                        Banking Office:
                        6041 N. Clark Street                            Owned               2,100 (Note 1)
                        Chicago, Illinois

                        Banking Office:
                        5345 N. Sheridan Road                          Leased               1,500
                        Chicago, Illinois

                        Banking Office:
                        1058 W. Bryn Mawr Avenue                       Leased               1,500
                        Chicago, Illinois

                        Aircraft Lending Office:
                        43 W 518 Route 30                              Leased               1,800
                        Aurora Municipal Airport
                        Sugar Grove, Illinois

HERITAGE                Main Office:
                        4222 E. Camelback Road                         Leased               4,100
                        Suite J200
                        Phoenix, Arizona

                        Banking Office:
                        4222 E. Camelback Road                         Leased               4,100
                        Suite J100
                        Phoenix, Arizona

                        Banking Office:
                        1333 W. Broadway                                Owned              10,500
                        Tempe, Arizona

</TABLE>

     At December 31, 1999, the properties and equipment of the Company had an
aggregate net book value of approximately $6.0 million.

     Note 1: These locations are owned by Uptown's wholly-owned subsidiary,
BCBC. Uptown utilizes approximately 49,000 square feet of its main office and
the rest of the facility is leased out by BCBC to independent third parties.


                                                                               7
<PAGE>

                            ITEM 3: LEGAL PROCEEDINGS

     Neither the Company nor its Subsidiary Banks are party to any litigation,
which in the judgment of management after consultation with counsel, would have
a material effect on the financial position or results of operations of the
Company or the Subsidiary Banks.

           ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     There were no items submitted to a vote of security holders during the
fourth quarter of 1999.

                                   P A R T II

 ITEM 5: MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
                                     MATTERS

     The Company's common stock is traded on the Over-The-Counter market under
the symbol UPBN. As of December 31, 1999, there were 318 shareholders of record.
The following table sets forth common stock information during each quarter of
1999 and 1998. This information has been adjusted to reflect the Company's
four-for-one stock split in October, 1998.

<TABLE>
<CAPTION>

                                                  1999                                                1998
                              -----------------------------------------------    -----------------------------------------------
MARKET PRICE OF                Fourth       Third       Second       First        Fourth       Third       Second       First
                              ----------  ----------  -----------  ----------    ----------  ----------  -----------  ----------
<S>                              <C>         <C>          <C>         <C>           <C>         <C>          <C>         <C>
  COMMON STOCK:
      High                       $33.25      $37.50       $37.50      $35.00        $36.25      $36.25       $37.25      $36.25
      Low                         33.00       32.50        32.50       33.00         35.00       35.69        35.50       32.75
      Quarter-End                 33.00       33.00        32.50       35.00         35.25       36.25        35.84       36.25

CASH DIVIDENDS PER SHARE          0.130       0.130        0.130       0.130         0.125       0.125        0.125       0.125

</TABLE>


     A discussion regarding the regulatory restrictions applicable to the
Subsidiary Banks' ability to pay dividends is included in the Dividends Section
under Item 1 of this Form 10-K and Note 12 in the Notes to Consolidated
Financial Statements included under Item 8 of this Form 10-K.


8

<PAGE>

                         ITEM 6: SELECTED FINANCIAL DATA

     The following Selected Financial Data is not covered by the report of
independent public accountants and should be read in conjunction with the
consolidated financial statements and accompanying notes included elsewhere in
this Form 10-K. A more detailed discussion and analysis of factors affecting the
Company's financial position and operating results is presented in Management's
Discussion and Analysis of Financial Condition and Results of Operations found
under Item 7 of this Form 10-K.

     Consolidated financial information reflecting a summary of the operating
results and financial condition of the Company for the five years ended December
31, 1999 is presented in the following table (all per share data has been
adjusted to reflect the Company's four for one stock split in October, 1998):

<TABLE>
<CAPTION>

SELECTED FINANCIAL DATA                                                YEARS ENDED DECEMBER 31,

                                                 -------------------------------------------------------------------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)        1999          1998         1997          1996         1995
                                                 ------------- ------------- ------------ ------------- ------------
<S>                                              <C>           <C>          <C>           <C>           <C>
OPERATING RESULTS:
  Interest income                                    $ 23,530      $ 20,040     $ 17,722      $ 15,805    $  15,312
  Interest expense                                      8,547         7,109        6,115         5,425        5,383
                                                 ------------- ------------- ------------ ------------- ------------
  Net interest income                                  14,983        12,931       11,607        10,380        9,929
  Provision for loan losses                               885           580          410           914          717
  Other income                                          3,213         3,154        2,667         2,440        1,982
  Other expense                                        13,349        11,940       10,760        10,059        9,551
                                                 ------------- ------------- ------------ ------------- ------------
  Income before income taxes                            3,962         3,565        3,104         1,847        1,643
  Applicable income taxes                               1,385         1,265        1,127           693          625
                                                 ------------- ------------- ------------ ------------- ------------
  Net income                                         $  2,577      $  2,300     $  1,977       $ 1,154     $  1,018
                                                 ------------- ------------- ------------ ------------- ------------
                                                 ------------- ------------- ------------ ------------- ------------

PER SHARE DATA:
  Net income                                         $   3.00      $   2.63     $   2.24       $  1.30      $  1.15
  Cash dividends declared                                0.52          0.50         0.50          0.50         0.50
  Dividend payout ratio                                 17.31%        19.04%       22.31%        38.39%       43.61%
  Book value                                            26.90         26.02        23.79         21.36        20.76
  Market price                                          33.00          5.25        31.13         17.06        15.00
  Weighted average shares                             859,710       875,907      882,800       885,741      888,000

BALANCE SHEET HIGHLIGHTS:
  Assets                                             $324,777      $269,462    $ 231,377      $226,395    $ 206,341
  Loans, net of unearned discount                     249,719       195,095      166,252       131,069      111,208
  Deposits                                            270,155       226,034      198,132       195,302      180,773
  Shareholders' equity                                 22,524        22,638       21,000        18,856       18,434
  Average equity to average asset ratio                 7.77%         8.69%        8.73%         8.58%        8.63%
  Asset growth rate                                    20.53%        16.46%        2.20%         9.72%      (1.85%)

PERFORMANCE RATIOS:
  Return on average assets                               .87%          .91%         .87%          .54%         .49%
  Return on average shareholders' equity               11.22%        10.44%        9.98%         6.28%        5.66%
  Net interest margin (FTE) (1)                         4.73%         4.74%        4.84%         4.62%        4.60%
  Percentage nonperfoming loans/
    loans, net of unearned discount                     0.36%         0.67%        0.69%         1.61%        3.42%
  Percentage of nonperfoming assets/
    total assets                                        0.28%         0.49%        0.64%         1.14%        2.56%


</TABLE>


(1) FTE - Fully taxable equivalent


                                                                               9
<PAGE>



     ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                             RESULTS OF OPERATIONS

                  (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

     The following management's discussion and analysis of financial condition
and results of operations should be read in conjunction with the Company's
Consolidated Financial Statements and Notes to Consolidated Financial Statements
presented in Item 8 of this Form 10-K as well as the Selected Financial Data
presented in Item 6 of this Form 10-K.

     This discussion and analysis is intended to address significant factors
affecting the Company's consolidated statements of condition and statements of
income for the past three years. The discussion is designed to provide
shareholders with a comprehensive review of the operating results and financial
condition of the Company.

SUMMARY

     The Company's consolidated net income for 1999 totaled $2,577 or $3.00 per
share. This is compared to net income and earnings per share of $2,300 or $2.63
and $1,977 or $2.24 for 1998 and 1997, respectively. The results of 1999
represent a 12% improvement in net income from 1998 after a 16% improvement in
1998 over 1997. As we noted last year and, again, consistent in the current
year, the earnings improvement is mostly attributable to increased net interest
income.

     The operating performance of bank holding companies is often measured and
comparisons made based on net income to average assets and net income to average
equity. The Company's return on average shareholders' equity for 1999 was 11.22%
as compared to 10.44% in 1998 and 9.98% in 1997. Return on average assets for
1999 was .87% as compared to .91% in 1998 and .87% in 1997.

     Nonperforming loans decreased as a percentage of outstanding loans during
the past three year period. Nonperforming loans totaled $907 or .36% of net
loans at December 31, 1999 as compared to $1,309 or .67% in 1998 and $1,148 or
 .69% in 1997.

     Upbancorp continues to maintain a strong capital base at December 31, 1999.
Consolidated capital levels as well as the individual Subsidiary Banks' capital
ratios exceed minimum capital requirements.

NET INTEREST INCOME

     Net interest income, which is the difference between interest and fees
earned on assets and the interest paid on deposits and other funding sources, is
the primary source of earnings for the Company. This component represents 82% of
the Company's net revenues in 1999. A detailed analysis highlighting the changes
in net interest income is provided in Table 2. Interest earned on tax-exempt
loans and investments is adjusted for comparative purposes to a taxable
equivalent basis using the federal tax rate of 34%, resulting in net interest
income FTE.

     Net interest income on a fully taxable equivalent basis totaled $15,238 in
1999 compared to $13,115 in 1998 and $11,720 in 1997. The significant increase
in net interest income in 1999 includes an increase of $2,503 due to volume
increases in 1999 following a $1,844 increase due to volume in 1998. Rate
movements negatively impacted the overall improvement in net interest income by
$315 after negatively impacting net interest income by $395 in 1998.

     The 1999 volume increase was fueled by the earning assets added to the
balance sheet. Average interest earning assets increased by $40,597 or 17.29%.
The majority of that increase is the result of growth in average loan balances
due in large part to the strong economic conditions, including the real estate
markets in both the Chicago and Phoenix metropolitan areas. In addition, we
recognize continued success of Zook Pilot Services, the aircraft lending
division. The loan growth was funded via a more aggressive pricing


10


<PAGE>

strategy with regard to time deposits and a greater utilization of borrowed
funds as well as maturities and selective sales in our investment portfolio.

     Net interest margin represents net interest income as a percentage of total
interest earning assets. The Company attempts to favorably impact net interest
income through investment decisions on interest earning assets and monitoring
interest rates its banking subsidiaries offer, particularly rates for time
deposits and short-term borrowings. The Company's net interest spread measured
on a fully taxable equivalent basis decreased slightly to 5.53% in 1999 from
5.58% in 1998.

     Table 1 summarizes Upbancorp's average earning assets and funding sources
over the last three years. Additionally, the table shows interest income and
expense related to each category of assets and funding sources and the yields
earned and the rates paid on such assets and funding sources.

                                     TABLE 1

                     NET INTEREST INCOME AND MARGIN ANALYSIS

<TABLE>

<CAPTION>

                                              1999                              1998                              1997
                             ---------------------------------  --------------------------------  ---------------------------------
                               Average                 Yield/     Average                Yield/     Average                Yield/

ASSETS:                        Balance      Interest    Rate      Balance     Interest    Rate      Balance     Interest    Rate
                             ------------- ----------- -------  ------------ ----------- -------  ------------ ----------- --------
<S>                              <C>          <C>       <C>        <C>          <C>       <C>        <C>          <C>       <C>
Investment securities:
  Taxable                        $ 38,104     $ 2,309   6.06%      $ 42,108     $ 2,540   6.03%      $ 54,005     $ 3,263    6.04%
  Non-taxable (1)(2)                6,987         609   8.72%         4,015         399   9.94%         2,189         236   10.78%
Federal funds sold                  4,174         209   5.01%         8,355         437   5.23%         7,390         401    5.43%
Mortgages held-for-sale             1,534          86   5.61%         2,314         118   5.10%         1,262          83    6.58%
Loans, net of unearned
  discount (2)(3)                 224,666      20,572   9.16%       178,076      16,730   9.39%       144,898      13,852    9.56%
                             ------------- ----------- -------  ------------ ----------- -------  ------------ ----------- --------
  Total interest earning
    assets (1)(2)(3)             $275,465     $23,785   8.63%      $234,868     $20,224   8.61%      $209,744     $17,835    8.50%
                             ------------- ----------- -------  ------------ ----------- -------  ------------ ----------- --------
Cash and due from banks            11,073                            10,073                             8,633
Allowance for loan losses          (2,759)                           (2,247)                           (1,700)
Other assets                       11,705                            10,865                            10,402
                             -------------                      ------------                      ------------
  Total assets                   $295,484                          $253,559                          $227,079
                             =============                      ============                      ============

LIABILITIES &
  SHAREHOLDERS' EQUITY:
Savings, NOW and
  money market deposits          $109,264     $ 3,020   2.76%      $100,853     $ 2,670   2.65%      $101,227     $ 2,577    2.55%
Other time deposits                88,203       4,438   5.03%        67,727       3,630   5.36%        59,361       3,158    5.32%
Borrowed funds                     21,411       1,089   5.09%        14,955         809   5.41%         6,521         380    5.83%
                             ------------- ----------- -------  ------------ ----------- -------  ------------ ----------- --------
Total interest bearing
liabilities                      $218,878     $ 8,547   3.90%      $183,535     $ 7,109   3.87%      $167,109     $ 6,115    3.66%
                             ------------- ----------- -------  ------------ ----------- -------  ------------ ----------- --------
Demand deposits                    49,638                            45,306                            38,254
Other liabilities                   3,994                             2,685                             1,897
Shareholders' equity               22,974                            22,033                            19,819
                             -------------                      ------------                      ------------
   Total liabilities and
      shareholders' equity       $295,484                          $253,559                          $227,079
                             ============= ----------- -------  ============ ----------- -------  ============ ----------- --------

Net interest income/margin
(1)(3)                                        $ 15,238   4.73%                  $13,115   4.74%                   $11,720    4.84%
                                           =========== =======               =========== =======               =========== ========
Net interest income/earning assets                       5.53%                            5.58%                              5.59%
                                                       =======                           =======                           ========

</TABLE>

(1)  Interest income and yields on non-taxable securities are reflected on a tax
     equivalent basis based upon a statutory Federal income tax rate of 34% for
     1999, 1998 and 1997.

(2)  Loans and securities on a non-accrual basis for the recognition of interest
     income are included in loans, net of unearned discount, and investment
     securities for purposes of this analysis.

(3)  Loan fees included in the above interest income computations total $1,133,
     $907, and $773 for the years ended December 31, 1999, 1998, and 1997,
     respectively. At December 31, 1999, 1998, and 1997, deferred loan and
     commitment fee income, net of direct loan origination costs, totaled $438,
     $235, and $244, respectively.


                                                                              11

<PAGE>

     Table 2 analyzes the changes in interest income, interest expense and net
interest income that result from changes in volumes of earning assets and
funding sources, as well as fluctuations in interest rates. Changes noted in the
volume/rate column represent variances attributable jointly to changes in volume
and rate.

                                     TABLE 2
     CHANGES IN NET INTEREST INCOME APPLICABLE TO VOLUMES AND INTEREST RATES

<TABLE>

<CAPTION>

1999 COMPARED TO 1998                             Increase Income/Expense                  Increase/(Decrease) dues to:
---------------------                    ---------------------------------------------- -------------------------------------
                                                                           Increase                                   Volume/
                                             1999           1998          (Decrease)      Volume         Rate          Rate
                                         ------------  ---------------  --------------- ----------   ------------   ----------
<S>                                      <C>            <C>             <C>            <C>           <C>           <C>
Investment securities:
  Taxable                                $     2,309      $     2,540   $      (231)   $      (242)   $        12   $      (1)
  Non-taxable (1)                                609              399           210            295            (49)        (36)
Federal funds sold                               209              437          (228)          (219)           (19)          9
 Mortgages held-for-sale                          86              118           (32)           (40)            12          (4)
 Loans, net of unearned discount              20,572           16,730         3,842          4,377           (424)       (111)
                                         ------------  ---------------  ------------   ------------  ------------  ------------
  Total interest income (1)              $    23,785      $    20,224   $     3,561    $     4,172    $      (468)  $    (143)
                                         ============  ===============  ============   ============  ============  ============
Savings, NOW and money market deposits         3,020            2,670           350            223            117           10
Other time deposits                            4,438            3,630           808          1,097           (222)         (67)
Borrowed funds                                 1,089              809           280            349            (48)         (21)
                                         ------------  ---------------  ------------   ------------  ------------  ------------
Total interest expense                         8,547            7,109         1,438          1,669           (153)         (78)
                                         ------------  ---------------  ------------   ------------  ------------  ------------
      Net interest income                $    15,238      $    13,115    $    2,123     $    2,503    $      (315)  $      (65)
                                         ============  ===============  ============   ============  ============  ============

</TABLE>

<TABLE>

<CAPTION>



1998 COMPARED TO 1997                              Increase Income/Expense               Increase/(Decrease) dues to:
---------------------                       --------------------------------------  ----------------------------------------
                                                                        Increase                                  Volume/
                                                1998        1997       (Decrease)      Volume         Rate          Rate
                                            ----------- ------------  ------------  -------------  -----------  ------------
<S>                                         <C>         <C>            <C>           <C>            <C>          <C>
Investment securities:
  Taxable                                   $    2,540  $     3,263    $     (723)   $      (719)   $      (5)    $       1
  Non-taxable (1)                                  399          236           163            197          (19)          (15)
Federal funds sold                                 437          401            36             52          (15)           (2)
Mortgages held-for-sale                            118           83            35             69          (19)          (16)
Loans, net of unearned discount                 16,730       13,852         2,878          3,172         (239)          (55)
                                            ----------- ------------  ------------  -------------  -----------  -----------
  Total interest income (1)                 $   20,224  $    17,835    $    2,389    $     2,771    $    (296)    $     (86)
                                            =========== ============  ============  =============  ===========  ===========
Savings, NOW and money market deposits           2,670        2,577            93            (10)         103            (0)
Other time deposits                              3,630        3,158           472            445           24             3
Borrowed funds                                     809          380           429            492          (27)          (35)
                                            ----------- ------------  ------------  -------------  -----------  -----------
    Total interest expense                       7,109        6,115           994            927           99           (32)
                                            ----------- ------------  ------------  -------------  -----------  -----------
      Net interest income                   $   13,115  $    11,720    $    1,395    $     1,844    $    (395)    $     (54)
                                            =========== ============  ============  =============  ===========  ===========
</TABLE>


(1)  Interest income and yields on non-taxable securities are reflected on a tax
     equivalent basis based upon a statutory Federal income tax rate of 34% for
     1999, for 1998 and 1997.

FUNDS MANAGEMENT ANALYSIS AND INTEREST RATE SENSITIVITY

     The interest earning asset portfolio of community banks is typically the
leading determinate of performance for the Company. This is because the largest
percentage of total income for the Company is attributable to net interest
income. The policies and practices for managing liquidity risk and interest rate
risk are set by the Subsidiary Banks' Funds Management Committees ("FMC's")
whose goal is to ensure maximum returns within safe and sound risk parameters.
The FMC's monitor exposures in view of market developments and the Subsidiary
Banks' financial conditions, set guidance for interest rate risk management
decisions, ensure consistency in the measurement of risk and monitor liquidity
and capital adequacy. In this capacity, the FMC's place limits on the level of
investments in various assets and off-balance sheet instruments, as well as on
the funding levels for loans and deposits. In addition, the FMC's establish
pricing policies for the Subsidiary Banks' products and services.


12

<PAGE>


     Interest rate risk is the degree to which market interest rate fluctuations
can effect net interest income. The Company not only responds to this interest
rate risk, but also tries to anticipate and build strategies based on the
current interest rate and maturity characteristics of the various balance sheet
categories of assets and liabilities. This is done through a formalized funds
management process and while there are several ways in which to analyze interest
rate risk, the traditional method is called a "gap" analysis. A gap analysis is
a static management tool used to identify mismatches or gaps in the repricing of
assets and liabilities within specified periods of time.

     The Company's gap analysis as of December 31, 1999 is presented in Table 3.
Earning assets and interest bearing liabilities are presented within selected
time intervals based upon their repricing and maturity characteristics. In a
perfectly matched gap analysis, an equal amount of rate sensitive assets and
liabilities would be reflected as repricing within each given time interval. A
positive interest rate sensitivity gap indicates more assets than liabilities
will reprice in that time period, while a negative gap indicates more
liabilities will reprice. Generally, a positive gap position, or asset sensitive
position, has a favorable impact on net interest income in periods of rising
interest rates. Conversely, a negative gap would generally imply a favorable
impact on net interest income in periods of declining interest rates.

                                     TABLE 3
                 REMAINING MATURITY OR EARLIEST POSSIBLE PRICING

<TABLE>

<CAPTION>
                                               Up to                                                    Greater
                                                 3             3-12           1-3            3-5          than
                                               Months        Months         Years          Years        5 Years        Total
                                            ------------- ------------- --------------  ------------  ------------  ------------
<S>                                             <C>        <C>          <C>             <C>            <C>          <C>
RATE SENSITIVE ASSETS:
Federal funds sold                             $   4,730    $        -   $          -     $       -      $      -     $   4,730
Investment securities - Debt (1)                   5,692           758          1,008        30,414         5,879        43,751
Investment securities - Equity (1)                     -             -              -             -         4,675         4,675
Loans and mortgages held-for-sale (1)             68,302        16,379         31,888       115,032        18,971       250,572
                                            ------------- ------------- --------------  ------------  ------------  ------------
  Total Rate Sensitive Assets                     78,724        17,137         32,896       145,446        29,525       303,728
                                            ------------- ------------- --------------  ------------  ------------  ------------

RATE SENSITIVE LIABILITIES:
Savings, NOW, and
  money market deposits                           32,826        32,948         42,010        11,525             -       119,309
Other time deposits                               30,433        55,629          8,978         2,593             -        97,633
Borrowed funds                                    18,634         5,000          5,000             -             -        28,634
                                            ------------- ------------- --------------  ------------  ------------  ------------
    Total Rate Sensitive Liabilities              81,893        93,577         55,988        14,118             -       245,576
                                            ------------- ------------- --------------  ------------  ------------  ------------
INTEREST SENSITIVITY GAP:
  Incremental                                  $ (3,169)    $ (76,440)   $   (23,092)     $ 131,328      $ 29,525     $  58,152
                                            ============= ============= ==============  ============  ============  ============
  Cumulative                                   $ (3,169)    $ (79,609)   $  (102,701)     $  28,627      $ 58,152
CUMULATIVE INTEREST SENSITIVE
  GAP AS A PERCENTAGE OF
  TOTAL EARNING ASSETS                               -1%          -26%           -34%            9%           19%


</TABLE>


(1)  Loans and securities on a nonaccrual basis are not included as a part of
     this analysis.

     Table 3 shows the under-one-year net liability position at December 31,
1999 was ($79,609) (24.51% of total assets), compared to the under-one-year net
liability position of ($45,722) at December 31, 1998 (16.97% of total assets). A
significant under-one-year net liability position would indicate that the
Company's net interest income is exposed to rising short-term interest rates,
while a significant net asset position would mean an exposure to declining
short-term interest rates. Upbancorp and the Subsidiary Banks follow a policy of
maintaining a relatively balanced mix of rate-sensitive assets and liabilities,
making each side of the balance sheet equally flexible in reacting to changes in
market interest rates so that net interest income will not be materially
affected in periods of rising or falling interest rates.


                                                                              13
<PAGE>

SECURITIES PORTFOLIO

     The following table shows the Company's available-for-sale investment
securities' maturity distribution and corresponding tax-equivalent yields at
December 31, 1999:

                                     TABLE 4
                          SECURITIES AVAILABLE-FOR-SALE
                   MATURITY DISTRIBUTION AND PORTFOLIO YIELDS

<TABLE>
<CAPTION>

                                               One year               One year              Five years               After
                                               or less             to five years           to ten years            ten years
                                         ---------------------  ---------------------  --------------------- ----------------------
                                         Amortized    Yield     Amortized    Yield     Amortized    Yield    Amortized     Yield
                                            Cost       (%)         Cost       (%)        Cost        (%)        Cost        (%)
                                         ----------- ---------  ----------- ---------  ----------  --------- -----------  ---------
<S>                                      <C>          <C>         <C>        <C>      <C>           <C>       <C>           <C>
U.S. Treasury securities                  $   -        0.00%      $   750     5.51%    $     -       0.00%   $     -         0.00%
U.S. Agency securities                        -        0.00%       30,300     6.38%          -       0.00%       638         8.00%

States and political subdivisions            940       9.37%        1,013     7.71%      1,642       7.19%     4,116         7.74%
                                         ----------- ---------  ----------- ---------  ----------  --------- -----------  ---------
    Total                                 $  940       9.37%      $32,063     6.40%    $ 1,642       7.19%   $ 4,754         7.77%
                                         ===========            ===========            ==========            ===========
</TABLE>


<TABLE>
<CAPTION>

                                         Amortized     Yield
                                            Cost         (%)
                                         ----------- ---------
<S>                                      <C>           <C>
Collateralized mortgage obligations
  and other mortgage-backed securities      $ 5,700     5.65%
                                         ===========
Equity securities                           $ 4,818     6.26%
                                         ===========
</TABLE>


     Of the $5,700 of collateralized mortgage obligations and other
mortgage-backed securities depicted above, all were issued or guaranteed by
various U.S. Government sponsored agencies.

LOAN PORTFOLIO

     The following table shows the major classifications of loans at
December 31:

                                     TABLE 5
                                 LOAN PORTFOLIO


<TABLE>
<CAPTION>
                                                             1999          1998           1997            1996           1995
                                                             ----          ----           ----            ----           ----
<S>                                                     <C>            <C>            <C>            <C>            <C>
Commercial - Aircraft related                            $  53,531      $  26,617      $  17,846      $   9,154      $     492
Commercial - Other                                          42,320         33,395         30,361         30,344         29,117
Secured by real estate - Construction                       35,686         22,365          9,440          9,829         16,249
Secured by real estate - Farmland                             --             --             --               62             64
Secured by real estate - Residential (1 to 4 family)        30,147         30,971         34,899         34,071         27,415
Secured by real estate - Residential (5 or more)            27,514         29,900         27,635         19,736         14,127
Secured by real estate - Non-residential                    55,352         45,640         40,984         23,925         18,705
Consumer                                                     5,169          6,207          5,087          3,948          5,039
                                                         ---------      ---------      ---------      ---------      ---------
Total loans                                                249,719        195,095        166,252        131,069        111,208
Less: Allowance for loan losses                             (3,114)        (2,499)        (2,010)        (1,485)        (1,402)
                                                         ---------      ---------      ---------      ---------      ---------
Total loans, net of allowance for loan losses            $ 246,605      $ 192,596      $ 164,242      $ 129,584      $ 109,806
                                                         =========      =========      =========      =========      =========
</TABLE>


14
<PAGE>

     The commercial loan maturities and sensitivity to changes in interest rates
at December 31, 1999, are shown in the following table:

                                     TABLE 6
    COMMERCIAL LOAN MATURITIES AND SENSITIVITIES TO CHANGES IN INTEREST RATES

<TABLE>
<CAPTION>

                                                     After one
                                   In one year        through            Over
                                     or less         five years       five years          Total
                                   -----------       ----------       ----------        ---------
<S>                                 <C>               <C>              <C>              <C>
Commercial loan maturities           $ 36,469          $ 55,792         $  3,590         $ 95,851
                                   ===========       ==========       ==========        =========

Interest rate sensitivity:

                    Fixed rate       $  6,895          $ 55,491         $  3,158         $ 65,544
                 Variable rate         29,574               301              432           30,307
                                   -----------       ----------       ----------        ---------
                         Total       $ 36,469          $ 55,792         $  3,590         $ 95,851
                                   ===========       ==========       ==========        =========
</TABLE>


LIQUIDITY MANAGEMENT

     A key element of the Company's FMC process is the management of liquidity.
Funds are needed by the Subsidiary Banks to meet the needs of their depositors,
borrowers and for regulatory requirements. Liquid funds, however, generally have
very low earnings potential and thus careful control of the Subsidiary Banks'
liquidity position is needed. Monitoring of this liquidity position is done
daily to ensure constant adequacy and to maintain optimal levels of liquidity on
the balance sheet. Another source of liquidity is off balance sheet, in the form
of pre-approved loan commitments from the Federal Home Loan Bank and various
correspondent banks. For a further review of the Company's sources and uses of
funds, see the Consolidated Statements of Cash Flows included under Item 8 of
this Form 10-K.

     The Company requires adequate liquidity to pay its expenses and shareholder
dividends. Liquidity is provided to the Company from the Subsidiary Banks in the
form of dividends. Other liquidity is provided by cash balances in banks,
maturing investments and interest on investments. For a discussion of dividend
payments, please see Note 12 in the Notes to Consolidated Financial Statements
included under Item 8 of this Form 10-K. One method of analyzing the Company's
liquidity position is through a careful review of available funding sources. The
following table provides information as it pertains to funding sources and
reflects a year-to-year comparison of the sources of the Company's liability
funding based upon year-end balances.

                                     TABLE 7
                       FUNDING SOURCES - YEAR-END BALANCES

<TABLE>
<CAPTION>

                                                               1999                  1998                1997
                                                        -------------------- --------------------- -----------------
<S>                                                     <C>                   <C>                <C>
Demand deposits                                          $    53,213           $    47,062        $   40,088
Savings, NOW & money market deposits                         119,309               104,067            98,660
Other time deposits of $100 or less                           60,661                55,021            44,409
                                                       -------------------- --------------------- -----------------
  Core deposits                                              233,183               206,150           183,157
Other time deposits of $100 or more                           36,972                19,884            14,975
Borrowed funds                                                28,634                18,097            10,037
                                                       -------------------- --------------------- -----------------
      Total funding sources                              $   298,789          $    244,131        $  208,169
                                                       ==================== ===================== =================
</TABLE>


     Total funding sources increased 22.39% at December 31, 1999 from prior year
levels. Core deposits increased 13.11% from December 31, 1998 balances while
other time deposits $100 or more grew at an 85.93% rate. A recap of other time
deposits $100 and over is presented in the following table. For a review of
total other time deposit maturities, see Note 6 in the Notes to Consolidated
Financial Statements included under Item 8 of this Form 10-K. A recap of
borrowed funds can be found in Note 7 in the Notes to Consolidated Financial
Statements included under Item 8 of this Form 10-K.


                                                                              15
<PAGE>


                                     TABLE 8
          REMAINING MATURITY OF OTHER TIME DEPOSITS - $100,000 AND OVER

<TABLE>
<S>                                      <C>
Three months or less                      $ 10,932
Over 3 through 6 months                     12,258
Over 6 through 12 months                    10,050
Over 12 months                               3,732
                                     --------------
                                          $ 36,972
                                     ==============
</TABLE>


     Borrowing facilities are available to the Subsidiary Banks through various
correspondent banks in the amount of $25,000. These lines are established for
the purpose of borrowing on an overnight basis in the form of Federal Funds. In
addition, Uptown has borrowing capacity with the Federal Home Loan Bank of
Chicago in the amount of $19,000 for short and long-term borrowings. These
borrowings are to be secured by qualifying 1-4 family first mortgages, private
mortgage backed securities or U.S. Treasury and Agency Obligations.

CAPITAL RESOURCES

     A strong capital structure is vital for many reasons, one of which is to
allow the Company the opportunity for future growth. Upbancorp has developed a
policy to manage its capital structure and that of its Subsidiary Banks in
accordance with regulatory guidelines and to ensure appropriate use of this
resource. The Company's capital policy requires that the Company and its
Subsidiary Banks maintain a capital ratio in excess of the minimum regulatory
guidelines. At December 31, 1999, all entities exceeded regulatory established
minimums as defined for financial institutions. Please see Note 13 in the Notes
to Consolidated Financial Statements included under Item 8 of this Form 10-K.

     Total shareholders equity decreased 0.50% to $22,524 at December 31, 1999.
Total equity as a percentage of assets was 6.94% at the end of 1999 versus 8.40%
a year earlier. Included in shareholders' equity is the net unrealized loss on
securities classified as available-for-sale, which amounted to $910 at the end
of 1999 against a gain of $253 as of the end of 1998.

PROVISION AND ALLOWANCE FOR LOAN LOSSES

     The allowance for loan losses is established through a provision for loan
losses charged to expense. Loans are charged against the allowance for loan
losses when management believes that the full collection of the loan principal
is unlikely. The level of the provision for loan losses charged to operating
expense as well as the balances maintained in the allowance for loan losses is
dependent upon many factors, including loan growth, changes in the composition
of the loan portfolio, net charge-off levels, delinquencies, collateral values
and management's assessment of current and prospective economic conditions in
the Company's primary market areas.

     The Subsidiary Banks measure the allowance for loan losses on a quarterly
or more frequent basis using three measures of reserve adequacy. The first
measurement compares the allowance as a percentage of the total loan portfolio.
The second test measures the allowance against various loan pools, or types,
using historical and peer group reserve percentages for expectations of possible
loan losses on each category. The third is a detailed evaluation by all loan
officers of classified or non-performing loans to ensure that an adequate
allowance has been established for these individual assets.

     The allowance for loan losses is comprised of both allocated and
unallocated allowances in order to quantify future loss potential. The allocated
position represents management's assessment as to potential loss exposure based
on both actual loan losses experienced historically and independent credit
ratings on individual credits. The unallocated portion is that which is not
specifically allocated to a particular loan or general loan category. At
December 31, 1999, the allowance for loan losses was comprised of $1,869 and
$1,245 of allocated and unallocated reserves, respectively.



16

<PAGE>

                                     TABLE 9
                    ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES

<TABLE>
<CAPTION>

                                                                              December 31,
                                               ----------------------------------------------------------------------------
                                                   1999            1998            1997           1996            1995
                                               -------------   -------------   -------------  -------------   -------------
<S>                                                <C>             <C>             <C>            <C>             <C>
Balance at beginning of year                        $ 2,499         $ 2,010         $ 1,485        $ 1,402         $ 1,605
Loan charge-offs:
  Commercial - Other                                    263             130              12            256             403
  Real estate - Residential (1 to 4 family)             105               -               1              -              18
  Real estate - Residential (5 or more)                   -               -               -            607              66
  Real estate - Non-Residential                           -               -               -              -             460
  Consumer                                               25              25              15             33               1
                                               -------------   -------------   -------------  -------------   -------------
    Total charge-offs                                   393             155              28            896             948

Recoveries:
  Commercial - Other                                    116              64              55             62              25
  Real estate - Residential (5 or more)                   -               -              86              -               -
  Consumer                                                7               -               2              3               3
                                               -------------   -------------   -------------  -------------   -------------
    Total recoveries                                    123              64             143             65              28

Net charge-offs (recoveries)                            270              91            (115)           831             920
Provision for loan losses                               885             580             410            914             717
                                               -------------   -------------   -------------  -------------   -------------
Balance at end of year                              $ 3,114         $ 2,499         $ 2,010        $ 1,485         $ 1,402
                                               =============   =============   =============  =============   =============

As a percent of average loans:
  Net loan charge-offs (recoveries)                   0.12%           0.05%         (0.08%)          0.69%           0.86%
  Provision for loan losses                           0.39%           0.33%           0.28%          0.76%           0.67%
Allowance for loan losses
  as a percentage of net loans:                       1.25%           1.28%           1.21%          1.13%           1.26%

Allocation of allowance:
  Commercial -  Aircraft related                        588             426             268            137               5
  Commercial -  Other                                   609             684             772            765             841
  Secured by real estate                                621             377              11            222             274
  Consumer                                               51              89              89            107             102
  Unallocated                                         1,245             923             870            254             180
                                               -------------   -------------   -------------  -------------   -------------
Balance at end of year                              $ 3,114         $ 2,499         $ 2,010        $ 1,485         $ 1,402
                                               =============   =============   =============  =============   =============

Loan balance as a percent of total loans:
  Commercial -  Aircraft related                        21%             14%             11%             7%              0%
  Commercial -  Other                                   17%             17%             18%            23%             26%
  Secured by real estate                                60%             66%             68%            67%             69%
  Consumer                                               2%              3%              3%             3%              5%
</TABLE>


     As indicated by this table, the provision for loan losses amounted to $885
for 1999 compared to $580 in 1998 and $410 in 1997. This increase in the 1999
provision is due to the continued growth in the Company's loan portfolio.

     The allowance for loan losses amounted to $3,114 for 1999 compared to
$2,499 in 1998 and $2,010 in 1997. Allowance levels are the result of the
Company's analysis of potential loan losses and the adequacy level as defined by
management's internal analysis.


                                                                              17
<PAGE>

NONPERFORMING ASSETS

     One measurement used by management in assessing the risk inherent in the
loan portfolio is the level of nonperforming assets. Nonperforming assets
consist of both nonaccrual loans, investments and other real estate owned.
Nonaccrual loans are those loans which have been determined to have reasonable
doubt as to the timely collectibility of interest or principal. Other real
estate owned ("OREO") represents real property which has been acquired through
foreclosure or real estate which a Subsidiary Bank has obtained possession of in
satisfaction of a debt. OREO is carried at the lower of the recorded investment
value of the loan or the estimated fair market value, less estimated disposal
costs, of the related real estate. Past due loans are loans whose principal and
interest payments are delinquent 90 days or more and are still accruing
interest.

     The following table summarizes nonperforming assets and past due loans for
the past five years as well as certain information related to interest income on
nonaccrual loans:

                                    TABLE 10
               ANALYSIS OF NONPERFORMING ASSETS AND PAST DUE LOANS

<TABLE>
<CAPTION>

                                                                              December 31,
                                                      -------------------------------------------------------------
                                                         1999          1998        1997           1996         1995
                                                         ----          ----        ----           ----         ----
<S>                                                  <C>           <C>           <C>           <C>           <C>
Nonaccrual loans                                      $  849        $1,234        $  252        $1,158        $2,369
Restructured loans                                        58            75           896           954         1,430
                                                      ------        ------        ------        ------        ------
    Total nonperforming loans                            907         1,309         1,148         2,112         3,799
Nonperforming securities, at market                     --            --            --             134           134
Other real estate owned                                 --            --             334           334         1,343
                                                      ------        ------        ------        ------        ------
       Total nonperforming assets                     $  907        $1,309        $1,482        $2,580        $5,276
                                                      ======        ======        ======        ======        ======
Percentage of nonperforming loans/loans,
    net of deferred fees                                0.36%         0.67%         0.69%         1.61%         3.42%
Percentage of nonperforming assets/total assets         0.28%         0.49%         0.64%         1.14%         2.56%
Past due loans, not included above                    $ --          $ --          $ --          $    5        $    4
    Percentage of total net loans                       0.00%         0.00%         0.00%         0.00%         0.00%
    Percentage of total assets                          0.00%         0.00%         0.00%         0.00%         0.00%
Interest income not recognized due to
    nonaccrual status of loans                        $   60        $  164        $   64        $  282        $  419
</TABLE>



     Nonperforming assets have decreased for four consecutive years and have
reached their lowest level in 15 years. This trend is a result of a strong
economy and the effectiveness of the Subsidiary Banks' loan administration and
workout procedures. As shown in Table 10, at December 31, 1999, nonperforming
assets totaled $907, a $402 decrease from 1998. As a result, the percentage of
nonperforming assets to total assets was reduced 42.86% to 0.28%.

NONINTEREST INCOME

     Noninterest income consists primarily of service charges on customer
deposit accounts and fees earned from mortgage banking activities. Total
noninterest income increased 1.87% to $3,213 in 1999 compared to 1998. The
continued improvement in noninterest income reflects the continued
diversification of our sources of revenue in addition to normal increases
related to growth. The following table analyzes the various sources of
noninterest income for the years ended December 31, 1997 through 1999.


18
<PAGE>

                                    TABLE 11
                          NONINTEREST INCOME COMPONENTS
<TABLE>
<CAPTION>

                                                       December 31,
                                         ------------------------------------------
                                            1999          1998           1997
                                         ------------ -------------- --------------
<S>                                          <C>           <C>            <C>
Service charges on deposit accounts          $ 1,784       $  1,481       $  1,215
Mortgage banking fees                            831          1,258            907
Other noninterest income                         510            317            475
Net gains from sale of loans                      87            126            177
Net gain (loss) on securities                      1            (28)          (107)
                                         ------------ -------------- --------------
  Total noninterest income                   $ 3,213        $ 3,154        $ 2,667
                                         ------------ -------------- --------------
                                         ------------ -------------- --------------

</TABLE>

     Service charges on deposit accounts, the largest component of noninterest
income, consists of fees on both interest bearing and noninterest bearing
deposit accounts and charges for items such as insufficient funds, overdrafts
and stop payment requests. These charges increased 20.46% in 1999 over 1998
levels.

     Mortgage banking activities at Heritage have produced revenues from the
sale of mortgage loans into the secondary market. Income from mortgage loans
sold in the secondary market was a significant contributor to Heritage's core
earnings performance. Heritage does not retain servicing rights to those
mortgage loans which it sells. Mortgage banking fee income of $831, a decrease
of 33.94%, was recognized in 1999 along with interest income of $86. As of
December, 1999, the mortgage banking division of Heritage was sold. Heritage
will continue to offer a variety of residential mortgage products.

     Net gain (loss) on securities result from the sale of securities from the
investment portfolio. For a review of gains and losses related to the investment
portfolio, see Note 3 in the Notes to Consolidated Financial Statements included
under Item 8 of this Form 10-K.

NONINTEREST EXPENSE

     Total noninterest expense increased $1,409 or 11.80%, in 1999 after
increasing $1,180, or 10.97% in 1998. This is reflective of the incremental
increase in salaries and benefits that result from the necessary staffing
increases due to the loan and deposit growth pattern as well as a new branch
facility. In addition, staffing was increased in connection with the
participation of various commercial loans to other banking institutions. Another
component of this increase is the financial impact of the Company's
technological advancements.

     A key indicator of a bank's ability to maintain low overhead while
generating net income is the bank's efficiency ratio. A lower ratio indicates a
bank's ability to maintain a lower cost operation in comparison to the resulting
income produced. The Company's efficiency ratio continues to improve; for the
year-ended December 31, 1999, the Company had a 73% efficiency ratio as compared
to 74% for the prior year's period. The following table analyzes the various
components of noninterest expense for the years ended December 31, 1997 through
1999.


                                                                              19
<PAGE>

                                    TABLE 12
                         NONINTEREST EXPENSE COMPONENTS
<TABLE>
<CAPTION>

                                                              December 31,
                                          ------------------------------------------------------
                                                1999             1998                1997
                                          ----------------- ----------------   -----------------
<S>                                           <C>              <C>                 <C>
Salaries and employee benefits:

  Core bank employees                         $   6,742        $   6,003           $   5,432
  Mortgage lending group                            761              911                 666
                                          ----------------- ----------------   -----------------
     Total                                        7,503            6,914               6,098
                                          ----------------- ----------------   -----------------
Net occupancy expense                               627              647                 680
Equipment expense                                   815              811                 579
Outside fees and services                           873              703                 979
Advertising and business
  development expense                               447              406                 316
Supplies and postage expense                        451              389                 346
Data processing expense                           1,080              659                 271
Regulatory services/fees                            115               95                  98
Other operating expense                           1,438            1,316               1,393
                                          ----------------- ----------------   -----------------
  Total noninterest expense                  $   13,349       $   11,940          $   10,760
                                          ----------------- ----------------   -----------------
                                          ----------------- ----------------   -----------------

</TABLE>

     An increase of $820 was recognized in noninterest expense other than
salaries and employee benefits, from $5,026 at December 31, 1998 to $5,846 at
December 31, 1999. The increase in data processing expense resulted from a full
operating year of a new LAN/WAN network along with the outsourcing of data
processing for Uptown. Management continues to focus on cost containment and
this control of expenses remains a priority as a part of our broader goal of
maximizing long-term profitability.

FORWARD LOOKING STATEMENTS

     Statements made about the Company's future economic performance, strategic
plans or objectives, revenue or earnings projections, or other financial items
and similar statements are not guarantees of future performance, but are forward
looking statements. By their nature, these statements are subject to numerous
uncertainties that could cause actual results to differ materially from those in
the statements. Important factors that might cause the Company's actual results
to differ materially include, but are not limited to, the following:

     -    Federal and state legislative and regulatory developments;
     -    Changes in management's estimate of the adequacy of the allowance for
          loan losses (and/or other significant estimates such as OREO, deferred
          tax valuation allowance, etc.);
     -    Changes in the level and direction of loan delinquencies and
          write-offs;
     -    Interest rate movements and their impact on customer behavior and
          Upbancorp's net interest margin;
     -    The impact of repricing and competitors' pricing initiatives on loan
          and deposit products;
     -    Upbancorp's ability to adapt successfully to technological changes to
          meet customers' needs and developments in the marketplace;
     -    Upbancorp's ability to access cost effective funding;
     -    Economic conditions;
     -    Year 2000 related complications and
     -    Recently enacted financial modernization legislation.


20

<PAGE>

YEAR 2000 COMPLIANCE

     We have tested our products and believe that they are year 2000 compliant.
We have also inquired of significant vendors of our internal systems as to their
year 2000 readiness and have tested our material internal systems. We believe
that, based on these tests and assurances of our vendors, we will not incur
material costs to resolve year 2000 issues for our products and internal
systems. Furthermore, to date we have not experienced any year 2000 problems and
our customers or vendors have not informed us of any material year 2000
problems. If it comes to our attention that there are any year 2000 problems
with our products or that some of our third-party hardware and software used in
our internal systems are not year 2000 compliant, then we will endeavor to make
modifications to our products and internal systems, or purchase new internal
systems, to quickly respond to the problem. The costs already incurred by us to
date related to year 2000 compliance are not material, and we do not anticipate
incurring additional material costs related to year 2000 compliance.

        ITEM 7A: QUANTITATIVE AND QUALITATIVE DISCLOSURES ON MARKET RISK

     While Table 3, illustrated on page 13 is a useful tool for management to
assess the general positioning of the Company's balance sheet, management uses
an additional measurement tool to evaluate its asset/liability sensitivity which
determines exposure to changes in interest rates by measuring the change in net
interest income as a percentage of Capital, due to changes in rates over a
one-year time horizon.

     Management measures such change assuming an immediate and sustained
parallel shift in rates of 50, 100 and 200 basis points, both upward and
downward. The model uses scheduled amortization, call date or final maturity as
appropriate on all non-rate sensitive assets. The model uses repricing frequency
on all variable rate assets and liabilities, it also uses a 5-year decay
analysis on all non-rate sensitive deposits. Prepayment rates on fixed rate
loans have been adjusted up or down by 10% per year to incorporate historical
experience in both an up-rate and down-rate environment. Utilizing this
measurement concept, the interest rate risk of the Company, expressed as change
in net interest income as a percentage of capital over a 1-year time horizon due
to changes in interest rates, at December 31, 1999 and 1998, was as follows:

<TABLE>
<CAPTION>

                                                        Basis Point Change
                            -------------------------------------------------------------------------------
                              +200         +100         +50          -50           -100           -200
                            ----------   ---------   ----------    ---------    -----------    ------------
<S>                            <C>         <C>          <C>          <C>           <C>            <C>
At December 31, 1999           -0.96%      -0.49%       -0.36%        0.35%         0.43%         -0.21%
At December 31, 1998            0.81%       0.40%        0.19%       -0.19%        -0.26%         -1.53%

</TABLE>


                                                                              21

<PAGE>

               ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

UPBANCORP, INC.
CONSOLIDATED STATEMENTS OF CONDITION
DECEMBER 31, (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                     1999            1998
-------------------------------------------------------------------------------------------
<S>                                                                <C>             <C>
ASSETS
  Cash and due from banks                                          $ 11,526        $  9,165
  Federal funds sold                                                  4,730          10,000
  Securities available for sale                                      48,426          42,179
  Securities held to maturity
  (Fair value of $200 in 1998)                                          --              200
  Mortgages held-for-sale                                             1,264           4,067
  Loans, net of allowance for loan losses of
    $3,114 and $2,499 in 1999 and 1998                              246,605         192,596
  Premises and equipment, net                                         6,002           6,349
  Accrued interest and other assets                                   6,224           4,906
                                                                  ---------       ---------
    TOTAL ASSETS                                                   $324,777        $269,462
                                                                  ---------       ---------
                                                                  ---------       ---------
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
  Demand deposits                                                  $ 53,213        $ 47,062
  Savings, NOW and money market deposits                            119,309         104,067
  Other time deposits                                                97,633          74,905
                                                                  ----------       ---------
    Total deposits                                                  270,155         226,034
  Borrowed funds                                                     28,634          18,097
  Accrued interest and other liabilities                              3,464           2,693
                                                                  ----------       ---------
    Total Liabilities                                               302,253         246,824
                                                                  ----------       ---------
SHAREHOLDERS' EQUITY
  Common stock, $1 par value: 3,000,000 shares authorized;
    1,000,000 issued in 1999 and 1998                                 1,000           1,000
  Additional paid in capital                                          4,500           4,500
  Retained earnings                                                  20,954          18,823
  Treasury stock - 162,692 shares in 1999 and  130,004 in 1998       (3,020)         (1,938)
  Accumulated other comprehensive income (loss)                        (910)            253
                                                                  ----------       ---------
    TOTAL SHAREHOLDERS' EQUITY                                       22,524          22,638
                                                                  ----------       ---------
    TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                     $324,777        $269,462
                                                                  ----------       ---------
                                                                  ----------       ---------

</TABLE>

   THE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ARE AN INTEGRAL
                           PART OF THESE STATEMENTS.


22

<PAGE>

UPBANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                              1999             1998        1997
-------------------------------------------------------------------------------------------------
<S>                                                         <C>              <C>         <C>
INTEREST INCOME
Interest and fees on loans                                  $ 20,572         $16,730     $13,852
Interest on mortgages held-for-sale                               86             118          83
Interest on federal funds sold                                   209             437         401
Interest on investments:

  Taxable                                                      2,309           2,540       3,263
  Non-taxable                                                    354             215         123
                                                            ---------       ---------   ---------
Total interest income                                         23,530          20,040      17,722
                                                            ---------       ---------   ---------
INTEREST EXPENSE
Interest on savings, NOW, and money market deposits            3,020           2,670       2,577
Interest on other time deposits                                4,438           3,630       3,158
Interest on borrowed funds                                     1,089             809         380
                                                            ---------       ---------   ---------
Total interest expense                                         8,547           7,109       6,115
                                                            ---------       ---------   ---------
NET INTEREST INCOME                                           14,983          12,931      11,607
PROVISION FOR LOAN LOSSES                                        885             580         410
                                                            ---------       ---------   ---------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES           14,098          12,351      11,197
                                                            ---------       ---------   ---------
NONINTEREST INCOME
Service charges on deposit accounts                            1,784           1,481       1,215
Mortgage banking fees                                            831           1,258         907
Other noninterest income                                         510             317         475
Net gains from sale of loans                                      87             126         177
Net gain (loss) on securities                                      1             (28)       (107)
                                                            ---------       ---------   ---------
Total noninterest income                                       3,213           3,154       2,667
                                                            ---------       ---------   ---------
NONINTEREST EXPENSE
Salaries and employee benefits                                 7,503           6,914       6,098
Net occupancy expense                                            627             647         680
Equipment expense                                                815             811         579
Outside fees and services                                        873             703         979
Advertising and business development expenses                    447             406         316
Supplies and postage expense                                     451             389         346
Data processing expense                                        1,080             659         271
Regulatory services/fees                                         115              95          98
Other operating expense                                        1,438           1,316       1,393
                                                            ---------       ---------   ---------
Total noninterest expense                                     13,349          11,940      10,760
                                                            ---------       ---------   ---------
INCOME BEFORE INCOME TAXES                                     3,962           3,565       3,104
Income taxes                                                   1,385           1,265       1,127
                                                            ---------       ---------   ---------
NET INCOME                                                  $  2,577        $  2,300    $  1,977
                                                            ---------       ---------   ---------
                                                            ---------       ---------   ---------
Basic earnings per share                                       $3.00           $2.63       $2.24
                                                            ---------       ---------   ---------
                                                            ---------       ---------   ---------
Weighted average shares outstanding                          859,710         875,907     882,800
                                                            ---------       ---------   ---------
                                                            ---------       ---------   ---------

</TABLE>

THE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ARE AN INTEGRAL PART
                              OF THESE STATEMENTS.


                                                                              23

<PAGE>

UPBANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOW
YEARS ENDED DECEMBER 31, (DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                  1999           1998           1997
------------------------------------------------------------------------------------------------------
<S>                                                          <C>             <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net Income                                                 $    2,577      $   2,300      $   1,977
  Adjustments to reconcile net income to net cash
   provided by operating activities:
    Provision for loan losses                                       885            580            410
    Depreciation and amortization                                 1,282          1,107            965
    Net gain (loss) on securities                                    (1)            28            107
    Net gains on sale of mortgage loans                             (87)          (126)          (177)
    Net gains on sale of other real estate owned                      -            (52)             -
    Change in deferred income taxes                                (541)          (179)           171
    Accretion on investment securities, net                        (258)          (118)          (342)
    Originations of mortgages held-for-sale                     (48,941)       (77,169)       (38,262)
    Proceeds from sales of mortgages held-for-sale               51,831         75,374         37,294
    Changes in assets and liabilities:
      Increase in accrued interest and other assets                (120)          (289)           (17)
      Increase in accrued interest and other liabilities            771            485            532
                                                             ----------      ----------      ---------
Net cash provided by operating activities                         7,398          1,941          2,658
                                                             ----------      ----------      ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Net (increase) decrease in federal funds sold                   5,270         (9,500)         9,050
  Purchases of available-for-sale securities                    (40,670)       (23,853)       (23,803)
  Proceeds from maturities and redemptions
    of available-for-sale securities                             10,479         15,330         27,319
  Proceeds from sale of available-for-sale securities            22,297         14,239         16,150
  Purchases of held-to-maturity securities                            -              -           (200)
  Proceeds from maturities and
    redemptions of held-to-maturity securities                      200              -              -
  Net increase in loans                                         (54,894)       (28,934)       (35,068)
  Purchases of premises and equipment                              (849)        (1,728)        (1,097)
  Purchase of airplane financing division                             -           (460)             -
  Proceeds from sale of other real estate                             -            386              -
                                                             ----------      ----------      ---------
Net cash used in investing activities                           (58,167)       (34,520)        (7,649)
                                                             ----------      ----------      ---------
Cash Flows from Financing Activities:
  Net increase in total deposits                                 44,121         27,902          2,830
  Net increase (decrease) in borrowed funds                      10,537          8,060           (524)
  Cash dividends paid                                              (446)          (438)          (441)
  Purchase of treasury stock                                     (1,082)          (458)             -
                                                             ----------      ----------      ---------
Net cash provided by financing activities                        53,130         35,066          1,865
                                                             ----------      ----------      ---------
Net increase (decrease) in cash and due from banks                2,361          2,487         (3,126)
Cash and due from banks at beginning of period                    9,165          6,678          9,804
                                                             ----------      ----------      ---------
Cash and due from banks at end of period                     $   11,526      $   9,165       $  6,678
                                                             ----------      ----------      ---------
                                                             ----------      ----------      ---------
Supplemental disclosure of cash flow information:
  Cash payments:        Interest                             $    8,172      $   7,017       $  5,936
                        Income taxes                              1,901          1,642            826

</TABLE>


THE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ARE AN INTEGRAL PART
                              OF THESE STATEMENTS.


24

<PAGE>

UPBANCORP, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
                                                                                                     Accumulated
                                                            Additional                                 Other
                                                Common       Paid In     Retained    Treasury       Comprehensive
                                                 Stock       Capital     Earnings     Stock         Income (loss)    Total
                                                ------      ---------    --------    --------       -------------    -----

<S>                                            <C>          <C>          <C>         <C>            <C>            <C>
BALANCE, DECEMBER 31, 1996 ...............     $ 1,000      $ 4,500      $15,425     $(1,480)       $  (589)       $18,856
                                               -------      -------      -------     -------        -------        -------
Comprehensive Income (loss):
  Net income .............................                                 1,977                                     1,977
  Net unrealized gain (loss) on securities
  available-for-sale, net of tax of $388 .                                                              608            608
                                                                                                                   -------
    Comprehensive Income (loss) ..........                                                                           2,585
                                                                                                                   -------
  Cash dividends: $.50 per share .........                                  (441)                                     (441)
                                               -------      -------      -------     -------        -------        -------
BALANCE, DECEMBER 31, 1997 ...............     $ 1,000      $ 4,500      $16,961     $(1,480)       $    19        $21,000
                                               -------      -------      -------     -------        -------        -------
Comprehensive Income (loss):
  Net income .............................                                 2,300                                     2,300
  Net unrealized gain (loss) on securities
  available-for-sale, net of tax of $149 .                                                              234            234
                                                                                                                   -------
    Comprehensive Income (loss) ..........                                                                           2,534
                                                                                                                   -------
  Cash dividends: $.50 per share .........                                  (438)                                     (438)
  Purchase of treasury stock .............                                              (458)                         (458)
                                               -------      -------      -------     -------        -------        -------
BALANCE, DECEMBER 31, 1998 ...............     $ 1,000      $ 4,500      $18,823     $(1,938)       $   253        $22,638
                                               -------      -------      -------     -------        -------        -------
Comprehensive Income (loss):
  Net income .............................                                 2,577                                     2,577
  Net unrealized gain (loss) on securities
  available-for-sale, net of tax of ($743)                                                           (1,163)        (1,163)
                                                                                                                   -------
    Comprehensive Income (loss) ..........                                                                           1,414
                                                                                                                   -------
  Cash dividends: $.52 per share .........                                  (446)                                     (446)
  Purchase of treasury stock .............                                            (1,082)                       (1,082)
                                               -------      -------      -------     -------        -------        -------
BALANCE, DECEMBER 31, 1999 ...............     $ 1,000      $ 4,500      $20,954     $(3,020)       $  (910)       $22,524
                                               -------      -------      -------     -------        -------        -------
                                               -------      -------      -------     -------        -------        -------

</TABLE>

THE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ARE AN INTEGRAL PART
                              OF THESE STATEMENTS.
UPBANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF BUSINESS:

     Upbancorp, Inc. ("Upbancorp" or the "Company"), is a multi-bank holding
company, organized in 1983 under the laws of the State of Delaware. The Company
owns all of the outstanding common stock of Uptown National Bank of Chicago
("Uptown"), organized in 1929 and located in Chicago, Illinois, and Heritage
Bank ("Heritage"), organized in 1977 and located in Phoenix, Arizona. Upbancorp
does not engage in any activities other than providing administrative services
and acting as a holding company for its Subsidiary Banks.

     The Company's affiliates consist of two full-service community banks, which
operate six banking offices and one loan production offices in northern Chicago
and metropolitan Phoenix. Both Subsidiary Banks are engaged in the general
commercial banking business in addition to offering a complete range of retail
banking services. The Subsidiary Banks conduct general banking business which
embraces all of


                                                                              25
<PAGE>

the usual functions, both commercial and consumer, and which they may
lawfully provide, including, but not limited to: the acceptance of deposits to
demand, savings, and time accounts and the servicing of such accounts;
commercial, industrial, consumer and real estate lending; collections; safe
deposit box operations; and other banking services tailored for both commercial
and retail clients.

     Uptown's wholly-owned subsidiary, Broadway Clark Building Corporation
("BCBC"), is an Illinois corporation and owns all of the real estate that is
used in connection with the operation of Uptown's business with the exception of
three facilities, which are leased.

     In February, 2000, Uptown applied to the Office of the Comptroller of the
Currency ("OCC") to merge Heritage with and into and under the charter of
Uptown. Following the consummation of the merger, the offices of Heritage will
operate as branches of Uptown. Heritage will retain its name in the Phoenix
area.

PRINCIPLES OF CONSOLIDATION:

     The consolidated financial statements include the accounts of Upbancorp and
its wholly-owned subsidiaries Uptown (including its wholly-owned subsidiary
BCBC) and Heritage after elimination of all intercompany balances and
transactions.

BASIS OF FINANCIAL STATEMENT PRESENTATION:

     The accounting and reporting policies of the Company conform to generally
accepted accounting principles. In preparing the accompanying consolidated
financial statements, management is required to make estimates and assumptions
that affect the reported amounts in the consolidated financial statements and
the accompanying notes. Significant estimates which are particularly susceptible
to change in a short period of time include the determination of the allowance
for loan losses. Actual results could differ from those estimates.

     Based on the Company's approach to decision making, it has decided that its
business is comprised of a single segment and that Statement of Financial
Accounting Standards No. 131 therefore has no impact on its consolidated
financial statements.

SECURITIES:

     Securities classified as held-to-maturity are those debt securities for
which the Subsidiary Banks have both the positive intent and ability to hold to
maturity and are reported at amortized cost. Amortization of premiums and
accretion of discounts, computed by the interest method over their contractual
lives, is included in interest income.

     Securities classified as available-for-sale are those debt securities that
the Subsidiary Banks intend to hold for an indefinite period of time, but not
necessarily to maturity. Any decision to sell a security classified as
available-for-sale would be based on various factors, including significant
movements in interest rates, changes in the maturity mix of the Subsidiary
Bank's assets and liabilities, liquidity needs, regulatory capital
considerations, and other similar factors.

     Securities available-for-sale are reported at fair value with unrealized
gains or losses reported as a separate component of other comprehensive income
net of the related deferred tax effect. The amortization of premiums and
accretion of discounts, computed by the interest method over their contractual
lives, are recognized in interest income.

     Realized gains or losses, determined on the basis of the cost of specific
securities sold, are included in earnings.

     Declines in the fair value of individual securities classified as either
held-to-maturity or available-for-sale below their amortized cost that are
determined to be other than temporary, result in write-downs of the individual
securities to their fair value with the resulting write-downs included in
current earnings as realized losses.


26


<PAGE>

MORTGAGES HELD-FOR-SALE:

     The Company routinely sells to investors its originated residential
mortgage loans and retains no servicing rights relating to these mortgages sold.
Mortgage activity includes both mortgages held-for-sale which are held for a
period of 5-10 days, all with pre-purchase agreements, in addition to loans sold
directly into the secondary market. Mortgages held-for-sale are carried at the
lower of cost or market for a period of up to ten days with interest income
recognized for that period. For purposes of this report, mortgages held-for-sale
and mortgage banking fees relate only to these two types of mortgage activities;
not to mortgages which are originated, booked and serviced by the Company. All
sales are made without recourse.

LOANS AND ALLOWANCE FOR LOAN LOSSES:

     Loans that management has the intent and ability to hold for the
foreseeable future or until maturity or pay-off are reported at their
outstanding unpaid principal balances reduced by any charge-offs or specific
valuation accounts and net of unearned discount, deferred loan fees and the
allowance for loan losses.

     Loan origination and commitment fees are deferred and the net amount is
accreted as an adjustment of the loan yield over the contractual life of the
related loans. Commitment fees based upon a percentage of a customer's unused
line of credit and fees related to standby letters of credit are recognized over
the commitment period.

     Interest is accrued daily on the outstanding balances. The accrual of
interest is discontinued on loans past due 90 days or more. For impaired loans,
accrual of interest is discontinued when management believes, after considering
collection efforts and other factors, that the borrower's financial condition is
such that collection of interest is doubtful. Interest income on these loans is
recognized to the extent interest payments are received and the principal is
considered fully collectible.

     A loan is impaired when it is probable the Subsidiary Bank will be unable
to collect all contractual principal and interest payments due in accordance
with the terms of the loan agreement. Impaired loans are measured based on the
present value of expected future cash flows discounted at the loan's effective
interest rate or at the fair value of the collateral if the loan is collateral
dependent. When the measure of the impaired loan is less than the recorded
investment in the loan, the impairment, as well as any subsequent changes, is
recorded through a valuation allowance included in the allowance for loan
losses. The Company considers consumer loans and residential real estate loans
to be smaller homogeneous loans that are not considered as impaired loans. All
other loan types are accounted for as impaired loans when they meet the above
criteria.

     The allowance for loan losses is established through a provision for loan
losses charged to expense. Loans are charged against the allowance for loan
losses when management believes that collectibility of the principal is
unlikely. The allowance is an amount that management believes will be adequate
to absorb estimated losses on existing loans, based on an evaluation of the
collectibility of loans and prior loss experience. This evaluation also takes
into consideration such factors as changes in the nature and volume of the loan
portfolio, overall portfolio quality, review of specific problem loans, and
current economic conditions that may affect the borrower's ability to pay. While
management uses the best information available to make its evaluation, future
adjustments to the allowance may be necessary if there are significant changes
in economic conditions. In addition, various regulatory agencies periodically
review the allowance for loan losses. These agencies may require the Banks to
make additions to the allowance for loan losses based on their judgments of
collectibility after reviewing the information available to them at the time of
their examination.


                                                                              27
<PAGE>


PREMISES AND EQUIPMENT:

     Premises and equipment are stated at cost less accumulated depreciation.
Depreciation is computed principally by the straight-line method over their
estimated useful lives.

INTANGIBLE ASSETS:

     Intangible assets consist of goodwill and other intangible assets which are
being amortized on a straight-line basis over estimated lives of 3 to 15 years.
Intangible assets, net of accumulated amortization, are included in other assets
in the consolidated statements of condition.

INCOME TAXES:

     Deferred income tax assets and liabilities are computed annually for
differences between the financial statement and tax bases of assets and
liabilities that will result in taxable or deductible amounts in the future
based on enacted tax laws and rates applicable to the periods in which the
differences are expected to affect taxable income. Valuation allowances are
established when necessary to reduce deferred tax assets to the amounts expected
to be realized. Income tax expense is the tax payable or refundable for the
period plus or minus the change during the period in deferred tax assets and
liabilities.

EARNINGS PER COMMON SHARE:

     Basic earnings per share is computed by dividing net income for the year by
the average number of shares outstanding during the year. Dilutive earnings per
share do not differ from basic earnings per share.

STOCK SPLIT:

     Effective October 20, 1998, the Company increased its authorized shares of
common stock from 300,000 to 3,000,000 and reduced the par value from $10 to $1.
In addition, the common stock was split on a four-to-one basis. All references
in the accompanying financial statements to number of shares and per share
amounts have been retroactively restated to reflect these changes.

RECLASSIFICATIONS:

     Certain amounts in the 1998 and 1997 consolidated financial statements have
been reclassified to conform with the 1999 presentation. Such reclassifications
have no effect on previously reported net income.

EMERGING ACCOUNTING STANDARDS:

     In June, 1998, the Financial Accounting Standards Board (FASB) issued
Statement No. 133, Accounting for Derivative Instruments and Hedging Activities
(FAS 133). FAS 133 requires companies to record derivatives on the balance sheet
as assets or liabilities at fair value. Depending on the use of the derivative
and whether it qualifies for hedge accounting, gains or losses resulting from
changes in the values of those derivatives would either be recorded as a
component of net income or as a change in stockholder's equity. In June 1999,
the FASB issued FAS 137 which deferred the effective date of FAS 133 to fiscal
years beginning after June 15, 2000. Management does not anticipate that the
adoption of the new Statement will have a significant effect on the Company's
earnings or financial position.

NOTE 2. RESTRICTIONS ON CASH AND DUE FROM BANKS

     The Subsidiary Banks are required to maintain reserve balances in cash or
on deposit with the Federal Reserve Bank, based on a percentage of deposits. The
total of these reserve balances was approximately $2,380 and $2,047 at December
31, 1999 and 1998.


28
<PAGE>


NOTE 3. SECURITIES

     The Company had no HELD-TO-MATURITY securities at December 31, 1999. The
amortized cost and fair value of securities HELD-TO-MATURITY at December 31,
1998 were:

<TABLE>
<CAPTION>
                                                    Gross           Gross
                                  Amortized       Unrealized      Unrealized         Fair
                                     Cost           Gains           Losses          Value
                                --------------- --------------- --------------- ---------------
<S>                                  <C>             <C>             <C>             <C>
U.S. Treasury securities             $200            $--             $--             $200
                                =============== =============== =============== ===============
</TABLE>


The amortized cost and fair value of securities AVAILABLE-FOR-SALE are as
follows at December 31:

<TABLE>
<CAPTION>
                                                                  1999
                                     ---------------------------------------------------------------
                                                          Gross           Gross
                                       Amortized       Unrealized      Unrealized         Fair
                                          Cost            Gains          Losses           Value
                                     ---------------  --------------  --------------  --------------
<S>                                        <C>            <C>            <C>            <C>
U.S. Treasury securities                   $   750        $  --          $     7        $   743
U.S. Government agencies                    30,938           --              678         30,260
States and political
  subdivisions                               7,711             44            495          7,260
Mortgage-backed securities                   5,700           --              212          5,488
Equity securities                            4,818              1            144          4,675
                                           -------        -------        -------        -------
Total securities available-for-sale        $49,917        $    45        $ 1,536        $48,426
                                           =======        =======        =======        =======
</TABLE>

<TABLE>
<CAPTION>
                                                                   1998
                                      ---------------------------------------------------------------
                                                           Gross           Gross
                                        Amortized       Unrealized      Unrealized         Fair
                                           Cost            Gains          Losses           Value
                                      ---------------  --------------  --------------  --------------
<S>                                    <C>            <C>            <C>            <C>
U.S. Treasury securities                   $  --          $  --          $  --          $  --
U.S. Government agencies                    25,494            242           --           25,736
States and political
  subdivisions                               5,757            208             26          5,939
Mortgage-backed securities                   5,736           --              154          5,582
Other securities                             4,778            144           --            4,922
                                           -------        -------        -------        -------
Total securities available-for-sale        $41,765        $   594        $   180        $42,179
                                           =======        =======        =======        =======
</TABLE>


     The amortized cost and fair value of securities AVAILABLE-FOR-SALE at
December 31, 1999, by contractual maturity, are shown below. Expected maturities
in mortgage-backed securities may differ from contractual maturities because the
mortgages underlying the securities may be called or repaid with or without
prepayment penalties. Equity securities have no stated maturity. Therefore,
neither type of these securities is included in the maturity categories in the
following maturity summary.
<TABLE>
<CAPTION>
                                                Amortized          Fair
                                                   Cost            Value
                                             ---------------  --------------
<S>                                          <C>             <C>
Due in one year or less                                $940            $961
Due after one year through five years                32,063          31,422
Due after five years through ten years                1,642           1,586
Due after ten years                                   4,754           4,294
Equity securities                                     4,818           4,675
Mortgage-backed securities                            5,700           5,488
                                             ---------------  --------------
Total                                               $49,917         $48,426
                                             ===============  ==============
</TABLE>


                                                                              29
<PAGE>


     Gross gains realized were $37 in 1999, $15 in 1998 and $19 in 1997. Gross
losses realized were $36 in 1999, $43 in 1998 and $126 in 1997.

     Investment securities carried at approximately $30,682 and $26,515 at
December 31, 1999 and 1998, respectively, were pledged to secure public and
trust deposits and for other purposes as required or permitted by law.

NOTE 4. LOANS

   Major classifications of loans are as follows at December 31:
   <TABLE>
   <CAPTION>
                                                                      1999           1998
                                                                   ---------      ---------
<S>                                                                <C>            <C>
          Commercial - Aircraft related                            $  53,531      $  26,617
          Commercial - Other                                          42,320         33,395
          Secured by real estate - Construction                       35,686         22,365
          Secured by real estate - Residential (1 to 4 family)        30,147         30,971
          Secured by real estate - Residential (5 or more)            27,514         29,900
          Secured by real estate - Non-residential                    55,352         45,640
          Consumer                                                     5,169          6,207
                                                                   ---------      ---------
          Total loans                                                249,719        195,095
          Less: Allowance for loan losses                             (3,114)        (2,499)
                                                                   ---------      ---------
          Total loans, net of allowance for loan losses            $ 246,605      $ 192,596
                                                                   =========      =========
</TABLE>

     Changes in the allowance for loan losses account during the years ended
December 31, 1999, 1998 and 1997 are summarized below:

<TABLE>
<CAPTION>

                                                                December 31,
                                            -----------------------------------------------------
                                                 1999               1998               1997
                                            ---------------    ---------------    ---------------
<S>                                               <C>             <C>             <C>
Balance at beginning of year                      $ 2,499         $ 2,010         $ 1,485
Provision for loan losses                             885             580             410
Loans charged-off                                    (393)           (155)            (28)
Recoveries on loans previously charged-off            123              64             143
                                                  -------         -------         -------
Balance at end of year                            $ 3,114         $ 2,499         $ 2,010
                                                  =======         =======         =======
</TABLE>


     As of December 31, 1999 and 1998, the Company's recorded investment in
impaired loans and the related valuation allowance are as follows:

<TABLE>
<CAPTION>
                                               1999                             1998
                                  ----------------------------    ----------------------------
                                    Carrying       Valuation         Carrying      Valuation
                                      Value        Allowance          Value        Allowance
                                  --------------  ------------    ---------------  -----------
<S>                                    <C>           <C>             <C>               <C>
Impaired loans
   Valuation allowance required        $ --          $--             $ --              $--
No valuation allowance required           849         --              1,234             --
                                       ------        ----            ------            ----
  Total impaired loans                 $  849        $--             $1,234            $--
                                       ======        ====            ======            ====
</TABLE>


     The valuation allowance is included in the allowance for loan losses on the
balance sheet. The average recorded investment in impaired loans for years-ended
December 31, 1999 and 1998, was $795 and $402, respectively. No interest income
was recognized in 1999 and 1998 on impaired loans.


30
<PAGE>


NOTE 5. PREMISES AND EQUIPMENT

     The following is a summary of bank premises and equipment at December 31:
<TABLE>
<CAPTION>
                                           1999               1998
                                      --------------     --------------
<S>                                      <C>              <C>
Land                                     $  1,106         $  1,106
Buildings and improvements                 12,660           12,474
Furniture, fixtures and equipment           7,669            7,318
                                         --------         --------
  Total cost                               21,435           20,898
Accumulated depreciation                  (15,433)         (14,549)
                                         --------         --------
                                         $  6,002         $  6,349
                                         ========         ========
</TABLE>


     Depreciation expense on premises and equipment totaled $1,196, $1,054, and
$923 for 1999, 1998 and 1997, respectively.

     The buildings, in which the main facilities of each bank are located, have
stores and offices which are rented. Total rent received was $1,132, $1,037 and
$974 in 1999, 1998 and 1997, respectively and is recorded as a reduction of net
occupancy expense.

NOTE 6. OTHER TIME DEPOSITS

     The aggregate amount of certificates of deposits of $100 or more totaled
$36,972 and $19,884 at December 31, 1999 and 1998.

     Maturities of other time deposits are summarized as follows at December 31:
<TABLE>
<CAPTION>

                               1999
                          --------------
                    <S>      <C>
                    2000     $85,691
                    2001       5,908
                    2002       3,256
                    2003       2,357
                    2004         421
                             -------
                             $97,633
                             =======
</TABLE>



NOTE 7. BORROWED FUNDS

     At December 31, 1999 and 1998, borrowed funds consisted of :
<TABLE>
<CAPTION>
                                                                                1999          1998
                                                                             ---------    -----------
<S>                                                                           <C>         <C>
Federal Home Loan Bank borrowing, due October 5, 2008, 4.20%, fixed rate      $ 5,000     $ 5,000
Federal Home Loan Bank borrowing, due January 20, 2008, 5.05%, fixed rate       5,000       5,000
Federal Home Loan Bank borrowing, due July 3, 2000, variable rate               4,000       4,000
Federal Home Loan Bank borrowing, due May 1, 2000, 5.93%, fixed rate            5,000        --
Federal Home Loan Bank borrowing, due July 25, 2003, variable rate               --         4,000
Federal funds purchased                                                         9,000        --
Securities sold under agreements to repurchase and
  U.S. Treasury tax and loan note accounts                                        634          97
                                                                              -------     -------
Total                                                                         $28,634     $18,097
                                                                              =======     =======
</TABLE>


                                                                              31
<PAGE>


     Uptown has an arrangement with the Federal Home Loan Bank of Chicago
whereby the FHLB will make advances to the Bank with repayment terms from
overnight to ten years. The Bank is eligible to obtain credit up to 20 times the
member Bank's holding of Federal Home Loan Capital Stock; these eligible
borrowings amount to $19,000.

As required under the agreement, the advances can be collateralized by the
following: qualifying 1-4 family first mortgages, private mortgage-backed
securities or U.S. Treasury and Agency obligations. Uptown has pledged a
combination of U.S. Treasury and Agency mortgage-backed securities.

NOTE 8. PENSION PLAN

     The Company has a defined benefit plan covering substantially all
employees. The plan is based on years of service and the employee's average
compensation during all years of employment. The Company's funding policy is to
meet the minimum funding requirements set forth in the Employee Retirement
Income Security Act of 1974 ("ERISA"), plus additional amounts as appropriate.
In addition, the Company adopted a Supplemental Executive Retirement Plan (the
"SERP") for certain executive officers, effective February 17, 1998.

     The following table provides a reconciliation of the changes in the Plans'
benefit obligations and fair value of assets over the two year period ended
December 31, 1999 and a statement of the Plans' funded status as of December 31
of both years:

<TABLE>
<CAPTION>

                                                    Pension Benefits
                                                1999         1998
--------------------------------------------------------------------------------
<S>                                                <C>         <C>
Reconciliation of benefit obligation:
  Net obligation at beginning of the year          7,231       5,546
  Service cost                                       372         307
  Interest cost                                      493         446
  Plan amendments                                   --           658
  Actuarial (gain) loss                           (1,370)        587
  Gross Benefits paid                               (331)       (313)
                                                  ------      ------
Net obligation at end of the year                  6,395       7,231
                                                  ======      ======
Reconciliation of fair value of plan assets:
  Fair value of plan assets at beginning year      7,924       7,845
  Actual return on plan assets                       690         392
  Gross benefits paid                               (331)       (313)
                                                  ------      ------
Fair value of plan assets at end of the year       8,283       7,924
                                                  ======      ======
Funded status:
  Funded status at end of the year                 1,888         693
  Unrecognized transition (asset) obligation        --          --
  Unrecognized prior service cost                    646         715
  Actuarial gain/(loss)                           (1,389)         13
                                                  ------      ------
Net amount recognized                              1,145       1,421
                                                  ======      ======
</TABLE>


     The net amount recognized is recorded in the financial statements in other
assets.

     As of December 31, 1999, the benefit obligations of the defined benefit
plan and the SERP were $5,709 and $686, respectively, and the fair value of plan
assets of the defined benefit plan and the SERP were $8,283 and $-0-,
respectively.


                                                                              32
<PAGE>


     The following table provides the components of net periodic benefit cost
for the plans fiscal years 1999, 1998 and 1997:
<TABLE>
<CAPTION>

                                                                  Pension Benefits
                                                 -----------------------------------------------------
                                                      1999               1998               1997
                                                 ---------------    ---------------     --------------
<S>                                               <C>               <C>                <C>
Service cost                                            372               307                249
Interest cost                                           493               446                377
Expected return on plan assets                         (660)             (654)              (532)
Amortization of transition obligation (asset)          --                 (53)              (133)
Amortization of prior service cost                       70                70                  6
Actuarial gain(loss)                                   --                  (6)              --
                                                       ----              ----               ----
Net periodic benefit cost                               275               110                (33)
                                                       ====              ====               ====
</TABLE>


     The assumptions used in the measurement of the Company's benefit obligation
are shown in the following table:

<TABLE>
<CAPTION>
                                                                    Pension Benefits
                                                            ---------------------------------
                                                                 1999              1998
                                                            ---------------   ---------------
<S>                                                               <C>               <C>
Weighted average assumptions as of December 31:
Discount rate                                                     8.00%             6.50%
Expected return on plan assets                                    8.50%             8.50%
Rate of compensation increase                                     5.00%             5.00%
</TABLE>



NOTE 9. INCOME TAXES

     The provision for income taxes for the years ended December 31, 1999, 1998
and 1997 is comprised of the following amounts:

<TABLE>
<CAPTION>
                                   1999            1998             1997
                              ---------------  --------------   --------------
<S>                             <C>               <C>               <C>
Current:
   Federal                      $ 1,733           $ 1,289           $   827
   State                            193               155               129
Deferred:                          (541)             (179)              171
                                -------           -------           -------
   Total tax provision          $ 1,385           $ 1,265           $ 1,127
                                =======           =======           =======
</TABLE>


     The components of the net deferred tax assets which are included in other
assets, are as follows:

<TABLE>
<CAPTION>
                                                                  1999          1998
                                                               ------------  -----------
<S>                                                              <C>             <C>
Deferred Tax Assets
  Allowance for loan losses and other real estate owned          $  906          $  570
  Depreciation                                                      695             603
  Interest on non-accrual loans                                      50              26
  Deferred loan fees                                                  4               8
  Securities available-for-sale                                     582            --
                                                                 ------          ------
Gross deferred tax assets                                         2,237           1,207
                                                                 ------          ------
Deferred Tax Liabilities
  Pension expense                                                   524             646
  Discount accretion                                                 29              32
  Securities available-for-sale                                    --               161
  Other                                                              75              43
                                                                 ------          ------
Gross deferred tax liabilities                                      628             882
                                                                 ------          ------
Net deferred tax assets                                          $1,609          $  325
                                                                 ======          ======
</TABLE>


                                                                              33
<PAGE>


     Management has determined that a valuation allowance is not required at
December 31, 1999 and 1998.

     The following table reconciles the statutory Federal income tax rate with
the effective income tax as a percent of pretax income.
<TABLE>
<CAPTION>
                                               1999         1998          1997
                                            -----------  -----------   ---------
<S>                                         <C>           <C>           <C>
Federal income tax as statutory rate          35.0%         35.0%         35.0%
  Tax-exempt interest                         (4.2)%        (3.4)%        (2.4)%
  Graduated tax rate                          (1.0)%        (1.0)%        (1.0)%
  State tax                                    3.2%          2.9%          2.8%
  Other, net                                   2.0%          2.0%          1.9%
                                            -----------   ----------   --------
Effective income tax rate                     35.0%         35.5%         36.3%
                                            ===========   ==========   =========
</TABLE>


NOTE 10.  RELATED PARTIES

     The Subsidiary Banks have entered into transactions with their directors
and their affiliates (related parties). The aggregate amount of loans to such
related parties at December 31, 1999 and 1998 was $3,466 and $2,805,
respectively. These loans were made using the same criteria and at interest
rates and terms that would be comparable to loans granted to a borrower who is
not an executive officer or director. During 1999, new loans and advances to
such related parties amounted to $3,410 and repayments amounted to $2,749.

NOTE 11. COMMITMENTS, CONTINGENCIES AND CREDIT RISK

     The Subsidiary Banks are parties to financial instruments with off-balance
sheet risk in the normal course of business to meet the financing needs of their
customers. These financial instruments include commitments to extend credit and
standby letters of credit. These instruments involve, to varying degrees,
elements of credit risk in excess of the amount recognized in the balance sheet.
The contract amounts of these instruments reflect the extent of involvement a
bank has in particular classes of financial instruments.

     The Subsidiary Banks' exposure to credit loss in the event of
nonperformance by the other party for commitments to extend credit and standby
and commercial letters of credit is presented by the contractual amount of those
instruments. The Subsidiary Banks use the same credit policies in making
commitments and conditional obligations as they do for on-balance sheet
instruments.

     Commitments to extend credit are agreements to lend to a customer as long
as there is no violation of any condition established in the contract.
Commitments generally have fixed expiration dates or other termination clauses
and may require payment of a fee. Since many of the commitments are expected to
expire without being drawn upon, the total commitment amounts do not necessarily
represent future cash requirements. The Subsidiary Banks evaluate each
customer's creditworthiness on a case-by-case basis. The amount of collateral
obtained if deemed necessary by the Subsidiary Banks upon an extension of credit
is based on management's credit evaluation of the customer. Collateral held
varies but may include accounts receivable, marketable securities, inventory,
property, plant, and equipment, and income-producing commercial properties and
residential properties.

     Standby letters of credit are conditional commitments issued by the
Subsidiary Banks to guarantee the performance of a customer to a third party.
Those guarantees are primarily issued to support public and private borrowing
arrangements. The credit risk involved in issuing letters of credit is
essentially the same as that involved in extending loan facilities to customers.
The Subsidiary Banks hold various types of collateral (primarily certificates of
deposit) to support those commitments for which collateral is deemed necessary.
Most of the letters of credit expire within twelve months.


                                                                              34
<PAGE>


<TABLE>
<CAPTION>
                                                         Contract Amount
                                                 -------------------------------
Off - balance sheet financial instruments            1999               1998
                                                 --------------     ------------
<S>                                               <C>                <C>
Commitments to extend credit                          $90,374          $68,792
Letters of credit:
  Standby                                                 253              340
  Commercial                                            2,064            1,149
</TABLE>


     The Company leases certain office facilities under various operating lease
agreements that provide for payment of taxes, insurance and maintenance costs.
These leases generally include renewal options. The future minimum rental
commitments at December 31, 1999 are as follows:

<TABLE>
<CAPTION>
                                      Premises
                                   -------------
<S>                                <C>
2000                                   $  241
2001                                      247
2002                                      251
2003                                      163
2004                                       68
2005 and thereafter                       222
                                   -------------
Total minimum payments                $ 1,192
                                   =============
</TABLE>

     In the ordinary course of business, the Banks have various outstanding
commitments and contingent liabilities that are not reflected in the
accompanying consolidated financial statements. In addition, the Company and its
Subsidiary Banks are defendants in certain claims and legal actions arising in
the ordinary course of business. In the opinion of management, after
consultation with legal counsel, the ultimate disposition of these matters is
not expected to have a material adverse effect on the consolidated financial
condition of the Company.

     In addition to financial instruments with off-balance-sheet risk, the
Company, to a certain extent, is exposed to varying risks associated with
concentrations of credit. Concentrations of credit risk generally exist if a
number of counterparties are engaged in similar economic characteristics that
would cause their ability to meet contractual obligations to be similarly
affected by economic or other conditions.

     The Company conducts substantially all of its lending activities throughout
northeastern Illinois and the greater Phoenix metropolitan area. As of December
31, 1999, loans to customers in Arizona were approximately $61 million. Loans
granted to businesses are primarily secured by business assets, owner-occupied
real estate or personal assets of commercial borrowers. Loans to individuals are
primarily secured by automobiles, residential real estate or other personal
assets. Since the Company's borrowers and its loan collateral have geographic
concentration in the greater Chicago and greater Phoenix metropolitan areas, the
Company could have exposure to a decline in those local economies and real
estate markets. However, management believes that the diversity of its customer
base and local economies, its knowledge of the local markets, and its proximity
to customers limits the risk of exposure to adverse economic conditions.

     As of December 31, 1999, the Company's loan portfolio included $53,531 of
loans secured by aircraft. Credit losses arising from aircraft loans compare
favorably with the Company's credit loss experience on its loan portfolio as a
whole.

NOTE 12. RESTRICTIONS ON RETAINED EARNINGS

     Uptown and Heritage are subject to certain restrictions on the amount of
dividends that they may declare without prior regulatory approval. At December
31, 1999, $2,529 of Uptown earnings were available for dividend declaration
without prior regulatory approval. Under the provisions of the Arizona Bank
Code, dividends may not be declared unless they are made in compliance within
the banking laws of Arizona.


                                                                              35
<PAGE>


NOTE 13. REGULATORY MATTERS

     The Company and the Banks are subject to various regulatory capital
requirements administered by the Federal banking agencies. Failure to meet
minimum capital requirements can cause regulators to initiate certain mandatory
- and possibly additional discretionary - action that, if undertaken could have
a direct material effect on the Company's financial statements. Under capital
adequacy guidelines and the regulatory framework for prompt corrective action,
the Company and the Banks must meet specific capital guidelines that involve
quantitative measures of the Company's and the Banks' assets, liabilities, and
certain off-balance sheet items as calculated under regulatory accounting
practices. The Company's and the Banks' capital amounts and classification are
also subject to qualitative judgments by the regulators about components, risk
weightings, and other factors.

     Quantitative measures established by regulation to ensure capital adequacy
require the Banks to maintain minimum amounts and ratios (set forth in the table
below) of total and Tier 1 capital (as defined in the regulations) to
risk-weighted assets (as defined), and of Tier 1 capital (as defined) to average
assets (as defined). Management believes the Company and the Banks meet all
capital adequacy requirements to which they are subject to at December 31, 1999.

     At December 31, 1999, all entities exceeded regulatory established minimums
as defined for financial institutions. To be categorized as adequately
capitalized, the Banks must maintain minimum total risk-based, Tier 1 risk
based, and Tier 1 leverage ratios as set forth in the table below. As of
year-end, Heritage Bank exceeded regulatory established capital minimums,
however, did not exceed the category for "well" capitalized institutions. As a
result, the Bank may not accept brokered deposits without prior approval from
the regulatory authorities. As a matter of fact, the Bank does not accept
brokered deposits. There are no conditions or events since that notification
that management believes have changed the Banks' category.


36
<PAGE>


     The Company's ratios are presented in the following table:

<TABLE>
<CAPTION>

                                                                                                          To be well
                                                                             For capital              capitalized under
                                                                              adequacy               prompt corrective
                                                       Actual                  purposes              action provisions
                                           --------------------------- ------------------------  ---------------------------
As of December 31, 1999:                        Amount         Ratio      Amount        Ratio      Amount        Ratio
------------------------
<S>                                            <C>             <C>       <C>             <C>      <C>         <C>
Total Capital (to risk-weighted assets)
  Consolidated                                 $25,905         10.0%     $20,789         8.0%     $  --         --
  Uptown National Bank                          19,894         10.1%      15,738         8.0%      19,672         10.0%
  Heritage Bank                                  5,994          9.3%       5,140         8.0%       6,425         10.0%

Tier 1 Capital (to risk-weighted assets)
  Consolidated                                  22,792          8.8%      10,394         4.0%        --         --
  Uptown National Bank                          17,645          9.0%       7,869         4.0%      11,803          6.0%
  Heritage Bank                                  5,190          8.1%       2,570         4.0%       3,855          6.0%

Leverage (Tier 1 to average assets)
  Consolidated                                  22,792          7.1%      12,798         4.0%        --         --
  Uptown National Bank                          17,645          7.0%      10,088         4.0%      12,610          5.0%
  Heritage Bank                                  5,190          7.2%       2,899         4.0%       3,624          5.0%

As of December 31, 1998:
------------------------
Total Capital (to risk-weighted assets)
  Consolidated                                 $24,244         11.9%     $16,302         8.0%     $ --          --
  Uptown National Bank                          17,171         11.8%      11,611         8.0%      14,513         10.0%
  Heritage Bank                                  5,255          8.9%       4,721         8.0%       5,901         10.0%

Tier 1 Capital (to risk-weighted assets)
  Consolidated                                  21,745         10.6%       8,151         4.0%        --         --
  Uptown National Bank                          15,356         10.6%       5,806         4.0%       8,708          6.0%
  Heritage Bank                                  4,654          7.9%       2,361         4.0%       3,541          6.0%


Leverage (Tier 1 to average assets)
  Consolidated                                  21,745          8.2%      10,594         4.0%        --         --
  Uptown National Bank                          15,356          7.6%       8,109         4.0%      10,136          5.0%
  Heritage Bank                                  4,654          7.3%       2,536         4.0%       3,170          5.0%
</TABLE>


NOTE 14. FINANCIAL INSTRUMENTS

     FAIR VALUE OF FINANCIAL INSTRUMENTS:

     The following methods and assumptions were used by the Company in
estimating its fair value of its financial instruments:

     CASH AND DUE FROM BANKS AND FEDERAL FUNDS SOLD: The carrying amounts
     reported in the balance sheet for cash and due from banks and federal funds
     sold approximate their fair values.

     SECURITIES HELD-TO-MATURITY AND AVAILABLE-FOR-SALE: Fair values of
     securities are based on quoted market prices, where available. If quoted
     market prices are not available, fair values are based on quoted market
     prices of comparable instruments.

     LOANS AND MORTGAGES HELD-FOR-SALE: The fair values of the loan portfolio
     are estimated based upon discounted cash flow analyses that apply using
     interest rates currently being offered for loans with similar terms to
     borrowers with similar credit quality.


                                                                              37
<PAGE>


     DEPOSIT LIABILITIES: The fair values disclosed for deposits with no defined
     maturities is equal to their carrying amounts which represent the amount
     payable on demand. The carrying amounts for variable-rate, fixed-term money
     market accounts and certificates of deposit approximate their fair value at
     the reporting date. Fair values for fixed rate certificates of deposit are
     estimated using a discounted cash flow calculation that applies interest
     rates currently being offered on certificates to a schedule of aggregated
     expected monthly maturities on time deposits.

     BORROWED FUNDS: The carrying amounts of borrowings under repurchase
     agreements and other short-term borrowings approximate their fair values.

     ACCRUED INTEREST: The carrying amounts of accrued interest approximate
     their fair values.

     OFF-BALANCE SHEET INSTRUMENTS: Fair values for the Company's off-balance
     sheet lending commitments (letters of credit and commitments to extend
     credit) are based on fees currently charged to enter into similar
     agreements, taking into account the remaining terms of the agreements and
     the counterparties' credit standing. The fair value for such commitments is
     nominal.

     The estimated fair values of the Company's financial instruments were as
     follows at December 31,
<TABLE>
<CAPTION>
                                                             1999                               1998
                                               ---------------------------------  ----------------------------------
                                                  Carrying         Estimated         Carrying          Estimated
                                                   Amount         Fair Value          Amount          Fair Value
                                               ---------------  ----------------  ---------------   ----------------
<S>                                               <C>              <C>                  <C>              <C>
FINANCIAL ASSETS
  Cash and due from banks                         $11,526          $11,526              $9,165           $9,165
  Federal fund sold                                 4,730            4,730              10,000           10,000
  Securities available-for-sale                    48,426           48,426              42,179           42,179
  Securities held-to-maturity                        --               --                   200              200
  Loans, net of unearned discount and
    mortgages held-for-sale                       250,983          251,358             198,562          205,482
  Accrued interest receivable                       1,876            1,876               1,632            1,632

FINANCIAL LIABILITIES
  Deposits                                       $270,155         $271,483            $226,034         $229,750
  Borrowed funds                                   28,634           28,634              18,097           18,097
  Accrued interest payable                          1,237            1,237                 862              862
</TABLE>


38
<PAGE>


NOTE 15. UPBANCORP, INC. - PARENT ONLY
FINANCIAL STATEMENTS

The Parent Company's condensed financial information, which follows, conforms
with the accounting policies described in the preceding notes:

                             STATEMENTS OF CONDITION

<TABLE>
<CAPTION>
December 31, (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)             1999                 1998
---------------------------------------------------------------------------------------------------------
<S>                                                                       <C>                  <C>
ASSETS
Cash                                                                      $    129              $  1,739
Investment in subsidiary banks                                              22,567                20,903
Other                                                                          235                   206
                                                                 ------------------  --------------------
TOTAL ASSETS                                                              $ 22,931              $ 22,848
                                                                 ==================  ====================
LIABILITIES
Dividend declared                                                         $    109              $    109
Other liabilities                                                              298                   101
                                                                 ------------------  --------------------
TOTAL LIABILITIES                                                         $    407              $    210
                                                                 ------------------  --------------------

SHAREHOLDERS' EQUITY
Common stock - $1 par value                                               $  1,000              $  1,000
Additional paid in capital                                                   4,500                 4,500
Retained earnings                                                           20,954                18,823
Treasury stock                                                              (3,020)               (1,938)
Accumulated other comprehensive income (loss)                                 (910)                  253
                                                                 ------------------  --------------------
TOTAL SHAREHOLDERS' EQUITY                                                $ 22,524              $ 22,638
                                                                 ------------------  --------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                $ 22,931              $ 22,848
                                                                 ==================  ====================
</TABLE>


                              STATEMENTS OF INCOME

<TABLE>
<CAPTION>
Years ended December 31, (DOLLARS IN THOUSANDS)                  1999            1998          1997
--------------------------------------------------------------------------------------------------------
<S>                                                                <C>            <C>           <C>
INCOME
Dividends received from
  bank subsidiaries                                                $   135        $  2,151      $ 1,736
Interest on short term investments                                      44              18           25
                                                             -------------- --------------- ------------
Total Income                                                           179           2,169        1,761
                                                             -------------- --------------- ------------
EXPENSE
Salaries and employee benefits                                         519             365          435
Other expense                                                          145             187          132
                                                             -------------- --------------- ------------
Total Expense                                                          664             552          567
                                                             -------------- --------------- ------------
INCOME (LOSS) BEFORE INCOME TAXES AND
 UNDISTRIBUTED INCOME OF SUBSIDIARIES                                 (485)          1,617        1,194
Income tax benefit                                                     235             205          140
                                                             -------------- --------------- ------------
INCOME (LOSS) BEFORE UNDISTRIBUTED INCOME
  OF SUBSIDIARIES                                                     (250)          1,822        1,334
Undistributed income of subsidiaries                                 2,827             478          643
                                                             -------------- --------------- ------------
NET INCOME                                                         $ 2,577         $ 2,300      $ 1,977
                                                             ============== =============== ============
</TABLE>


                                                                              39
<PAGE>


NOTE 15. UPBANCORP, INC. - PARENT ONLY
FINANCIAL STATEMENTS

(Continued)

                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
Years ended December 31, (DOLLARS IN THOUSANDS)                  1999            1998          1997
--------------------------------------------------------------------------------------------------------
<S>                                                                    <C>            <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income                                                           $  2,577       $ 2,300       $ 1,977
  Adjustments to reconcile net income to
    net cash provided by (used in) operating activities:
      Equity in undistributed income of subsidiaries                     (2,827)         (478)         (643)
      Accretion on U.S. Treasury Bills                                        -             -           (10)
      Other, net                                                            168           (49)           88
                                                                  -------------- ------------- -------------
Net cash provided by (used in) operating activities                        (82)         1,773         1,412
                                                                  -------------- ------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES
  Capital infusion to subsidiary                                              -             -          (500)
  Purchases of U.S. Treasury Bills                                            -             -          (738)
  Maturities of U.S. Treasury Bills                                           -             -           748
                                                                  -------------- ------------- -------------
Net cash provided by (used in) investing activities                           -             -          (490)
                                                                  -------------- ------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES

  Cash dividends paid                                                      (446)         (438)         (441)
  Treasury stock purchased                                               (1,082)         (458)            -
                                                                  -------------- ------------- -------------
Net cash used in financing activities                                    (1,528)         (896)         (441)
                                                                  -------------- ------------- -------------
Net increase (decrease) in cash                                          (1,610)          877           481
Cash at beginning of year                                                 1,739           862           381
                                                                  -------------- ------------- -------------
Cash at end of year                                                     $   129       $ 1,739        $  862
                                                                  ============== ============= =============

</TABLE>



40
<PAGE>


REPORT OF MANAGEMENT ON RESPONSIBILITY FOR FINANCIAL REPORTING
UPBANCORP, INC. AND SUBSIDIARIES

To the Shareholders of Upbancorp, Inc.:

         The accompanying consolidated financial statements were prepared by
Management, who is responsible for the integrity and objectivity of the data
presented. In the opinion of Management, the financial statements, which
necessarily include amounts based on Management's best estimates and judgments,
have been prepared in conformity with generally accepted accounting principles
appropriate to the circumstances.

         Management depends upon the Company's system of internal controls in
meeting its responsibilities for reliable financial statements. This system is
designed to provide reasonable assurance that assets are safeguarded and that
transactions are properly recorded and executed in accordance with Management's
authorization. Judgments are required to assess and balance the relative cost
and the expected benefits of these controls. As an integral part of the system
of internal controls, the Bank Subsidiaries contract with a professional staff
of Independent Internal Auditors who conduct operational, financial, and special
audits, and coordinate audit coverage with the Independent Auditors.

         The consolidated financial statements have been audited by our
Independent Auditors, McGladrey & Pullen LLP, who render an independent
professional opinion on Management's financial statements.

         The Audit Committee of Upbancorp, Inc.'s Board of Directors, composed
solely of outside directors, meets regularly with the Independent Internal
Auditors, the Independent Auditors and Management to assess the scope of the
annual examination plan and to discuss audit, internal control and financial
reporting issues, including major changes in accounting policies and reporting
practices. The Independent Internal Auditors and the Independent Auditors have
free access to the Audit Committee, without Management present, to discuss the
results of their audit work and their evaluations of the adequacy of internal
controls and the quality of financial reporting.

Sincerely,

/s/ Richard K. Ostrom

Richard K. Ostrom
Chairman of the Board
President and Chief Executive Officer


 /s/ Kathleen L. Harris

Kathleen L. Harris
Senior Vice President & Chief Financial Officer


                                                                              41
<PAGE>


REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Shareholders and Board of Directors of Upbancorp, Inc.:

         We have audited the accompanying consolidated statements of condition
of Upbancorp, Inc. and subsidiaries as of December 31, 1999 and 1998 and the
related consolidated statements of income, cash flows and changes in
shareholders' equity for each of the three years in the period ended December
31, 1999. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

         We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

         In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Upbancorp, Inc. and
subsidiaries as of December 31, 1999 and 1998 and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1999 in conformity with generally accepted accounting principles.


                                                    /s/ McGladrey & Pullen LLP

                                                  McGladrey & Pullen LLP

Schaumburg, Illinois
March 10, 2000



42
<PAGE>




ITEM 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURES

         None.

                                    PART III

         ITEM 10: DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         Information regarding the Directors and Executive Officers of the
Company, their family relationships and their business experience is contained
in the "Information about Directors and Nominees" and "Executive Officers"
sections of the Proxy Statement for the 2000 Annual Meeting of Shareholders of
the Company to be held on April 18, 2000, which is incorporated herein by
reference.

                   ITEM 11: EXECUTIVE COMPENSATION

         Information regarding compensation of the Executive Officers of the
Company is contained in the "Executive Compensation" section of the Proxy
Statement for the 2000 Annual Meeting of Shareholders of the Company to be held
on April 18, 2000, which is incorporated herein by reference.

       ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         Information regarding security ownership of certain beneficial owners
and management is contained in the "Security Ownership of Certain Beneficial
Owners and Management" section of the Proxy Statement for the 2000 Annual
Meeting of Shareholders of the Company to be held on April 18, 2000, which is
incorporated herein by reference.

              ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Information regarding certain relationships and related transactions of
the Company is contained in the "Certain Relationships and Related Transactions"
section of the Proxy Statement for the 2000 Annual Meeting of Shareholders of
the Company to be held on April 18, 2000, which is incorporated herein by
reference. Further information with respect to loans to the Directors and
Executive Officers of the Company is prov7ided in Note 10 in the Notes to
Consolidated Financial Statements included under Item 8 of this Form 10-K.



                                                                             43
<PAGE>


                                     PART IV

      ITEM 14: EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)      The following exhibits, financial statements and financial statement
         schedules are filed as part of this report:

                              FINANCIAL STATEMENTS

         Consolidated Statements of Condition - December 31, 1999 and 1998

         Consolidated Statements of Income - Years ended December 31, 1999, 1998
         and 1997

         Consolidated Statements of Cash Flows - Years ended December 31, 1999,
         1998 and 1997

         Consolidated Statements of Changes in Shareholders' Equity - Years
         ended December 31, 1999, 1998 and 1997

         Notes to Consolidated Financial Statements

         Report of Independent Public Accountants

                          FINANCIAL STATEMENT SCHEDULES

         All schedules normally required by Form 10-K are omitted since they are
         either not applicable or the required information is shown in the
         financial statements or notes thereto.

                                    EXHIBITS

(3)      Amended Certificate of Incorporation and by-laws (filed as an Exhibit
         to the Registrant's 1998 Form 10K and incorporated herein by
         reference).

(10.1)   Employment Agreement between Upbancorp, Inc. and Richard K. Ostrom is
         attached hereto as Exhibit A.

         Employment Agreement between Heritage Bank, Upbancorp, Inc. and
         John E. Fahrendorf, Jr. (filed as an Exhibit to the Registrant's 1998
         Form 10-K and incorporated herein by reference).

         Employment Agreement between Uptown National Bank of Chicago,
         Upbancorp, Inc. and Robert P. Griffiths (filed as an Exhibit to the
         Registrant's 1998 Form 10-K and incorporated herein by reference).

(10.2)   Indemnity Agreement between Upbancorp, Inc. and its Directors and
         Officers (filed as an Exhibit to the Registrant's 1992 Form 10-K and
         incorporated herein by reference).

(22)     Subsidiaries of the Registrant (see Item 1 which contains this
         information).

(28)     Proxy Statement for the 2000 Annual Meeting is attached hereto as
         Exhibit B.



(b)      REPORTS ON FORM 8-K - No reports on Form 8-K were filed during the
         fourth quarter of 1999.


44
<PAGE>

                                   SIGNATURES

         PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) 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.

Date: March 10, 2000                                    UPBANCORP, INC.
                                                        ------------------------
                                                        (The Registrant)

                                                        /s/ Richard K. Ostrom
                                                        ------------------------
                                                        Richard K. Ostrom
                                                        Chairman of the Board,
                                                        President and Chief
                                                        Executive Officer

         PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934,
THIS REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE
REGISTRANT AND IN THEIR CAPACITIES ON MARCH 10, 2000.

<TABLE>
<S>                                                    <C>                             <C>
                /s/ Richard K. Ostrom                  Chairman of the Board           March 10, 2000
------------------------------------------------------
                  Richard K. Ostrom

             /s/ Stephen W. Edwards, CLU               Director                        March 10, 2000
------------------------------------------------------
               Stephen W. Edwards, CLU

                /s/ Delbert R. Ellis                   Director                        March 10, 2000
------------------------------------------------------
                  Delbert R. Ellis

             /s/ John E. Fahrendorf, Jr.               Director                        March 10, 2000
------------------------------------------------------
               John E. Fahrendorf, Jr.

               /s/ Robert P. Griffiths                 Director                        March 10, 2000
------------------------------------------------------
                 Robert P. Griffiths

            /s/ Alfred E. Hackbarth, Jr.               Director                        March 10, 2000
------------------------------------------------------
              Alfred E. Hackbarth, Jr.

                 /s/ James E. Heraty                   Director                        March 10, 2000
------------------------------------------------------
                   James E. Heraty

                /s/ Marvin L. Kocian                   Director                        March 10, 2000
------------------------------------------------------
                  Marvin L. Kocian
</TABLE>



                                                                              45