<PAGE>   1

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K


[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
     ACT OF 1934

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999

                                     0-23235
                             COMMISSION FILE NUMBER

                            SUCCESS BANCSHARES, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

            DELAWARE                                           36-3497644
  (State or other jurisdiction                              (I.R.S. Employer
of incorporation or organization)                          Identification No.)

                     100 TRI STATE INTERNATIONAL - SUITE 300
                                  P.O. BOX 1499
                        LINCOLNSHIRE, ILLINOIS 60069-1499
                    (Address of principal executive offices)

                                 (847) 279-9000
               Registrant's telephone number, including area code:

                         COMMON STOCK, $0.001 PAR VALUE
           Securities registered pursuant to Section 12(g) of the Act

Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.  [X] Yes  [ ] No.

Indicate by check mark if 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. [ ]

The aggregate market value of the registrant's voting stock held by
non-affiliates of the registrant was approximately $28.5 million as of March 3,
2000. As of March 3, 2000, the registrant had outstanding 2,664,606 shares of
Common Stock.

                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant's Annual Report to Shareholders for the year ended
December 31, 1999, are incorporated by reference into Part II hereof and
portions of the Proxy Statement for the registrant's Annual Meeting of
Shareholders to be held on May 24, 2000, are incorporated by reference into Part
III hereof.


<PAGE>   2


                                TABLE OF CONTENTS



<TABLE>
<CAPTION>
                                                      PART I

<S>        <C>                                                                                               <C>
ITEM 1.    Business.......................................................................................   1 - 15
ITEM 2.    Properties.....................................................................................       16
ITEM 3.    Legal Proceedings..............................................................................       16
ITEM 4.    Submission of Matters to Vote of Security Holders..............................................       16



                                                      PART II

ITEM 5.    Market for Registrant's Common Equity and Related Stockholder Matters..........................       17
ITEM 6.    Selected Financial Data........................................................................       17
ITEM 7.    Management's Discussion and Analysis of Financial Condition and Results of Operations..........       17
ITEM 7A.   Quantitative and Qualitative Disclosures About Market Risk.....................................       17
ITEM 8.    Financial Statements and Supplementary Data....................................................       17
ITEM 9.    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure...........       17



                                                      PART III

ITEM 10.   Directors and Executive Officers of the Registrant.............................................       18
ITEM 11.   Executive Compensation.........................................................................       18
ITEM 12.   Security Ownership of Certain Beneficial Owners and Management.................................       18
ITEM 13.   Certain Relationships and Related Transactions.................................................       18



                                                      PART IV

ITEM 14.   Exhibits, Financial Statement Schedules and Reports on Form 8-K................................  19 - 22
           Signatures ....................................................................................       23
</TABLE>



<PAGE>   3


PART I



ITEM 1.       BUSINESS


OVERVIEW

Success Bancshares, Inc., a Delaware corporation incorporated in 1984 (the
"Company"), is a bank holding company headquartered in Lincolnshire, Illinois
with total assets of over $497 million at December 31, 1999. The Company's
common stock is quoted on the NASDAQ National Market System under the symbol
"SXNB." Through its wholly-owned subsidiary, Success National Bank which was
founded in 1973 (the "Bank"), the Company engages in full service community
banking. The Bank is also headquartered in Lincolnshire, Illinois, located
approximately 35 miles north of downtown Chicago, and, in addition to its
headquarters, has nine additional branch offices. These banking facilities are
located in Deerfield, Libertyville (2), Lincolnwood (2), Lincolnshire,
Chicago-Lincoln Park, Skokie and Northbrook. Effective December 24, 1999, the
Company closed its Chicago Loop branch. In addition, the Company has entered
into a contract to sell its Arlington Heights branch property on February 22,
2000. This sale transaction, which includes the branch building and equipment,
will generate a gain estimated at $75 thousand. Both the Loop and Arlington
Heights branches, which were open for 21 months and 31 months, respectively,
were unable to secure sufficient business to warrant their continued operation.
The lease on the Company's Deerfield/Riverwoods branch, which space was used
primarily for loan origination and processing, was not renewed in October 1999.
Employees from the Deerfield/Riverwoods branch were moved to the newly leased
corporate center. The Company's corporate center is currently staffed with
approximately 115 employees.

The Company provides community banking services to individuals, small-to-medium-
sized businesses, local governmental units and institutional clients primarily
in the northern Chicagoland area. These services include traditional checking,
NOW, money market, savings and time deposit accounts, as well as a number of
innovative deposit products targeted to specific market segments. The Bank
offers home equity, home mortgage, commercial real estate, commercial and
consumer loans, safe deposit facilities and other innovative and traditional
services specially tailored to meet the needs of customers in its target
markets. The Company's goal is to continue to offer innovative, attractive
financial products to businesses and individuals in its target markets. The Bank
maintains its own home page on the World Wide Web (http://www.successbank.com)
and enables consumers to access information regarding branch locations, deposit
and loan rates and economic forecasts. The Bank's principal business activities
are competitive with other financial services providers offering a wide array of
financial products and services. The competitors include other banks, savings
and loan associations, credit unions, brokerage firms, finance companies,
insurance companies, mutual funds and mortgage bankers. Competition is generally
in the form of interest rates and points charged on loans, interest rates paid
on deposits, service charges, banking hours and other service-related products.

The following discussion should be read in conjunction with the Company's
Consolidated Financial Statements, including the accompanying notes, which
appear in the Company's 1999 Annual Report, filed as an exhibit to this Form
10-K.


STATISTICAL INFORMATION

Interest Earning Assets and Interest Bearing Liabilities

The following table sets forth the average daily balances, net interest income
and expense and average yields and rates for the Company's interest earning
assets and interest bearing liabilities for the indicated years on a
tax-equivalent basis assuming a 34% tax rate.



                                                                               1

<PAGE>   4


<TABLE>
<CAPTION>
                                                                               YEAR ENDED DECEMBER 31,
                                                   --------------------------------------------------------------------------------
                                                              1999                       1998                       1997
                                                   -------------------------- --------------------------  -------------------------
                                                   AVERAGE            YIELD/  AVERAGE            YIELD/   AVERAGE           YIELD/
                                                   BALANCE   INTEREST  RATE   BALANCE   INTEREST  RATE    BALANCE  INTEREST  RATE
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                                <C>       <C>       <C>    <C>       <C>       <C>    <C>       <C>       <C>
ASSETS

Loans (1) & (2) .................................  $382,812  $ 32,033  8.37%  $331,878  $ 28,970  8.73%  $239,084  $ 21,755  9.10%
Taxable investment securities ...................    26,090     1,548  5.93     40,130     2,317  5.77     38,801     2,318  5.97
Investment securities exempt from
   Federal income taxes (1) .....................    12,773       923  7.23     12,798       939  7.34      8,214       613  7.46
Interest bearing deposits with financial
   institutions..................................     3,687       181  4.91      5,349       283  5.29      4,032       215  5.33
Other interest earning assets ...................     6,694       343  5.12      5,398       301  5.58      3,576       208  5.82
-----------------------------------------------------------------------------------------------------------------------------------
Total interest earning assets ...................   432,056  $ 35,028  8.11%   395,553  $ 32,810  8.29%   293,707  $ 25,109  8.55%
Non-interest earning assets .....................    33,737                     31,685                     25,335
-----------------------------------------------------------------------------------------------------------------------------------
    Total assets ................................  $465,793                   $427,238                   $319,042
===================================================================================================================================

LIABILITIES & SHAREHOLDERS' EQUITY

Deposits:
   NOW & money market accounts ..................  $166,065  $  6,593  3.97%  $131,681  $  5,976  4.54%  $ 88,652  $  3,114  3.51%
   Savings deposits .............................    22,769       459  2.02     21,104       667  3.16     19,946       640  3.21
   Time deposits ................................   145,115     7,677  5.29    163,139     8,622  5.29    127,236     7,436  5.84
Notes payable ...................................         -         -  -             -         -  -         4,249       363  8.54
Other borrowings ................................    40,704     2,693  6.62     28,873     1,919  6.65     20,978     1,308  6.24
-----------------------------------------------------------------------------------------------------------------------------------
Total interest bearing liabilities ..............   374,653    17,422  4.65    344,797    17,184  4.98    261,061    12,861  4.93
Demand deposits - non-interest bearing ..........    56,354                     48,044                     40,868
Other non-interest bearing liabilities ..........     3,011                      2,674                      2,560
Minority interest in subsidiary bank ............         -                          -                        544
Shareholders' equity.............................    31,775                     31,723                     14,009
-----------------------------------------------------------------------------------------------------------------------------------
    Total liabilities & shareholder's equity.....   465,793                   $427,238                   $319,042
===================================================================================================================================

Net interest income..............................            $ 17,606                   $ 15,626                   $ 12,248
===================================================================================================================================

Net interest margin..............................                      4.07%                      3.95%                      4.17%
===================================================================================================================================
</TABLE>

----------------------

(1)  Tax-exempt income as reflected on a fully tax equivalent basis utilizing a
     34% rate for all years presented.
(2)  Non-accrual loans are included in average loans.

The increase in average interest earning assets of $36.5 million to $432.1
million for the year ended December 31, 1999, is primarily attributable to the
Company's loan growth. The average balance of loans during 1999 was $382.8
million, compared with $331.9 million for 1998, an increase of $50.9 million or
15.3%. Average taxable investment securities decreased $14.0 million or 35.0%
during 1999 to $26.1 million as compared to $40.1 million for 1998.

The increase in the loan portfolio during this period was due to increased loan
demand primarily in commercial and commercial real estate loans. At December 31,
1999 commercial loans increased $26.6 million to $129.2 million, or 26.0%, from
December 31, 1998. For 1999, commercial real estate loans increased $34.7
million, or 36.0%, to $131.1 million as compared to $96.4 million at year end
1998.

The Company's loan growth was funded primarily with non-interest bearing
deposits and borrowings. Non-interest bearing deposits at December 31, 1999
increased $7.0 million to $60.6 million, or 13.1%, from December 31, 1998.
Borrowings at December 31, 1999, including a $15.0 million trust preferred
securities issuance in May 1998, increased $32.6 million to $69.1 million, or
89.3%, over December 31, 1998.

Rate/Volume Analysis

The following table sets forth the affects of changing rates and volumes on net
interest income of the Company. Information is provided with respect to (i)
effects on interest income attributable to changes in volume (changes in volume
multiplied by prior rate) and (ii) effects on interest income attributable to
changes in rate (changes in rate multiplied by prior volume). Changes in
rate/volume (change in rate multiplied by change in volume) have been allocated
to the rate and volume categories in proportion to the relationship of the
absolute dollar amounts of the change in each.




                                                                               2

<PAGE>   5


<TABLE>
<CAPTION>
                                                                                  YEAR ENDED DECEMBER 31,
                                                              -------------------------------------------------------------
                                                                     1999 OVER 1998                   1998 OVER 1997
                                                              -----------------------------    ----------------------------
                                                               CHANGE DUE TO        TOTAL       CHANGE DUE TO       TOTAL
                                                              VOLUME      RATE      CHANGE     VOLUME      RATE     CHANGE
---------------------------------------------------------------------------------------------------------------------------
                                                                                (dollars in thousands)
<S>                                                           <C>        <C>        <C>        <C>       <C>        <C>
INTEREST EARNING ASSETS:

Loans (1) ................................................... $ 4,301    $(1,238)   $ 3,063    $ 8,133   $  (918)   $ 7,215
Taxable investment securities ...............................    (831)        62       (769)        78       (79)        (1)
Investment securities exempt from Federal income taxes (1)...      (2)       (14)       (16)       337       (11)       326
Interest bearing deposits with financial institutions .......     (83)       (19)      (102)        70        (2)        68
Federal funds sold (Other interest earning assets) ..........      68        (26)        42        102        (9)        93
---------------------------------------------------------------------------------------------------------------------------
    Total increase (decrease) in interest income ............ $ 3,453     (1,235)     2,218      8,720    (1,019)     7,701
---------------------------------------------------------------------------------------------------------------------------

INTEREST BEARING LIABILITIES:

NOW & money market accounts ................................. $ 1,428    $  (811)       617    $ 1,787   $ 1,075      2,862
Savings deposits ............................................      49       (257)      (208)        37       (10)        27
Time deposits ...............................................    (954)         9       (945)     1,948      (762)     1,186
Notes payable ...............................................                                     (181)     (182)      (363)
Other borrowings ............................................     783         (9)       774        520        91        611
---------------------------------------------------------------------------------------------------------------------------
    Total increase (decrease) in interest expense ...........   1,306     (1,068)       238      4,111       212      4,323
---------------------------------------------------------------------------------------------------------------------------
    Increase (decrease) in net interest income .............. $ 2,147    $  (167)   $ 1,980    $ 4,609   $(1,231)   $ 3,378
===========================================================================================================================
</TABLE>

---------------------------------------
(1)  Tax-exempt income is reflected on a fully tax equivalent basis utilizing a
     34% rate for all periods presented.

Securities

The following table sets forth certain information with respect to the Company's
securities portfolio.


<TABLE>
<CAPTION>
                                                                         DECEMBER 31,
                                                   ----------------------------------------------------------
                                                          1999               1998                1997
                                                   ------------------  ------------------  ------------------
                                                   AMORTIZED   FAIR    AMORTIZED   FAIR    AMORTIZED   FAIR
                                                      COST     VALUE      COST     VALUE      COST     VALUE
-------------------------------------------------------------------------------------------------------------
                                                                     (dollars in thousands)
<S>                                                 <C>       <C>       <C>       <C>       <C>       <C>
SECURITIES AVAILABLE-FOR-SALE:
   U.S. Treasury .................................. $ 4,989   $ 4,940   $ 5,201   $ 5,215   $ 3,775   $ 3,792
   U.S. government sponsored entities .............   6,926     6,831     4,251     4,276     3,346     3,301
   States and political subdivisions;
     Taxable ......................................   1,668     1,690     1,732     1,881         -         -
     Exempt from Federal income taxes .............  11,138    10,989    12,995    13,191     4,437     4,442
   Mortgage-backed securities .....................   7,197     7,072    10,691    10,788     7,019     7,054
   SBA guaranteed loan participation certificates..     850       829     2,304     2,290     3,221     3,238
   Other securities ...............................   3,767     3,978     3,141     3,396       182       263
-------------------------------------------------------------------------------------------------------------
       Total ...................................... $36,535   $36,329   $40,315   $41,037   $21,980   $22,090
=============================================================================================================


SECURITIES HELD-TO-MATURITY:
   U.S. Treasury .................................. $         $         $     -   $     -   $   246   $   248
   U.S. government sponsored entities .............                           -         -    14,754    14,962
   States and political subdivisions
     Taxable ......................................                           -         -     1,791     1,899
     Exempt from Federal income taxes .............                           -         -     6,506     6,702
   Mortgage-backed securities .....................                           -         -     5,148     5,409
   Other securities ...............................                           -         -     3,219     3,219
-------------------------------------------------------------------------------------------------------------
       Total ...................................... $         $         $     -   $     -   $31,664   $32,439
=============================================================================================================
</TABLE>

Securities of a Single Issuer

There were no securities of any single issuer, other than the U.S. Treasury or
U.S. government sponsored entities, which had a book value in excess of ten
percent of shareholders' equity at December 31, 1999. Securities, Maturities and
Yields



                                                                               3

<PAGE>   6


The following table sets forth maturities and the weighted average yields of the
securities at December 31, 1999.

<TABLE>
<CAPTION>
                                                                             MATURITY
                                    --------------------------------------------------------------------------------------------
                                      DUE IN ONE YEAR        DUE AFTER ONE YEAR    DUE AFTER FIVE YEARS
                                          OR LESS            THROUGH FIVE YEARS      THROUGH TEN YEARS       DUE AFTER TEN YEARS
                                    --------------------------------------------------------------------------------------------
                                              Weighted                Weighted                Weighted                 Weighted
                                               Average                 Average                 Average                  Average
                                     Balance    Yield        Balance    Yield        Balance    Yield        Balance     Yield
--------------------------------------------------------------------------------------------------------------------------------
                                                                     (dollars in thousands)
<S>                                  <C>         <C>         <C>         <C>         <C>         <C>         <C>         <C>
AVAILABLE-FOR-SALE:
U.S. Treasury....................... $ 2,970     5.19        $ 1,970     5.07        $     -                 $     -
U.S. government sponsored entities..     496     5.19          6,106     6.03            229     6.08          2,559     6.07
State and political subdivisions (1)     691     4.58          5,084     4.86          4,244     5.08            536     6.32
Mortgage-backed securities..........     414     6.48          4,341     6.47          1,780     6.37                    6.37
SBA guaranteed loan
   participation certificates (2)...      54     7.11             88     7.04            110     7.04            577     7.01
Other securities....................      50     9.00            400     8.24                                  3,528     5.73
--------------------------------------------------------------------------------------------------------------------------------
                                     $ 4,675     5.28        $17,989     5.76        $ 6,364     5.51        $ 7,301     6.00
================================================================================================================================
</TABLE>

-------------------------
(1)  The yield is reflected on a fully tax equivalent basis utilizing a 34% tax
     rate.
(2)  These securities are presented based on contractual maturities.

Loan Portfolio

The loan portfolio is the largest category of the Company's interest earning
assets. At December 31, 1999 the ratio of total loans to total assets was 86.3%
as compared to a ratio of 79.7% at December 31, 1998.

The following table sets forth the historical composition of the loan portfolio.

<TABLE>
<CAPTION>
                                                                         December 31,
                              ----------------------------------------------------------------------------------------------------
                                     1999                1998                 1997                1996                1995
                              ------------------- ------------------- -------------------- -------------------  ------------------
                                       Percent of          Percent of           Percent of          Percent of          Percent of
                               Amount   Portfolio  Amount   Portfolio  Amount    Portfolio  Amount   Portfolio   Amount  Portfolio
----------------------------------------------------------------------------------------------------------------------------------
                                                                    (dollars in thousands)
<S>                           <C>        <C>      <C>        <C>      <C>         <C>      <C>        <C>       <C>       <C>
Commercial................... $129,233    30.13%  $102,592    27.34%  $ 87,506     30.21%  $ 58,912    28.68%   $ 45,217   26.14%
Real estate - construction...   19,422     4.53%    15,517     4.14     13,409      4.63     12,282     5.98      12,821    7.41
Real estate - mortgages......  197,587    46.06%   168,833    45.00    106,120     36.64     84,920    41.34      68,227   39.44
Home equity..................   74,936    17.47%    78,384    20.89     72,944     25.18     43,193    21.03      37,820   21.86
Installment..................    7,385     1.72%     9,433     2.51      9,253      3.19      5,615     2.73       8,655    5.00
Credit cards.................      373     0.09%       456     0.12        432      0.15        503     0.24         261    0.15
----------------------------------------------------------------------------------------------------------------------------------
     Total gross loans.......  428,936   100.00%   375,215   100.00%   289,664    100.00%   205,425   100.00%    173,001  100.00%
                                         =======             =======              =======             =======             =======

Unearned discount............        -                   -                   -                   (2)                  (3)
Net deferred loan fees.......      205                 135                (187)                (261)                (223)
Unaccreted discount from
   loss on transfer of loans
   from held-for-sale to
   portfolio.................     (204)               (263)               (373)                (438)                (451)
----------------------------------------------------------------------------------------------------------------------------------
Loans, net of unearned
   discount and net deferred
   loan fees.................  428,937             375,087             289,104              204,724              172,324
Allowance for loan losses....   (4,269)             (3,824)             (2,079)              (1,425)              (1,189)
----------------------------------------------------------------------------------------------------------------------------------
   Net loans................. $424,668            $371,263            $287,025             $203,299             $171,135
==================================================================================================================================
</TABLE>

Commercial Loans: Commercial loans are written with either adjustable interest
rates to match variable rate funding sources or fixed interest rates. At
December 31,1999, the adjustable rate commercial loans represented approximately
68.2% of total commercial loans. Total commercial loans increased $26.6 million
to $129.2 million at December 31, 1999, as the Company continued to actively
pursue commercial loan relationships. Commercial loans represented 30.1% of the
total loan portfolio at December 31, 1999, as compared to 27.3% of the total
loan portfolio at December 31, 1998.

Real Estate Mortgage Loans: Real estate mortgage loans, which consist of
residential and commercial loans secured by real estate, totaled $197.6 million
at December 31, 1999, compared to $168.8 million at December 31, 1998. This
increase is primarily associated with growth during 1999 of $34.7 million or
36.0% in commercial mortgage loans to $131.1 million at December 31, 1999 as
compared to December 31, 1998. Residential real estate loans decreased $6.0
million, or 8.2%, to $66.5 million as compared to December 31, 1998.


                                                                               4

<PAGE>   7


Home Equity Loans: Home equity loans decreased $3.4 million, or 4.4%, from
December 31, 1998 and were $74.9 million at December 31, 1999. At December 31,
1999, home equity loans accounted for 17.5% of the total loan portfolio,
compared to 20.9% of the total loan portfolio at December 31, 1998. The majority
of the Company's home equity loans feature a fixed rate for three years,
adjusting to prime thereafter.

The Bank has no concentrations of loans to borrowers engaged in the same or
similar industries that exceed 10% of total loans. The Company attempts to
direct its lending activities to the target markets from which its deposits are
drawn.

Loan Maturities

The following table sets forth the maturities of commercial and real estate
construction loans outstanding at December 31, 1999. Also set forth are the
amounts of such loans due after one year, classified according to sensitivity to
changes in interest rates.

<TABLE>
<CAPTION>
                                                                           MATURITY
                                               -----------------------------------------------------------------
                                                DUE IN ONE      DUE AFTER ONE YEAR
                                               YEAR OR LESS     THROUGH FIVE YEARS        DUE AFTER FIVE YEARS       TOTAL
                                               ------------  ------------------------  -------------------------   ----------
                                                                    (dollars in thousands)
                                                                           FLOATING                    FLOATING
                                                                FIXED        RATE         FIXED          RATE
                                                             -----------  -----------  -----------    ----------
<S>                                            <C>           <C>          <C>          <C>            <C>          <C>
Commercial and real estate construction loans..  $ 108,828    $  14,298    $  14,310    $   8,057     $   3,162    $ 148,655
                                               ============  ===========  ===========  ===========    ==========   ==========
</TABLE>

Non-performing Loans

Non-performing loans include: (1) loans accounted for on a non-accrual basis;
(2) accruing loans contractually past due ninety days or more as to interest or
principal payments; and (3) loans whose terms have been renegotiated to provide
a reduction or deferral of interest or principal because of a deterioration in
the financial position of the borrower.

The Bank has a reporting and control system to monitor non-performing loans. The
following table provides certain information on the Bank's non-performing loans
at the dates indicated.

<TABLE>
<CAPTION>
                                                                                    DECEMBER 31,
                                                     ------------------------------------------------------------------------
                                                          1999           1998           1997           1996            1995
                                                     ------------------------------------------------------------------------
                                                                              (dollars in thousands)
<S>                                                      <C>            <C>            <C>           <C>              <C>
Nonaccrual loans ...................................     $1,486         $  268         $1,479        $      -         $   13
Restructured loans .................................          -              -              -               -              -
Loans 90 days or more past due, still accruing .....        222             81            341             118            626
-----------------------------------------------------------------------------------------------------------------------------
     Total non-performing loans ....................     $1,708         $  349         $1,820        $    118         $  639
-----------------------------------------------------------------------------------------------------------------------------
Non-performing loans to loans, net of unearned
   discount and net deferred loan fees .............       0.40%          0.09%          0.63%           0.06%          0.37%

Non-performing loans to allowance for loan losses...      40.01%          9.13%         87.54%           8.28%         53.74%
</TABLE>

Management is aggressively pursuing collection efforts with respect to
non-performing loans.

Loans with principal or interest payments contractually due but not yet paid are
reviewed by senior management on a weekly basis and are placed on nonaccrual
status when scheduled payments remain unpaid for 90 days or more, unless, in the
judgement of management, the loan is both well-secured and in the process of
collection. Interest accrued and unpaid at the time a loan is placed on
nonaccrual status is charged against interest income. Subsequent payments are
either applied to the outstanding principal balance or recorded as interest
income, depending on the assessment of the ultimate collectibility of the loan.
Restructured loans include troubled debt restructuring (which involved forgiving
a portion of interest or principal on any loans or making loans at a rate
materially less than the market rate). The Company had no restructured loans at
December 31, 1999.



                                                                               5

<PAGE>   8

Potential Problem Loans

In addition to those loans disclosed under "Non-performing Loans," there are
certain loans in the portfolio which management has identified, through its
problem loan identification system which exhibit a higher than normal credit
risk. Management's review of the total loan portfolio to identify loans where
there is concern that the borrower will not be able to continue to satisfy
present loan repayment terms includes factors such as review of individual
loans, recent loss experience and current economic conditions. Loans in this
category include those with characteristics such as those that have recent
adverse operating cash flow or balance sheet trends, or have general risk
characteristics that the loan officer believes might jeopardize the future
timely collection of principal and interest payments. The principal amount of
loans in this category as of December 31, 1999 and December 31, 1998 were
approximately $2.3 million and $812 thousand, respectively. The loans classified
as potential problem loans at December 31, 1998 were either repaid or upgraded
during 1999. At year-end 1999, loans in the amounts of $1.1 million and $895
thousand comprised a majority of the $2.3 million classified as potential
problem loans. Early in the year 2000, a $304 thousand prepayment was received
on the larger loan. At December 31, 1999, there were no significant loans which
were classified by any bank regulatory agency that are not included above as
non-performing or as a potential problem loan.

Other Real Estate Owned

The Bank had one property totaling $50 thousand in other real estate owned at
December 31, 1999. At December 31, 1998 other real estate owned was comprised of
two commercial strip centers with combined balances of $435 thousand.

Allowance for Loan Losses

The allowance for loan losses is maintained at a level considered adequate to
provide for potential future losses in the Company's loan portfolio. The level
of the allowance is based upon management's periodic and comprehensive
evaluation of the loan portfolio, as well as current and projected economic
conditions. Reports of examination furnished by Federal banking authorities are
also considered by management in this regard. These evaluations by management in
assessing the adequacy of the allowance include consideration of past loan loss
experience, changes in the composition of the loan portfolio, the volume and
condition of loans outstanding and current market and economic conditions.

Loans are charged to the allowance for loan losses when deemed uncollectible by
management, unless sufficient collateral exists to repay the loan.

Set forth in the following table is an analysis of the allowance for loan
losses.

<TABLE>
<CAPTION>
                                                                   YEAR ENDED DECEMBER 31,
                                             --------------------------------------------------------------------
                                               1999           1998           1997           1996           1995
                                             --------------------------------------------------------------------
                                                                   (dollars in thousands)
<S>                                           <C>            <C>            <C>            <C>            <C>
Allowance at beginning of period .........    $3,824         $2,079         $1,425         $1,189         $1,000
Charge-offs:
   Commercial ............................       768            185             71             49              -
   Real estate - construction ............         -              -              -              -              -
   Real estate - mortgage ................        50              -              -              -              -
   Home equity ...........................         -              -              -              -              -
   Installment ...........................        18             13             23             20              4
   Credit cards ..........................         6              9             55              9             15
-----------------------------------------------------------------------------------------------------------------
Total charge-offs ........................       842            207            149             78             19
-----------------------------------------------------------------------------------------------------------------


Recoveries:
   Commercial ............................       106              2             22              -              -
   Real estate - construction ............         -              -              -              -              -
   Real estate - mortgage ................         -              -              -              -              -
   Home equity ...........................         -              -              -              -              -
   Installment ...........................         -              5             15              3              -
   Credit cards ..........................         1              2              -              1              1
-----------------------------------------------------------------------------------------------------------------
Total recoveries .........................       107              9             37              4              1
-----------------------------------------------------------------------------------------------------------------
Net charge-offs ..........................       735            198            112             74             18
Provision for loan losses ................     1,180          1,943            766            310            207
-----------------------------------------------------------------------------------------------------------------
Allowance at end of period ...............    $4,269         $3,824         $2,079         $1,425         $1,189
=================================================================================================================
Allowance to loans, net of unearned
   discount and net deferred loan fees ...      1.00%          1.02%          0.72%          0.70%          0.70%
Net charge-offs to average net loans .....      0.19%          0.06%          0.05%          0.04%          0.01%
</TABLE>



                                                                               6

<PAGE>   9


The loan loss provision of $1.2 million in 1999 reflects a decrease of $763
thousand from the 1998 provision. In 1998, management determined that the
appropriate level for the allowance for loan losses was approximately $3.8
million necessitating a material provision for loan losses of $1.9 million
during the year.

The following table presents management's allocation of the allowance for loan
losses.

<TABLE>
<CAPTION>
                                                                       DECEMBER 31,
                             ---------------------------------------------------------------------------------------------------
                                   1999                 1998               1997                1996                 1995
                             ------------------  ------------------ -------------------  ------------------  -------------------
                                     PERCENT OF          PERCENT OF          PERCENT OF          PERCENT OF           PERCENT OF
                                      LOANS OF            LOANS OF            LOANS OF            LOANS OF             LOANS OF
                                        EACH                EACH                EACH                EACH                 EACH
                                      CATEGORY            CATEGORY            CATEGORY            CATEGORY             CATEGORY
                                      TO TOTAL            TO TOTAL            TO TOTAL            TO TOTAL             TO TOTAL
                              AMOUNT    LOANS     AMOUNT    LOANS    AMOUNT     LOANS     AMOUNT    LOANS     AMOUNT     LOANS
--------------------------------------------------------------------------------------------------------------------------------
                                                                  (dollars in thousands)
<S>                          <C>       <C>       <C>       <C>      <C>        <C>       <C>       <C>       <C>        <C>
Commercial...................$ 2,288    30.13%   $ 1,242    27.34%  $   829     30.21%   $   597    28.68%   $   596     26.14%
Real estate - construction...      -     4.53%         -     4.14         -      4.63          -     5.98          -      7.41
Real estate - mortgage.......     99    46.06%        64    45.00       118     36.64         59    41.34         37     39.44
Installment..................     61     1.72%        91     2.51        56      3.19         34     2.73         36      5.00
Home equity..................    732    17.47%       635    20.89       387     25.18        224    21.03        190     21.86
Credit cards.................      -     0.09%        10     0.12         5      0.15         12     0.24          7      0.15
Unallocated..................  1,089               1,782        -       684         -        499        -        323         -
--------------------------------------------------------------------------------------------------------------------------------
     Total...................$ 4,269   100.00%   $ 3,824   100.00%  $ 2,079    100.00%   $ 1,425   100.00%   $ 1,189    100.00%
================================================================================================================================
</TABLE>

Control of the Company's loan quality is continually monitored by management and
is reviewed by the Board of Directors and loan committee of the Bank on a
monthly basis, subject to the oversight by the Company's Board of Directors
through its members who serve on the loan committee. Independent external review
of the loan portfolio is provided by the examinations conducted by regulatory
authorities and an independent loan review. The amount of additions to the
allowance for loan losses, which are charged to earnings through the provision
for loan losses, are determined based on a variety of factors, including actual
charge-offs during the year, historical loss experience, delinquent loans, and
an evaluation of current and prospective economic conditions in the Company's
market area. Although management believes the allowance for loan losses is
adequate to cover any potential losses, there can be no assurance that the
allowance will prove sufficient to cover actual loan losses in the future.

Deposits

Average total deposits were $390.3 million for the year ended December 31, 1999,
an increase of $26.3 million or 7.2% from 1998. The increase in deposits
occurred primarily as a result of improved marketing initiatives and rate
promotions.

The following table sets forth the maturities of certificates of time deposit of
$100,000 or more and other time deposits of $100 thousand or more at December
31, 1999.

                                                          DECEMBER 31, 1999
                                                       ----------------------
                                                       (dollars in thousands)
      Maturing within three months..................       $    11,653
      After three but within six months.............            11,242
      After six but within twelve months............            15,795
      After twelve months...........................             5,811
                                                       ----------------------
           Total....................................       $    44,501
                                                       ======================



                                                                               7

<PAGE>   10

Securities Sold Under Agreements to Repurchase

Securities sold under agreements to repurchase are overnight repurchase
agreements with customers of the Bank and consist of primarily U.S. government
sponsored entity obligations.

The securities underlying the agreements are book-entry securities. During the
period, the securities were delivered by appropriate entry into a third-party
custodian's account designated by the Bank under a written custodial agreement
that explicitly recognizes the customer's interest in the securities. At
December 31, 1999, no material amount of agreements to repurchase securities
sold were outstanding with any individual customer. Securities sold under
agreements to repurchase averaged $5.4 million during both 1999 and 1998,
respectively, and the maximum amounts outstanding at any month-end during 1999
and 1998 were $7.1 million and $6.4 million, respectively. The weighted average
rate paid during 1999 and 1998 was 3.78% and 4.15%, respectively, and the
weighted average rate at the end of 1999 and 1998 was 4.43% and 3.92%.


YEAR 2000 ISSUES

The year 2000 was the first century date change ever for an automated society.
For years, information systems were designed using a two-digit date field. This
practice has created an environment in which older generation software programs
may not be able to discern the difference between the year 2000 and the year
1900. This problem could result in the failure of computers and/or information
systems. Due to its reliance on both computers and information systems, in early
1998, the Company began the process of identifying and assessing the degree to
which its hardware and software would be impacted by the date change. As a
result of the efforts described below, the Company experienced no year 2000
related problems.

A committee, comprised of representatives from all major operating areas, was
created to assess whether or not the Company's internal and external systems,
particularly those that are mission-critical, are year 2000 compliant. The
committee developed and adopted an action plan that addressed the Company's year
2000 renovation, testing, contingency planning and management review process. In
addition the Company developed a due diligence process to monitor and evaluate
the efforts of external third party suppliers to achieve year 2000 readiness.
The committee developed and implemented a written testing plan for both internal
and external mission-critical systems and finalized substantially all testing of
internal mission-critical systems by December 31, 1998. A business resumption
contingency plan that defines scenarios for mission-critical systems failing to
achieve year 2000 readiness and evaluates the Company's options was completed by
the committee during 1999.

The Company was committed to year 2000 compliance and, as such, undertook steps
to educate its customers in identifying potential year 2000 problems. A year
2000 risk assessment of borrowers with loans in excess of $100 thousand was
completed. The Company was satisfied that these borrowers represented a low year
2000 risk.

It is estimated that the Company spent approximately $140 thousand in total in
preparation for year 2000 compliance.




COMPETITION

The Company competes in the commercial banking industry through its subsidiary,
the Bank, in the communities it serves. The commercial banking industry is
highly competitive, and the Bank faces strong direct competition for deposits,
loans, and other


                                                                               8

<PAGE>   11


financial-related services. The Bank competes directly in Cook and Lake Counties
with other commercial banks, thrifts, credit unions, stockbrokers, and the
finance divisions of automobile companies. Factors which affect competition
generally include the general and local economic conditions, current interest
rate levels and volatility in the mortgage markets. Some of these competitors
are local, while others are statewide or nationwide. The Bank has developed a
community banking and marketing strategy. In keeping with this strategy, the
Bank provides highly personalized and responsive service characteristic of
locally-owned and managed institutions. As such, the Bank competes for other
deposits principally by offering depositors a variety of deposit programs,
convenient office locations, hours and other services. The Bank competes for
loan originations primarily through the interest rates and loan fees it charges,
the efficiency and quality of services it provides to borrowers and the variety
of its loan products. Some of the financial institutions and financial services
organizations with which the Bank competes are not subject to the same degree of
regulation as that imposed on bank holding companies and national banking
associations. In addition, the larger banking organizations have significantly
greater resources than those that will be available to the Bank. As a result,
such competitors have advantages over the Bank in providing certain non-deposit
services. Currently, major competitors in certain of the Bank's markets include
Harris Trust and Savings Bank, The Northern Trust Company, American National
Bank, LaSalle Bank, N.A., BankOne and Bank of America.


EMPLOYEES

As of December 31, 1999, the Company had 185 full-time equivalent employees. The
employees are not represented by a collective bargaining unit. The Company
considers its relationship with its employees to be good.


SUPERVISION AND REGULATION

Bank holding companies and banks are extensively regulated under federal and
state law. References under this heading to applicable statutes or regulations
are brief summaries of portions thereof which do not purport to be complete and
which are qualified in their entirety by reference to those statutes and
regulations. Any change in applicable laws or regulations may have a material
adverse effect on the business of commercial banks and bank holding companies,
including the Company and the Bank. However, management is not aware of any
current recommendations by any regulatory authority which, if implemented, would
have or would be reasonably likely to have a material effect on liquidity,
capital resources or operations of the Company or the Bank.

On November 12, 1999, President Clinton signed legislation that will allow bank
holding companies to engage in a wider range of nonbanking activities, including
greater authority to engage in securities and insurance activities. Under the
Gramm-Leach-Bliley Act (the "Act"), a bank holding company that elects to become
a financial holding company may engage in any activity that the Federal Reserve,
in consultation with the Secretary of the Treasury, determines by regulation or
order is (i) financial in nature, (ii) incidental to any such financial
activity, or (iii) complementary to any such financial activity and does not
pose a substantial risk to the safety or soundness of depository institutions or
the financial system generally. The Act specifies certain activities that are
deemed to be financial in nature, including lending, exchanging, transferring,
investing for others, or safeguarding money or securities; underwriting and
selling insurance; providing financial, investment, or economic advisory
services; underwriting, dealing in or making a market in, securities; and any
activity currently permitted for bank holding companies by the Federal Reserve
under section 4(c)(8) of the Bank Holding Company Act. A bank holding company
may elect to be treated as a financial holding company only if all depository
institution subsidiaries of the holding company are well-capitalized,
well-managed and have at least a satisfactory rating under the Community
Reinvestment Act.




National Banks are also authorized by the Act to engage, through "financial
subsidiaries," in any activity that is permissible for a financial holding
company (as described above) and any activity that the Secretary of the
Treasury, in consultation with the Federal Reserve, determines is financial in
nature or incidental to any such financial activity, except (i) insurance
underwriting, (ii) real estate development or real estate investment activities
(unless otherwise permitted by law), (iii) insurance company


                                                                               9

<PAGE>   12


portfolio investments and (iv) merchant banking. The authority of a national
bank to invest in a financial subsidiary is subject to a number of conditions,
including, among other things, requirements that the bank must be well-managed
and well-capitalized (after deducting from capital the bank's outstanding
investments in financial subsidiaries). The Act provides that state banks may
invest in financial subsidiaries (assuming they have the requisite investment
authority under applicable state law) subject to the same conditions that apply
to national bank investments in financial subsidiaries.

At this time, the Company is unable to predict the impact the Act may have on
the Company or the Bank. Various bank regulatory agencies have begun issuing
proposed regulations as mandated by the Act. On January 19, 1999, the Federal
Reserve issued an interim rule, which sets forth procedures by which bank
holding companies may become financial holding companies, the criteria necessary
for such a conversion, and the Federal Reserve's enforcement powers should a
holding company fail to maintain compliance with the criteria. That same day the
Office of the Comptroller of the Currency issued a proposed rule discussing the
procedures by which national banks may establish financial subsidiaries as well
as the qualifications and safeguards that will be required. Both rules became
effective on March 11, 2000, the effective day of the Act.

The Act limits the nonbanking activities of unitary savings and loan holding
companies by generally prohibiting any savings and loan holding company from
engaging in any activity other than activities that (i) are currently permitted
for multiple savings and loan holding companies or (ii) are permissible for
financial holding companies (as described above) (collectively "permissible
activities"). The Act also generally prohibits any company from acquiring
company control of a savings association or savings and loan holding company
unless the acquiring company engages solely in permissible activities. The Act
creates an exemption from the general prohibitions for unitary savings and loan
holding companies in existence, or formed pursuant to an application pending
before the Office of Thrift Supervision, on or before May 4, 1999.


Bank Holding Company Regulation:

General.

The Company is registered as a "bank holding company" with the Federal Reserve
and, accordingly, is subject to supervision by the Federal Reserve under the
Bank Holding Company Act (the "BHC Act"). The Company is required to file with
the Federal Reserve periodic reports and such additional information as the
Federal Reserve may require pursuant to the BHC Act. The Federal Reserve
examines the Company and may examine the Bank.

Investments and Activities.

The BHC Act requires prior Federal Reserve approval for, among other things, the
acquisition by a bank holding company of direct or indirect ownership or control
of more than five percent of the voting shares or substantially all the assets
of any bank or bank holding company, or for a merger or consolidation of a bank
holding company with another bank holding company. With certain exceptions, the
BHC Act prohibits a bank holding company from acquiring direct or indirect
ownership or control of voting shares of any company which is not a bank or bank
holding company and from engaging directly or indirectly in any activity other
than banking or managing or controlling banks or performing services for its
authorized subsidiaries. Under the BHC Act and Federal Reserve regulations, the
Company and the Bank are prohibited from engaging in certain tie-in arrangements
in connection with an extension of credit, lease, sale of property, or
furnishing of services.






Under the Change in Bank Control Act, any person who acquires stock of the
Company such that its interest exceeds ten percent of the Company, may be
required to demonstrate that such person is not in control of the Company. Prior
regulatory approval will be required before acquiring the power to directly or
indirectly direct the management, operations or policies of the Company or the
Bank or before acquiring control of 25 percent or more of any class of the
Company's or Bank's outstanding


                                                                              10

<PAGE>   13

voting stock. In addition, any corporation, partnership, trust or organized
group that acquires a controlling interest in the Company or the Bank may have
to obtain approval of the Federal Reserve to become a bank holding company and
thereafter be subject to regulation as such.

It is the policy of the Federal Reserve that the Company is expected to act as a
source of financial strength to the Bank and to commit resources to support the
Bank. The Federal Reserve takes the position that in implementing this policy,
it may require the Company to provide such support when the Company otherwise
would not consider itself able to do so.

Capital Requirements.

The Federal Reserve has adopted risk-based capital requirements for assessing
bank holding company capital adequacy. These standards define regulatory capital
and establish minimum capital standards in relation to assets and off-balance
sheet exposures, as adjusted for credit risks. Under the Federal Reserve's
risk-based guidelines, capital is classified into two categories. For bank
holding companies, Tier 1 or "core" capital consists of common shareholders'
equity, perpetual preferred stock and trust preferred stock (both subject to
certain limitations) and minority interest in the common equity accounts of
consolidated subsidiaries, and is reduced by goodwill, certain other intangible
assets and certain investments in other corporations. Tier 2 capital consists of
the allowance for loan and lease losses (subject to certain conditions and
limitations), perpetual preferred stock (to the extent not included in Tier 1
capital), "hybrid capital instruments," perpetual debt and mandatory convertible
debt securities, and term subordinated debt and intermediate-term preferred
stock.

Under the Federal Reserve's capital guidelines, bank holding companies are
required to maintain a minimum ratio of qualifying capital to risk-weighted
assets of 8.0%, of which at least 4.0% must be in the form of Tier 1 capital.
The Federal Reserve also requires a minimum leverage ratio of Tier 1 capital to
total average assets of 4.0%, except that bank holding companies not rated in
the highest category under the regulatory rating system are required to maintain
a leverage ratio of 1.0% to 2.0% above such minimum.

In its capital adequacy guidelines, the Federal Reserve emphasizes that the
foregoing standards are supervisory minimums and that banking organizations
generally are expected to operate well above the minimum ratios. These
guidelines also provide that banking organizations experiencing internal growth
or making acquisitions will be expected to maintain strong capital positions
substantially above the minimum levels. The growth of the Company and the Bank
has been, and may in the future be, constrained by these capital adequacy
requirements.

As of December 31, 1999, the Company had a Tier 1 Ratio of 10.83%, a Total
Risk-Based Capital Ratio of 13.18% and a Tier 1 capital to total average assets
ratio (leverage ratio) of 8.87%.

Dividend Limitations.

As a holding company, the Company is primarily dependent upon dividend
distributions from the Bank for its income. Federal statutes and regulations
impose restrictions on the payment of dividends by the Company and the Bank.

Federal Reserve policy provides that a bank holding company should not pay
dividends unless (i) the bank holding company's net income over the prior year
is sufficient to fully fund the dividends and (ii) the prospective rate of
earnings retention appears consistent with the capital needs, asset quality and
overall financial condition of the bank holding company and its subsidiaries.

Delaware law also places certain limitations on the ability of the Company to
pay dividends. For example, the Company may not pay dividends to its
shareholders if, after giving effect to the dividend, the Company would not be
able to pay its debts as they become due. The Company's ability to pay dividends
is likely to be dependent on the amount of dividends paid by the Bank. No
assurance can be given that the Bank will, in any circumstances, pay dividends
to the Company.


                                                                              11

<PAGE>   14

Bank Regulation:

General.

The Bank is subject to supervision and examination by the OCC pursuant to the
National Bank Act and regulations promulgated thereunder. The Bank is a member
of the Federal Reserve and as such is also subject to examination by the Federal
Reserve.

The deposits of the Bank are insured by the Bank Insurance Fund under the
provisions of the Federal Deposit Insurance Act (The "FDIA"), and the Bank is,
therefore, also subject to supervision and examination by the FDIC. The FDIA
requires that the appropriate federal regulatory authority (the OCC, in the case
of the Bank) approve any merger and/or consolidation by or with an insured bank,
as well as the establishment or relocation of any bank or branch office. The
FDIC also supervises compliance with the provisions of federal law and
regulations which place restrictions on loans by FDIC-insured banks to their
directors, executive officers and other controlling persons. Furthermore, banks
are affected by the credit policies of other monetary authorities, including the
Federal Reserve, which regulate the national supply of bank credit. Such
regulation influences overall growth of bank loans, investments, and deposits
and may also affect interest rates charged on loans and paid on deposits. The
monetary policies of the Federal Reserve have had a significant effect on the
operating results of commercial banks in the past and are expected to continue
to do so in the future.

Transactions with Insiders and Affiliates.

Transactions between a bank and its holding company or other affiliates are
subject to various restrictions imposed by state and federal regulatory
agencies. Such transactions include loans and other extensions of credit,
purchases of securities and other assets, and payments of fees or other
distributions. In general, these restrictions limit the amount of transactions
between an institution and an affiliate of such institution, as well as the
aggregate amount of transactions between an institution and all of its
affiliates, and require transactions with affiliates to be on terms comparable
to those for transactions with unaffiliated entities.

Capital Requirements.

The OCC has established the following minimum capital standards for national
banks, such as the Bank: a leverage requirement consisting of a minimum ratio of
Tier 1 capital to total assets of 3% for the most highly-rated banks within
minimum requirements of 4% to 5% for all others, and a risk-based capital
requirement consisting of a minimum ratio of total capital to total
risk-weighted assets of 8%, at least one-half of which must be Tier 1 capital.
For purposes of these capital standards, Tier 1 capital and total capital
consists of substantially the same components as Tier 1 capital and total
capital under the Federal Reserve's capital guidelines for bank holding
companies. See "--Bank Holding Company Regulation--Capital Requirements."

The capital requirements described above are minimum requirements. Higher
capital levels will be required if warranted by the particular circumstances or
risk profiles of individual institutions. For example, the regulations of the
OCC provide that additional capital may be required to take adequate account of,
among other things, interest rate risk or the risks posed by concentrations of
credit, nontraditional activities or securities trading activities.

During the year ended December 31, 1999, the Bank was not required by the OCC to
increase its capital to an amount in excess of the minimum regulatory
requirement. As of December 31, 1999, the Bank exceeded its minimum regulatory
capital requirements with a leverage ratio of 8.00% and a risk-based capital
ratio of 10.95%.

In August, 1995, federal banking agencies published a final rule modifying their
existing risk-based capital standards to provide for consideration of interest
rate risk when assessing the capital adequacy of a bank. Under the final rule,
the Federal Reserve, the OCC and the FDIC must explicitly include a bank's
exposure to declines in the economic value of its capital due to changes in
interest rates as a factor in evaluating a bank's capital adequacy. The federal
banking agencies also have adopted a joint agency policy statement providing
guidance to banks for managing interest rate risk. This policy statement
emphasizes the importance of adequate oversight by management and a sound risk
management process. The assessment of interest rate risk management made by the
banks' examiners will be incorporated into the banks' overall risk management
rating and used to determine the effectiveness of management.



                                                                              12

<PAGE>   15

Dividend Limitations.

Pursuant to the National Bank Act, all dividends must be paid out of undivided
profits. Federal regulations prohibit any Federal Reserve member bank, including
the Bank, from declaring dividends in any calendar year in excess of its net
profit for the year plus the retained net profits for the preceding two years
without the prior approval of the Federal Reserve. Furthermore, the OCC may,
after notice and opportunity for hearing, prohibit the payment of a dividend by
a national bank if it determines that such payment would constitute an unsafe or
unsound practice.

In additional to the foregoing, the ability of the Company and the Bank to pay
dividends may be affected by the various minimum capital requirements and the
capital and non-capital standards established under the Federal Deposit
Insurance Corporation Improvements Act of 1991 ("FDICIA"), as described below.
The right of the Company, its shareholders and its creditors to participate in
any distribution of the assets or earnings of its subsidiaries is further
subject to the prior claims of creditors of the respective subsidiaries.

Standards for Safety and Soundness.

The FDIA, as amended by FDICIA and the Riegle Community Development and
Regulatory Improvement Act of 1994, requires the Federal Reserve, together with
the other federal bank regulatory agencies, to prescribe standards of safety and
soundness, by regulations or guidelines, relating generally to operations and
management, asset growth, asset quality, earnings, stock valuation, and
compensation. The Federal Reserve, the OCC and the other federal bank regulatory
agencies have adopted, effective August 9, 1995, a set of guidelines prescribing
safety and soundness standards pursuant to FDICIA, as amended. The guidelines
establish general standards relating to internal controls and information
systems, internal audit systems, loan documentation, credit underwriting,
interest rate exposure, asset growth, and compensation, fees and benefits. In
general, the guidelines require, among other things, appropriate systems and
practices to identify and manage the risks and exposures specified in the
guidelines. The guidelines prohibit excessive compensation as an unsafe and
unsound practice and describe compensation as excessive when the amounts paid
are unreasonable or disproportionate to the services performed by an executive
officer, employee, director or principal stockholder. In addition, each of the
Federal Reserve and the OCC adopted regulations that authorize, but do not
require, the Federal Reserve or the OCC, as the case may be, to order an
institution that has been given notice by the Federal Reserve or the OCC, as the
case may be, that it is not satisfying any of such safety and soundness
standards to submit a compliance plan. If, after being so notified, an
institution fails to submit an acceptable compliance plan or fails in any
material respect to implement an accepted compliance plan, the Federal Reserve
or the OCC, as the case may be, must issue an order directing action to correct
the deficiency and may issue an order directing other actions of the types to
which an undercapitalized association is subject under the "prompt corrective
action" provisions of FDICIA. If an institution fails to comply with such an
order, the Federal Reserve or the OCC, as the case may be, may seek to enforce
such order in judicial proceedings and to impose civil money penalties. The
federal bank regulatory agencies also proposed guidelines for asset quality and
earnings standards.

Prompt Corrective Action.

FDICIA requires the federal banking regulators, including the Federal Reserve,
the OCC and the FDIC, to take prompt corrective action with respect to
depository institutions that fall below certain capital standards and prohibits
any depository institution from making any capital distribution that would cause
it to be undercapitalized. Institutions that are not adequately capitalized may
be subject to a variety of supervisory actions including, but not limited to,
restrictions on growth, investment activities, capital distributions and
affiliate transactions and will be required to submit a capital restoration plan
which, to be accepted by the regulators, must be guaranteed in part by any
company having control of the institution (such as the Company). In other
respects, FDICIA provides for enhanced supervisory authority, including greater
authority for the appointment of a conservator or receiver for under capitalized
institutions. The capital-based prompt corrective action provisions of FDICIA
and their implementing regulations apply to FDIC-insured depository
institutions. However, federal banking agencies have indicated that, in
regulating bank holding companies, the agencies may take appropriate action at
the holding company level based on their assessment of the effectiveness of
supervisory actions imposed upon subsidiary insured depository institutions
pursuant to the prompt corrective action provisions of FDICIA.


                                                                              13

<PAGE>   16

Insurance of Deposit Accounts.

Under FDICIA, as an FDIC-insured institution, the Bank is required to pay
deposit insurance premiums based on the risk it poses to the insurance fund. The
FDIC has authority to raise or lower assessment rates on insured deposits in
order to achieve certain designated reserve ratios in the insurance funds and to
impose special additional assessments. The FDIC amended the risk-based
assessment system and on December 11, 1995, adopted a new assessment rate
schedule for BIF insured deposits. The new assessment rate schedule, effective
with respect to the semiannual premium assessment beginning January 1, 1996,
provides for an assessment range of zero to 0.27% (subject to a $2,000 minimum)
of insured deposits depending on capital and supervisory factors. Each
depository institution is assigned to one of three capital groups: "well
capitalized", "adequately capitalized" or "less than adequately capitalized."
Within each capital group, institutions are assigned to one of three supervisory
subgroups: "healthy," "supervisory concern" or "substantial supervisory
concern." Accordingly, there are nine combinations of capital groups and
supervisory subgroups to which varying assessment rates would be applicable.

During 1999, the Bank was assessed at an average annual rate of [0]% of
deposits. Deposit insurance may be terminated by the FDIC upon a finding that an
institution has engaged in unsafe or unsound practices, is in an unsafe or
unsound condition to continue operations or has violated any applicable law,
regulation, rule, order or condition imposed by the FDIC. The management of the
Bank does not know of any practice, condition or violation that might lead to
termination of deposit insurance.

The Economic Growth and Regulatory Paperwork Reduction Act of 1996 enacted on
September 30, 1996 provides that beginning with semi-annual periods after
December 31, 1996, deposits insured by the Bank Insurance Fund ("BIF") will also
be assessed to pay interest on the bonds (the "FICO Bonds") issued in the late
1980s by the Financing Corporation to recapitalize the now defunct Federal
Savings & Loan Insurance Corporation. For purposes of the assessments to pay
interest on the FICO Bonds, BIF deposits will be assessed at a rate of 20.0% of
the assessment rate applicable to Savings Association Insurance Fund ("SAIF")
deposits until December 31, 1999. After the earlier of December 31, 1999 or the
date on which the last savings association ceases to exist, full pro rata
sharing of FICO assessments will begin. It has been estimated that the rates of
assessment for the payment of interest on the FICO Bonds will be approximately
1.3 basis points for BIF-assessable deposits and approximately 6.4 basis points
for SAIF-assessable deposits. The payment of the assessment to pay interest on
the FICO Bonds did not materially affect the Bank.

Federal Reserve System.

The Bank is subject to Federal Reserve regulations requiring depository
institutions to maintain non-interest-earning reserves against their transaction
accounts (primarily NOW and regular checking accounts). The Federal Reserve
regulations generally require 3.0% reserves must be maintained against total
transaction accounts of $44.3 million or less plus 10.0% on the remainder. The
first $5.0 million of otherwise reservable balances (subject to adjustments by
the Federal Reserve) are exempted from the reserve requirements. The Bank is in
compliance with the foregoing requirements.

Community Reinvestment Act.

Under the Community Reinvestment Act ("CRA"), a financial institution has a
continuing and affirmative obligation, consistent with the safe and sound
operation of such institution, to help meet the credit needs of its entire
community, including low- and moderate-income neighborhoods. The CRA does not
establish specific lending requirements or programs for financial institutions
nor does it limit an institution's discretion to develop the types of products
and services that it believes are best suited to its particular community,
consistent with the CRA. The CRA requires each federal banking agency, in
connection with its examination of a financial institution, to assess and assign
one of four ratings to the institution's record of meeting the credit needs of
its community and to take such record into account in its evaluation of certain
applications by the institution, including applications for charters, branches
and other deposit facilities, relocations, mergers, consolidations, acquisitions
of assets or assumptions of liabilities, and savings and loan holding company
acquisitions. The CRA also requires that all institutions make public disclosure
of their CRA ratings. The Bank received a "satisfactory" rating from the OCC on
its most recent CRA performance evaluations.



                                                                              14

<PAGE>   17

In April 1995, the Federal Reserve, the OCC and other federal banking agencies
adopted amendments revising their CRA regulations. Among other things, the
amended CRA regulations substitute for the prior process-based assessment
factors a new evaluation system that rates an institution based on its actual
performance in meeting community needs. In particular, the system focuses on
three tests: (i) a lending test, to evaluate the institution's record of making
loans in its assessment areas; (ii) an investment test, to evaluate the
institution's record of investing in community development projects, affordable
housing, and programs benefiting low or moderate income individuals and
businesses; and (iii) a service test, to evaluate the institution's delivery of
services through its branches, ATMs and other offices. The amended CRA
regulations also clarify how an institution's CRA performance is considered in
the application process.

Brokered Deposits.

Well-capitalized institutions are not subject to limitations on brokered
deposits, while an adequately capitalized institution is able to accept, renew
or rollover brokered deposits only with a waiver from the FDIC and subject to
certain restrictions on the yield paid on such deposits. Undercapitalized
institutions are not permitted to accept brokered deposits. The Bank is eligible
under the statutory standard to accept brokered deposits and may use this
funding source form time to time when management deems it appropriate from an
asset/liability management perspective.

Monetary Policy and Economic Conditions.

The earnings of banks and bank holding companies are affected by general
economic conditions and also by the fiscal and monetary policies of federal
regulatory agencies, including the Federal Reserve. Through open market
transactions, variations in the discount rate and the establishment of reserve
requirements, the Federal Reserve exerts considerable influence over the cost
and availability of funds obtainable for lending or investing.

The above monetary and fiscal policies and resulting changes in interest rates
have affected the operating results of all commercial banks in the past and are
expected to do so in the future. The Bank cannot fully predict the nature or the
extent of any effects which fiscal or monetary policies may have on its business
and earnings.


FORWARD LOOKING STATEMENTS

Statements made about the Company's future economic performance, strategic plans
or objectives, revenues or earnings projections, or other financial items and
similar statements throughout this annual report or Form 10-K including without
limitation in Item 1. 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;
-    The impact of continued loan and deposit promotions on the Company's net
     interest margin;
-    The impact of opening, staffing and operating new branch facilities;
-    Changes in management's estimate of the adequacy of the allowance for loan
     losses;
-    Changes in the level and direction of loan delinquencies and write-offs;
-    Interest rate movements and their impact on customer behavior and the
     Company's net interest margin;
-    The impact of repricing and competitors' pricing initiatives on loan and
     deposit products;
-    The Company's ability to adapt successfully to technological changes to
     meet customers' needs and developments in the marketplace;
-    The Company's ability to access cost effective funding; and
-    Changes in financial markets and general economic conditions.




                                                                              15

<PAGE>   18


ITEM 2.  PROPERTIES

The Company and the Bank are headquartered in Lincolnshire, Illinois. In
addition to its headquarters the Bank has nine branch facilities located in
Deerfield, Libertyville (2), Lincolnwood (2), Chicago-Lincoln Park,
Lincolnshire, Skokie and Northbrook, Illinois.

The table below summarizes the Company's owned and leased facilities.

<TABLE>
<CAPTION>
                                                                                       Approximate
             Location                             Type of Facility                   Square Footage             Expiration Date
-----------------------------------    ----------------------------------------    --------------------       --------------------
<S>                                    <C>                                                <C>                 <C>
Lincolnshire, IL                       Corporate headquarters                             26,578              October 2003
Lincolnshire, IL                       Branch                                             11,760              Owned
Lincolnwood, IL                        Branch                                              8,760              Owned
Lincolnwood/International, IL          Branch                                              1,900              October 2001
Chicago/Lincoln Park, IL               Branch                                              1,967              April 2003
Libertyville, IL                       Branch                                              8,100              Owned
Libertyville, IL                       Branch                                              6,250              Owned
Northbrook, IL                         Branch                                              4,100              November 2000
Deerfield/Downtown, IL                 Branch                                              2,200              Owned
Skokie, IL                             Branch                                                648              March 2001
</TABLE>


ITEM 3.  LEGAL PROCEEDINGS

The Company and the Bank are from time to time parties in various routine legal
actions arising in the normal course of business. Management believes that there
is no proceeding threatened or pending against the Company or the Bank which, if
determined adversely, would materially adversely affect the consolidated
financial position or operations of the Company.


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

No matters were submitted to a vote of security holders during the quarter ended
December 31, 1999.






                                                                              16

<PAGE>   19


PART II

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

Information required in response to this item is contained in the Annual Report
to Shareholders under the caption "Shareholder Information" and is incorporated
herein by reference.


ITEM 6.  SELECTED FINANCIAL DATA

Information required in response to this item is contained in the Annual Report
to Shareholders under the caption "Selected Financial Highlights" and is
incorporated herein by reference.


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

The information required in response to this item is contained in the Company's
Annual Report to Shareholders under the caption "Management's Discussion and
Analysis of Financial Condition and Results of Operations," and is incorporated
herein by reference. The discussion and analysis of financial condition and
results of operations should be read in conjunction with the consolidated
financial statements and supplementary data contained in the Company's Annual
Report to Shareholders.


ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The information required in response to this item is contained in the Company's
Annual Report to Shareholders under the caption "Management's Discussion and
Analysis of Financial Condition and Results of Operations," within the heading
"Asset/Liability Management."


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The information required in response to this item is contained in the Annual
Report to Shareholders under the caption "Consolidated Financial Statements,"
and is incorporated herein by reference. Also, refer to Item 14 of this Report
for the Index to Financial Statements.


ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

Not applicable.




                                                                              17

<PAGE>   20


PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information required in response to this item will be contained in the
Company's definitive Proxy Statement (the "Proxy Statement") for its Annual
Meeting of Shareholders to be held May 24, 2000, under the captions "General
Information-Section 16(a) Beneficial Ownership Reporting Compliance," "Election
of Directors" and "Executive Officers" and is incorporated herein by reference.


ITEM 11. EXECUTIVE COMPENSATION

The information required in response to this item will be contained in the
Company's Proxy Statement under the caption "Executive Compensation" and is
incorporated herein by reference.


ITEM 12. SECURITY-OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information required in response to this item will be contained in the
Company's Proxy Statement under the caption "General Information
Security-Ownership of Principal Holders and Management" and is incorporated
herein by reference.


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required in response to this item will be contained in the Proxy
Statement under the caption "Election of Directors - Certain Relationships and
Related Transactions," and is incorporated herein by reference.




                                                                              18

<PAGE>   21


PART IV

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

(a)      Documents filed as part of this Report:

         1., 2.   Financial Statements and Schedules

                  The Consolidated Financial Statements are incorporated by
                  reference to the following pages from the 1999 Annual Report
                  to Shareholders, attached hereto as Exhibit 13.1:

<TABLE>
<CAPTION>
                                                                                                                   Page
                                                                                                                   ----
                  <S>                                                                                             <C>
                  Report of Independent Auditors..........................................................           17
                  Report of Consolidated Balance Sheets...................................................           18
                  Report of Consolidated Statements of Income.............................................           19
                  Report of Consolidated Statements of Shareholders' Equity...............................           20
                  Report of Consolidated Statements of Cash Flows                                                    21
                  Report of Notes to Consolidated Financial Statements....................................        22-34
</TABLE>

                  No financial statement schedules are required to be filed with
                  this report.

         3.       Exhibits


         3.1      Second Restated Certificate of Incorporation of the Company
                  (incorporated by reference to Exhibit 3.1 of the Company's
                  Form S-1 Registration Statement (No. 333-32561) filed with the
                  Securities and Exchange Commission (the "Commission") on July
                  31, 1997).

         3.1.1    Certificate of Designations of Series B Junior Participating
                  Preferred Stock (incorporated by reference to Exhibit 3.1.1 of
                  the Company's Form S-1 Registration Statement (No. 333-32561)
                  filed with the Securities and Exchange Commission (the
                  "Commission") on July 31, 1997).

         3.2      By-laws of the Company (incorporated by reference to Exhibit
                  3.2 of the Company's Form S-1 Registration Statement (No.
                  333-32561) filed with the Commission on July 31, 1997).

         3.2.1    Amendment No. 1 to By-laws (incorporated by reference to
                  Exhibit 3.2.1 of the Company's Form 10-Q filed with the
                  Commission on May 13, 1999).

         4.1      Form of Subordinated Indenture relating to the Junior
                  Subordinated Debentures (incorporated by reference to Exhibit
                  4.1 of the Form S-1 Registration Statement of the Company and
                  Success Capital Trust I ("Success Capital") (No. 333-51271 and
                  No. 333-51271-01) filed with the Commission on April 28,
                  1998).

         4.2      Form of Junior Subordinated Debenture Certificate (included as
                  an exhibit to Exhibit 4.1).

         4.3      Certificate of Trust of Success Capital (incorporated by
                  reference to Exhibit 4.3 of the Form S-1 Registration
                  Statement of the Company and Success Capital (No. 333-51271
                  and 333-51271-01) filed with the Commission on April 28,
                  1998).

         4.4      Form of Amended and Restated Trust Agreement of Success
                  Capital (incorporated by reference to Exhibit 4.4 of the Form
                  S-1 Registration Statement of the Company and Success Capital
                  (No. 333-51271 and 333-51271-01) filed with the Commission on
                  April 28, 1998).

         4.5      Form of Trust Preferred Security Certificate of Success
                  Capital (included as an exhibit to Exhibit 4.4).

         4.6      Form of Common Security Certificate of Success Capital
                  (included as an exhibit to Exhibit 4.4).




                                                                              19

<PAGE>   22


          4.7     Form of Guarantee Agreement of the Company relating to the
                  Trust Preferred Securities (incorporated by reference to
                  Exhibit 4.7 of the Form S-1 Registration Statement of the
                  Company and Success Capital (No. 333-51271 and 333-51271-01)
                  filed with the Commission on April 28, 1998).

          4.8     Form of Rights Agreement, dated as of August 1, 1998, between
                  the Company and Harris Trust and Savings Bank, which includes
                  as Exhibit B thereto the Form of Right Certificate
                  (incorporated by reference to Exhibit 1 of the Company's Form
                  8-A Registration Statement (File No. 001-14381) filed with the
                  Commission on August 6, 1998).

      (1)10.1     Success Bancshares, Inc. 1995 Employee Stock Option Plan
                  (incorporated by reference to Exhibit 10.2 of the Company's
                  Form S-1 Registration Statement (No. 333-32561) filed with the
                  Commission on July 31, 1997).

      (1)10.2     Employment Agreement between the Bank and Laurie K.
                  Breitenstein dated as of April 15, 1999 (incorporated by
                  reference to Exhibit 10.3 of the Company's Form 10-Q filed
                  with the Commission on August 15, 1999).

         10.3     Success Bancshares, Inc. 1999 Stock Option Plan (incorporated
                  by reference to Exhibit 10.4 of the Company's Annual Report on
                  Form 10-K filed with the Commission on March 30, 1999).

         10.4     Lease with respect to Lincolnwood branch banking facility
                  (October, 1991) (incorporated by reference to Exhibit 10.5 of
                  the Company's Form S-1 Registration Statement (No. 333-32561)
                  filed with the Securities and Exchange Commission on July 31,
                  1997).

         10.5     Lease with respect to Lincoln Park branch banking facility
                  (April, 1993) (incorporated by reference to Exhibit 10.6 of
                  the Company's Form S-1 Registration Statement (No. 333-32561)
                  filed with the Commission on July 31, 1997).

         10.6     Lease with respect to Northbrook branch banking facility
                  (December, 1994) (incorporated by reference to Exhibit 10.7 of
                  the Company's Form S-1 Registration Statement (No. 333-32561)
                  filed with the Commission on July 31, 1997).

      (1)10.7     Employment Agreement between the Bank and Christa N. Calabrese
                  dated as of August 1, 1998, as amended (incorporated by
                  reference to Exhibit 10.9 of the Company's Form 10-Q filed
                  with the Commission on November 13, 1998).

      (1)10.8     Employment Agreement between the Bank and Kurt C. Felde dated
                  as of August 1, 1998, as amended (incorporated by reference to
                  Exhibit 10.10 of the Company's Form 10-Q filed with the
                  Commission on November 13, 1998).

      (1)10.9     Employment Agreement between the Bank and Ronald W. Tragasz
                  dated as of August 1,1 998, as amended (incorporated by
                  reference to Exhibit 10.11 of the Company's Form 10-Q filed
                  with the Commission on November 13, 1998).

      (1)10.10    Employment Agreement between the Bank and Marlene Sachs dated
                  as of August 1, 1998 (incorporated by reference to Exhibit
                  10.12 of the Company's Form 10-Q filed with the Commission on
                  November 13, 1998).

      (1)10.11    Stock Option Agreement dated as of September 23, 1998 between
                  the Company and Christa N. Calabrese (incorporated by
                  reference to Exhibit 10.13 of the Company's Form 10-Q filed
                  with the Commission on November 13, 1998).

      (1)10.12    Stock Option Agreement dated as of June 25, 1998 between the
                  Company and Kurt C. Felde (incorporated by reference to
                  Exhibit 10.14 of the Company's Form 10-Q filed with the
                  Commission on November 13, 1998).

      (1)10.13    Stock Option Agreement dated as of September 23, 1998 between
                  the Company and Ronald W. Tragasz (incorporated by reference
                  to Exhibit 10.15 of the Company's Form 10-Q filed with the
                  Commission on November 13, 1998).

      (1)10.14    Stock Option Agreement dated as of September 23, 1998 between
                  the Company and Marlene Sachs (incorporated by reference to
                  Exhibit 10.16 of the Company's Form 10-Q filed with the
                  Commission on


                                                                              20

<PAGE>   23


                  November 13, 1998).

      (1)10.15    Stock Option Agreement dated as of August 26, 1998 between the
                  Company and Sherwin Koopmans (incorporated by reference to
                  Exhibit 10.17 of the Company's Form 10-Q filed with the
                  Commission on November 13, 1998).

      (1)10.16    Stock Option Agreement dated as of August 26, 1998 between the
                  Company and George M. Ohlhausen (incorporated by reference to
                  Exhibit 10.18 of the Company's Form 10-Q filed with the
                  Commission on November 13, 1998).

      (1)10.17    Stock Option Agreement dated as of August 26, 1998 between the
                  Company and Norman D. Rich (incorporated by reference to
                  Exhibit 10.20 of the Company's Form 10-Q filed with the
                  Commission on November 13, 1998).

      (1)10.18    Amendment No. 1 to Employment Agreement dated as of August 1,
                  1998 between the Bank and Marlene Sachs (incorporated by
                  reference to Exhibit 10.21 of the Company's Annual Report on
                  Form 10-K filed with the Commission on March 30, 1999).

      (1)10.19    Stock Option Agreement dated as of August 26, 1998 between the
                  Company and Avrom H. Goldfeder (incorporated by reference to
                  Exhibit 10.22 of the Company's Form 10-Q filed with the
                  Commission on November 13, 1998).

      (1)10.20    Stock Option Agreement dated as of August 26, 1998 between the
                  Company and Glen Wherfel (incorporated by reference to Exhibit
                  10.23 of the Company's Form 10-Q filed with the Commission on
                  November 13, 1998).

      (1)10.21    Employment Agreement dated as of December 16, 1998 between the
                  Bank and Wilbur G. Meinen (incorporated by reference to
                  Exhibit 10.24 of the Company's Annual Report on Form 10-K
                  filed with the Commission on March 30, 1999).

      (1)10.22    Stock Option Agreement dated as of December 16, 1998 between
                  the Company and Kurt C. Felde (incorporated by reference to
                  Exhibit 10.25 of the Company's Annual Report on Form 10-K
                  filed with the Commission on March 30, 1999).

      (1)10.23    Stock Option Agreement dated as of December 16, 1998 between
                  the Company and Wilbur G. Meinen (incorporated by reference to
                  Exhibit 10.26 of the Company's Annual Report on Form 10-K
                  filed with the Commission on March 30, 1999).

      (1)10.24    Stock Option Agreement dated as of January 27, 1999 between
                  the Company and Wilbur G. Meinen (incorporated by reference to
                  Exhibit 10.27 of the Company's Annual Report on Form 10-K
                  filed with the Commission on March 30, 1999).

      (1)10.25    Success Bancshares, Inc. 1998 Employee Stock Purchase Plan
                  (incorporated by reference to Exhibit 10.28 of the Company's
                  Annual Report on Form 10-K filed with the Commission on March
                  30, 1999).

      (1)10.26    Amendment No. 1 to 1995 Stock Option Plan (incorporated by
                  reference to Exhibit 10.29 of the Company's Annual Report on
                  Form 10-K filed with the Commission on March 30, 1999).

      (1)10.27    Restricted Stock Agreement dated as of December 16, 1998
                  between the Company and Wilbur G. Meinen (incorporated by
                  reference to Exhibit 10.30 of the Company's Annual Report on
                  Form 10-K filed with the Commission on March 30, 1999).

         10.28    Lease with respect to Chicago downtown branch banking facility
                  (May, 1998) (incorporated by reference to Exhibit 10.31 of the
                  Company's Annual Report on Form 10-K filed with the Commission
                  on March 30, 1999).

      (1)10.29    Amendment No. 2 to Employment Agreement dated as of December
                  16, 1998 between the Bank and Christa N. Calabrese
                  (incorporated by reference to Exhibit 10.32 of the Company's
                  Form 10-Q filed with the Commission on May 13, 1999).


                                                                              21

<PAGE>   24


      (1)10.30    Agreement dated April 28, 1999 between the Company and Ronald
                  W. Tragasz (incorporated by reference to Exhibit 10.33 of the
                  Company's Form 10-Q filed with the Commission on August 15,
                  1999).

      (1)10.31    Stock Option Agreement dated April 28, 1999 between the
                  Company and Ronald W. Tragasz (incorporated by reference to
                  Exhibit 10.34 of the Company's Form 10-Q filed with the
                  Commission on August 15, 1999).

         10.32    Sublease with respect to Corporate Center (April, 1999)
                  (incorporated by reference to Exhibit 10.35 of the Company's
                  Form 10-Q filed with the Commission on August 15, 1999).

      (1)10.33    Stock Option Agreement dated August 25, 1999 between the
                  Company and Sherwin Koopmans (incorporated by reference to
                  Exhibit 10.36 of the Company's Form 10-Q filed with the
                  Commission on November 10, 1999).

      (1)10.34    Stock Option Agreement dated August 25, 1999 between the
                  Company and Glen Wherfel (incorporated by reference to Exhibit
                  10.37 of the Company's Form 10-Q filed with the Commission on
                  November 10, 1999).

      (1)10.35    Stock Option Agreement dated August 25, 1999 between the
                  Company and George M. Ohlhausen (incorporated by reference to
                  Exhibit 10.38 of the Company's Form 10-Q filed with the
                  Commission on November 10, 1999).

      (1)10.36    Stock Option Agreement dated August 25, 1999 between the
                  Company and Avrom Goldfeder (incorporated by reference to
                  Exhibit 10.39 of the Company's Form 10-Q filed with the
                  Commission on November 10, 1999).

      (1)10.37    Stock Option Agreement dated August 25, 1999 between the
                  Company and Norman Rich (incorporated by reference to Exhibit
                  10.41 of the Company's Form 10-Q filed with the Commission on
                  November 10, 1999).

      (2)13.1     1999 Annual Report to Shareholders

         21.1     Subsidiary of the Company (incorporated by reference to
                  Exhibit 21.1 of the Company's Form S-1 Registration Statement
                  (No. 333-32561) filed with the Securities and Exchange
                  Commission on July 31, 1997

      (2)23.1     Consent of McGladrey & Pullen, L.L.P.

      (2)27.1     Financial Data Schedule

-----------------------------

(1)  Management contract or compensatory plan or arrangement

(2)  Filed herewith

(b)      Reports on Form 8-K

         None






                                                                              22

<PAGE>   25


                                   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.

                            SUCCESS BANCSHARES, INC.

<TABLE>
<S>                         <C>                                                      <C>
By:  Wilbur G. Meinen, Jr.  /s/ Wilbur G. Meinen                                        March 23, 2000
                                --------------------------------------------------   --------------------
                                President /Chief Executive Officer                          (Dated)

     Kurt C. Felde          /s/ Kurt C. Felde                                           March 23, 2000
                                --------------------------------------------------   --------------------
                                Executive Vice President / Chief Financial Officer          (Dated)
</TABLE>

     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 the capacities and on the dates indicated.

<TABLE>
<S>                         <C>                                                      <C>

     Wilbur G. Meinen, Jr.  /s/ Wilbur G. Meinen                                        March 23, 2000
                                --------------------------------------------------   --------------------
                                Director

     Avrom H. Goldfeder     /s/ Avrom H. Goldfeder                                      March 23, 2000
                                --------------------------------------------------   --------------------
                                Director                                                    (Dated)

     Glen R. Wherfel        /s/ Glen R. Wherfel                                         March 23, 2000
                                --------------------------------------------------   --------------------
                                Director                                                    (Dated)

     Sherwin Koopmans       /s/ Sherwin Koopmans                                        March 23, 2000
                                --------------------------------------------------   --------------------
                                Director                                                    (Dated)

     George M. Ohlhausen
                                --------------------------------------------------   --------------------
                                Director                                                    (Dated)

     Norman D. Rich         /s/ Norman D. Rich                                          March 23, 2000
                                --------------------------------------------------   --------------------
                                Director                                                    (Dated)
     Joseph A. Cari, Jr.
                                --------------------------------------------------   --------------------
                                Director                                                    (Dated)
</TABLE>






                                                                              23

<PAGE>   26


                                  EXHIBIT INDEX



         3.1      Second Restated Certificate of Incorporation of the Company
                  (incorporated by reference to Exhibit 3.1 of the Company's
                  Form S-1 Registration Statement (No. 333-32561) filed with the
                  Securities and Exchange Commission (the "Commission") on July
                  31, 1997).

         3.1.1    Certificate of Designations of Series B Junior Participating
                  Preferred Stock (incorporated by reference to Exhibit 3.1.1 of
                  the Company's Form S-1 Registration Statement (No. 333-32561)
                  filed with the Securities and Exchange Commission (the
                  "Commission") on July 31, 1997).

         3.2      By-laws of the Company (incorporated by reference to Exhibit
                  3.2 of the Company's Form S-1 Registration Statement (No.
                  333-32561) filed with the Commission on July 31, 1997).

         3.2.1    Amendment No. 1 to By-laws (incorporated by reference to
                  Exhibit 3.2.1 of the Company's Form 10-Q filed with the
                  Commission on May 13, 1999).

         4.1      Form of Subordinated Indenture relating to the Junior
                  Subordinated Debentures (incorporated by reference to Exhibit
                  4.1 of the Form S-1 Registration Statement of the Company and
                  Success Capital Trust I ("Success Capital") (No. 333-51271 and
                  No. 333-51271-01) filed with the Commission on April 28,
                  1998).

         4.2      Form of Junior Subordinated Debenture Certificate (included as
                  an exhibit to Exhibit 4.1).

         4.3      Certificate of Trust of Success Capital (incorporated by
                  reference to Exhibit 4.3 of the Form S-1 Registration
                  Statement of the Company and Success Capital (No. 333-51271
                  and 333-51271-01) filed with the Commission on April 28,
                  1998).

         4.4      Form of Amended and Restated Trust Agreement of Success
                  Capital (incorporated by reference to Exhibit 4.4 of the Form
                  S-1 Registration Statement of the Company and Success Capital
                  (No. 333-51271 and 333-51271-01) filed with the Commission on
                  April 28, 1998).

         4.5      Form of Trust Preferred Security Certificate of Success
                  Capital (included as an exhibit to Exhibit 4.4).

         4.6      Form of Common Security Certificate of Success Capital
                  (included as an exhibit to Exhibit 4.4).

         4.7      Form of Guarantee Agreement of the Company relating to the
                  Trust Preferred Securities (incorporated by reference to
                  Exhibit 4.7 of the Form S-1 Registration Statement of the
                  Company and Success Capital (No. 333-51271 and 333-51271-01)
                  filed with the Commission on April 28, 1998).

         4.8      Form of Rights Agreement, dated as of August 1, 1998, between
                  the Company and Harris Trust and Savings Bank, which includes
                  as Exhibit B thereto the Form of Right Certificate
                  (incorporated by reference to Exhibit 1 of the Company's Form
                  8-A Registration Statement (File No. 001-14381) filed with the
                  Commission on August 6, 1998).

     (1)10.1      Success Bancshares, Inc. 1995 Employee Stock Option Plan
                  (incorporated by reference to Exhibit 10.2 of the Company's
                  Form S-1 Registration Statement (No. 333-32561) filed with the
                  Commission on July 31, 1997).

     (1)10.2      Employment Agreement between the Bank and Laurie K.
                  Breitenstein dated as of April 15, 1999 (incorporated by
                  reference to Exhibit 10.3 of the Company's Form 10-Q filed
                  with the Commission on August 15, 1999).

        10.3      Success Bancshares, Inc. 1999 Stock Option Plan (incorporated
                  by reference to Exhibit 10.4 of the Company's Annual Report on
                  Form 10-K filed with the Commission on March 30, 1999).

        10.4      Lease with respect to Lincolnwood branch banking facility
                  (October, 1991) (incorporated by reference to Exhibit 10.5 of
                  the Company's Form S-1 Registration Statement (No. 333-32561)
                  filed with the Securities and Exchange Commission on July 31,
                  1997).

        10.5      Lease with respect to Lincoln Park branch banking facility
                  (April, 1993) (incorporated by reference to Exhibit 10.6 of
                  the Company's Form S-1 Registration Statement (No. 333-32561)
                  filed with the Commission on July 31, 1997).


<PAGE>   27


         10.6     Lease with respect to Northbrook branch banking facility
                  (December, 1994) (incorporated by reference to Exhibit 10.7 of
                  the Company's Form S-1 Registration Statement (No. 333-32561)
                  filed with the Commission on July 31, 1997).

      (1)10.7     Employment Agreement between the Bank and Christa N. Calabrese
                  dated as of August 1, 1998, as amended (incorporated by
                  reference to Exhibit 10.9 of the Company's Form 10-Q filed
                  with the Commission on November 13, 1998).

      (1)10.8     Employment Agreement between the Bank and Kurt C. Felde dated
                  as of August 1, 1998, as amended (incorporated by reference to
                  Exhibit 10.10 of the Company's Form 10-Q filed with the
                  Commission on November 13, 1998).

      (1)10.9     Employment Agreement between the Bank and Ronald W. Tragasz
                  dated as of August 1,1 998, as amended (incorporated by
                  reference to Exhibit 10.11 of the Company's Form 10-Q filed
                  with the Commission on November 13, 1998).

      (1)10.10    Employment Agreement between the Bank and Marlene Sachs dated
                  as of August 1, 1998 (incorporated by reference to Exhibit
                  10.12 of the Company's Form 10-Q filed with the Commission on
                  November 13, 1998).

      (1)10.11    Stock Option Agreement dated as of September 23, 1998 between
                  the Company and Christa N. Calabrese (incorporated by
                  reference to Exhibit 10.13 of the Company's Form 10-Q filed
                  with the Commission on November 13, 1998).

      (1)10.12    Stock Option Agreement dated as of June 25, 1998 between the
                  Company and Kurt C. Felde (incorporated by reference to
                  Exhibit 10.14 of the Company's Form 10-Q filed with the
                  Commission on November 13, 1998).

      (1)10.13    Stock Option Agreement dated as of September 23, 1998 between
                  the Company and Ronald W. Tragasz (incorporated by reference
                  to Exhibit 10.15 of the Company's Form 10-Q filed with the
                  Commission on November 13, 1998).

      (1)10.14    Stock Option Agreement dated as of September 23, 1998 between
                  the Company and Marlene Sachs (incorporated by reference to
                  Exhibit 10.16 of the Company's Form 10-Q filed with the
                  Commission on November 13, 1998).

      (1)10.15    Stock Option Agreement dated as of August 26, 1998 between the
                  Company and Sherwin Koopmans (incorporated by reference to
                  Exhibit 10.17 of the Company's Form 10-Q filed with the
                  Commission on November 13, 1998).

      (1)10.16    Stock Option Agreement dated as of August 26, 1998 between the
                  Company and George M. Ohlhausen (incorporated by reference to
                  Exhibit 10.18 of the Company's Form 10-Q filed with the
                  Commission on November 13, 1998).

      (1)10.17    Stock Option Agreement dated as of August 26, 1998 between the
                  Company and Norman D. Rich (incorporated by reference to
                  Exhibit 10.20 of the Company's Form 10-Q filed with the
                  Commission on November 13, 1998).

      (1)10.18    Amendment No. 1 to Employment Agreement dated as of August 1,
                  1998 between the Bank and Marlene Sachs (incorporated by
                  reference to Exhibit 10.21 of the Company's Annual Report on
                  Form 10-K filed with the Commission on March 30, 1999).

      (1)10.19    Stock Option Agreement dated as of August 26, 1998 between the
                  Company and Avrom H. Goldfeder (incorporated by reference to
                  Exhibit 10.22 of the Company's Form 10-Q filed with the
                  Commission on November 13, 1998).

      (1)10.20    Stock Option Agreement dated as of August 26, 1998 between the
                  Company and Glen Wherfel (incorporated by reference to Exhibit
                  10.23 of the Company's Form 10-Q filed with the Commission on
                  November 13, 1998).

      (1)10.21    Employment Agreement dated as of December 16, 1998 between the
                  Bank and Wilbur G. Meinen (incorporated by reference to
                  Exhibit 10.24 of the Company's Annual Report on Form 10-K
                  filed with the Commission on March 30, 1999).


<PAGE>   28


      (1)10.22    Stock Option Agreement dated as of December 16, 1998 between
                  the Company and Kurt C. Felde (incorporated by reference to
                  Exhibit 10.25 of the Company's Annual Report on Form 10-K
                  filed with the Commission on March 30, 1999).

      (1)10.23    Stock Option Agreement dated as of December 16, 1998 between
                  the Company and Wilbur G. Meinen (incorporated by reference to
                  Exhibit 10.26 of the Company's Annual Report on Form 10-K
                  filed with the Commission on March 30, 1999).

      (1)10.24    Stock Option Agreement dated as of January 27, 1999 between
                  the Company and Wilbur G. Meinen (incorporated by reference to
                  Exhibit 10.27 of the Company's Annual Report on Form 10-K
                  filed with the Commission on March 30, 1999).

      (1)10.25    Success Bancshares, Inc. 1998 Employee Stock Purchase Plan
                  (incorporated by reference to Exhibit 10.28 of the Company's
                  Annual Report on Form 10-K filed with the Commission on March
                  30, 1999).

      (1)10.26    Amendment No. 1 to 1995 Stock Option Plan (incorporated by
                  reference to Exhibit 10.29 of the Company's Annual Report on
                  Form 10-K filed with the Commission on March 30, 1999).

      (1)10.27    Restricted Stock Agreement dated as of December 16, 1998
                  between the Company and Wilbur G. Meinen (incorporated by
                  reference to Exhibit 10.30 of the Company's Annual Report on
                  Form 10-K filed with the Commission on March 30, 1999).

         10.28    Lease with respect to Chicago downtown branch banking facility
                  (May, 1998) (incorporated by reference to Exhibit 10.31 of the
                  Company's Annual Report on Form 10-K filed with the Commission
                  on March 30, 1999).

      (1)10.29    Amendment No. 2 to Employment Agreement dated as of December
                  16, 1998 between the Bank and Christa N. Calabrese
                  (incorporated by reference to Exhibit 10.32 of the Company's
                  Form 10-Q filed with the Commission on May 13, 1999).

      (1)10.30    Agreement dated April 28, 1999 between the Company and Ronald
                  W. Tragasz (incorporated by reference to Exhibit 10.33 of the
                  Company's Form 10-Q filed with the Commission on August 15,
                  1999).

      (1)10.31    Stock Option Agreement dated April 28, 1999 between the
                  Company and Ronald W. Tragasz (incorporated by reference to
                  Exhibit 10.34 of the Company's Form 10-Q filed with the
                  Commission on August 15, 1999).

         10.32    Sublease with respect to Corporate Center (April, 1999)
                  (incorporated by reference to Exhibit 10.35 of the Company's
                  Form 10-Q filed with the Commission on August 15, 1999).

      (1)10.33    Stock Option Agreement dated August 25, 1999 between the
                  Company and Sherwin Koopmans (incorporated by reference to
                  Exhibit 10.36 of the Company's Form 10-Q filed with the
                  Commission on November 10, 1999).

      (1)10.34    Stock Option Agreement dated August 25, 1999 between the
                  Company and Glen Wherfel (incorporated by reference to Exhibit
                  10.37 of the Company's Form 10-Q filed with the Commission on
                  November 10, 1999).

      (1)10.35    Stock Option Agreement dated August 25, 1999 between the
                  Company and George M. Ohlhausen (incorporated by reference to
                  Exhibit 10.38 of the Company's Form 10-Q filed with the
                  Commission on November 10, 1999).

      (1)10.36    Stock Option Agreement dated August 25, 1999 between the
                  Company and Avrom Goldfeder (incorporated by reference to
                  Exhibit 10.39 of the Company's Form 10-Q filed with the
                  Commission on November 10, 1999).

      (1)10.37    Stock Option Agreement dated August 25, 1999 between the
                  Company and Norman Rich (incorporated by reference to Exhibit
                  10.41 of the Company's Form 10-Q filed with the Commission on
                  November 10, 1999).

      (2)13.1     1999 Annual Report to Shareholders

         21.1     Subsidiary of the Company (incorporated by reference to
                  Exhibit 21.1 of the Company's Form S-1 Registration Statement
                  (No. 333-32561) filed with the Securities and Exchange
                  Commission on July 31, 1997

      (2)23.1     Consent of McGladrey & Pullen, L.L.P.


<PAGE>   29

      (2)27.1     Financial Data Schedule

------------------------------

(1)  Management contract or compensatory plan or arrangement
(2)  Filed herewith